株探米国株
英語
エドガーで原本を確認する
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Table of Contents





UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 2023
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                 to
Commission file number: 001-39943
MONDEE HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)

Delaware      88-3292448
(State or other jurisdiction of
incorporation or organization)
  
(I.R.S. Employer
Identification No.) 

10800 Pecan Park Blvd.
Suite 315
Austin, Texas 78750
(Address of principal executive offices)

(650) 646-3320
(Issuer’s telephone number)


(Former Name or Former Address, if Changed Since Last Report)


Securities registered pursuant to Section 12(b) of the Act:
Title of each class
      Trading Symbol(s)      Name of each exchange on which registered
Class A common stock, $0.0001 par value per share
   MOND  
The Nasdaq Stock Market LLC


Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 Large accelerated filer
☐ 
 Accelerated filer
☐
 Non-accelerated filer
☒ 
 Smaller reporting company
☒ 
    Emerging growth company
☒ 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

As of the last practicable date November 9, 2023, there were 85,820,365 shares of Class A common stock, par value $0.0001 per share issued and outstanding.






Table of Contents



MONDEE HOLDINGS, INC.
FORM 10-Q FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023
TABLE OF CONTENTS

Page
5
1
Table of Contents

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
2
Table of Contents
MONDEE HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except stock and par value data) (unaudited)
September 30,
2023		 December 31,
2022
Assets
Current assets
Cash and cash equivalents $ 39,896  $ 78,841 
Restricted cash and cash equivalents 8,023  8,639 
Accounts receivable, net of allowance of $6,890 and $4,861 as of September 30, 2023 and December 31, 2022, respectively
 108,278  21,733 
Contract assets, net of allowance of $7 and $750 as of September 30, 2023 and December 31, 2022, respectively
 12,223  5,794 
Prepaid expenses and other current assets 8,326  4,673 
Total current assets 176,746  119,680 
Property and equipment, net 15,072  11,332 
Goodwill 77,167  66,420 
Intangible assets, net 91,155  57,370 
Amounts receivable from related parties 199  — 
Operating lease right-of-use assets 2,273  1,384 
Deferred income taxes 918  237 
Other non-current assets 2,039  1,674 
TOTAL ASSETS $ 365,569  $ 258,097 
Liabilities, Redeemable Preferred Stock and Stockholders’ Deficit
Current liabilities
Accounts payable $ 113,336  $ 33,749 
Deferred underwriting fee —  500 
Amounts payable to related parties 42  13 
Government loans, current portion 72  72 
Accrued expenses and other current liabilities 28,211  9,319 
Earn-out liability, net, current portion 3,155  — 
Deferred revenue, current portion 5,945  5,828 
Long-term debt, current portion 10,313  7,514 
Total current liabilities 161,074  56,995 
Deferred income taxes 111  307 
Note payable to related party 200  197 
Government loans, excluding current portion 143  159 
Earn-out liability, net, excluding current portion 3,411  — 
Warrant liability 177  1,293 
Long-term debt, excluding current portion 145,142  126,882 
Deferred revenue, excluding current portion 12,847  14,656 
Operating lease liabilities, excluding current portion 1,750  1,620 
Other long-term liabilities 3,003  2,713 
Total liabilities 327,858  204,822 
Commitments and contingencies (Note 11)
3
Table of Contents
MONDEE HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except stock and par value data) (unaudited)
Redeemable preferred stock
Series A preferred stock - 250,000,000 shares authorized, $0.0001 par value, 85,000 shares issued and outstanding as of September 30, 2023 and December 31, 2022 (liquidation preference $95,346 and $87,323 as of September 30, 2023 and December 31, 2022, respectively)
 92,484  82,597 
Stockholders’ deficit
Class A Common Stock – 500,000,000 shares authorized, $0.0001 par value, 85,498,657 and 82,266,160 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively
 8  7 
Treasury stock - 2,448,928 and 0 shares of Class A Common Stock as of September 30, 2023 and December 31, 2022, respectively
 (22,884) — 
Shareholder receivable —  (20,336)
Additional paid-in capital 296,635  271,883 
Accumulated other comprehensive gains (losses) (655) (621)
Accumulated deficit (327,877) (280,255)
Total stockholders’ deficit (54,773) (29,322)
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT $ 365,569  $ 258,097 
    
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Table of Contents
MONDEE HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except stock and per share data) (unaudited)
Three Months Ended
September 30,		 Nine Months Ended
September 30,
2023 2022 2023 2022
Revenues, net $ 54,532  $ 40,513  $ 161,232  $ 125,236 
Operating expenses
Sales and marketing expenses 35,971  28,650  113,476  88,467 
Personnel expenses, including stock-based compensation of $2,638, $55,064, $9,261, and $55,219, respectively
 10,696  59,807  30,521  71,131 
General and administrative expenses, including non-employee stock-based compensation of $336, $172, $1,078, and $178, respectively
 4,629  2,337  14,350  6,802 
Information technology expenses 1,073  1,176  3,372  3,639 
Provision for credit losses, net 535  211  (166) 297 
Depreciation and amortization 4,165  2,963  11,354  8,549 
Restructuring expense, net 239  2,130  1,600  2,130 
Total operating expenses 57,308  97,274  174,507  181,015 
Loss from operations (2,776) (56,761) (13,275) (55,779)
Other income (expense)
Interest income 243  28  880  289 
Interest expense (8,740) (7,157) (25,372) (19,987)
Gain on extinguishment of PPP loan —  —  —  2,009 
Changes in fair value of warrant liability 744  683  1,116  683 
Other expense, net (9,189) (1,080) (7,883) (316)
Total other expense, net (16,942) (7,526) (31,259) (17,322)
Loss before income taxes (19,718) (64,287) (44,534) (73,101)
Provision for income taxes (381) (321) (3,088) (611)
Net loss (20,099) (64,608) (47,622) (73,712)
Cumulative dividends allocated to preferred stockholders (2,859) (47) (8,023) (47)
Net loss attributable to common stockholders $ (22,958) $ (64,655) $ (55,645) $ (73,759)
Net loss attributable per share to common stockholders
Basic and diluted $ (0.29) $ (0.89) $ (0.72) $ (1.14)
Weighted-average shares used to compute net loss attributable per share to common stockholders
Basic and diluted 77,925,635  72,462,512  77,162,363  64,730,224 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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MONDEE HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
(In thousands) (unaudited)
Three Months Ended
September 30,		 Nine Months Ended
September 30,
2023 2022 2023 2022
Net loss $ (20,099) $ (64,608) $ (47,622) $ (73,712)
Other comprehensive gain (loss), net of tax
Gain (loss) on currency translation adjustment (2,938) (158) (34) (330)
Comprehensive loss $ (23,037) $ (64,766) $ (47,656) $ (74,042)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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MONDEE HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Mezzanine Equity and Stockholders’ Deficit
For the three and nine months ended September 30, 2023 and 2022
(In thousands, except stock and par value data) (unaudited)
Mezzanine Equity Stockholders' Deficit
Preferred stock Class A Common Stock Treasury Stock Additional
Paid-in-
Capital		 Accumulated
Other
Comprehensive
Gains (Losses)		 Accumulated
Deficit		 Total
Stockholders’
Deficit
Shares Amount Shares Amount Shares Amount
Balance at June 30, 2023 85,000  $ 88,960  84,242,767  $ 8  2,033,578  $ (20,336) $ 291,004  $ 2,283  $ (307,778) $ (34,819)
Issuance of common stock through employee stock plans —  —  241,549  —  —  —  —  —  —  — 
Tax withholding related to vesting of restricted stock units —  —  (81,309) —  —  —  (723) —  —  (723)
Common stock repurchased —  —  (215,350) —  215,350  (766) —  —  —  (766)
Stock-based compensation —  —  —  —  —  —  2,974  —  —  2,974 
Currency translation adjustments —  —  —  —  —  —  —  (2,938) —  (2,938)
Net loss —  —  —  —  —  —  —  —  (20,099) (20,099)
Acquisitions of Interep and Skypass —  —  1,311,000  —  —  —  6,904  —  —  6,904 
Shares received for divestiture of LBF and post-sales support —  —  —  —  200,000  (1,782) —  —  —  (1,782)
Accrual of dividends and accretion of redeemable series A preferred stock —  3,524  —  —  —  $ —  (3,524) —  —  (3,524)
Balance at September 30, 2023 85,000 $ 92,484  85,498,657 $ 8  $ 2,448,928  $ (22,884) $ 296,635  $ (655) $ (327,877) $ (54,773)
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Mezzanine Equity Stockholders' Deficit
Preferred stock Class A Common Stock Treasury Stock Shareholder Additional
Paid-in-
Capital		 Accumulated
Other
Comprehensive
Gains (Losses)		 Accumulated
Deficit		 Total
Stockholders’
Deficit
Shares Amount Shares Amount Shares Amount Receivable
Balance at December 31, 2022 85,000  $ 82,597  82,266,160  $ 7  —  $ —  $ (20,336) $ 271,883  $ (621) $ (280,255) $ (29,322)
Issuance of common stock through employee stock plans —  —  596,649  —  —  —  —  —  —  —  — 
Tax withholding related to vesting of restricted stock units —  —  (186,207) —  —  —  —  (1,738) —  —  (1,738)
Common stock repurchased —  —  (215,350) —  215,350  (766) —  —  —  —  (766)
Stock-based compensation —  —  —  —  —  —  —  10,339  —  —  10,339 
Currency translation adjustments —  —  —  —  —  —  —  —  (34) —  (34)
Net loss —  —  —  —  —  —  —  —  —  (47,622) (47,622)
Settlement of shareholder receivable —  —  —  —  2,033,578  (20,336) 20,336  —  —  —  — 
Acquisitions of Orinter, Interep, and Skypass —  —  3,037,405  1  —  —  —  26,038  —  —  26,039 
Shares received for divestiture of LBF and post-sales support —  —  —  —  200,000  (1,782) —  —  —  (1,782)
Accrual of dividends and accretion of redeemable series A preferred stock —  9,887  —  —  —  —  —  (9,887) —  —  (9,887)
Balance at September 30, 2023 85,000 $ 92,484  85,498,657 $ 8  2,448,928  $ (22,884) $ —  $ 296,635  $ (655) $ (327,877) $ (54,773)
Dividends accrued for preferred stockholders were $33.64 and $94.39 per share for the three and nine months ended September 30, 2023, and $0.55 per share for the three and nine months ended September 30, 2022.

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MONDEE HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Mezzanine Equity and Stockholders’ Deficit
For the three and nine months ended September 30, 2023 and 2022
(In thousands, except stock and par value data) (unaudited)
Mezzanine Equity Stockholders' Deficit
Preferred Stock Class A Common Stock Shareholder Receivable Additional
Paid-in-Capital		 Accumulated
Other
Comprehensive
Gains (Losses)		 Accumulated
Deficit		 Total
Stockholders’
Deficit
Shares Amount Shares Amount
Balance at June 30, 2022 — $ —  1 $ —  $ —  $ 163,626  $ (445) $ (199,121) $ (35,940)
Retroactive application of recapitalization —  —  60,799,999  6  —  (6) —  —  — 
Balance at June 30, 2022 — —  60,800,000 6  —  163,620  (445) (199,121) (35,940)
Issuance of Class A Common Stock upon
the reverse recapitalization including
PIPE financing, net of transaction costs		 — —  13,947,218 1  —  48,340  —  —  48,341 
Issuance of Mondee Holdings LLC
Class G units upon prepayment of debt		 — —  — —  —  9,750  —  —  9,750 
Merger earn-out shares — —  7,400,000 —  —  —  —  —  — 
Settlement of related party loan — —  — —  (20,336) —  —  —  (20,336)
Common control acquisition — —  — —  —  (2,000) —  —  (2,000)
Payment made on behalf of Mondee
Holdings LLC 		— —  — —  —  (5,241) —  —  (5,241)
Shares issued upon exercise of common
stock warrants 		— —  118,942 —  —  1,368  —  —  1,368 
Transfer of Private Warrants to Public
Warrants 		— —  — —  —  536  —  —  536 
Issuance of redeemable series A preferred
stock, net of issuance costs 		85,000 79,549  — —  —  —  —  —  — 
Issuance of common stock
warrants		 — —  — —  —  3,891  —  —  3,891 
Accrual of dividends and
accretion of redeemable series A
preferred stock 		— 57  — —  —  (57) —  —  (57)
Stock based compensation — —  — —  —  55,236  —  —  55,236 
Currency translation adjustment — —  — —  —  —  (158) —  (158)
Net loss — —  — —  —  —  —  (64,608) (64,608)
Balance at September 30, 2022 85,000  $ 79,606  82,266,160  $ 7  $ (20,336) $ 275,443  $ (603) $ (263,729) $ (9,218)

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Mezzanine Equity Stockholders' Deficit
Preferred stock Class A Common Stock Shareholder Additional
Paid-in-Capital		 Accumulated
Other
Comprehensive
Gains (Losses)		 Accumulated
Deficit		 Total
Stockholders’
Deficit
Shares Amount Shares Amount Receivable
Balance at December 31, 2021 — $ —  1 $ —  $ —  $ 163,465  $ (273) $ (190,017) $ (26,825)
Retroactive application of recapitalization — —  60,799,999  6  —  (6) —  —  — 
Balance at December 31, 2021 — — 60,800,000 6  —  163,459  (273) (190,017) (26,825)
Issuance of Class A Common Stock upon
the reverse recapitalization including
PIPE financing, net of transaction costs		 — — 13,947,218 1  —  48,340  —  —  48,341 
Issuance of Mondee Holdings LLC
Class G units upon prepayment of debt		 — — — —  —  9,750  —  —  9,750 
Merger earn-out shares — — 7,400,000 —  —  —  —  —  — 
Settlement of related party loan — — — —  (20,336) —  —  —  (20,336)
Common control acquisition — — — —  —  (2,000) —  —  (2,000)
Payment made on behalf of Mondee
Holdings LLC		 — — — —  —  (5,241) —  —  (5,241)
Shares issued upon exercise of common
stock warrants		 — — 118,942 —  —  1,368  —  —  1,368 
Transfer of Private Warrants to Public
Warrants		 — — — —  —  536  —  —  536 
Issuance of redeemable series A preferred
stock, net of issuance costs		 85,000 79,549 — —  —  —  —  —  — 
Issuance of common stock
warrants		 — — — —  —  3,891  —  —  3,891 
Accrual of dividends and
accretion of redeemable series A
preferred stock		 — 57 — —  —  (57) —  —  (57)
Stock-based compensation — — — —  —  55,397  —  —  55,397 
Currency translation adjustments — — — —  —  —  (330) —  (330)
Net loss — — — —  —  —  —  (73,712) (73,712)
Balance at September 30, 2022 85,000  $ 79,606  82,266,160  $ 7  $ (20,336) $ 275,443  $ (603) $ (263,729) $ (9,218)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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MONDEE HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands) (unaudited)
Nine Months Ended
September 30,
2023 2022
Cash flows from operating activities
Net loss $ (47,622) $ (73,712)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Depreciation and amortization 11,354  8,549 
Non-cash gain on disposal of LBF US (697) — 
Deferred taxes (1,050) 138 
Provision for credit losses, net (166) 297 
Stock-based compensation 10,339  55,397 
Non-cash lease expense and lease impairment charges 753  — 
Amortization of loan origination fees 6,403  4,238 
Payment in kind interest expense 4,241  8,147 
Gain on forgiveness of PPP Loan —  (2,009)
Gain on termination of lease (337) — 
Unrealized (gain) loss on foreign currency exchange derivatives (270) — 
Change in the estimated fair value of earn-out consideration and warrants (1,008) (1,259)
Changes in operating assets and liabilities:
Accounts receivable (19,523) (15,870)
Accounts receivable from related parties (199) — 
Contract assets (6,041) (2,635)
Prepaid expenses and other current assets (451) (17,547)
Operating lease right-of-use assets —  (320)
Other non-current assets (315) (716)
Amounts payable to related parties 18  (716)
Accounts payable 27,469  26,353 
Accrued expenses and other liabilities 6,363  12,333 
Deferred revenue (1,692) (1,658)
Operating lease liabilities (969) 300 
Net cash used in operating activities (13,400) (690)
Cash flows from investing activities
Capital expenditures (7,660) (5,415)
Purchase of restricted short term investments —  (394)
Cash paid for acquisitions, net of cash acquired (24,081) — 
Net cash used in investing activities (31,741) (5,809)
Cash flows from financing activities
Repayment of debt (4,118) (41,500)
Proceeds from issuance of preferred stock —  85,000 
Issuance cost from preferred stock —  (1,560)
Proceeds from exercise of common stock warrants —  1,368 
Proceeds from Business Combination and issuance of PIPE shares —  78,548 
Payment of offering costs (4,372) (20,053)
Payment made on behalf of Mondee Holdings LLC —  (5,241)
Loan origination fee for long term debt (616) — 
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MONDEE HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands) (unaudited)
Proceeds from long term debt 15,000  — 
Net cash provided by by financing activities 5,894  96,562 
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents (314) (341)
Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents (39,561) 89,722 
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period 87,480  15,506 
Cash and cash equivalents and restricted cash and cash equivalents at end of period $ 47,919  $ 105,228 
Supplemental cash flow information
Cash paid for interest $ 8,418  $ 140 
Cash paid for income taxes 115  — 
Cash paid for LBF US transition services 7,386  — 
Non-cash financing and investing activities
Right-of-use assets obtained in exchange for new operating lease liabilities $ 249  $ — 
Legacy Mondee shares converted to Mondee Holdings Inc. —  7 
Assumption of net liabilities from Business Combination —  15,002 
Unpaid offering costs —  12,030 
Issuance of common stock warrants —  3,892 
Conversion of warrant classification —  535 
Settlement of related party loan —  (20,336)
Common control acquisition —  (2,000)
Issuance of Mondee Holdings LLC Class G units upon modification of debt —  9,750 
Property and equipment included in accounts payable 61  — 
Fair value of Class A Common Stock issued in connection with acquisitions 26,038  — 
Fair value of earn-out liabilities issued in connection with acquisitions 7,014  — 
Shares withheld for tax withholding on vesting of restricted stock units 1,738  — 
Deferred consideration in connection with acquisitions 2,259  — 
Accrued series A preferred stock dividend 8,023  46 
Interest capitalized for software development 163  — 
Common stock repurchases 766  — 
Noncash purchase consideration received for LBF divestiture, net 1,282  — 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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MONDEE HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(In thousands, except stock, units and par value data)
(unaudited)
1.    NATURE OF OPERATIONS
Mondee Holdings, Inc. is a Delaware corporation. We refer to Mondee Holdings, Inc. and its subsidiaries, collectively as “Mondee,” the “Company,” “us,” “we”, “our” and "New Mondee" in these condensed consolidated financial statements. Mondee is a rapid-growth, travel technology company and marketplace with a portfolio of globally recognized brands in the leisure and corporate travel sectors.
Reverse Recapitalization
On July 18, 2022 (the “Closing Date”), we consummated the business combination pursuant to the Business Combination Agreement, dated December 20, 2021, by and among ITHAX Acquisition Corp. (“ITHAX”), Ithax Merger Sub I, LLC, a Delaware limited liability company and wholly owned subsidiary of ITHAX (“First Merger Sub”), Ithax Merger Sub II, LLC a Delaware limited liability company and wholly owned subsidiary of ITHAX (“Second Merger Sub”) and Mondee Holdings II, Inc., a Delaware corporation (“Legacy Mondee”) (the “Business Combination”).
On the Closing Date, following the domestication, First Merger Sub merged with and into Legacy Mondee, with Legacy Mondee surviving such merger as a wholly owned subsidiary of the Company (the “First Merger”). Immediately following the First Merger, Legacy Mondee merged with and into Second Merger Sub, with Second Merger Sub surviving such merger as a wholly owned subsidiary of the Company.
On the Closing Date, the registrant changed its name from ITHAX Acquisition Corp. to Mondee Holdings, Inc. The transaction was accounted for as a reverse recapitalization, rather than a business combination, for financial accounting and reporting purposes. Accordingly, Legacy Mondee was deemed the accounting acquirer (and legal acquiree) and ITHAX was treated as the accounting acquiree (and legal acquirer). Under this method of accounting, the reverse recapitalization was treated as the equivalent of Legacy Mondee issuing stock for the net assets of ITHAX, accompanied by a recapitalization.
2.    IMMATERIAL CORRECTIONS OF PREVIOUSLY ISSUED QUARTERLY FINANCIAL INFORMATION

During the fourth quarter of the year ended December 31, 2022, the Company identified an error related to arrangements with travel agents which requires the recording of travel agent commissions to revenue with a corresponding off-setting entry to sales and marketing expense. As a result, there was an understatement of reported revenues, net and sales and marketing expenses for the unaudited three and nine months ended September 30, 2022. Additionally, the Company identified an error related to the classification of credit card processing fees which should have been recorded in sales and marketing expense rather than revenues, net thereby contributing to the understatement of such financial statement line items. There was no impact to net loss for either period. The Company previously disclosed marketing expenses and sales and other expenses separately through the quarter ended September 30, 2022, and for the year ended December 31, 2022, the Company changed its manner of presentation to its current presentation of sales and marketing expense as one financial statement line item. Management assessed the materiality of these errors and concluded the misstatements were not material to the unaudited financial statements for the period ended September 30, 2022.

The following table summarizes the effect of the revision on the affected financial statement line items, corresponding to the Company’s presentation of the relevant financial statement line item in the period relevant to the error:


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Three Months Ended September 30, 2022
 As Previously Reported Adjustments As Corrected
Condensed Consolidated Statements of Operations
Revenues, net $ 39,466  $ 1,047  $ 40,513 
Marketing expenses 24,298  519  24,817 
Sales and other expenses 3,305  528  3,833 
Total operating expenses $ 96,227  $ 1,047  $ 97,274 

Nine Months Ended September 30, 2022
As Previously Reported Adjustments As Corrected
Condensed Consolidated Statements of Operations
Revenues, net $ 119,769  $ 5,467  $ 125,236 
Marketing expenses 73,317  3,464  76,781 
Sales and other expenses 9,683  2,003  11,686 
Total operating expenses $ 175,548  $ 5,467  $ 181,015 

3.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Other than policies noted below, there have been no changes to the Company’s significant accounting policies described in the annual consolidated financial statements for the year ended December 31, 2022.
Basis of Presentation
We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting. We have included all adjustments necessary for a fair presentation of the results of the interim period. These adjustments consist of normal recurring items. Our interim unaudited condensed consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022, previously filed with the Securities and Exchange Commission (“SEC”).
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including acquired businesses from the dates of acquisition. All intercompany accounts and transactions have been eliminated in consolidation. The functional currency of the Company’s subsidiaries is generally the respective local currency. For international operations, assets and liabilities are translated into U.S. dollars at the rate of exchange existing at the balance sheet date. Income statement amounts are translated at monthly average exchange rates applicable for the period. Translation gains and losses are included as a component of accumulated other comprehensive gains (losses) in the accompanying condensed consolidated balance sheets. Foreign currency transaction gains and losses are included in other expense, net in the accompanying condensed consolidated statements of operations.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. We evaluate our estimates on an ongoing basis. We base our estimates on our historical experience and also on assumptions that we believe are reasonable; however, actual results could significantly differ from those estimates.
Accounts Receivable, Contract Assets and Allowance for Doubtful Accounts
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Accounts receivable from customers are recorded at the original invoiced amounts net of an allowance for doubtful accounts. We make estimates of expected credit losses for our allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history continually updated for new collections data, the credit quality of our customers, current economic conditions, reasonable and supportable forecasts of future economic conditions and other factors that may affect our ability to collect from customers. The provision for estimated credit losses is recorded in accounts receivable, net of allowance on our condensed consolidated balance sheets.
Contract assets represent unbilled and accrued incentive revenues from airline companies and our GDS service providers based on the achievement of contractual targets defined at contract inception. The provision for estimated credit losses is recorded in contract assets, net of allowance on our condensed consolidated balance sheets.
During the nine months ended September 30, 2023, the Company recorded a gain of $166 to provision for credit losses, net, due to the revision of estimates of expected credit losses on accounts receivables and contract assets, and $1,914 additional allowance associated with acquisitions during the period, offset by $1,205 of write-offs, net of recoveries.
Foreign Currency Exchange Derivatives
The Company is exposed to foreign currency fluctuations and enters into foreign currency exchange derivative financial instruments to reduce the exposure to variability in certain expected future cash flows. The Company uses foreign currency forward contracts with maturities of up to four months to hedge a portion of anticipated exposures. These contracts are not designated as hedging instruments and changes in fair value are recorded in other expense, net on the condensed consolidated statement of operations. Realized gains and losses from the settlement of the derivative assets and liabilities are classified as operating activities on the condensed consolidated statement of cash flows. The foreign currency exchange derivatives are recognized on the condensed consolidated balance sheet at fair value within accrued expenses and other current liabilities. The Company does not hold or issue derivatives for trading purposes.
Goodwill
The Company tests good for impairment on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has two reporting units and tests goodwill for each respective reporting unit. During the third quarter of 2023, the Company voluntarily changed its annual goodwill impairment test date from December 31 to October 1, as the new date of the assessment better aligns with the Company's long-term business planning process. This change was not material to the Company's condensed consolidated financial statements as it did not delay, accelerate, or avoid any potential goodwill impairment charge.
Revenue Recognition
The majority of our revenues are generated by providing online travel reservation services, which principally allow travelers to book travel reservations with travel suppliers through our technology solutions. These transaction-based revenue sources are reflected within our travel marketplace segment and primarily consist of:
•Commissions revenue, including mark-up fees and commissions on airline ticket sales and to a lesser extent, for hotel accommodations and booking of car rentals, and other travel services;
•Incentive revenues earned from Global Distribution System (“GDS”) service providers and airline companies for airline reservations, as well as from our fintech payment programs based on the aggregate gross booking amounts processed by us; and;
•Other travel products and services.
We have determined the nature of our promise is to arrange for travel services to be provided by travel suppliers, and are therefore an agent in the transaction, whereby we record as revenue the net commission we receive in exchange for our travel reservation services. In these transactions, the travel supplier is determined to be our customer. Travel suppliers consist of GDS service providers and airline companies. Our revenue is earned through mark-up fees and commissions, and is recorded net of estimated cancellation, refunds, and chargebacks. Revenue is recognized when the traveler completes a reservation, as our performance obligation is satisfied upon issuance of the ticket or reservation details to the traveler. From time to time, the Company issues credits or refunds to the traveler in the event of cancellations. Additionally, when travel bookings are made, there is a risk of transaction losses as a result of chargebacks pursued by payment processors in connection with fraudulent charges. We record estimates for chargebacks against our mark-up fees or commission earned upon travel bookings as variable consideration.
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We record estimates for losses related to chargebacks of the travel supplier cost as sales and marketing expense. Reserves are recorded based on our assessment of various factors, including the amounts of actual chargeback activity during the current year.

We earn incentives from airline companies based on the volume of airline ticket bookings that have flown. We also receive incentives from our GDS service providers based on the volume of segment bookings mediated by us through the GDS systems. The periods in which the contractual targets are based on a range from months to years. The rate at which the Company earns the incentives from airline companies and GDS service providers, or travel suppliers, is subject to fluctuations as the incentive amount earned on any given day is contingent on the cumulative prior performance under the contract. Additionally, some travel supplier contracts have tiered level pricing where the incentive rate applied depends on several performance targets specified in the contract. At the end of each reporting period, the Company estimates the incentives earned in the period based on the flights taken and the respective incentive rates that would apply to the Company, based on the tier the Company will most likely fall under. Revenue earned and recognized relating to incentives with airline companies and GDS service providers will be estimated to the extent that it is probable that a significant reversal of any incremental revenue will not occur. This revenue is recognized net of variable consideration, including cancellations, refunds, and shortfall penalty fees, as applicable. In addition to travel-related revenue, we also earn incentives from fintech programs held with banks and financial institutions, which we leverage in our payment processing and settlement platform. Our fintech programs include a wide array of payment options, such as credit cards, wallets, alternate payment methods, and next generation fraud protection tools. These incentives received are based on the aggregate transaction amounts processed by us.
In Brazil and Mexico, the Company partners with financing companies to allow travelers the possibility of purchasing the product of their choice through financing plans established, offered and administrated by such financing companies. Participating financing companies bear full risk of fraud, delinquency, or default by travelers. When travelers elect to finance their purchase, we receive payments from financing companies as installments become due regardless of when the traveler makes the scheduled payments. In most cases, we receive payments before travel occurs or during travel, and the period between completion of booking and receipt of scheduled payments is typically less than one year. The Company uses the practical expedient and does not recognize a significant financing component when the difference between payment and revenue recognition is less than a year.
In partnering with the financing companies mentioned above, the Company has the option to collect payments upfront or receive in installments as they become due. Upfront payments are determined to be factoring transactions, and therefore financing fees associated with these payments are recorded within interest expense. Fees for payments received in installments are recorded within sales and marketing expense. Financing fees associated with these upfront payments are recorded within interest expense. During the three and nine months ended September 30, 2023, the Company incurred factoring fees of $345, and $1,420, respectively, which represents 2% and 5%, respectively, of the total other expense, net on the condensed consolidated statements of operations.
To a lesser extent, we also generate revenues by entering into subscription contracts for access to our travel management offerings. These revenues are reflected within our software-as-a-service (“SaaS”) platform segment. Under these contracts, payment is collected upfront when the customer signs up to use the platform. Subscription revenue is recognized on a straight-line basis over the term of the agreement using a time-based measure of progress, as the nature of the Company’s promise to the customer is to stand ready to provide platform access. The Company earns variable consideration in the form of a booking fee for each instance a traveler books a trip on the platform. The Company applies the series guidance variable consideration estimation exception to recognize the variable fees upon the completion of travel bookings as this is when our performance obligation is satisfied.
Certain Risks and Concentrations
Our business is subject to certain risks and concentrations including dependence on relationships with travel suppliers, primarily airlines, dependence on third-party technology providers, exposure to risks associated with online commerce security and payment related fraud. We also rely on GDS service providers and third-party service providers for certain fulfillment services.
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Significant concentrations are those that represent more than 10% of the Company’s total revenue or total accounts receivable and contract assets. As of September 30, 2023, there were two financing companies that accounted for 34% and 14% of the total accounts receivable balance at period end. As of December 31, 2022, two customers accounted for 23% of total accounts receivable and contract assets. The Company performs credit evaluations of its customers and generally does not require collateral for sales on credit. The Company’s accounts receivable comprises of amounts due from affiliates, airline companies, GDS service providers and financing companies, which are well established institutions that the Company believes to be of high quality.
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The Company reviews accounts receivable balances to estimate the expected credit loss and record it within the allowance for doubtful accounts.
The Company’s cash and cash equivalents are on deposit with major financial institutions. Such deposits may be in excess of insured limits. The Company has not experienced any losses due to institutional failure or bankruptcy.
Recently Adopted Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” or ASU No. 2016-13. The amendments in ASU No. 2016-13 introduce an approach based on expected losses to estimated credit losses on certain types of financial instruments, modify the impairment model for available-for-sale debt securities and provide for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The Company adopted ASU 2016-13 as of January 1, 2023 with no material impact to its condensed consolidated financial statements.
In October 2021, the FASB issued new guidance related to recognizing and measuring contract assets and contract liabilities from contracts with customers acquired in a business combination. The new guidance will require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination as compared to current U.S. GAAP where an acquirer generally recognizes such items at fair value on the acquisition date. The new guidance is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company adopted this guidance as of January 1, 2023 and applied Topic 606 to recognize and measure contract assets and contract liabilities of business combinations executed beginning January 1, 2023 and onwards.
Recently Issued Accounting Pronouncements Not Yet Adopted
The Company has considered the applicability of recently issued accounting pronouncements by the FASB and have determined that they are either not applicable or are not expected to have a material impact on the Company’s condensed consolidated financial statements.
Change in Financial Statement Presentation
In connection with the preparation of its condensed consolidated financial statements as of and for the three and nine months ended September 30, 2023 and 2022, the Company changed the presentation of “Sales and other Expense” and “Marketing Expense” within the condensed consolidated statement of operations. The Company combined “Sales and other Expense” and “Marketing Expense” into “Sales and Marketing Expense”. The change is a result of an increased overlap between the nature and purpose of expenses that fall within these groups. This change in presentation has been applied retrospectively and does not change any previously reported subtotals or totals on the condensed consolidated statement of operations and comprehensive loss.
4.    FAIR VALUE MEASUREMENT
The Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period.
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The following table sets forth the Company’s financial assets and liabilities that were measured at fair value, on a recurring basis:
September 30, 2023
Level 1 Level 2 Level 3 Total
Assets
Foreign currency exchange derivatives(1)
 $ —  $ 104  $ —  $ 104 
  Total assets $ —  $ 104  $ —  $ 104 
Liabilities
Warrant liability - private placement warrants(2)
 $ —  $ —  $ 177  $ 177 
Orinter earn-out consideration(3)
 —  —  3,990  3,990 
Consolid earn-out consideration(4)
 —  —  1,120  1,120 
Interep earn-out consideration(5)
 —  —  1,780  1,780 
Skypass earn-out consideration(6)
 —  —  232  232 
Total liabilities $ —  $ —  $ 7,299  $ 7,299 
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December 31, 2022
Level 1   Level 2   Level 3   Total
Liabilities
Warrant liability - private placement warrants(2)
 $ —  $ —  $ 1,293  $ 1,293 
______________________________
(1)
The Company uses foreign currency forwards contracts with maturities of up to 4 months to hedge a portion of anticipated exposures. The foreign currency exchange derivatives are recognized on the condensed consolidated balance sheet at fair value within prepaid expenses and other current assets.
(2)
On February 1, 2021, with the closing of its initial public offering, ITHAX consummated the sale of 675,000 private placement units, including the exercise by the underwriters of their over-allotment option. As of September 30, 2023, the Company had 232,500 private placement warrants outstanding.
(3)
The Orinter earn-out consideration represents arrangements to pay the former owners of Orinter, which was acquired by the Company in 2023. The undiscounted maximum payment under the arrangement is $10,000 in aggregate at the end of fiscal years 2023 through 2025. As of September 30, 2023, no payments have been made. Earn-out consideration is included in earn-out liability, net, current portion and earn-out liability, net, excluding current portion on the Company’s condensed consolidated balance sheets.
(4)
The Consolid earn-out consideration represents arrangements to pay the former owners of Consolid, which was acquired by the Company in 2023. The Company may be required to make earn-out payments up to an aggregate of $1,000 and 400,000 shares of common stock contingent on Consolid meeting certain adjusted EBITDA targets. As of September 30, 2023, no payments have been made. Earn-out consideration is included in earn-out liability, net, current portion and earn-out liability, net, excluding current portion on the Company’s condensed consolidated balance sheets.
(5)
The Interep earn-out consideration represents arrangements to pay the former owners and key executives of Interep, which was acquired by the Company in 2023. The Company may be required to make earn-out payments of up to $3,000 contingent upon Interep reaching specified EBITDA targets by the end of fiscal year 2025. As of September 30, 2023, no payments have been made. Earn-out consideration is included in earn-out liability, net, current portion and earn-out liability, net, excluding current portion on the Company’s condensed consolidated balance sheets.
(6)
The Skypass earn-out consideration represents arrangements to pay the former owners of Skypass, which was acquired by the Company in 2023. The Company may be required to make earn-out payments of up to an aggregate of 1,800,000 shares of common stock contingent on Skypass meeting certain adjusted EBITDA targets. In the event the EBITDA target is exceeded, the Company is required to pay 2.5% on any excess of the EBITDA target, settled in shares. The number of shares payable will be calculated based on the market value of the Company’s Class A Common Stock at settlement date. As of September 30, 2023, no payments have been made. Earn-out consideration is included in earn-out liability, net, current portion and earn-out liability, net, excluding current portion on the Company’s condensed consolidated balance sheets.
Short-Term Financial Assets and Liabilities
The fair value of Company’s short-term financial assets and liabilities including cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable, deferred underwriting fee, and accrued expenses approximated their carrying values as of September 30, 2023 and December 31, 2022, due to their short-term nature. The Company’s restricted cash and cash equivalents comprise of cash and certificate of deposits held at banks. All of the Company’s outstanding debt are recorded on an amortized cost basis.
Foreign Currency Exchange Derivatives
The notional amount of the foreign currency exchange derivatives outstanding as of September 30, 2023 is $8,241. The notional amount of a foreign currency forward contract is the contracted amount of foreign currency to be exchanged and is not recorded in the balance sheets. The changes in fair value of the foreign currency exchange derivatives are recorded in other expense, net in the condensed consolidated statement of operations. For the three and nine months ended September 30, 2023 the Company recorded gains of $392 and $270, respectively in other expense, net.
Roll-forward of Level 3 Recurring Fair Value Measurements
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The following tables summarizes the fair value adjustments for liabilities measured using significant unobservable inputs (Level 3):
Earn-out consideration
Three Months Ended
September 30,		 Nine Months Ended
September 30,
2023 2022 2023 2022
Balance, beginning of period $ 8,330  $ 2  $ —  $ 597 
Additions of earn-out consideration with the acquisition of Orinter —  —  3,060  — 
Additions of earn-out consideration with the acquisition of Interep —  —  1,700  — 
Additions of earn-out consideration with the acquisition of Consolid —  —  1,820  — 
Additions of earn-out consideration with the acquisition of Skypass 434  —  434  — 
Change in the estimated fair value of earn-out consideration (1,642) 19  108  (576)
Balance, end of the period $ 7,122  $ 21  $ 7,122  $ 21 
The earn-out consideration consists of the fair values of contingent consideration in connection with the Company’s acquisitions. See Note 6 – Business Combinations and Divestitures for further detail. The earn-out considerations are fair valued using the Monte Carlo Method and is a Level 3 measurement because the Company estimates projections during the earn-out period utilizing various potential pay-out scenarios. The Monte Carlo simulation method repeats a process thousands of times in an attempt to predict all the possible future outcomes. At the end of the simulation, several random trials produce a distribution of outcomes that are then analyzed to determine the average present value of the earn-out liability. The valuation model utilized the following assumptions for the valuation of the earn-out liabilities as of September 30, 2023:
Orinter Interep Consolid Skypass
Cost of equity 29.0% 33.0% 29.0% 26.0%
EBITDA volatility 61.0% 61.0% 80.0% 57.0%
Equity volatility 78.0% 78.0% 98.0% 75.0%
Required metric risk premium 22.5% 26.0% 23.5% 20.0%
Risk-neutral adjustment factor
 0.70 - 0.97
0.67 - 0.97
0.85 - 0.98
0.65 - 0.94
The earn-out consideration is recorded in earn-out liability, net, current portion and earn-out liability, net, excluding current portion on the Company’s condensed consolidated balance sheets. Changes to the unobservable inputs do not have a material impact on the Company’s condensed consolidated financial statements. The Company recognized a gain of $1,642 and a loss of $108 for the remeasurement of the earn-out liabilities during the three and nine months ended September 30, 2023, respectively, recorded as general and administrative expenses within the condensed consolidated statements of operations.
Private placement warrant liability
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Three Months Ended
September 30,		 Nine Months Ended
September 30,
2023 2022 2023 2022
Balance, beginning of period $ 921  $ —  $ 1,293  $ — 
Warrants recognized upon closing of reverse recapitalization —  1,721  —  1,721 
Transfer of Private Warrants to Public Warrants —  (536) —  (536)
Change in the estimated fair value of warrants (744) (683) (1,116) (683)
Balance, end of the period $ 177  $ 502  $ 177  $ 502 
The private placement warrant liability is fair valued using the Black-Scholes option-pricing model. The following table provides quantitative information regarding assumptions used in the Black-Scholes option-pricing model to determine the fair value of the private placement warrants as of September 30, 2023 and December 31, 2022:
September 30, 2023 December 31, 2022
Stock price $3.57 $10.88
Term (in years) 3.8 4.6
Expected volatility 63.0% 60.0%
Risk-free rate 4.8% 4.1%
Dividend yield —% —%
Changes to the unobservable inputs do not have a material impact on the Company’s condensed consolidated financial statements. The Company recognized a gain of $744 and $1,116 during the three and nine months ended September 30, 2023, respectively, and $683 during the three and nine months ended September 30, 2022, recorded in changes in fair value of warrant liability within the condensed consolidated statements of operations.
There were no transfers between Level 1, Level 2 or Level 3 fair value hierarchy categories of financial instruments for the three and nine months ended September 30, 2023 and September 30, 2022.
Assets Measured at Fair Value on a Nonrecurring Basis
Our non-financial assets, such as goodwill, intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur such that a non-financial asset is required to be evaluated for impairment and an impairment is recorded to reduce the non-financial asset’s carrying value to the fair value as a result of such triggering events, the non-financial assets are measured at fair value for the period such triggering events occur.
For the three and nine months ended September 30, 2023 and 2022, respectively, the Company has not recorded any impairment charges on non-financial assets.
5.    REVENUE
Disaggregation of Revenue
The Company believes that the disaggregation based on the reportable segments best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market, and other factors. As described in Note 13 – Segment Information, the Company has two reportable segments, travel marketplace and SaaS platform.
Three Months Ended
September 30,		 Nine Months Ended
September 30,
2023 2022 2023 2022
Revenue from travel marketplace $ 54,101  $ 40,094  $ 160,302  $ 124,272 
Revenue from SaaS Platform 431  419  930  964 
$ 54,532  $ 40,513  $ 161,232  $ 125,236 
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Contract Balances
The timing of revenue recognition, billing, and cash collection results in the recognition of accounts receivable, contract assets and contract liabilities on the condensed consolidated balance sheets.
Contract assets represent unbilled and accrued incentive revenues from airline companies and our GDS service providers based on the achievement of contractual targets defined at contract inception.
Contract liabilities, discussed below, are recorded as deferred revenue on the condensed consolidated balance sheets and disclosures. Cash received that are contingent upon the satisfaction of performance obligations are accounted for as deferred revenue. Deferred revenue primarily relates to cash advances received from GDS service providers for future bookings of airline tickets.
The opening and closing balances of accounts receivable and deferred revenue are as follows:
Accounts
Receivable		 Contract
 Asset		 Deferred
Revenue
Ending Balance as of December 31, 2022 $ 21,733  $ 5,794  $ 20,484 
Increase/(decrease), net 86,545  6,429  (1,692)
Ending Balance as of September 30, 2023 $ 108,278  $ 12,223  $ 18,792 
During the nine months ended September 30, 2023, the Company recognized revenue of $3,174 from the deferred revenue balance as of December 31, 2022.
As of September 30, 2023, the Company expects approximately 32% of total deferred revenue to be realized within one year, approximately 36% within two to three years and the remaining 32% within four to six years.
6.    BUSINESS COMBINATIONS AND DIVESTITURES

Orinter Acquisition

On January 31, 2023 (the “Orinter Closing Date”), the Company executed the Share Purchase and Sale Agreement (the “Orinter Purchase Agreement”) to acquire all of the outstanding equity interests in Orinter Tour & Travel, S.A. (“Orinter”) from OTT Holding Ltd (the “Sellers”) (such transactions contemplated by the Orinter Purchase Agreement, the “Orinter Acquisition”). Orinter is a high-growth and leading travel provider that currently serves a multitude of travel companies, with a strong presence in Brazil and Latin America. Through this acquisition, the Company has expanded its geographic footprint to include Brazil’s domestic and outbound travel market. Additionally, Orinter’s direct relationships with Latin American hotels will provide valuable cross-sell opportunities for the Company.
The acquisition date fair value of consideration transferred for Orinter is as follows:

Cash consideration (i)
 $ 21,556 
Issuance of Class A Common Stock (ii)
 16,037 
Fair value of earn-out consideration (iii)
 3,060 
Total purchase price consideration $ 40,653 

i.Cash consideration of $20,020 paid and $1,536 holdback consideration transferred to an escrow account as a guarantee in case of necessity of reimbursement, payment and/or use by Orinter for fulfillment of obligations of Orinter deriving from customers credits and customers prepayment.
ii.Issuance of 1,726,405 shares of common stock to be maintained in an escrow account. The release of the shares are as follows: (a) 903,202 after a period of 12 months from the Orinter Closing Date, and (b) 823,203 shares after a period of 24 months from the Orinter Closing Date.
iii.The purchase price consideration includes an earn-out obligation of $10,000 (paid in equal installments over 3 years) contingent on Orinter meeting EBITDA targets of $10,500, $11,500, and $12,500, for the years ended December 31, 2024, 2025 and 2026, respectively.

The Company estimated the preliminary fair value of acquired assets and liabilities as of the effective time of the business combination based on information currently available and continues to adjust those estimates upon refinement of market participant assumptions for integrating businesses.
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The Company is continuing to obtain information to finalize acquired tax liabilities and assets with respect to the Orinter Acquisition. As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period, but no later than one year from the date of the Orinter Closing Date. The Company will reflect measurement period adjustments, if any, in the period in which the adjustments are recognized.

Final determination of the fair values may result in further adjustments to the values presented in the following table.

Assets acquired: Estimated Fair Value
Cash $ 624 
Accounts receivable 40,431 
Prepaid expenses and other current assets 1,447 
Property and equipment 336 
Goodwill 6,146 
Operating lease right-of-use-assets 172 
Intangible assets 29,280 
Fair value of assets acquired 78,436 
Liabilities assumed:
Accounts payable 31,243 
Accrued expenses and other current liabilities 6,437 
Operating lease liabilities 103 
Fair value of liabilities assumed 37,783 
Total purchase consideration $ 40,653 

During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill.

Goodwill

The excess of the purchase price consideration over the fair values assigned to the assets acquired and liabilities assumed was recorded as goodwill. The resulting goodwill is primarily attributable to expected post-acquisition synergies from integrating Orinter’s technology with Mondee’s platform and technology. Goodwill recorded in connection with the acquisition was allocated to the travel marketplace segment and is amortizable for income tax purposes. The goodwill attributable to the acquisition was recorded as a non-current asset and is not amortized but is subject to an annual review for impairment.

Identifiable Intangible Assets

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:
Useful life (years) Fair value
Customer relationships 11 $ 21,600 
Trade names 15 7,680 
Total acquired intangibles $ 29,280 

Since the acquisition, Orinter was included in the Company’s travel marketplace segment.

Acquisition costs related to the Orinter Acquisition were not material. The amounts of revenue and pretax net income of Orinter included in the Company’s condensed consolidated statement of operations from the Orinter Closing Date to September 30, 2023 were $40,936 and $7,852, respectively.

Interep Acquisition

On May 12, 2023 (the “Interep Closing Date”), the Company acquired all of the outstanding stock of Interep Representações Viagens E Turismo S.A. (“Interep”, such transaction referred to as the “Interep Acquisition”). Interep is a Brazilian travel operator that focuses on the upscale segment of the travel market.
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This acquisition further expands the Company’s geographical footprint in Latin America, enhance its product offerings and provide a complementary distribution network to that of Orinter, given Interep’s focus on the luxury market.

The acquisition date fair value of consideration transferred for Interep is as follows:

Cash consideration (i) (ii)
 $ 4,633 
Issuance of Class A Common Stock (iii)
 3,097 
Other consideration - travel credit (iv)
 50 
Fair value of earn-out consideration (v)
 1,700 
Total purchase consideration $ 9,480 

In connection with the acquisition, the Company agreed to pay total consideration of (i) $4,000 on the Interep Closing Date, (ii) a deferred payment of $720 paid in 36 installments, (iii) 411,000 shares of Company Class A Common Stock, (iv) $50 in travel credits, and (v) an earn-out component up to an aggregate of $3,000 contingent on Interep meeting certain adjusted EBITDA targets. The 411,000 shares of Company Class A Common Stock were legally issued on July 12, 2023.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date:

Assets acquired: Estimated Fair Value
Cash $ 2,925 
Accounts receivable 21,697 
Prepaid expenses and other current assets 683 
Property and equipment 61 
Operating lease right-of-use-assets 63
Other non-current assets 9
Deferred income tax asset 265
Goodwill 808 
Intangible assets 7,120 
Fair value of assets acquired 33,631 
Liabilities assumed:
Accounts payable 22,962 
Accrued expenses and other current liabilities 1,112 
Operating lease liabilities 63 
Other long-term liabilities 14 
Fair value of liabilities assumed 24,151 
Total purchase consideration $ 9,480 


The Company recorded $4,910 for customer relationships with an estimated useful life of 7.5 years, and $2,210 for trade names with an estimated useful life of 15 years. The resulting goodwill is primarily attributable to the assembled workforce and expanded market opportunities from the Interep Acquisition. Goodwill recorded in connection with the acquisition was allocated to the travel marketplace segment and is amortizable for income tax purposes. Acquisition costs related to the Interep Acquisition were not material.

The amounts of revenue and pretax net income of Interep included in the Company’s condensed consolidated statement of operations from the Interep Closing Date to September 30, 2023 were $9,943 and $2,809, respectively.

Consolid Acquisition

On May 12, 2023 (the “Consolid Closing Date”), the Company acquired all of the outstanding stock in Consolid Mexico Holding, S.A. P.I. de C.V. (“Consolid”) (such transaction referred to as the “Consolid Acquisition”). Consolid is a high-growth, leading travel provider based in Mexico with the main objective of generating higher income for travel agencies in Mexico and around the world through first-class technological tools with products and services. Through this acquisition, the Company expands its geographic footprint in Mexico’s domestic and outbound travel market, as well as in other areas of Latin America.
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The acquisition date fair value of consideration transferred for Consolid is as follows:
Amount
Cash consideration $ 3,406 
Fair value of earn-out consideration 1,820 
Total purchase consideration $ 5,226 

In connection with the Consolid Acquisition, the Company agreed to pay cash consideration of $3,406 and an earn-out component up to an aggregate of $1,000 cash and 400,000 shares of Company Class A Common Stock, contingent on Consolid meeting certain adjusted EBITDA targets. The Company intends to claw back the net working capital adjustment of $556 net of future earn-out payments, and therefore, the $556 is recorded net against the fair value of the earn-out liability on the condensed consolidated balance sheet since these amounts have the right to offset.

The Company estimated the preliminary fair value of acquired assets and liabilities as of the effective time of the Consolid Acquisition based on information currently available and continues to adjust those estimates upon refinement of market participant assumptions for integrating businesses. The Company is continuing to obtain information to finalize acquired tax liabilities and assets with respect to the Consolid Acquisition, as well as the clawback amount impacting the purchase consideration. As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period, but no later than one year from the date of the Consolid Acquisition. The Company will reflect measurement period adjustments, if any, in the period in which the adjustments are recognized, to the assets acquired and liabilities assumed, with a corresponding offset to goodwill. Final determination of the fair values may result in further adjustments to the values presented in the following table.

Assets acquired: Estimated Fair Value
Cash $ 4,050 
Accounts receivable 3,569 
Prepaid expenses and other current assets 1,236 
Deferred income tax assets 704 
Property and equipment 90 
Goodwill 1,354 
Operating lease right-of-use-assets 143 
Intangible assets 1,195 
Other non-current assets 41 
Fair value of assets acquired 12,382 
Liabilities assumed:
Accounts payable 5,441 
Accrued expenses and other current liabilities 1,261 
Operating lease liability 143 
Other long-term liabilities 311 
Fair value of liabilities assumed 7,156 
Total purchase consideration $ 5,226 


The intangible assets acquired include customer relationships with a fair value of $674 and an estimated useful life of 8.5 years, as well as trade names with a fair value of $521 and an estimated useful life of 15 years. The Company recorded approximately $1,354 of goodwill, which is primarily attributed to the assembled workforce and expanded market opportunities obtained through the Consolid Acquisition. Goodwill recorded in connection with the acquisition was allocated to the travel marketplace segment and is not deductible for income tax purposes. Acquisition costs related to the Consolid Acquisition were not material.

The Company has included the financial results of Consolid in its condensed consolidated financial statements from the Consolid Closing Date, which have not been material to date.
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Skypass Acquisition

On August 12, 2023 (the “Skypass Closing Date”), the Company executed the Share Purchase Agreement to purchase all of the outstanding shares of Skypass Travel Inc., Skypass Travel de Mexico Sa de CV, Skypass Travel Private Limited and Skypass Holidays, LLC (collectively, “Skypass”) (such transaction referred to as the “Skypass Acquisition”). Skypass is an international travel operator specializing in national and international air travel and hotel bookings primarily for travelers and employees associated with international corporations. The Skypass Acquisition allows the Company to expand its reach in the cruise and holiday packages travel sectors.

The acquisition date fair value of consideration transferred for Skypass is as follows:
Amount
Cash consideration(i)
 $ 3,908 
Issuance of Class A Common Stock at Closing(ii)
 5,320 
Deferred stock consideration(iii)
 1,584 
Fair value of earn-out consideration(iv)
 434 
Total purchase price consideration $ 11,246 

In connection with the acquisition, the Company agreed to pay total consideration of (i) $3,000 on the Skypass Closing Date, with an adjustment for working capital, (ii) 900,000 shares of Company Class A Common Stock on the Skypass Closing Date, (iii) 100,000 shares of Company Class A Common Stock within 60 days after each of the first, second and third anniversaries of the Skypass Closing Date, and (iv) an earn-out component up to an aggregate of 1,800,000 shares of Company Class A Common Stock over a four year period contingent on Skypass meeting certain adjusted EBITDA growth targets. In the event the EBITDA target is exceeded, the Company is required to pay additional shares of 2.5% on excess of the EBITDA target. The number of shares payable will be calculated based on the market value of the Company’s Class A Common Stock at settlement date.

The Company estimated the preliminary fair value of acquired assets and liabilities as of the effective time of the Skypass Acquisition based on information currently available and continues to adjust those estimates upon refinement of market participant assumptions for integrating businesses. The Company is continuing to obtain information to determine the acquired assets and liabilities, including tax assets, liabilities and other attributes. As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period, but no later than one year from the date of the Skypass Closing Date. The Company will reflect measurement period adjustments, if any, in the period in which the adjustments are recognized, to the assets acquired and liabilities assumed, with a corresponding offset to goodwill. Final determination of the fair values may result in further adjustments to the values presented in the following table.

Assets acquired: Estimated Fair Value
Cash $ 1,746 
Accounts receivable 3,491 
Prepaid expenses and other current assets 25 
Goodwill 4,054 
Operating lease right-of-use-assets 1,006 
Intangible assets 4,135 
Fair value of assets acquired 14,457 
Liabilities assumed:
Accounts payable 668 
Accrued expenses and other current liabilities 684 
Operating lease liabilities 714 
Deferred income tax 1,145 
Fair value of liabilities assumed 3,211 
Total purchase consideration $ 11,246 


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The intangible assets acquired include customer relationships with a fair value of $3,370 and an estimated useful life of 8.4 years, as well as trade names with a fair value of $765 and an estimated useful life of 15 years. The Company recorded approximately $4,054 of goodwill, which is primarily attributed to the assembled workforce and expanded market opportunities obtained through the Skypass Acquisition. Goodwill recorded in connection with the acquisition was allocated to the travel marketplace segment and is not deductible for income tax purposes. Acquisition costs related to the Skypass Acquisition were not material.

The Company has included the financial results of Skypass in its condensed consolidated financial statements from the Skypass Closing Date, which have not been material to date. Pro forma results of operations have not been presented because the effect of the acquisition was not material to the condensed consolidated statements of operations.

LBF US Divestiture

In July 2023, the Company entered into a letter of intent with a former employee to sell LBF Travel Inc, LBF Travel Holdings LLC, Avia Travel and Tours Inc, and Star Advantage Limited (collectively, "LBF US") for net proceeds of 200,000 shares of the Company’s Class A Common Stock, which was valued at $1.7 million as of the disposal date. The Company allocated $0.5 million of the value of the shares to post-sales support provided to LBF US subsequent to the sale and recognized the remaining $1.2 million as purchase consideration. The divestiture of LBF US closed in September 2023. LBF US was initially acquired by the Company on December 20, 2019 ("2019 Acquisition") and operated within the travel marketplace segment. The buyer was a previous owner of LBF Travel Inc, who then became a Mondee employee along with the 2019 Acquisition until Mondee’s divestiture of LBF US.

In connection with the sale, the Company recognized a gain of $532, which was recorded in other expense, net. The gain on the transaction is comprised of a non-cash gain of $697, offset by the derecognition of $165 of cash. Additionally, the Company provided certain short term transition services to support the divested business through the third quarter of 2023. The Company incurred $9,859 of transition service costs for the three months ended September 30, 2023, which was recorded in other expense, net. As of September 30, 2023, the Company has paid $7,386 towards the LBF US transition services, and have a remaining amount of $2,473 unpaid. The results of the divested business through date of sale and the transition services provided to LBF US post the sale were reflected within the travel marketplace segment.

Unaudited Pro Forma Operating Results

The following unaudited pro forma combined financial information presented the results of operations as if (i) the acquisitions of Orinter, Interep and Consolid and (ii) the divestiture of LBF US were consummated on January 1, 2022 (the beginning of the comparable prior reporting period), including certain pro forma adjustments that were directly attributable to the Orinter, Interep and Consolid Acquisitions, including additional amortization adjustments for the fair value of the assets acquired. These unaudited pro forma results do not reflect any synergies from operating efficiencies post their acquisition dates. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations. The unaudited pro forma financial information did not include the effect of Skypass Acquisition due to its insignificant impact to the Company's consolidated operation results.

Three Months Ended
September 30,		 Nine Months Ended
September 30,
2023 2022 2023 2022
Revenues, net $ 53,840  $ 51,075  $ 172,624  $ 145,992 
Net loss (19,699) (58,610) (38,382) (64,295)
7.    GOODWILL AND INTANGIBLE ASSETS, NET
The following table presents the changes in goodwill by reportable segments:
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Travel Marketplace SaaS Platform Total
Balance as of December 31, 2022 $ 58,999  $ 7,421  $ 66,420 
Additions, including measurement period adjustments (Note 6 – Business Combinations and Divestitures) 12,362  —  12,362 
Divestiture of LBF US (Note 6 – Business Combinations and Divestitures)
 (1,679) —  $ (1,679)
Foreign currency translation impact 64  —  64 
Balance as of September 30, 2023 $ 69,746  $ 7,421  $ 77,167 
Indefinite-lived Intangible Assets. Our indefinite-lived intangible assets relate to trade names acquired in various acquisitions in past periods. Intangible assets, net includes indefinite-life intangible assets of $10,653 as of September 30, 2023 and $12,028 as of December 31, 2022, respectively.
Definite-life intangible assets, net consisted of the following as of September 30, 2023:
Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Customer relationships $ 91,481  $ (34,383) $ 57,098 
Trade name 20,803  (6,076) 14,727 
Supplier relationships 5,767  (1,443) 4,324 
Developed technology 7,220  (2,867) 4,353 
Balances as of September 30, 2023 $ 125,271  $ (44,769) $ 80,502 
Definite-life intangible assets, net consisted of the following as of December 31, 2022:
Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Customer relationships $ 60,778  $ (29,288) $ 31,490 
Trade name 9,580  (5,295) 4,285 
Supplier relationships 5,767  (1,153) 4,614 
Developed technology 7,220  (2,267) 4,953 
Balances as of December 31, 2022 $ 83,345  $ (38,003) $ 45,342 
Amortization expense for intangible assets was $2,458 and $1,584 for the three months ended September 30, 2023 and 2022, respectively, and $6,747 and $4,753 for the nine months ended September 30, 2023 and 2022, respectively.
The estimated future amortization expense related to intangible assets with definite lives is as follows:
Fiscal years ending December 31,
2023 (remaining three months) $ 2,508 
2024 10,034 
2025 9,860 
2026 9,510 
2027 9,510 
Thereafter 39,080 
$ 80,502 
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8.    DEBT

The following table summarizes the Company’s outstanding borrowing arrangements, excluding governmental loans:
As of September 30, As of December 31,
2023 2022
TCW Term Loan $ 102,500  $ 106,250 
Wingspire Term Loan 14,632  — 
TCW Term Loan payment in-kind interest 50,543  46,518 
Wingspire Term Loan payment in-kind interest 379  — 
Others —  14 
Total outstanding principal balance 168,054  152,782 
Less: TCW Term Loan unamortized debt issuance costs and discounts (12,316) (18,386)
Less: Wingspire Term Loan unamortized debt issuance costs and discounts (283) — 
Total debt 155,455  134,396 
Less: Current portion of long-term debt (10,313) (7,514)
Long-term debt, excluding current portion $ 145,142  $ 126,882 

TCW Credit Agreement

On December 23, 2019, the Company, entered into a financing agreement (the “TCW Agreement”) with TCW (the “Lenders”) consisting of a $150,000 multi-draw term loan with a maturity date of December 23, 2024 (the “TCW Term Loan”). Additionally, on the same day, the Company entered into a revolving credit facility (“TCW LOC”) with an aggregate principal amount not exceeding $15,000. Undrawn balances available under the revolving credit facility are subject to commitment fees of 1%. These facilities are guaranteed and are secured by substantially all of the assets of the Company.

On January 11, 2023, the Company executed a Ninth Amendment to the financing agreement with TCW (the “Ninth Agreement”), wherein Wingspire Capital LLC (“Wingspire”) became a party to the TCW Agreement. The amendment resulted in the redesignation of $15,000 under the TCW Term Loan from other lenders to Wingspire. Concurrently, Wingspire funded an additional $15,000 of term loan commitment on top of the already outstanding TCW Term Loan (the “Wingspire Term Loan”), with a total of $30,000 contributed by Wingspire as part of this amendment. Additionally, the Ninth Amendment split the TCW Term Loan into two loans. The first loan will be represented by Wingspire with an outstanding principal balance of $30,000 and the second loan will be represented by TCW with an outstanding principal balance of $137,753. Further, pursuant to the Ninth Amendment, Wingspire consented to take over the TCW LOC for a principal amount not to exceed $15,000, which resulted in a total of contributed by Wingspire in the arrangement.

Until January 11, 2024, the Company has the option to increase the Wingspire Term Loan by $20,000 under two conditions: (i) the Company must have a trailing 12-month EBITDA of at least $25,000; and (ii) the Company must draw in increments of at least $5,000.

On January 31, 2023, the Company executed a tenth amendment to the TCW Agreement (the “Tenth Amendment”). The Tenth Amendment (1) set forth the terms on which we could acquire Orinter, pursuant to that certain Orinter Purchase Agreement, among us, Mondee Brazil, LLC, a Delaware limited liability company (“Mondee Brazil”), OTT Holdings Ltda. (“OTT Holdings”), Orinter, and the other parties named therein; (2) set forth the terms on which we could pay the earn-out payment contemplated to be paid to OTT Holdings and certain key executives of OTT Holdings pursuant to the Orinter Purchase Agreement; (3) required that Mondee Brazil join as a party to the TCW Agreement and the Security Agreement (as defined in the TCW Agreement); (4) required that Mondee, Inc. pledge 100% of the equity interests of Mondee Brazil; and (5) required that Mondee Brazil and Mondee Inc. pledge 100% of the equity interests of Orinter.

The effective interest on the TCW Term Loan for the nine months ended September 30, 2023, and 2022 is 24% and 22%, respectively. The effective interest on the Wingspire Term Loan for the nine months ended September 30, 2023 is 17%.

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As of September 30, 2023, and December 31, 2022, the total estimated fair value of the Company’s TCW Term Loan was $147,426 and $143,651, respectively. As of September 30, 2023, the total fair value of the Company’s Wingspire Term Loan was $14,460. The fair value of debt is calculated using a market-based discount rate.
9.    EQUITY
Class A Common Stock
As of September 30, 2023, the Company had authorized a total of 500,000,000 shares for issuance of common stock, of which 85,498,657 shares are issued and outstanding. Not reflected in the shares issued and outstanding is approximately 118,769 shares related to restricted stock units (“RSUs”) that vested during 2023, but have not been settled and issued.
As of December 31, 2022, the Company had 82,266,160 shares of the Company’s common stock issued and outstanding. Not reflected in the shares issued and outstanding is approximately 331,600 shares related to RSUs that vested in 2022, but had not been settled and issued.

Warrants
As of September 30, 2023 and December 31, 2022, the Company had the following common stock warrants outstanding:
Warrants Exercise Price Issuance Date Expiration
Private Placement Warrants 232,500  $ 11.50  7/18/2022 7/18/2027
Common Stock Warrants 1,275,000  11.50  9/29/2022 9/29/2027
Total 1,507,500 
Share Repurchase Program
On September 21, 2023, the Company’s Board of Directors (the “Board”) authorized a share repurchase program to purchase up to $30,000 of the Company’s outstanding shares of Class A Common Stock (the “Share Repurchase Program”). The amount and timing of repurchases is determined at the Company’s discretion, depending on market and business conditions, and prevailing stock prices among other factors. Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including insider trading laws. The program is not subject to any self-imposed Company trading restrictions or blackout periods and has no expiration date.
During the nine months ended September 30, 2023, the Company repurchased 215,350 shares of its Class A Common Stock for a total of $766. The repurchase was at a weighted-average price of $3.54 per share when excluding commissions, and are recorded to treasury stock. The repurchase liability of $766 is included in accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheets, pending settlement of trade in October 2023. As of September 30, 2023, $29,234 remained available under the Share Repurchase Program. On October 17, 2023, the Company’s Board authorized a $10,000 expansion of the Company’s on-going Share Repurchase Program, bringing the total size of the common stock repurchase program authorized by the Board up to $40,000.
10.    STOCK-BASED COMPENSATION
2022 Equity Incentive Plan
The Board adopted, and the stockholders of the Company approved the 2022 Equity Incentive Plan (the “2022 Plan”), effective as of the Closing Date. The maximum number of shares of common stock that may be issued pursuant to the 2022 Plan is 9,615,971.
Restricted Stock Units
RSU activity during the nine months ended September 30, 2023 was as follows:
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Number of Restricted Stock
Incentive Units
Outstanding		 Weighted-Average Grant Date Fair Value
Unvested - December 31, 2022 105,000 $ 9.40 
Granted 2,978,378 7.70 
Vested (383,818) 8.90 
Forfeited or canceled — — 
Unvested – September 30, 2023 2,699,560 $ 7.30 

The Company recognized $2,170 and $3,596 in personnel expense for RSUs in the three and nine months ended September 30, 2023. The Company recognized $59 and $227, respectively, in general and administrative expense for RSUs in the three and nine months ended September 30, 2023. The Company recognized $3,386 in personnel expense for RSUs during the three and nine months ended September 30, 2022. The Company recognized $139 in general and administrative expense for RSUs during the three and nine months ended September 30, 2022.
Secondary Sale
In June 2023, the Company facilitated the sale of 5,250,000 shares of the Company’s Class A Common Stock at a price of $10.00 per share to investors for an aggregate purchase price of $52,500. Of the 5,250,000 shares that were sold in the transaction, 2,148,783 shares of common stock were sold by current and former employees. The Company did not receive any proceeds from the secondary sale, however, as the shares were sold above fair value, the Company recognized the excess purchase price paid above fair value to current and former employees as stock-based compensation expense. The Company recognized $1,848 in personnel expense on the condensed consolidated statement of operations for the nine months ended September 30, 2023.
Of the 5,250,000 shares sold, 2,122,529 shares, or an aggregate purchase price of $1,825, were sold by related parties of the Company.
Earn-out Shares

Earn-out shares were issued following the closing of the reverse recapitalization on July 18, 2022. Holders of the earn-out shares are entitled to the right to receive up to an aggregate amount of 9,000,000 shares of common stock. The earn-out shares would vest in equal thirds if the trading price of the Company’s common stock was greater than or equal to $12.50, $15.00, and $18.00 for any 20 trading days in any 30 consecutive trading day period, at any time during the period beginning on the first anniversary of the Closing Date and ending on the fourth anniversary of the Closing Date. These earn-out shares were determined to be equity-classified

As of September 30, 2023, the earn-out shares were allocated as follows:

Shareholder Type Grant Date Number of Shares
Employee 7/18/2022 6,000,000 
Investor 7/18/2022 500,000 
Employee 9/7/2022 900,000 
Non-employee 9/12/2022 200,000 
Employee 4/20/2023 180,000 
Unallocated shares — 1,220,000 
Total 9,000,000 
Except for the 380,000 earn-out shares allocated on September 12, 2022 and April 20, 2023, the remaining earn-out shares have been legally issued to the respective shareholders and have restrictions that prohibit the shareholders from transferring them until the vesting market conditions are met. These earn-out shares in escrow are not considered outstanding for accounting purposes until resolution of the earn-out contingency.
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The estimated grant date fair value of shares allocated in 2023 was determined using the Monte Carlo simulation method. Assumptions used in the valuation were as follows:
April 20, 2023
Fair value of Class A Common Stock $10.70
Selected volatility 65.0%
Risk-free interest rate 3.9%
Contractual term (years) 3.2
The Company recognized $450 and $3,787 of compensation expense for employees to personnel expenses within the condensed consolidated statement of operations for the three and nine months ended September 30, 2023, respectively. The non-employee is an advisor to the Company and its stock-based compensation expense of $278 and $851 for the three and nine months ended September 30, 2023, respectively was recorded to general and administrative expenses within the condensed consolidated statement of operations.
The Company recognized $50,734 of compensation expense for employees to personnel expenses within the condensed consolidated statement of operations for the three and nine months ended September 30, 2022. The Company recognized $33 of non-employee stock-based compensation expense to general and administrative expenses within the condensed consolidated statement of operations for the three and nine months ended September 30, 2022.
On the Closing Date, 6,000,000 of the earn-out Class A Common Stock were issued to the chief executive officer of Mondee which was determined to be equity settled in accordance with ASC 480. The chief executive officer was awarded earn out shares primarily to lead and direct activities contributing to successful close of the Business Combination in his capacity of an executive responsible for oversight with no future services required. The Company determined his awards to be compensatory in nature owing to his service agreement and oversight role in the Business Combination. The Company recorded compensation expenses upon completion of the Business Combination totaling $50,060 within personnel expenses on the condensed consolidated statement of operations for the three and nine months ended September 30, 2022.
Subsequent to the Closing Date, the Company allocated an additional 1,100,000 shares. These earn-out shares require future services and therefore were concluded to be compensatory in nature in accordance with ASC 718. The stock based compensation expense for employee earn-out shares were recognized over the derived service period. For non-employee earn-out shares, the Company recorded stock based compensation expense on a monthly basis over the longest period between the implicit or derived service period. The Company recorded an additional $674 of compensation expense for employees to personnel expenses within the condensed consolidated statement of operations for the three and nine months ended September 30, 2022.
Employee Stock Purchase Plan

The Board adopted, and the stockholders of the Company approved, the Employee Stock Purchase Plan (“ESPP”), which became effective as of the Closing Date. The ESPP initially reserves and authorizes the issuances of up to a total of 1,923,194 shares of common stock to participating employees. The ESPP permits participants to purchase common stock of up to the lesser of 8% of their eligible compensation or $25,000 per offering period. The initial offering period began May 1, 2023 and will end on October 31, 2023. On each purchase date, participating employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of our common stock on the offering date or (2) the fair market value of our common stock on the purchase date. Stock-based compensation for ESPP for the three months ended September 30, 2023 was not material. As of September 30, 2023, the remaining unrecognized stock-based compensation for ESPP is not material.
11.    COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, the Company may be a party to litigation and subject to claims incidental to its business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these matters will not have a material effect on its business. Regardless of the outcome, litigation can have an adverse impact on the Company because of judgment, defense and settlement costs, diversion of management resources, and other factors.
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As of September 30, 2023, the Company currently has two outstanding legal claims that may have a material impact.
Litigation Relating to LBF Acquisition. Thomas DeRosa, a shareholder of LBF Travel Management Corp. (f/k/a LBF Travel, Inc.), the entity that sold LBF Travel Holdings, LLC to Mondee, sued LBF Travel Management Corp. and its CEO to recover a portion of the proceeds of the sale of LBF Travel Holdings, LLC to Mondee. Mondee was later added as a party to this litigation via a third-party complaint that alleges, among other things, that Mondee aided and abetted the directors and officers of LBF Travel Management Corp. in breaches of their fiduciary duties in connection with the acquisition. The case remains pending in Federal Court. There is a separate state court action that has been stayed. While the Company believes that they will be successful based on their position, it is nevertheless reasonably possible that the Company could be required to pay any assessed amounts in order to contest or litigate the assessment and an estimate for a reasonably possible range of loss of any such payments cannot be made.
On October 13, 2021, Mondee received a summons from Global Collect Services B.V. to appear in the District Court of Amsterdam with respect to a claim of $548 for past dues and outstanding invoices, fees, plus interest and costs of collection. The Company is in current discussions to settle this lawsuit and at this time the Company cannot reasonably estimate the possible loss.
Letters of Credit
The Company had $7,650 and $7,432 secured letters of credit outstanding as of September 30, 2023 and December 31, 2022, respectively. These primarily relate to securing the payment for the potential purchase of airline tickets in the ordinary course of business and are collateralized by term deposits, for which the contractual obligation is less than a year.
12.    RELATED PARTY TRANSACTIONS
A summary of balances due to and from related parties, and transactions with related parties are as follows:
Balances at Period End September 30,
2023		 December 31,
2022
Amount payable to related party (1)
 $ 42  $ 13 
Amount receivable from related party (2)
 43  38 
Loan receivable from related party (3)
 92  — 
Note payable to related party (4)
 200  197 
Rent payable to related parties and an affiliate associated with these related parties and an employee(5)
 222  — 
Amounts receivable from related parties (6)
 156  — 
Three Months Ended September 30, Nine Months Ended
September 30,
Transactions with Related Parties 2023 2022 2023 2022
Offshore IT and software development services, sales support and other services (7)
 $ —  $ —  $ —  $ 660 
Interest income (8)
 —  26  —  282 
Payment made on behalf of Mondee Holdings LLC (9)
 —  5,241  —  5,241 
Service fees (2)
 (1) 441  (1) 2,382 
Loan receivable from related party (3)
 92  —  92  — 
Lease expense (5)
 112  58  222  116 
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_________________________
(1)
As of December 31, 2022 Mondee Tech Pvt Ltd had a payable to Metaminds Software, which was settled in the three months ending March 31, 2023. As of September 30, 2023, Interep owes a travel credit of $42 to Asi Ginio, a member of the Board of Directors. In connection with the Interep Acquisition, the Company has agreed to provide Mr. Ginio the travel credits in exchange for the general advisory services Mr. Ginio provided to the former owners of Interep.
(2)
Pursuant to a Universal Air Travel Plan (“UATP”) Servicing Agreement dated May 11, 2021, the Company sold certain airline tickets using prepaid UATP credit cards arranged by Mondee Group, LLC (“Mondee Group”), in exchange for a service fee equal to 10.0% of the revenue derived from the sale of such airline tickets. Mondee Group is owned by the Company’s CEO, Prasad Gundumogula, and is not a wholly-owned subsidiary of the Company. Mondee Group led the fundraising and arranged the funds that were used to purchase prepaid UATP credit cards at a discount from their face value from a certain airline.
(3)
In July 2023, the Company provided financing of $100 to its Chief Financial Officer ("CFO") as part of his relocation package. The promissory note bears an annual interest rate of 3.3% per annum and matures at the earlier of April 2026 or when the CFO's employment with the Company terminates. All outstanding principal, inclusive of any accrued and unpaid interest, is slated for settlement upon maturity of the note. The Company has the option to forgive the obligation in one-third increments which is contingent upon the absence of any breach of the CFO's obligations with the Company and his continued service.
(4)
The Company has a note payable to the CEO amounting to $200 and $197 as of September 30, 2023 and December 31, 2022, respectively. The loan is collateralized and carries an interest rate of 2.0% per annum. Principal and interest are due on demand.
(5)
The Company currently leases office space from Metaminds Software. The lease commencement date for this was April 1, 2022. The lease had an original lease term of 11 months, and has been renewed, and the monthly minimum base rent is immaterial. From August 2023, the Company started leasing office spaces from certain employees and entities associated with these employees. These leases were recognized on the Skypass Closing Date and have 3 year terms. The monthly minimum base rent is immaterial.
(6) Corresponds to receivables from former owners of Interep and Skypass for payments made by the Company on their behalf.
(7)
Metaminds Technologies Pvt. Ltd. and Metaminds Software Solutions Ltd, corporations limited by shares organized under the laws of India, and Metaminds Global Solutions Inc. (“Metaminds”), provide certain consulting services to Mondee and its subsidiaries in the areas of software development, fulfillment and other support. The CEO co-owns Metaminds with his wife. The CEO is a material shareholder in Mondee, and both the CEO and his wife serve on the Board of Directors of Mondee, Inc. and certain of its subsidiaries. Prior to acquisition of certain assets and liabilities of Metaminds Technologies Pvt Ltd (“Metaminds Technologies”), Mondee hired all employees of Metaminds Technologies and Metaminds Software Solutions Ltd (“Metaminds Software”) in April 2022. There were no services rendered by Metaminds Technologies and Metaminds Software for offshore IT, offshore software development, or sales support for the three and nine months ended September 30, 2023.
(8)
The Company had a secured promissory note receivable from Mondee Group, bearing an interest rate of 2.3% compounded annually, with a 10-year term, and was secured by 14,708 Class A units in Mondee Holdings, LLC. The note was settled upon the occurrence of the reverse recapitalization with ITHAX, partly by a right to receive the Company’s Class A Common Stock to the extent of $20,336 and partly by the asset acquisition of Metaminds Technologies (defined below). On March 10, 2023, the Company received 2,033,578 shares of Class A Common Stock, which were valued at $20,336. The shares are reflected as treasury stock on the condensed consolidated balance sheet as the shares have not been retired as of September 30, 2023.
(9) Corresponds to a payment made to Rocketrip put option holders by the Company on behalf Mondee Holdings LLC.

In addition to the above transactions, in connection with the Orinter Acquisition, the former owners of Orinter agreed that upon the release of the 903,202 escrow shares from escrow 12 months after the Orinter Closing Date the former owners will transfer 80,000 of those escrow shares to Asi Ginio, a current Board member of the Company, in connection with general advisory services Mr. Ginio provided to the former owners.

Prepaid expenses and other current assets on the Company's condensed consolidated balance sheets includes the current portion of loans receivable from related parties and other employees of $98 and $81 as of September 30, 2023 and December 31, 2022, respectively. Other non-current current assets on the Company's condensed consolidated balance sheets includes the non-current portion of loans receivable from related parties and other employees of $322 and $200 as of September 30, 2023 and December 31, 2022, respectively.
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13.    SEGMENT INFORMATION
We have the following reportable segments: travel marketplace and SaaS Platform. These reportable segments offer different products and services and are managed separately because the nature of products and services, and methods used to distribute the services are different. Our primary segment measure is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Assets, liabilities, one-time legal expenses, income tax expense and other expense, net are reviewed on an entity-wide basis by the Chief Operating Decision Maker (“CODM”), and hence are not allocated to these reportable segments. Segment revenue is reported and reviewed by the CODM on a monthly basis.
Such amounts are detailed in our segment reconciliation below.
Three Months Ended September 30, 2023
Travel Marketplace SaaS Platform Corporate Total
Revenue $ 54,101  $ 431  $ —  $ 54,532 
Adjusted EBITDA 5,805  (512) 208  5,501 
Depreciation and amortization (4,031) (134) —  (4,165)
Stock-based compensation (2,974) —  —  (2,974)
Payroll tax expense related to stock-based compensation (140) —  —  (140)
Restructuring (expense) income, net (239) —  —  (239)
Acquisition cost (545) —  —  (545)
Non-recurring legal expense —  —  (785) (785)
One time non-recurring expense1
 (22) —  —  (22)
Change in fair value of earn-out liability 593  —  —  593 
Operating loss $ (2,776)
Total other expense, net (16,942)
Loss before income taxes (19,718)
Provision for income taxes (381)
Net loss $ (20,099)
1 Includes non-recurring transaction filing fees and associated professional services
Three Months Ended September 30, 2022
Travel Marketplace SaaS Platform Total
Revenue $ 40,094  $ 419  $ 40,513 
Adjusted EBITDA 3,763  (195) 3,568 
Depreciation and amortization (2,826) (137) (2,963)
Restructuring (expense) income, net (2,130) —  (2,130)
Stock-based compensation (55,236) —  (55,236)
Operating loss $ (56,761)
Total other expense, net   (7,526)
Loss before income taxes   (64,287)
Provision for income taxes   (321)
Net loss   $ (64,608)
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Nine Months Ended
September 30, 2023
Travel Marketplace SaaS Platform Corporate Total
Revenue $ 160,302  $ 930  $ —  $ 161,232 
Adjusted EBITDA 14,351  (255) —  14,096 
Depreciation and amortization (10,948) (406) —  (11,354)
Stock-based compensation (10,339) —  —  (10,339)
Payroll tax expense related to stock-based compensation (226) —  —  (226)
Restructuring (expense) income, net (1,600) —  —  (1,600)
Acquisition cost (1,088) —  —  (1,088)
Non-recurring legal expense —  (2,024) (2,024)
One time non-recurring expense1
 (632) —  —  (632)
Change in fair value of earn-out liability (108) —  —  (108)
Operating loss $ (13,275)
Total other expense, net (31,259)
Loss before income taxes (44,534)
Provision for income taxes (3,088)
Net loss $ (47,622)
1 Includes non-recurring transaction filing fees and associated professional services
Nine Months Ended
September 30, 2022
Travel Marketplace SaaS Platform Total
Revenue $ 124,272  $ 964  $ 125,236 
Adjusted EBITDA 11,500  (1,203) 10,297 
Depreciation and amortization (8,138) (411) (8,549)
Restructuring (expense) income, net (2,130) —  (2,130)
Stock-based compensation (55,397) —  (55,397)
Operating loss $ (55,779)
Total other expense, net (17,322)
Loss before income taxes (73,101)
Provision for income taxes (611)
Net loss $ (73,712)
Geographic Information
Revenue by geographic area, based on the geographic location of the Company’s subsidiaries processing the bookings, which is not necessarily representative of the travel destination or customer location, is as follows:
Three Months Ended September 30, Nine Months Ended
September 30,
2023 2022 2023 2022
United States $ 27,729  $ 37,004  $ 98,306  $ 117,588 
Brazil 22,015  —  50,879  — 
Rest of the world 4,788  3,509  12,047  7,648 
$ 54,532  $ 40,513  $ 161,232  $ 125,236 
Long-lived assets (excluding capitalized software) and operating lease assets by geographic area is as follows:
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September 30, December 31,
2023 2022
United States $ 1,267  $ 1,016 
Rest of the world 1,573  642 
$ 2,840  $ 1,658 

14. NET LOSS PER SHARE
The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022:
Three Months Ended September 30, Nine Months Ended
September 30,
2023 2022 2023 2022
Numerator:
Net loss $ (20,099) $ (64,608) $ (47,622) $ (73,712)
Cumulative dividends allocated to preferred stockholders (2,859) (47) (8,023) (47)
Net loss attributable to common stockholders, basic and diluted $ (22,958) $ (64,655) $ (55,645) $ (73,759)
Denominator:
Weighted average shares outstanding, basic and diluted 77,925,635  72,462,512  77,162,363  64,730,224 
Basic and diluted net loss per share $ (0.29) $ (0.89) $ (0.72) $ (1.14)

The following table presents the potential common shares outstanding that were excluded from the computation of diluted net loss per share of common shares as of the periods presented because including them would be anti-dilutive:

September 30,
2023 2022
Warrants (public warrants, private warrants, common stock warrants) 1,507,500  13,568,543 
Outstanding earn-out shares (a)
 7,780,000  7,600,000 
Consolid earn-out shares 400,000  — 
Skypass earn-out shares 1,800,000  — 
Restricted stock units 2,699,560  105,000 
ESPP shares 17,550  — 
Potential common share excluded from diluted net loss per share 14,204,610  21,273,543 
______________________________
(a)
While 7,400,000 of the earn-out shares allocated are legally issued and outstanding, they are excluded from the weighted average shares outstanding calculation because they are contingently returnable based on the Company's stock price during the term of the earn-out shares.

15. RESTRUCTURING EXPENSE, NET
During the three and nine months ended September 30, 2023 and 2022, the Company took actions at some of the office locations to reduce the size of its workforce to optimize efficiency and reduce costs. The Company completed the vast majority of announcements that affected employees by March 2023, including office closures.
During the three and nine months ended September 30, 2023, the Company recorded a net expense of $239 and $1,600, respectively, in restructuring expense, net on the condensed consolidated statements of operations. These expenses are one-time and are primarily related to employee severance and other termination benefits.
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During the nine months ended September 30, 2023, the Company terminated an office lease in India and recognized a gain of $337.
During the three and nine months ended September 30, 2023, the Company made employee severance, other termination benefits, and other restructuring costs payments of $232 and $1,368, respectively. The restructuring activity was completed by the end of June 30, 2023 and the Company currently does not expect material costs associated with restructuring activities in future periods.
During the three and nine months ended September 30, 2022, the Company recorded expense of $2,130, within restructuring expense, net in the condensed consolidated statements of operations. These expenses are one-time cash-based and of employee severance, lease rental termination related, and other termination benefits. During the three and nine months ended September 30, 2022, the Company made employee severance, other termination benefits, and other restructuring costs payments of $1,216. Outstanding restructuring charges at the reporting period are recorded in accrued expenses and other current liabilities, on the Company's condensed consolidated balance sheets.
Activities related to our restructuring impacted our travel marketplace segment. The following is a roll forward of the outstanding restructuring charges by cost type for the nine months ended September 30, 2023:

Balance as of December 31, 2022 Additions Adjustments Cash Payments Balance as of September 30, 2023
Severance and termination-related costs $ —  $ 1,676  $ (14) $ (1,118) $ 544 
Other exit costs —  277  (2) (250) 25 
Total $ —  $ 1,953  $ (16) $ (1,368) $ 569 

16.    INCOME TAXES
We have assessed our ability to realize our deferred tax assets and have recorded a valuation allowance against such assets to the extent that, based on the weight of all available evidence, it is more likely than not that all or a portion of the deferred tax assets will not be realized. In assessing the likelihood of future realization of our deferred tax assets, we placed significant weight on our history of generating tax losses. As a result, we have a full valuation allowance against all of our net deferred tax assets in the United States and certain other jurisdictions. We expect to maintain a valuation allowance in such jurisdictions for the foreseeable future.
We determine our provision for income taxes for interim periods using an estimate of our annual effective tax rate. We record any changes affecting the estimated annual effective tax rate in the interim period in which the change occurs, including discrete items. The tax expense arising on account of tax amortization of an indefinite lived intangible asset and the state minimum taxes is calculated based on the discrete approach.
The Company recorded a $1,476 liability for an income tax contingency related to the acquisition of Orinter. At the date of acquisition, we recognized an indemnification asset at the same time and on the same basis as the recognized liability, to the extent that collection is reasonably assured, in accordance with ASC 805.
The effective income tax rate was (2)% and (7)% on the pre-tax loss for the three and nine months ended September 30, 2023, respectively, and (1)% and (1)% for the three and nine months ended September 30, 2022, respectively.
The effective tax rate differs from the U.S. statutory tax rate primarily due to the valuation allowances on the Company’s deferred tax assets as it is more likely than not that some or all of the Company’s deferred tax assets will not be realized.
17.    EMPLOYEE BENEFIT PLAN
The Company sponsors a 401(k) defined contribution plan covering its employees in the United States of America. Participants may contribute a portion of their compensation to the 401(k) plan, subject to limitations under the Internal Revenue Code. The Company does not match contributions to its 401(k) plan.
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The Company’s Gratuity Plan in India (the “India Plan”) provides for a lump sum payment to vested employees on retirement or upon termination of employment in an amount based on the respective employee’s salary and years of employment with the Company. Liabilities with regard to the India Plan are determined by actuarial valuation using the projected unit credit method. Current service costs for these plans are accrued in the year to which they relate. Actuarial gains or losses or prior service costs, if any, resulting from amendments to the plans are recognized and reported as personnel expenses in the condensed consolidated statement of operations.
Components of net periodic benefit costs are as follows:
Three Months Ended September 30, Nine Months Ended
September 30,
2023 2022 2023 2022
Current service cost $ 25  $ 20  $ 87  $ 65 
Past service cost 10  —  10  — 
Interest cost 6  8  24  23 
Net actuarial (gain)/loss recognized in the period (42) 33  (204) (4)
Expenses recognized in the condensed consolidated statement of operations $ (1) $ 61  $ (83) $ 84 
The components of actuarial gain/(loss) on retirement benefits are as follows:
Three Months Ended September 30, Nine Months Ended
September 30,
2023 2022 2023 2022
Actuarial gain/(loss) for the period obligation $ 42  $ (33) $ 204  $ 4 
Actuarial gain/(loss) for the period plan assets —  —  —  — 
Actuarial gain for the period $ 42  $ (33) $ 204  $ 4 

18.    SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed consolidated financial statements were issued. Based upon this review, other than as described below, the Company did not identify any additional subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.
On October 13, 2023, the Company executed an eleventh amendment to the TCW Agreement (the “Eleventh Amendment”). The Eleventh Amendment (1) provided consent to the Company’s acquisitions of Interep, Consolid and Skypass; (2) required that the Company pledge 100% of the equity interests of Interep, Consolid and Skypass, and certain other subsidiaries; (3) specifies that certain leverage ratios, minimum unadjusted EBITDA and fixed charge coverage ratio covenants shall not be measured through the term of the TCW Agreement; (4) sets forth certain qualified cash requirements; (5) adds as an event of default the failure of the Company to achieve certain refinancing milestones; (6) provides that the revolving credit commitment shall be uncommitted and discretionary in nature; and (7) provides for the payment of certain fees.
On October 17, 2023, the Company completed a private placement of the Company’s Series A-3 Preferred Stock and issued 10,000 shares for gross proceeds of $10,000. In conjunction with the closing of the preferred stock financing, the Company issued warrants to purchase 1,275,000 shares of the Company’s Class A Common Stock to the participating investors.
On November 2, 2023, the Company entered into a waiver (the "Waiver") with TCW Asset Management Company, Wingspire Capital LLC regarding the TCW Agreement which waived certain mandatory prepayment obligations of the Company.
On November 13, 2023 (the “Purplegrids Closing Date”), the Company executed a stock purchase agreement to purchase all of the outstanding shares of Purplegrids, Inc. Purplegrids combines open AI with business intelligence and RPA to automate customer experiences.
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In connection with the acquisition, the Company agreed to pay total consideration of approximately 1,900,000 shares adjusted for net working capital to target net working capital, closing cash to target cash, and indebtedness, including approximately i) 700,000 shares at closing with no lock-up; ii) 200,000 shares with a six month lock-up after closing and iii) 1,000,000 shares with a one year lock-up after closing. Sellers may receive up to 1,000,000 earn out shares that can be earned over a two-year period upon the achievement of certain revenue targets. Additionally, sellers may receive up to 1,542,857 shares depending on the price of the Company's stock on the first anniversary of the Purplegrids Closing date.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to “we,” “us” or our “Company” refer to Mondee Holdings, Inc., a Delaware corporation, and its wholly-owned subsidiaries. References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Investors are cautioned that statements that are not strictly historical statements of fact constitute forward-looking statements, including, without limitation, statements under this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and are identified by words like “believe,” “expect,” “may,” “will,” “should,” “seek,” “anticipate,” or “could” and similar expressions. Forward-looking statements in this Quarterly Report on Form 10-Q may include, for example, statements about:
•changes in domestic and foreign business, market, financial, political, regulatory and legal conditions;
•our ability to execute our business strategy, including monetization of our products;
•our ability to implement our strategic initiatives and continue to innovate our existing services;
•our projected financial information, growth rate and market opportunity;
•the ability to maintain the listing of our Class A common stock, par value $0.0001 per share (our “Class A Common Stock”) on the Nasdaq Global Market, and the potential liquidity and trading of our securities;
•the ability to recognize the anticipated benefits of any mergers and acquisition activity, which may be affected by, among other things, competition, our ability of to grow, manage growth profitably and retain our key employees;
•changes in applicable laws or regulations;
•rising inflationary pressures and fluctuations in interest rates;
•our ability to raise financing in the future and ability to continue as a going concern;
•our success in retaining or recruiting, or changes required in, our officers, key employees or directors;
•our ability to maintain relationships with customers and suppliers;
•our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business;
•our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
•our financial performance;
•our ability to expand or maintain our existing customer base;
•our ability to remediate any material weaknesses and maintain an effective system of internal control over financial reporting;
•the outcome of any legal proceedings that may be instituted against us;
•unfavorable conditions in our industry, the global economy or global supply chain, including financial and credit market fluctuations, international trade relations, pandemics, political turmoil, natural catastrophes, warfare (such as the conflict involving Russia and Ukraine), and terrorist attacks; and
•other factors detailed under the section entitled “Risk Factors” discussed in our Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023.

Forward-looking statements are not assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those expressed or implied by forward-looking statements include those discussed elsewhere in this Quarterly Report and in our future Quarterly Reports on Form 10-Q or other reports we file with the Securities and Exchange Commission (“SEC”).

Any forward-looking statement made by us in this Quarterly Report is based only on information currently available to us and speaks only as of the date of this report. We undertake no obligation to publicly revise or update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
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References to a fiscal quarter refer to our fiscal quarter ended September 30, 2023.

Overview
We are a leading travel technology company and marketplace with a portfolio of globally recognized technology solutions in the leisure, retail and corporate travel sectors.

We provide state-of-the art technologies, operating systems and technology-enabled services that seamlessly facilitate travel market transactions to better serve travelers through travel affiliates and numerous other emerging channels. These technology solutions with access to global travel inventory and extensive negotiated travel content, combined with our distribution network, create a modern travel marketplace. Our modern marketplace provides the increasingly discerning traveler with enhanced options on efficient consumer-friendly distribution platforms, while supporting our travel supplier partners in utilizing highly-perishable travel inventory.

In addition to the rapid development and enhancement of our modern travel marketplace, we are increasingly focused on expanding our penetration of the “gig economy” segment of the travel market. We believe our technology solutions are well-suited to serve gig workers seeking more flexible, diverse content and travel services.

From its founding, our Company began building a leading international wholesale travel business through acquisitions and deployment of our technology platform. We have continued to enhance our technology, expand our market reach and increase our travel market penetration with a combination of organic and inorganic initiatives and transactions. Most recently, we have acquired companies with subscription products, expanded hotel and retail consumer services and added more global content.

We believe the successful execution of our combined organic and inorganic acquisition business strategy has enhanced our modern travel marketplace and positioned us well for emerging travel business opportunities.

We generate revenue primarily from travel-related activity, which is presented as travel marketplace segment revenue on the Company's financial statements disaggregated revenue disclosure. The travel marketplace segment includes revenue earned from:

•Commissions revenue, including mark-up fees and commissions on airline ticket sales and to a lesser extent, for hotel accommodations and booking of car rentals, and other travel services;

•Incentive revenues earned from GDS service providers and airline companies for airline reservations, as well as from our fintech payment programs based on the aggregate gross booking amounts processed by us; and

•Other travel products and services.

The remainder of our revenues are generated from subscription contracts for access to our travel management software-as-a service ("SaaS") platforms. Our SaaS platform revenues are recognized over the term of the duration of the contract.
Recent Developments

Share Pledge Agreement in Connection with the Orinter Acquisition

On January 31, 2023 (the “Orinter Closing Date”), our Company and its wholly-owned subsidiary, Mondee Brazil (“Mondee Brazil”), entered into the Share Purchase and Sale Agreement, with OTT Holding (“OTT”) and Orinter Viagens E Turismo S.A., a corporation organized under the laws of Brazil (“Orinter”), along with other parties thereto (the “Orinter Purchase Agreement”). Pursuant to the Orinter Purchase Agreement, OTT sold all of the issued and outstanding shares of the Orinter to our Company and Mondee Brazil, in exchange for total consideration of $40.7 million (such transactions contemplated by the Orinter Purchase Agreement, the “Orinter Acquisition”).

On April 14, 2023, and in connection with the Orinter Acquisition, Mondee Brazil and Mondee, Inc., a Delaware corporation (“Mondee, Inc.”, together with Mondee Brazil, the “Pledgors”), both subsidiaries of our Company, TCW Asset Management Company, a Delaware limited liability company (the “Administrative Agent”), the lenders from time to time (the “Lenders”) party to the TCW Agreement (as defined herein) and Orinter, executed that certain share pledge agreement, effective as of March 28, 2023 (the “Share Pledge Agreement”) pursuant to that certain Amendment No.
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10, dated as of January 31, 2023 (the “Tenth Amendment”), to that certain financing agreement, dated as of December 23, 2019, by and among our Company, the Administrative Agent and the other parties thereto (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the “TCW Agreement”).

The Share Pledge Agreement sets forth the terms on which: (i) Mondee, Inc., the sole equity owner of Mondee Brazil and minority equity owner of Orinter, pledges 100% of the equity interests of Mondee Brazil, which is the majority equity owner of Orinter, pursuant to the Tenth Amendment; and (ii) the Pledgors pledge 100% of the equity interests of Orinter, pursuant to the Tenth Amendment. The Share Pledge Agreement shall terminate on the termination date of the TCW Agreement.

Pro Rata Distribution and Settlement of Mondee Group Note

In connection with the business combination between ITHAX Acquisition Corp., a Cayman Islands exempted company, and Mondee Holdings II, Inc., a Delaware company, (the “Business Combination”), Mondee Holdings, LLC, a Delaware limited liability company, (the “Mondee Stockholder”) received 60,800,000 shares of our Class A Common Stock. Mondee Holdings, LLC shall distribute the 60,800,000 shares of our Class A Common Stock on a pro rata basis to the members of Mondee Holdings LLC (the “Pro Rata Distribution”).

Upon the completion of the Pro Rata Distribution, Mondee Holdings LLC ceased to hold any shares of our Class A Common Stock, with the exception of the 2,033,578 shares that Mondee Group transferred to Mondee Holdings LLC in order to settle the $19.3 million note entered between Mondee Group and Mondee, Inc on March 25, 2016 (“Mondee Group Note”).

2023 Restructuring

During the nine months ended September 30, 2023, our Company announced reductions to employees in India, Thailand and the United States. The purpose of this action was to pursue greater cost efficiencies and to realign our business and strategic priorities. As part of this action, we generally provided involuntary termination benefits in the amount of one month of compensation as a severance payment. During the three and nine months ended September 30, 2023, the Company recorded a net expense of $239 and $1,600, respectively, in restructuring expense, net on the condensed consolidated statements of operations. During the three and nine months ended September 30, 2022, the Company recorded expense of $2,130, within restructuring expense, net in the condensed consolidated statements of operations.

Skypass Acquisition

On August 12, 2023 (the “Skypass Closing Date”), we executed the Share Purchase Agreement to purchase all of the outstanding shares of Skypass Travel Inc., Skypass Travel de Mexico Sa de CV, Skypass Travel Private Limited and Skypass Holidays, LLC (collectively, "Skypass") (such transaction referred to as the "Skypass Acquisition”). Skypass is an international travel operator specializing in national and international air travel and hotel bookings primarily for travelers and employees associated with international corporations. The Skypass Acquisition allows the Company to expand its reach in the cruise and holiday packages travel sectors.

In connection with the acquisition, we agreed to pay total consideration of (i) $3.0 million on the Skypass Closing Date, with an adjustment for working capital, (ii) 900,000 shares of Company Class A Common Stock on the Skypass Closing Date, (iii) 100,000 shares of Company Class A Common Stock within 60 days after each of the first, second and third anniversaries of the Skypass Closing Date, and (iv) an earn-out component up to an aggregate of 1,800,000 shares of Company Class A Common Stock over a four year period contingent on Skypass meeting certain adjusted EBITDA growth targets. In the event the EBITDA target is exceeded, the Company is required to pay additional shares of 2.5% on excess of the EBITDA target.

LBF US Divestiture
In July 2023, the Company entered into a letter of intent with a related party buyer to sell LBF Travel Inc, LBF Travel Holdings LLC, Avia Travel and Tours Inc, and Star Advantage Limited ("LBF US" collectively) for a net proceeds of 200,000 shares of the Class A Common Stock returned from the buyer. The divestiture of LBF US closed in September 2023. In connection with the sale, the Company recognized a gain of $532, net of transaction costs, which was recorded in other expense, net. Additionally, the Company provided certain short term transition services to support the divested business through the third quarter of 2023. Cost of the transition services of $9,859 was recorded in other expense, net. The results of the divested business through date of sale and the transition services provided to the LBF US post the sale were reflected within the travel marketplace segment.
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Eleventh Amendment to the TCW Agreement
On October 13, 2023, the Company executed an eleventh amendment to the TCW Agreement (the “Eleventh Amendment”). The Eleventh Amendment (1) provided consent to the Company’s acquisitions of Interep, Consolid and Skypass; (2) required that the Company pledge 100% of the equity interests of Interep, Consolid and Skypass, and certain other subsidiaries; (3) specifies that certain leverage ratios, minimum unadjusted EBITDA and fixed charge coverage ratio covenants shall not be measured through the term of the TCW Agreement; (4) sets forth certain qualified cash requirements; (5) adds as an event of default the failure of the Company to achieve certain refinancing milestones; (6) provides that the revolving credit commitment shall be uncommitted and discretionary in nature; and (7) provides for the payment of certain fees.

Issuance of Series A-3 Preferred Stock
On October 17, 2023, we issued an additional 10,000 shares of Series A-3 Preferred Stock at a purchase price of $1,000 per share. In conjunction with the closing of the preferred stock financing, we issued warrants to purchase 1,275,000 shares of Class A Common Stock. The preferred stockholders are entitled to receive dividends at an escalating rate ranging from the Secured Overnight Finance Rate (“SOFR”) plus 7.00% per annum to SOFR plus 12.00% per annum.
Factors Affecting Our Performance

Adverse changes in general market conditions for travel services, including the effects of macroeconomic conditions, terrorist attacks, natural disasters, health concerns, civil or political unrest or other events outside our control could materially affect our business, liquidity, financial condition and operating results.

Our revenue is derived from the global travel industry and would be significantly impacted by declines in, or disruptions to, travel activity, particularly air travel. Global factors over which we have no control, but which could impact our clients’ willingness to travel and, depending on the scope and duration, cause a significant decline in travel volumes include, among other things:

•widespread health concerns, epidemics or pandemics, such as the COVID-19 pandemic, the Zika virus, H1N1 influenza, the Ebola virus, avian flu, SARS or any other serious contagious diseases;
•global security concerns caused by terrorist attacks, the threat of terrorist attacks, or the precautions taken in anticipation of such attacks, including elevated threat warnings or selective cancellation or redirection of travel;
•cyber-terrorism, political unrest, the outbreak of hostilities or escalation or worsening of existing hostilities or war;
•natural disasters or severe weather conditions, such as hurricanes, flooding and earthquakes;
•climate change-related impact to travel destinations, such as extreme weather, natural disasters and disruptions, and actions taken by governments, businesses and supplier partners to combat climate change;
•the occurrence of travel-related accidents or the grounding of aircraft due to safety concerns;
•disruptions in travel, such as labor strife in the travel industry;
•adverse changes in visa and immigration policies or the imposition of travel restrictions or more restrictive security procedures; and
•any decrease in demand for consumer or business travel could materially and adversely affect our business, financial condition and results of operations.

Our operating results are impacted by our ability to manage costs and expenses, while achieving a balance between making appropriate investments to grow revenue and increase profitability.

Cost and expense management will have a direct impact on our financial performance. We may look to drive revenue growth through investments in marketing, technology, and acquisitions to increase our net revenue, product offerings, revenue per transaction, and ultimately market share. These investments will need to be weighed against creating a more cost-efficient business to reduce operating expenses as a percentage of revenue.
Operating Metrics

Our financial results are driven by certain operating metrics that encompass the business activity generated by our travel-related services. Transactions represent the number of travel reservations that were processed on Mondee’s platform during the period.
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Gross bookings are defined as the total dollar value, generally inclusive of taxes and fees, of all travel reservations through our platform between a third-party seller or service provider and the traveler, net of cancellations. Take rate is defined as revenues as a percentage of gross bookings.

Management considers these operating metrics to have a correlation to our commission revenues and incentive revenues recognized, and are therefore useful units of measurement for investors. Management also uses these operating metrics as part of its overall assessment of the Company’s operational performance and for its preparation of operating budget and forecasts.
Transactions, gross bookings and take rate for the three and nine months ended September 30, 2023 and 2022, respectively, were as follows (Gross bookings are disclosed in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Transactions 695,694  591,760  2,082,331  1,604,420 
Gross bookings $ 597,451  $ 583,388  $ 1,944,774  $ 1,648,954 
Take rate 9.1  % 6.9  % 8.3  % 7.6  %
Comparability of Financial Information
Our results of operations between the three and nine months ended September 30, 2023 and the three and nine months ended September 30, 2022 may not be comparable as a result of the Business Combinations and Divestitures.

Additionally, the Company has continued to experience a trend upwards towards pre-pandemic travel activity throughout 2022 and 2023 as vaccination rates increase, infection rates decreased, and travel restrictions were lifted.
Basis of Presentation
We currently conduct our business through two operating segments, namely our travel marketplace, which is our transactional business serving the end travelers directly or through travel affiliates, and our software-as-a service (“SaaS Platform”). Substantially, all of our long-lived assets are maintained in, and all of our losses are attributable to, our activity in the United States of America. See Note 13 – Segment Information to the accompanying unaudited condensed consolidated financial statements for the quarter ended September 30, 2023 included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on basis of presentation and operating segments, respectively.
Components of Results of Operation
Revenues, Net
We generate commissions revenue by providing online travel reservation services, primarily for airline ticket sales, and to a lesser extent, for reservation of hotel accommodations, booking of car rentals, and other travel services. We also earn incentives from (1) airlines and GDS service providers for achieving volume targets and (2) on transacted amounts from fintech programs held with banks and financial institutions, which we leverage in our payment processing and settlement platform. Our fintech programs include a wide array of payment options, such as credit cards, wallets, alternate payment methods, and next generation fraud protection tools. We primarily facilitate travel bookings and act as the agent in the transaction as the travel supplier is responsible for providing the travel services, and we do not control the travel services provided to the traveler. Accordingly, revenues are recognized when the Company has completed its booking services, or when performance targets have been met. We do not have any significant obligations following the processing of the transaction. We also generate revenue by providing subscription-based platform access that offers businesses and consumers the ability to purchase travel services directly on the platform.
Sales and Marketing Expenses
We changed the presentation of “Sales and other Expense” and “Marketing Expense” within our condensed consolidated statement of operations by combining “Sales and other Expense” and “Marketing Expense” into “Sales and Marketing Expense”. The change is a result of an increased overlap between the nature and purpose of expenses that fall within these groups.

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Sales expenses are generally variable in nature and consist primarily of: (1) credit cards and other payment processing fees associated with merchant transactions; (2) fees paid to third parties that provide call center, website content translations, fraud protection services, and other services; (3) offshore customer support; and (4) customer chargeback provisions.

We rely on marketing channels to generate a significant amount of traffic to our websites. Marketing expenses consist primarily of the costs of (1) advertising, including digital and physical advertising and (2) affiliate marketing programs. We intend to continue making significant investments in marketing to drive additional revenue, increase our market share, and expand our global customer base. As a result, we expect our marketing expenses to increase in absolute dollars as we expect to invest in growing and training our sales force and broadening our brand awareness.
General and Administrative
General and administrative expenses consist primarily of: (1) occupancy and office expenses; (2) fees for outside professionals, including legal and accounting services; (3) audit and tax fees; and (4) other miscellaneous expenses. We expect to incur additional general and administrative expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and stock exchange listing standards, additional insurance expenses (including directors’ and officers’ insurance), investor relations activities and other administrative and professional services. We also expect to increase the size of our general and administrative functions to support the growth of our business. However, we anticipate general and administrative expenses to decrease as a percentage of revenue over the long term.
Personnel Expenses
Personnel expenses consist of compensation to our personnel, including salaries, bonuses, payroll taxes, and employee health and other benefits, as well as stock-based compensation expense. We expect to incur additional personnel expenses as a result of operating as a public company, including expanding head count through organic growth as well as increasing headcount through mergers and acquisitions. However, we anticipate personnel expenses to decrease as a percentage of revenue over the long term.
IT Expenses
IT expenses consist primarily of: (1) software license and system maintenance fees; (2) outsourced data center and web hosting costs; (3) payments to contractors; and (4) data communications and other expenses associated with operating our services. We expect to incur additional IT expenses as a result of operating as a public company, including expanding our operations through growth of our online booking platform and hosting fees. We also expect an increase in IT expenses to support the growth of our business. However, we anticipate IT expenses to decrease as a percentage of revenue over the long term.
Depreciation and Amortization
Depreciation and amortization expenses consist of: (1) amortization of intangible assets with determinable lives; (2) depreciation of computer equipment; (3) amortization of internally developed and purchased software; and (4) depreciation of furniture and office equipment. We expect to incur additional depreciation and amortization expenses as a result of operating as a public company, including expanding our operations through capital expenditures and purchases of long-lived assets, as well as potential impacts of our continued mergers and acquisitions strategy. However, we anticipate depreciation and amortization expenses to decrease as a percentage of revenue over the long term.
Other Income (Expense)
Other income (expense) consists primarily of: (1) interest income; (2) interest expense; (3) other income and expense, (4) government assistance, and (5) changes in the fair value of our private placement warrant liability (6) gain on the divestiture of LBF. Interest expense relates to interest on loans, amortization of debt issuance costs, and factoring interest. Interest income was recorded from the Mondee Group Note for our related party loan settled upon the consummation the Business Combination. Other expenses include realized gains and losses on foreign currency exchange.
Benefit from (Provision for) Income Taxes
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We are subject to payment of federal and state income taxes in the U.S. and other forms of income taxes in other jurisdictions. Consequently, we determine our consolidated provision for income taxes based on tax obligations incurred using the asset and liability method. Under this method, deferred tax assets and liabilities are calculated based upon the temporary differences between the condensed consolidated financial statements and income tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, we believe it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods.

We evaluate uncertain tax positions to determine if it is more likely than not that such tax positions would be sustained upon examination. We record a liability when such uncertainties fail to meet the more likely than not threshold.

A U.S. shareholder is subject to current tax on “global intangible low-taxed income” (“GILTI”) of its controlled foreign corporations (“CFCs”). We are subject to tax under GILTI provisions and include our CFCs’ income in our U.S. income tax provision in the period that the CFCs earn the income.

Results of Operations
Comparison of Three and Nine Months Ended September 30, 2023 and 2022
We have derived this data from our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. This information should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. The results of historical periods are not necessarily indicative of our results of operations for any future period. The following tables set forth our unaudited condensed consolidated statement of operations as well as other financial data that our management considers meaningful for 2023 and 2022:

Three Months Ended September 30, Nine Months Ended
September 30,
2023 2022 $ Change % Change 2023 2022 $ Change % Change
($ in thousands)
Revenues, net $ 54,532  $ 40,513  $ 14,019  34.6  % $ 161,232  $ 125,236  $ 35,996  28.7  %
Operating expenses:
Sales and marketing expenses 35,971  28,650  7,321  25.6  % 113,476  88,467  25,009  28.3  %
Personnel expense 10,696  59,807  (49,111) (82.1) % 30,521  71,131  (40,610) (57.1) %
General and administrative expense 4,629  2,337  2,292  98.1  % 14,350  6,802  7,548  111.0  %
Information technology expense 1,073  1,176  (103) (8.8) % 3,372  3,639  (267) (7.3) %
Provision for credit losses, net 535  211  324  153.6  % (166) 297  (463) (155.9) %
Depreciation and amortization 4,165  2,963  1,202  40.6  % 11,354  8,549  2,805  32.8  %
Restructuring expense, net 239  2,130  (1,891) (88.8) % 1,600  2,130  (530) (24.9) %
Total operating expenses 57,308  97,274  (39,966) (41.1) % 174,507  181,015  (6,508) (3.6) %
Loss from operations (2,776) (56,761) 53,985  (95.1) % (13,275) (55,779) 42,504  (76.2) %
Other income (expense):
Interest income 243  28  215  767.9  % 880  289  591  204.5  %
Interest expense (8,740) (7,157) (1,583) 22.1  % (25,372) (19,987) (5,385) 26.9  %
Gain on extinguishment of PPP loan —  —  —  N/A —  2,009  (2,009) (100.0) %
Changes in fair value of warrant liability 744  683  61  8.9  % 1,116  683  433  63.4  %
Other expense, net (9,189) (1,080) (8,109) 750.8  % (7,883) (316) (7,567) 2394.6  %
Total other expense, net (16,942) (7,526) (9,416) 125.1  % (31,259) (17,322) (13,937) 80.5  %
Loss before income taxes (19,718) (64,287) 44,569  (69.3) % (44,534) (73,101) 28,567  (39.1) %
Provision for income taxes (381) (321) (60) 18.7  % (3,088) (611) (2,477) 405.4  %
Net loss $ (20,099) $ (64,608) $ 44,509  (68.9) % $ (47,622) $ (73,712) $ 26,090  (35.4) %
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Revenues, net
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 $ Change % Change 2023 2022 $ Change % Change
($ in thousands)
Revenue from travel marketplace $ 54,101  $ 40,094  $ 14,007  34.9  % $ 160,302  $ 124,272  $ 36,030  29.0  %
Revenue from SaaS Platform $ 431  $ 419  $ 12  2.9  % $ 930  $ 964  $ (34) (3.5) %
Revenues, net $ 54,532  $ 40,513  $ 14,019  34.6  % $ 161,232  $ 125,236  $ 35,996  28.7  %
Revenues, net for the three and nine months ended September 30, 2023 increased by $14.0 million and $36.0 million, or 35% and 29%, respectively, compared to the same periods in 2022. The increase was primarily driven by the organic growth and synergies in the expanded market and business associated with the acquisitions of Orinter, Interep, Consolid, and Skypass during 2023 on the Company's integrated technology platform. The Company merged customers and supplier relationships from the business acquisitions into consolidated operations, as such, separating revenues specifically from these acquired entities in future periods becomes impractical.
The revenues, net increase is primarily contributed by our travel marketplace segment. Revenues from our travel marketplace segment for the three and nine months ended September 30, 2023 increased by $14.0 million and $36.0 million, or 35% and 29%, respectively, compared to the same periods in 2022. Specifically, for the three and nine months ended September 30, 2023 we saw an increase of $15.0 and $30.8 million or 56% and 34%, respectively, for commission revenues earned from mark-up fees, airline ticket sales, hotel accommodations, car rental bookings, and other travel services. For the nine months ended September 30, 2023, we saw an increase of $6.2 million or 19%, from incentive revenues earned from GDS service providers and airlines suppliers. For the three months ended September 30, 2023 we saw a decrease of $1.0 million or 73% from ancillary goods and services. The revenue growth in our travel marketplace segment in 2023 was primarily contributed by a 2% and 18% increase in the value of gross bookings during the three and nine months ended September 30, 2023, respectively, and a 18% and 30% increase in the number of transactions processed in our travel marketplace, during the three and nine months ended September 30, 2023, as compared to 2022. Refer to our Operating Metrics for further details.
Operating Expenses and Other (Income) Expense
Sales and Marketing Expenses
Sales and marketing expenses for the three and nine months ended September 30, 2023 increased by $7.3 million and $25.0 million, or 26% and 28%, respectively, compared to the same periods in 2022. The increase was primarily driven by an increase of $12.5 million, and $36.9 million, or 59% and 58%, in affiliate marketing expense and affiliate credit card merchant expense, respectively, for the three and nine months ended September 30, 2023 compared to the same periods in 2022. Of the $12.5 million and $36.9 million increase in affiliate marketing expense and credit card merchant expense during the three and nine months ended September 30, 2023, respectively, $13.8 million and $30.8 million, respectively, was due to additional sales and marketing activities along with the Company's expanded presence post acquisitions of Orinter, Interep, Consolid and Skypass in 2023, which was partially offset by decreases in affiliate marketing expense and credit card merchant expense by the legacy business. These increases were offset by decreases in web advertising expenses of $4.9 million and $10.0 million for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022.
Personnel Expenses
Personnel expenses for the three and nine months ended September 30, 2023 decreased by $49.1 million and $40.6 million, or 82% and 57%, respectively, compared to the same periods in 2022. The decrease was primarily attributable to a decrease of $52.4 and $46.0 million in stock-based compensation for the three and nine months ended September 30, 2023, respectively, primarily due to $50.7 million stock-based compensation during the three and nine months ended September 30, 2022 related to earn-out shares issued to the CEO and an employee on closing and subsequent to the Business Combination. The decrease was partially offset by increases due to the additional headcount from the acquisitions of Orinter, Interep, Consolid, and Skypass during 2023.
General and Administrative Expenses
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General and administrative expenses for the three and nine months ended September 30, 2023 increased by $2.3 million and $7.5 million, or 98% and 111%, respectively, compared to the same periods in 2022. The increase was primarily due to an increase in legal and professional fees of $1.0 million and $4.0 million for the three and nine months ended September 30, 2023, respectively, which was attributed to our preparation and filings with the SEC. The remainder of the increase is primarily due to an increase in business insurance expense and non-employee stock compensation of $0.3 and $1.1 million for the three and nine months ended September 30, 2023, respectively.

IT Expenses
IT expenses for the three and nine months ended September 30, 2023 decreased by $0.1 million and decreased by $0.3 million, or 9% and 7%, respectively, compared to the same periods in 2022. The decrease was primarily due to an overall decrease in off-shore consulting costs.
Provision for Credit Losses, Net
Provision for credit losses, net for the three months ended September 30, 2023 increased by $0.3 million, or 154%, compared to the same period in 2022, due to changes in estimated recovery of accounts receivable. Provisions for credit losses, net for the nine months ended September 30, 2023 decreased by $0.5 million, or 156%, compared to the same periods in 2022 due to changes in estimated recovery of accounts receivable and contract assets as a result of gradual improvement in travel industry.
Depreciation and Amortization
Depreciation and amortization expenses for the three and nine months ended September 30, 2023 increased by $1.2 million and $2.8 million, or 41% and 33%, respectively, compared to the same periods in 2022. The increase was primarily due to an increase in amortization from additional capitalized software and an increase in amortization of intangibles as a result of the acquisitions of Orinter, Interep, Consolid, and Skypass during 2023.
Restructuring Expense, Net
Restructuring expense, net for the three and nine months ended September 30, 2023 decreased by $1.9 million and $0.5 million, or 89% and 25%, respectively, compared to the same periods in 2022. The decrease was primarily due to restructuring activities at offshore office locations to reduce the size of the workforce to optimize efficiency and reduce costs.
Interest Income
Interest income for the for the three and nine months ended September 30, 2023 increased by $0.2 million and $0.6 million, or 768% and 204%, respectively, compared to the same periods in 2022. The increase was primarily due to an increase in cash interest income on bank balances due to higher interest rates in the current period.
Interest Expense
Interest expense for the three and nine months ended September 30, 2023 increased by $1.6 million and $5.4 million, or 22% and 27%, respectively, compared to the same periods in 2022. The increase was primarily due to the factoring arrangements entered into by Orinter, Interep, and Consolid, as well as the drawdown of additional debt in January 2023.
Gain on Extinguishment of PPP Loan
Gain on extinguishment of PPP Loan for the nine months ended September 30, 2023 decreased by $2.0 million compared to the same periods in 2022. The decrease was primarily due to the forgiveness of PPP Loans that took place during fiscal 2022.
Changes in Fair Value of Warrant Liability
Changes in fair value of warrant liability for the three and nine months ended September 30, 2023 increased by $0.1 million and $0.4 million, or 9% and 63%, respectively, compared to the same periods in 2022. The increase was primarily due to the decrease in fair value of the Company’s private warrants during the three and nine months ended September 30, 2023.
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Other Expense, net
Other expense, net for the three and nine months ended September 30, 2023 increased by $8.1 million and $7.6 million, or 751% and 2395%, respectively, compared to the same periods in 2022. The increase in other expense, net for both comparative periods is primarily due to the net expense recognized in the three and nine months ended September 30, 2023 of $9.4 million, comprising of $0.5 million gain on the LBF US divestiture and $9.9 million expense incurred on the LBF US transition service costs, and partially offset by gains on foreign currency exchange.
Income Taxes
The provision for income taxes for the three and nine months ended September 30, 2023 increased by $0.1 million and $2.5 million, or 19% and 405%, respectively, compared to the same periods in 2022, mainly driven by the impact of profits earned by the Orinter, Interep, Consolid, and Skypass acquisitions.
Non-GAAP Financial Measures

In addition to our financial results determined in accordance with U.S. GAAP, we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the terms “Adjusted EBITDA”, "Adjusted Net Loss” and "Adjusted Net Loss Per Share” to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures, when taken together with the corresponding U.S. GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. We consider Adjusted EBITDA, Adjusted Net Loss and Adjusted Net Loss Per Share to be important non-GAAP financial measures, because they illustrate underlying trends in our business and our historical operating performance on a more consistent basis. We believe that the use of Adjusted EBITDA, Adjusted Net Loss and Adjusted Net Loss Per Share are helpful to our investors in assessing the health of our business and our operating performance.

In addition, we believe the following non-GAAP measure, "Free Cash Flow", is helpful in evaluating our liquidity. We use Free Cash Flow to measure cash generated internally that is available to service debt and fund inorganic growth or acquisitions and believe that this measure provides meaningful supplemental information regarding our liquidity. We consider Free Cash Flow to be an important non-GAAP financial measure because it illustrates underlying trends in our business and is helpful to our investors in assessing our liquidity.

Non-GAAP financial information, which is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation is provided below for the non-GAAP financial measures to the most directly comparable financial measures stated in accordance with U.S. GAAP. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures, and not to rely on any single financial measure to evaluate our business.
Financial measures that are non-GAAP should not be considered as alternatives to operating income, cash flows from operating activities or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance, or cash flows as measures of liquidity. These measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.

Adjusted EBITDA
Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance which provides useful information to investors, analysts and rating agencies. By reporting Adjusted EBITDA, we provide a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance.
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Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes. We define Adjusted EBITDA as net loss before (1) depreciation and amortization; (2) provision for income taxes; (3) interest expense, net; (4) other expense, net; (5) stock-based compensation and the related payroll tax expense; (6) restructuring and related costs; (7) acquisition-related costs (including bank fees, due diligence fees, etc.); (8) legal costs pertaining to acquisitions, and other filings which are not ordinary and outside the course of our business; (9) other non-recurring expenses; and (10) and changes in fair value attributable to earn-out and warrant liabilities. For the periods presented, non-recurring expenses include transaction filing fees and associated professional services.

The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, or because the amount and timing of these items is unpredictable, not driven by core results of operations, and renders comparisons with prior periods and competitors less meaningful. We believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business performance.

We began excluding (1) the change in fair value of our earn-out liabilities and (2) stock-based compensation payroll tax expense for the purpose of calculating Adjusted EBITDA beginning the quarter ended June 30, 2023. For comparability, references to prior period non-GAAP measures have been updated to show the effect of removing the change in the fair value of our earn-out liabilities from Adjusted EBITDA. The Company did not incur payroll tax expenses on stock-based compensation prior to this quarter. We believe this updated presentation of Adjusted EBITDA enhances investors’ understanding of our financial performance from activities occurring in the ordinary course of our business.
Some of the limitations of Adjusted EBITDA are as follows: (i) Adjusted EBITDA does not properly reflect capital commitments to be paid in the future; and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures. In evaluating Adjusted EBITDA, our investors should be aware that in the future we may not incur expenses similar to the adjustments in this presentation. Lastly, Adjusted EBITDA can obfuscate the one-time impacts of events that happen out of the ordinary course of business.

The following table reconciles net loss to Adjusted EBITDA for the three and nine months ended September 30, 2023 and 2022, respectively:
Three Months Ended
September 30,		 Nine Months Ended
September 30,
2023 2022 $ Change % Change 2023 2022 $ Change % Change
($ in thousands)
Net loss $ (20,099) $ (64,608) $ 44,509  (68.9) % $ (47,622) $ (73,712) $ 26,090  (35.4) %
Interest expense, (net) 8,497  7,129  1,368  19.2  % 24,492  19,698  4,794  24.3  %
Stock-based compensation expense 2,974  55,236  (52,262) (94.6) % 10,339  55,397  (45,058) (81.3) %
Payroll tax expense related to stock-based compensation 140  —  140  —  % 226  —  226  —  %
Depreciation and amortization 4,165  2,963  1,202  40.6  % 11,354  8,549  2,805  32.8  %
Restructuring expense, net 239  2,130  (1,891) (88.8) % 1,600  2,130  (530) (24.9) %
Provision for income taxes 381  321  60  18.7  % 3,088  611  2,477  405.4  %
Changes in fair value of warrant liabilities (744) (683) (61) 8.9  % (1,116) (683) (433) 63.4  %
Changes in fair value of earn-out liabilities (593) —  (593) —  % 108  —  108  —  %
Acquisition costs 545  —  545  —  % 1,088  —  1,088  —  %
Non-recurring legal expense 785  —  785  —  % 2,024  —  2,024  —  %
Other non-recurring expenses1
 22  —  22  —  % 632  —  632  —  %
Extinguishment of PPP Loan —  —  —  —  % —  (2,009) 2,009  (100.0) %
LBF US divestiture and transition service expense 9,327  —  9,327  —  % 9,327  —  9,327  —  %
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Other expense (income), net2
 (138) 1,080  (1,218) (112.8) % (1,444) 316  (1,760) (557.0) %
Adjusted EBITDA $ 5,501  $ 3,568  $ 1,933  54.2  % $ 14,096  $ 10,297  $ 3,799  36.9  %

1 Includes non-recurring transaction filing fees and associated professional services
2 Excludes LBF US divestiture and transition service expense for the three and nine months ended September 30, 2023
Adjusted Net Loss and Adjusted Net Loss Per Share
Adjusted Net Loss and Adjusted Net Loss Per Share are key performance measures that our management uses to assess our operating performance which provides useful information to investors, analysts and rating agencies. By reporting Adjusted Net Loss and Adjusted Net Loss Per Share, we provide a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance
We define Adjusted Net Loss as net loss before (1) stock-based compensation expense; (2) amortization of intangibles; (3) provision for income taxes; (4) certain one-time expenses. For the periods presented, one-time expenses include: changes in fair value of warrant liabilities, restructuring expense, legal costs pertaining to acquisitions, TCW term loan amendment fees, and other filings which are not ordinary and outside the course of our business, acquisition costs, changes in fair value of earn-out liabilities, expenses incurred for office relocation, gain on forgiveness of PPP loan, non-recurring transaction filing fees and associated professional services, and net expense incurred on the LBF US divestiture and LBF US transition services.
The following table reconciles net loss to Adjusted Net Loss for the three and nine months ended September 30, 2023 and 2022, respectively:
Three Months Ended
September 30,		 Nine Months Ended
September 30,
2023 2022 $ Change % Change 2023 2022 $ Change % Change
($ in thousands)
Net loss $ (20,099) $ (64,608) $ 44,509  (68.9) % $ (47,622) $ (73,712) $ 26,090  (35.4) %
Stock-based compensation expense 2,974  55,236  (52,262) (94.6) % 10,339  55,397  (45,058) (81.3) %
Amortization of intangibles 2,458  1,584  874  55.2  % 6,747  4,753  1,994  42.0  %
Income tax provision 381  321  60  18.7  % 3,088  611  2,477  405.4  %
One-time expenses1
 9,581  1,656  7,925  478.6  % 13,663  (264) 13,927  (5275.4) %
Adjusted net loss $ (4,705) $ (5,811) $ 1,106  (19.0) % $ (13,785) $ (13,215) $ (570) 4.3  %

1 Includes changes in fair value of warrant liabilities, restructuring expense, legal costs pertaining to acquisitions, and other filings which are not ordinary and outside the course of our business, other acquisition costs, and changes in` fair value of earn-out liabilities
We define Adjusted Net Loss Per Share as the per share earnings based on the Company’s Adjusted Net Loss attributable to common stockholders, which includes dividends accrued for preferred stockholders, in the respective periods presented.
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The following table reconciles net loss per share to Adjusted Net Loss per share for the three and nine months ended September 30, 2023 and 2022, respectively:
Adjusted Net Loss Per Share
Three Months Ended
September 30,		 Nine Months Ended
September 30,
2023 2022 2023 2022
($ in thousands)
Net loss $ (20,099) $ (64,608) $ (47,622) $ (73,712)
Cumulative dividends allocated to preferred stockholders $ (2,859) $ (47) $ (8,023) $ (47)
Net loss attributable to common stockholders, basic and diluted $ (22,958) $ (64,655) $ (55,645) $ (73,759)
Weighted average shares outstanding, basic and diluted 77,925,635  72,462,512  77,162,363  64,730,224 
Basic and diluted net loss per share $ (0.29) $ (0.89) $ (0.72) $ (1.14)
Adjusted net loss $ (4,705) $ (5,811) $ (13,785) $ (13,215)
Cumulative dividends allocated to preferred stockholders $ (2,859) $ (47) $ (8,023) $ (47)
Adjusted net loss attributable to common stockholders, basic and diluted $ (7,564) $ (5,858) $ (21,808) $ (13,262)
Weighted average shares outstanding, basic and diluted 77,925,635  72,462,512  77,162,363  64,730,224 
Adjusted net loss per share
 $ (0.10) $ (0.08) $ (0.28) $ (0.20)
Free Cash Flow
Free Cash Flow is a key measure that is relevant to investors because it provides a measure of cash generated internally that is available both to service debt and to fund inorganic growth or acquisitions and provides useful information to investors regarding our liquidity. By reporting Free Cash Flow, we provide a basis for comparison of our cash generated internally between current, past and future periods. Free Cash Flow has the same limitations as Adjusted EBITDA, Adjusted Net Loss and Adjusted Net Loss Per Share in that it does not consider the capital structure of our Company.
Free Cash Flow, a non-GAAP liquidity measure, is defined as cash provided by or used in operating activities, less capital expenditures.
We believe the presentation of Free Cash Flow is relevant and useful for investors because it measures cash generated from operations after payment of capital expenditures that we can use to invest in our business and meet our current and future financing needs.
The following table reconciles net cash used in operating activities to Free Cash Flows for the three and nine months ended September 30, 2023, and 2022, respectively:
Three Months Ended
September 30,		 Nine Months Ended
September 30,
2023 2022 $ Change % Change 2023 2022 $ Change % Change
($ in thousands)
Net cash provided by (used in) operating activities (1)(2)
 $ (994) $ (854) $ (140) 16.4  % $ (13,400) $ (690) $ (12,710) 1842.0  %
Capital expenditures (3,186) (1,943) (1,243) 64.0  % (7,660) (5,415) (2,245) 41.5  %
Free cash flow(1)(2)
 $ (4,180) $ (2,797) $ (1,383) 49.4  % $ (21,060) $ (6,105) $ (14,955) 245.0  %
(1)
Included cash paid for interest related to the TCW Agreement for the three and nine months ended September 30, 2023 was $4.2 million and $8.4 million, respectively. No cash was paid for interest related to the TCW Agreement for the three and nine months ended September 30, 2022.
(2)
Included cash paid for LBF US transition services for the three and nine months ended September 30, 2023 was $7.4 million. No cash was paid for LBF US transition services for the three and nine months ended September 30, 2022.
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Financial Position, Liquidity and Capital Resources
Sources of Liquidity
As of September 30, 2023, we had cash and cash equivalents totaling $39.9 million, which were held for working capital purposes and a TCW LOC available for draw down of $15.0 million. Our cash equivalents are comprised primarily of cash checking accounts and our restricted cash and cash equivalents comprise of certificate of deposits held at banks which we intend to hold to maturity. To date, our principal sources of liquidity have been payments received from our revenue arrangements and financing arrangements with banks and financial institutions.
As of September 30, 2023, we held $47.9 million of cash, cash equivalents and restricted cash and cash equivalents, of which $10.7 million was held by our foreign subsidiaries outside of the United States. In the event that we repatriate these funds from our foreign subsidiaries, we may need to accrue and pay applicable United Sates taxes and withholding taxes payable to various countries. As of September 30, 2023, our intent was to permanently reinvest these funds outside of the United States.
Accordingly, no deferred taxes have been provided for withholding taxes, U.S. state income taxes or other taxes that would result upon repatriation of approximately $19.2 million of undistributed earnings from these foreign subsidiaries as those earnings and any excess of financial reporting over the tax basis of these foreign subsidiaries are indefinitely reinvested. It is not practicable to estimate income tax liabilities that might be incurred if such earnings were remitted to the United States due to the complexity of the underlying calculation. The majority of the undistributed earnings would have been previously-taxed for U.S. federal income taxes as a result of the 2017 U.S. Tax and Jobs Act. Although we have no intention to repatriate the undistributed earnings of our foreign subsidiaries for the foreseeable future, if such funds are needed for operations in the United States, to the extent applicable and material, we will revise future filings to address the potential tax implications.
TCW Agreement
On January 11, 2023, we executed the Ninth Amendment to the TCW Agreement wherein Wingspire became a party to the TCW Agreement, among other changes. Wingspire funded an additional $15.0 million of term loan commitment on top of the already outstanding TCW Term Loan. Additionally, the Ninth Amendment split the TCW Term Loan into two loans. The first loan will be represented by Wingspire with an outstanding principal balance of $30.0 million and the second loan will be represented by TCW with an outstanding principal balance of $137.8 million.

Additionally, pursuant to the Ninth Amendment, Wingspire consented to take over the TCW LOC for a principal amount not to exceed $15.0 million (the “Wingspire Term Loan”). Until January 11, 2024, we have the option to increase Term Loan A by $20.0 million under two conditions: (i) the Company must have a trailing 12-month EBITDA of at least $25.0 million; and (ii) the Company must draw in increments of at least $5.0 million.

On January 31, 2023, we executed the Tenth Amendment to the TCW Agreement. The Tenth Amendment (1) set forth the terms on which we could acquire Orinter, pursuant to the Orinter Purchase Agreement; (2) set forth the terms on which we could pay the earn-out payment contemplated to be paid to OTT Holdings and certain key executives of OTT Holdings pursuant to the Orinter Purchase Agreement; (3) required that Mondee Brazil join as a party to the TCW Agreement and the Security Agreement; (4) required that Mondee, Inc. pledge 100% of the equity interests of Mondee Brazil; and (5) required that Mondee Brazil and Mondee Inc. pledge 100% of the equity interests of Orinter.
On October 13, 2023, the Company executed an eleventh amendment to the TCW Agreement (the “Eleventh Amendment”). The Eleventh Amendment (1) provided consent to the Company’s acquisitions of Interep, Consolid and Skypass; (2) required that the Company pledge 100% of the equity interests of Interep, Consolid and Skypass, and certain other subsidiaries; (3) specifies that certain leverage ratios, minimum unadjusted EBITDA and fixed charge coverage ratio covenants shall not be measured through the term of the TCW Agreement; (4) sets forth certain qualified cash requirements; (5) adds as an event of default the failure of the Company to achieve certain refinancing milestones; (6) provides that the revolving credit commitment shall be uncommitted and discretionary in nature; and (7) provides for the payment of certain fees.
Financial Position
We are required to make debt repayments aggregating to $10.3 million in the next 12 months from the date of issuance of the condensed consolidated financial statements.
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As of September 30, 2023, we had $39.9 million of unrestricted cash and cash equivalents, $8.0 million of restricted cash and cash equivalents and $15.0 million in unused TCW LOC.

As of the date on which our condensed consolidated financial statements for the fiscal quarter ended September 30, 2023, we believe that the cash on hand, cash generated from operating activities, and access to funds under our LOC with TCW will satisfy our working capital and capital requirements for at least the subsequent 12 months.
Material Cash Requirements and Other Obligations
Our material cash requirements and other obligations as of September 30, 2023 include the following:

•Term Loan - Principal and interest payments related to the TCW and Wingspire Term Loans. As of September 30, 2023, we had an outstanding balance of $168.1 million, with $10.3 million payable within 12 months. See Note 8 – Debt to our condensed consolidated financial statements for additional information.
•Governmental Loans - As of September 30, 2023, our outstanding balance related to the CEBA and HASCAP loans was $0.2 million, with $0.1 million payable within 12 months.
•Operating Lease Obligations - Fixed lease payments related to our operating leases. As of September 30, 2023, we had outstanding operating lease obligations of $3.8 million, with $1.2 million payable within 12 months.

See Note 11 – Commitments and Contingencies to our condensed consolidated financial statements for further information related to our letters of credit and outstanding legal claims.
Off- Balance Sheet Arrangements
We had the following Off-Balance Sheet Arrangements as of September 30, 2023 and December 31, 2022:
September 30,
December 31,
(In millions)
2023
2022
Letters of credit $ 7.7  $ 7.4 
No amount on the TCW LOC has been drawn down as of September 30, 2023 and December 31, 2022.
Cash Flow Summary
The following table summarizes our cash flows for the periods presented:
Nine Months Ended
September 30,
2023 2022
($ in thousands)
Net cash used in operating activities $ (13,400) $ (690)
Net cash used in investing activities (31,741) (5,809)
Net cash provided by financing activities 5,894  96,562 
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents (314) (341)
Net (decrease)/increase in cash, cash equivalents and restricted cash and cash equivalents $ (39,561) $ 89,722 
Cash Used in Operating Activities
During the nine months ended September 30, 2023, cash used in operating activities was $13.4 million. The primary factors affecting our operating cash flows during this period were our net loss totaling $47.6 million, which was offset by non-cash charges of $29.6 million primarily consisting of depreciation and amortization of $11.4 million, stock-based compensation of $10.3 million, non-cash gain on disposal of LBF US of $0.7 million, amortization of loan origination fees of $6.4 million, PIK interest expense of $4.2 million, and a net gain in estimated fair value of earn-out consideration and warrant liability of $1.0 million. Cash provided by our operating assets and liabilities was $4.7 million, primarily owing to a $19.5 million increase in accounts receivable, a $6.0 million increase in contract assets, a $1.7 million decrease in deferred revenue, a $0.5 million increase in prepaid expenses and other current assets, and a $1.0 million decrease in operating lease liabilities.
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These changes were offset by a $27.5 million increase in accounts payable, and a $6.4 million increase in accrued expenses and other liabilities. The increase in accounts receivable was primarily from the acquired business in Orinter, Interep, Consolid and Skypass.
During the nine months ended September 30, 2022, cash used in operating activities was $0.7 million. The primary factors affecting our operating cash flows during this period were our net loss of $73.7 million, which was offset by non-cash charges of $73.5 million primarily consisting of stock-based compensation of $55.4 million, PIK interest expense of $8.1 million and depreciation and amortization of $8.5 million. This reduction attributable to non-cash charges was offset by a $2.0 million gain on forgiveness of our PPP loan. Cash provided from changes in our operating assets and liabilities was $0.5 million, primarily owing to a $26.4 million increase in accounts payable, and $12.3 million increase in accrued expenses and other current liabilities. These increases were offset by a $15.9 million increase in accounts receivable, $17.5 million increase in prepaid expense and other current assets, and $2.6 million increase in contract assets.
Cash Used in Investing Activities
During the nine months ended September 30, 2023, cash used in investing activities was $31.7 million, which was primarily due to cash paid for the acquisitions of Orinter, Interep, Consolid, and Skypass and the purchase of property and equipment.
During the nine months ended September 30, 2022, cash used in investing activities was $5.8 million, which was primarily due to the purchase of property and equipment.
Cash Provided by Financing Activities
During the nine months ended September 30, 2023, cash provided by financing activities was $5.9 million, primarily due to $15.0 million in proceeds from the Wingspire Term Loan, offset by the repayment of debt and offering costs.
During the nine months ended September 30, 2022, cash provided by financing activities was $96.6 million, primarily due to the proceeds from the closing of the Business Combination and issuance of preferred stock.
Critical Accounting Policies and Estimates
The preparation of the condensed consolidated financial statements and related disclosures in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. We use our judgment to determine the appropriate assumptions to be used in the determination of certain estimates and we evaluate our estimates on an ongoing basis. Estimates are based on historical experience, terms of existing contracts, our observance of trends in the travel industry, and on various other assumptions that we believe to be reasonable under the circumstances. Our actual results may differ from these estimates under different assumptions or conditions. Our critical accounting estimates supplement, but not duplicate, the description of accounting policies or other disclosures in the notes to the financial statements. Matters that involve significant estimates and judgments of management include the following:

Revenue Recognition

We make several estimates in our revenue recognition process that affect the net revenues presented on our condensed consolidated statements of operations.

We earn incentives from airline companies based on the volume of airline ticket bookings that have flown. We also receive incentives from our GDS service providers based on the volume of segment bookings mediated by us through the GDS systems. The periods in which the contractual targets are based on range from months to years. The rate at which the Company earns the incentives from airline companies and GDS service providers, or travel suppliers, is subject to fluctuations, as the incentive amount earned on any given day is contingent on the cumulative prior performance under contract. Additionally, some travel supplier contracts have tiered level pricing where the incentive rate applied depends on several performance targets specified in the contract. At the end of each reporting period, the Company estimates the incentives earned in the period based on the flights taken and the respective incentive rates that would apply to the Company, based on the tier the Company will most likely fall under. Revenue earned and recognized relating to incentives with airline companies and GDS service providers will be estimated to the extent that it is probable that a significant reversal of any incremental revenue will not occur.
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Our revenues are recorded net of cancellations, refunds, and chargebacks, which all represent variable consideration and must be estimated. From time to time, the Company issues credits or refunds to the traveler in the event of cancellations. Additionally, when travel bookings are made, there is a risk of transaction losses as a result of chargebacks pursued by payment processors in connection with fraudulent charges. We estimate and record reserves for cancellations, refunds, and chargebacks based on our assessment of various factors, including the amounts of actual chargeback activity during the current year.

Valuation of Goodwill, Definite-Lived Intangible Assets, and Indefinite-Lived Intangible Assets

The application of the acquisition method of accounting for business combinations requires the use of significant estimates and assumptions to determine the fair value of the assets acquired and liabilities assumed. Our estimates of the fair value are based upon assumptions that we believe are reasonable. When we deem appropriate, we utilize assistance from third-party valuation firms. The consideration transferred is allocated to the assets acquired and liabilities assumed based on their respective values at the acquisition date. The excess of the consideration transferred over the net of the amounts allocated to the identifiable assets acquired and liabilities assumed is recognized as goodwill.

We review long-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The assessment of possible impairment is based upon the ability to recover the carrying value of the assets from the estimated undiscounted future net cash flows, before interest and taxes, of the related asset group.
Goodwill increased during the nine months ended September 30, 2023 due to the acquisitions of Orinter, Interep, Consolid, and Skypass. See Note 6 – Goodwill and Intangible Assets, Net to our condensed consolidated financial statements for additional information related to the acquisitions.

We test goodwill for impairment on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We have two reporting units and test goodwill for each respective reporting unit. In prior years, our annual goodwill impairment tests were performed as of December 31. During the third quarter of 2023, the Company voluntarily changed its annual goodwill impairment test date from December 31 to October 1, as the new date of the assessment better aligns with the Company's long-term business planning process. This change was not material to the Company's condensed consolidated financial statements as it did not delay, accelerate, or avoid any potential goodwill impairment charge.

As of December 31, 2022, the estimated fair value of our two reporting units was determined using the income approach valuation technique by discounting the Company’s future cash flows. The income approach, applied as of December 31, 2022, reflected a reduction in the forecasted cash flows of our reporting units and a longer assumed recovery period. The discount rate is determined based on the reporting unit’s estimated weighted-average cost of capital and adjusted to reflect the risks inherent in its cash flows, which requires significant judgments. As of December 31, 2022, we performed our annual goodwill impairment test that resulted in the calculation of fair value of the respective reporting units that substantially exceeds carrying value. Therefore, the Company concluded that there was no impairment of goodwill.

The estimation of fair values of our reporting units reflect numerous assumptions that are subject to various risks and uncertainties, including key assumptions regarding each reporting unit’s expected growth rates and operating margin and the competitive environment, as well as other key assumptions with respect to matters outside of our control, such as discount rates. The estimation of fair value requires significant judgments and estimates, and actual results could be materially different than the judgments and estimates used. Discount rates have been impacted during the period due to rising interest rates and adverse changes in the macroeconomic environment. Future events and changing market conditions, including economic uncertainties such as inflation, rising interest rates and risks of a potential recession, may lead us to re-evaluate the assumptions used to estimate the fair values of our reporting units, which may result in a need to recognize additional goodwill impairment charges that could have a material adverse effect on our results of operations.

Earn-Out Liabilities

See Note 4 – Fair Value Measurement for additional information related to the Company’s fair value measurements. When little or no market data is available, the fair value is measured using unobservable inputs (“Level 3 inputs”). Our liabilities measured using Level 3 inputs primarily consist of earn-out liabilities acquired from acquisitions. The fair value of earn-out liabilities are estimated using the Monte Carlo simulation method.
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In determining the fair value, the following factors were considered: the expected future financial performance of the acquired entities, the underlying financial metric on which the earn-out payment is based upon, historical financial performance, and the Company’s credit risk.

Equity-Classified Earn-Out Shares

As part of the reverse recapitalization that closed on July 18, 2022, earn-out shares were approved to be issued to holders, would be entitled to the right to receive shares of common stock, which vest based on the trading price of the Company’s Common Stock. The earn-out was determined to be equity-classified, and the Company estimates the fair value of the award on the date the shares are allocated to a holder. The Company obtains a third-party valuation to determine the fair value. The Monte Carlo method was used to determine the expected value of the earn-out shares to be vested by simulating our Common Stock price from the allocation date to the end of the vesting period. The income approach was used to determine the fair value of the award on the allocation date, which includes estimating future cash flows to be received by the award owners over the economic life of the award and converting the cash flows to their present value equivalents using an appropriate discount rate that accounts for the relative risk of not realizing the annual cash flows and for the time value of money.
Recent Accounting Pronouncements
See “Part I, Item 1, Note 3 – Summary of Significant Accounting Policies” to our condensed consolidated financial statements included elsewhere in this Quarterly Report for recently adopted accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information otherwise required under this item.
Item 4. Controls and Procedures

Evaluation of our Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2023, our disclosure controls and procedures were not effective, due to material weaknesses in our internal control over financial reporting that remain since they were identified in connection with the preparation and filing of the of our Annual Report on Form 10-K for the year ended December 31, 2022, as amended (the “2022 Form 10-K”).

Material Weaknesses

In connection with our Chief Executive Officer and Chief Financial Officer’s evaluation of the effectiveness of our controls, we disclosed in Part II, Item 9A Controls and Procedures in the 2022 Form 10-K that we had identified material weaknesses in internal control over financial reporting. These material weaknesses were related to the control environment, risk assessment and control activities component of internal control over financial reporting as established by the COSO framework. The following control deficiencies constitute material weaknesses, either individually or in the aggregate:

•Failure to maintain a whistle-blower hotline that facilitates anonymous receipt of information relevant to our financial reporting.
•Lack of involvement of personnel with sufficient training and knowledge of U.S. GAAP.
•Failure to perform a formalized risk assessment, including a fraud risk assessment.
•Lack of a formalized process to assess and review the accounting treatment for significant events, significant accounting policies, and significant accounting estimates.
•Lack of segregation of duties related to the ability to create, approve and post journal entries within the Company’s general ledger system.
•Lack of formalized process to review and approve of work performed by management’s third-party consultants related to the measurement of certain instruments measured at fair value.
•Inadequate design, implementation and maintenance of information systems controls including access security and change management controls.
•Failure to timely recognize material transactions, which includes the appropriate determination of revenue recognition based on the terms of the contracts and sales and marketing expenses associated with affiliates of the
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Company, with an appropriate review by management, including review of both internal and external information used by the Company in determining the amount to record.

Management’s Remediation Efforts

In response to these material weaknesses, management is in the process of completing the following remediation actions:

•We plan to implement a global whistle-blower hotline and fraud monitoring program to facilitate the receipt of anonymous tips relevant to financial reporting.
•We are actively recruiting a technical accounting team with relevant accounting certifications and U.S. GAAP experience to assess the accounting treatment of significant transactions and events and oversee the work of our third-party consultants.
•We are establishing a formal risk assessment process to identify and evaluate risks relevant to financial reporting objectives, including fraud risks.
•We are designing and implementing additional control activities related to the review of the accounting treatment for significant events, significant accounting policies, and significant accounting estimates within our accounting and finance department, including those that are prepared by third-party consultants.
•We are implementing segregation of duties by adding system approval workflows to create, approve and post journal entries within the Company’s general ledger system.
•We are designing and implementing adequate information systems controls, including access security and change management controls.

Remediation of the identified material weaknesses and strengthening our internal control environment will require a substantial effort throughout the fiscal year ending December 31, 2023 and beyond, as necessary. We will test the ongoing operating effectiveness of the new and existing controls in future periods. The material weaknesses cannot be considered completely remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control over Financial Reporting

Other than the material weakness remediation efforts as described above, there were no changes in our internal control over financial reporting identified that occurred during the three months ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings

For a description of our material pending legal proceedings, see Note 11 – Commitments and Contingencies to the accompanying unaudited condensed consolidated financial statements for the quarter ended September 30, 2023 included in Part I, Item 1 of this Quarterly Report.

In addition, from time to time, the Company may be a party to claims that arise in the ordinary course of business. None of these matters are expected to have a material adverse effect on the Company’s financial condition or results of operations.

Item 1A. Risk Factors

In addition to the other information set forth in this report, including the important information in “Forward-Looking Statements,” you should carefully consider the “Risk Factors” discussed in our 2022 Form 10-K. If any of those factors were to occur, they could materially adversely affect our financial condition or future results, and could cause our actual results to differ materially from those expressed in its forward-looking statements in this report. We are aware of no material changes to the Risk Factors discussed in our 2022 Annual Report, except as described below, however, additional risks not currently known or currently material may also harm our business.

We cannot guarantee that our previously-announced restructuring program will achieve its intended result.

As part of our restructuring plans, we conducted a reduction in workforce (“RIF”) of over 300 employees from July 2022 to October 2022, including involuntary and voluntary positions that were not backfilled. We have closed our Mohali and Dehradun, India, offices and plan to exit or sublease these premises. This right-sizing program resulted in the reduction of front-end sales positions; mid-office quality control, ticketing and related positions; back-office accounting and fraud protection positions; and the vacating of the Mohali and Dehradun facilities. All functional areas are now covered in the remaining Delhi and Hyderabad facilities with existing staff. We recorded, in the aggregate, approximately $2.5 million in restructuring and related charges associated with this restructuring program. During the three months ended March 31, 2023, we conducted an additional RIF of over 260 employees, primarily in India, but also in Thailand and the United States. The purpose of these actions is to pursue greater cost efficiencies and to realign our business and strategic priorities. We cannot guarantee that these restructuring actions will achieve or sustain the targeted benefits, or that the benefits, even if achieved, will be adequate to meet our long-term profitability expectations. Risks associated with these restructuring actions also include additional unexpected costs, negative impacts on our cash flows from operations and liquidity, employee attrition and adverse effects on employee morale and our potential failure to meet operational and growth targets due to the loss of employees, any of which may impair our ability to achieve anticipated results from our operations or otherwise adversely affect our business.

If we fail to either develop new and innovative technologies or enhance our existing technologies and grow our systems and infrastructure in response to changing client demands and rapid technological change, our business may suffer.

The travel industry is subject to changing client preferences and demands relating to travel and travel-related services, including in response to constant and rapid technological change. If we are unable to develop or enhance technology in response to such changes, products or technologies offered or developed by our competitors, our travelers may find our services less attractive.

Our ability to provide high-quality service to our travelers depends upon the use of sophisticated information technologies and systems, including technologies and systems used for reservation systems, communications, procurement and administrative systems. As our operations grow in both size and scope, we continuously need to improve and upgrade our systems and infrastructure to offer and provide support for an increasing number of travelers and travel providers enhanced products, services, features and functionality, while maintaining the reliability and integrity of our systems and infrastructure. We may fail to effectively scale and grow our systems and infrastructure to accommodate these increased demands. Further, our systems and infrastructure may not be adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be harmful to our business, or could contain errors, bugs or vulnerabilities.

Our future success also depends on our ability to understand, adapt and respond to rapidly changing technologies in the travel industry that will allow us to address evolving industry standards and to improve the breadth, diversity and reliability of our services. For example, technology solutions that include the use of AI to analyze known traveler data and preferences to develop a tailored travel plan are being developed. As they are in the early stages, we must understand and respond to the potential impacts of such technology, and evaluate and mitigate any potential additional risks related to the use of such technology in our business, including with respect to intellectual property, cybersecurity and privacy.
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We may be unsuccessful, or may be less successful than our current or new competitors, in developing such technology or mitigating such risks, which would negatively impact our business and financial performance.

If we are unable to maintain existing systems, obtain new technologies and systems, or replace or introduce new technologies and systems as quickly as our competitors or in a cost-effective manner, our business and operations could be materially adversely affected. Also, we may not achieve the benefits anticipated from any new technology or system or be able to devote financial resources to new technologies and systems in the future.

Cybersecurity attacks or security breaches could adversely affect our ability to operate, could result in personal data and our proprietary information being lost, stolen, made inaccessible, improperly disclosed or misappropriated or could cause us to be held liable or subject to regulatory penalties and sanctions and to litigation (including class action litigation), each of which could have a material adverse effect on our reputation and business.

We, and our travel suppliers and third-party service providers on our behalf, collect, use, transmit and otherwise process a large volume of personal data, which poses a tempting target for malicious actors who may seek to carry out cyber-attacks (or other forms of attempts to obtain personal data) against us or our suppliers or third-party service providers. The secure transmission of client information over the internet contributes to maintaining the confidence of travel suppliers and travelers. Substantial or ongoing data security breaches or cyber-attacks on our systems or other systems on which we rely, whether instigated internally or externally, could result in, among other things: (i) exposure to a significant risk of loss, theft, the rendering inaccessible, improper disclosure or misappropriation of personal data, resulting in regulatory actions, litigation (including class action litigation) and potential liability, damages and regulatory fines and penalties and other related costs (including in connection with our investigation, notification and remediation efforts); (ii) severe damage to our IT infrastructure, including damage that could impair our ability to offer our services; (iii) negative publicity; (iv) damage to our reputation or brand; (v) the disclosure, loss or theft of our intellectual property, including our proprietary software, source code and trade secrets, or proprietary information; (vi) diversion of our management’s time and attention away from daily operations; (vii) regulatory penalties and sanctions, which could lead to further enhanced regulatory oversight; and (viii) travelers and potential travel suppliers losing confidence in our cybersecurity and choosing to use our competitors’ services, any of which could have a material adverse effect on our technology solutions, market share, results of operations and financial condition. Furthermore, some of our third-party service providers, travel suppliers and other third parties may receive or store information, including our clients’ information provided by us. For example, our travel suppliers currently require most travelers to pay for their transactions with their credit cards, especially in the U.S., and such suppliers receive our clients’ personal data to process the transactions and we can carry some liability in relation to the suppliers we use and ensuring that they have appropriate technical and organizational security procedures in place to protect personal data. Increasingly sophisticated technological capabilities and techniques of threat actors, including traditional hackers, organized crime, and nation state and state-supported actors, pose greater cybersecurity threats and could result in a cyber-attack or a compromise or breach of the technology that we use to protect client transaction data. Outside of cybersecurity, there remain similar risks for personal data and our intellectual property and proprietary information in relation to other forms of data breach including through social engineering or human error, negligence or malfeasance.

We incur material expense to protect against cyber-attacks and security breaches and their consequences, and we may need to increase our security-related expenditures to maintain or increase our systems’ security in the future.

However, despite these efforts, our security measures may not prevent cyber-attacks or data security breaches from occurring, and we may ultimately fail to detect, or accurately assess the severity of, a cyber-attack or other form of security breach or not respond quickly enough. In addition, to the extent we experience a cyber-attack or security breach, we may be unsuccessful in implementing remediation plans to address exposure and future harms. It is possible that computer circumvention capabilities, new discoveries or advances or other developments, which change frequently and often are not recognized until launched against a target, could result in a compromise or breach of client data, even if we take all reasonable precautions, including to the extent required by law. These risks are likely to increase as we expand our offerings, expand internationally, integrate our products and services, and store and process more data, including personal data and other sensitive data. Further, if any of our third-party service providers, travel suppliers or other third parties with whom we share client data fail to implement adequate data-security practices or comply with our terms and policies or otherwise suffer a network or other security breach, our clients’ information may be improperly accessed, used or disclosed. We maintain a comprehensive portfolio of insurance policies to both meet our legal obligations and cover perceived risks within our business, including those related to cybersecurity, and we believe that our coverage and the deductibles under these policies are adequate for the risks that we currently face. However, we cannot be certain that our insurance coverage will be adequate for liabilities actually incurred in the event of any breach, that insurance will continue to be available to us on commercially reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our financial condition, results of operations and reputation.
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If a party (whether internal, external, an affiliate or unrelated third party) either is able to circumvent our data security systems or those of the third parties with whom we share client information, or engages in cyber-attacks, such data breaches or cyber-attacks could result in such bad actor obtaining our proprietary information, the loss, theft or inaccessibility of, unauthorized access to, or improper use or disclosure of, our clients’ data or a significant interruption in our operations. Our business continuity and disaster recovery plans may not be effective, particularly if catastrophic events occur where large numbers of our people are located, or simultaneously affect our people in multiple locations around the world. If these disruptions prevent us from effectively serving our clients, our results of operations could be significantly adversely affected.

Please see the Risk Factor titled “Our collection, storage, use, disclosure and other processing of personal data, including of travelers and our employees, exposes us to risks stemming from possible failure to comply with applicable laws and regulations and other legal obligations relating to data privacy and security” for further information.

Our failure to adequately protect, maintain or enforce our intellectual property may negatively impact our ability to compete effectively against competitors in our industry.

Our success and ability to compete depend, in part, upon our ability to protect, maintain and enforce our intellectual property, including our technology solutions and database. In the U.S. and other jurisdictions, we rely on a combination of copyright, trademark, and trade secret laws, as well as license and confidentiality agreements and internal policies and procedures to protect our intellectual property. Even with these precautions, however, it may be possible for another party to infringe, copy or otherwise obtain and use our owned or licensed intellectual property without our authorization or to develop similar intellectual property independently, particularly in those countries where effective trademark, domain name, copyright, and trade secret protection may not be available. Even where effective protection is available, policing unauthorized use of our intellectual property is difficult and expensive, and despite our efforts to protect our intellectual property rights, they may not be respected in the future or may be invalidated, circumvented, or challenged. If it becomes necessary for us to litigate to protect these rights, any proceedings could be burdensome and costly, could result in counterclaims challenging our ownership of intellectual property or its validity or enforceability or accusing us of infringement, and we may not prevail. We cannot be certain that the steps that we have taken or will take in the future will prevent misappropriation or infringement of intellectual property used in our business. Unauthorized use and misuse of our intellectual property or intellectual property we otherwise have the rights to use could reduce or eliminate any competitive advantage we have developed, potentially causing us to lose sales or actual or potential clients, or otherwise harm our business, resulting in a material adverse effect on our business, financial condition or results of operations, and we cannot assure you that legal remedies would adequately compensate us for the damage caused by unauthorized use.

Our use of “open source” software could adversely affect our ability to protect our proprietary software and subject us to possible litigation.

We use open source software in connection with our software development. From time to time, companies that use open source software have faced claims challenging the use of open source software or demanding compliance with open source license terms. We could be subject to suits by parties claiming ownership of what we believe to be open source software, or claiming non-compliance with open source licensing terms. Some open source licenses require licensees who distribute software containing, linking to or derived from open source software to make publicly available the source code of such distributed software, which in some circumstances could be valuable proprietary code, or could require us to license our software for free or permit others to make derivative works based on such software. Further, the terms of many open source licenses have not been interpreted by U.S. courts, and there is a risk that these licenses could be construed in ways that could impose unanticipated conditions or restrictions on our ability to commercialize our technology solutions incorporating such software. While we have implemented policies to ensure that no open source software is used in a manner that would require us to disclose our proprietary source code, license our software for free or permit others to make derivative works based on it, there can be no guarantee that such use could not inadvertently occur. Any requirement to disclose our proprietary source code, license it for free or license it for purposes of making derivative works, and any requirement to pay damages for breach of contract and/or intellectual property infringement may have a material adverse effect on our business, results of operations or financial condition, and could help our competitors develop services that are similar to or better than ours.

Our collection, storage, use, and disclosure and other processing of personal data, including of travelers and our employees, exposes us to risks stemming from possible failure to comply with applicable laws and regulations and other legal obligations relating to data privacy and security. Such laws, regulations and other obligations, and the costs of
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complying with them, are increasing globally, and any actual or perceived failure to comply with them could have a material adverse effect on our business.

In our processing of travel transactions, we or our travel suppliers and third-party service providers collect, use, analyze, transmit and otherwise process a large volume of personal data in and outside of the U.S. As a result, we are subject to numerous laws with a significant impact on our operations regarding privacy, cyber security and the storage, sharing, use, analysis, transfer, disclosure, protection and other processing of personal data and consumer data, the scope of which are changing, subject to differing interpretations, and may be inconsistent between states within a country or between countries.

Privacy laws are constantly evolving and new legal obligations and liabilities in relation to these are appearing around the world, each of which demand increased compliance resources, including personnel and financing resources. Internationally, many jurisdictions in which we operate have established their own data privacy and security legal framework with which we must comply. For example, the EU’s General Data Protection Regulation (“GDPR”), became effective on May 25, 2018, and continues to result in significantly greater compliance burdens and costs for companies with users or operations in the EU. The GDPR imposes numerous technical and operational obligations on processors and controllers of personal data and provides numerous protections for individuals in the European Economic Area (“EEA”), including, but not limited to, the right to receive notifications regarding certain data breaches, the right to access personal data and the right to delete personal data. The GDPR provides data protection authorities with enforcement powers which include the ability to restrict processing activities and impose fines of up to 20 million Euros or up to 4% of the annual global turnover of the infringer, whichever is greater. In addition, the GDPR imposes strict rules on the transfer of personal data out of the EEA to a so-called “third country,” with the use of European Commission Approved Standard Contractual Clauses (“SCCs”) being a primary mechanism for such transfers. These obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other requirements or our practices.

Following the U.K.’s exit from the EU (“Brexit”), the U.K. Data Protection Act contains provisions, including its own derogations, for how the GDPR is applied in the U.K. (“U.K. GDPR”). The U.K. Data Protection Act has been enacted alongside the U.K. GDPR. From the beginning of 2021 (when the transitional period following Brexit expired), we have been required to continue to comply with GDPR and also the U.K. Data Protection Act and the U.K. GDPR, under which our applicable entities may be subject to fines for non-compliance that are of the same amount as provided for in the GDPR. At the current time, the European Commission has issued an “adequacy” decision to the U.K., which facilitates the sharing of personal data between the EEA and the U.K. However, such adequacy decision will sunset in June 2025 unless extended and it may be revoked in the future by the European Commission if the U.K. data protection regime is reformed in ways that deviate substantially from the level of protection currently in place. Adding further complexity for international data flows, in March 2022, the U.K. adopted its own International Data Transfer Agreement (“IDTA”) for transfers of personal data out of the U.K. to so-called third countries, as well as an international data transfer addendum (“U.K. Addendum”) that can be used with the SCCs for the same purpose. The EU has also proposed legislation that would regulate non-personal data and establish new cybersecurity standards, and other countries, including the U.K., may similarly do so in the future. While the GDPR and U.K. GDPR remain substantially similar for the time being, the U.K. GDPR is currently under review in the U.K. and there may be further changes made to it over the next few years, including in ways that may differ from the GDPR, which could result in further compliance obligations. While these developments increase uncertainty with regard to data protection regulation in the U.K., even in their current, substantially similar form, the GDPR and U.K. GDPR can expose businesses to divergent parallel regimes that may be subject to potentially different interpretations and enforcement actions for certain violations and related uncertainty.

Cross-border transfers of data continues to be an area of considerable focus by data protection regulators around the world and we are subject to evolving laws and regulations that dictate whether, how, and under what circumstances we can transfer, process or receive personal data. For example, in July 2020, the Court of Justice of the European Union invalidated the “EU-US Privacy Shield,” a framework for transfers of personal data from the European Economic Area to the United States. Subsequent to this, as noted above, new standard contractual clauses have been adopted by the EU and the U.K. and we are required to use such new contract clauses where appropriate and to carry out additional transfer impact assessments. Additionally, in October 2022, President Biden signed an executive order to implement the EU-U.S. Data Privacy Framework, which would serve as a replacement to the EU-US Privacy Shield. The European Commission initiated the process to adopt an adequacy decision for the EU-US Data Privacy Framework in December 2022, however, the European Commission and the European Data Protection Board both have been critical of the framework and it is unclear if or when the framework will be finalized or adopted. Given that this is such an area of compliance focus by regulators, there remains a risk that transfers of personal data to some jurisdictions could be considered to be unlawful without adequate data transfer mechanisms in place.

In the U.S., there are numerous federal, state and local data privacy and security laws, rules, and regulations governing the collection, sharing, use, retention, disclosure, security, transfer, storage and other processing of personal data, including federal and state data privacy and security laws, data breach notification laws, and data disposal laws.
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For example, at the federal level, we are subject to, among other laws and regulations, the rules and regulations promulgated under the authority of the Federal Trade Commission (which has the authority to regulate and enforce against unfair or deceptive acts or practices in or affecting commerce, including acts and practices with respect to data privacy and security), as well as the Electronic Communication Privacy Act and the Computer Fraud and Abuse Act. The United States Congress also has considered, is currently considering, and may in the future consider, various proposals for comprehensive federal data privacy and security legislation, to which we may become subject if passed. If we are found to have violated applicable laws or regulations, we also may be subject to penalties, fines, damages, injunctions or other outcomes that may adversely affect our operations and financial results.

At the state level, we are subject to laws and regulations such as the California Consumer Privacy Act (“CCPA”), as amended by the California Privacy Rights Act (the “CPRA”). The CCPA became effective on January 1, 2020, and limits how we may collect and use personal data, including by requiring companies that process information relating to California residents to make disclosures to consumers about their data collection, use and sharing practices, provide consumers with rights to know and delete personal data and allow consumers to opt out of certain data sharing with third parties. The CCPA also creates an expanded definition of personal data, imposes special rules on the collection of consumer data from minors, and provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase the likelihood and cost of data breach litigation. The potential effects of this legislation are far-reaching and may require us to modify our data processing practices and policies and incur substantial costs and expenses in compliance and potential ligation efforts. Further, the CPRA, which went into effect January 1, 2023, creates certain additional rights for California residents. For example, the CPRA creates the new category of “sensitive personal information,” which covers data types such as precise geolocation information, biometric information, race and ethnicity, and information regarding sex life or sexual orientation. The CPRA also creates new rights for California residents to direct a business to limit the use and disclosure of such information to that which is necessary to perform the services reasonably expected by the consumer and to request that a company correct inaccurate personal data that is retained by us. The Virginia Consumer Data Protection Act, which also became effective on January 1, 2023, gives new data protection rights to Virginia residents and imposes additional obligations on controllers and processors of consumer data similar to the CCPA and CPRA. In addition, other states have signed into law (including Colorado and Connecticut, which laws will become effective July 1, 2023, and Utah, which law will become effective December 31, 2023) or are considering legislation governing the handling of personal data, indicating a trend toward more stringent privacy legislation in the U.S. Moreover, laws in all 50 U.S. states require businesses to provide notice under certain circumstances to consumers whose personal data has been disclosed as a result of a data breach. Existing and evolving compliance obligations in respect of privacy rules relating to marketing and the use of cookies and related advertising technology may also have an impact on the business such as by reducing the use of databases and advertising techniques in order to conduct marketing activities. Compliance failures in this area can result in potential rulings to delete or stop using marketing databases, fines, penalties and claims from individuals. In addition to the existing framework of data privacy laws and regulations, the U.S. Congress, U.S. state legislatures and many states and countries outside the U.S. are considering new privacy and security requirements that would apply to our business. Compliance with current or future privacy, cyber security, data protection, data governance, account access and information and cyber security laws requires ongoing investment in systems, policies and personnel and will continue to impact our business in the future by increasing our legal, operational and compliance costs and could significantly curtail our collection, use, analysis, sharing, retention and safeguarding of personal data and restrict our ability to fully maximize our closed-loop capability, deploy data analytics or AI technology or provide certain products and services, which could materially and adversely affect our profitability. We or our third-party service providers could be adversely affected if legislation or regulations are expanded to require changes in our or our third-party service providers’ business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our or our third-party service providers’ business, results of operations or financial condition.

Our ability to use net operating loss carryforwards to offset future taxable income for U.S. federal tax purposes is subject to limitation and risk that could further limit our ability to utilize our net operating losses.

As of December 31, 2022, our Company had net operating loss carryforwards (“NOLs”) for federal and state of approximately $100.95 million and $122.65 million, respectively. As of December 31, 2021, our Company had net operating loss carryforwards for federal and state of approximately $108.53 million and $141.37 million, respectively. The federal net operating losses will begin to expire in 2032, and state net operating losses begin to expire in 2027, if not utilized. Under current law, federal NOLs generated in taxable years ending after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80%. Federal NOLs generated prior to January 1, 2018, however, have a 20-year carryforward period, but are not subject to the 80% limitation.

Under U.S. federal income tax law, a corporation’s ability to utilize its NOLs to offset future taxable income may be significantly limited if it experiences an “ownership change” as defined in Section 382 of the Internal Revenue Code, as amended (the “Code”). In general, an ownership change will occur if there is a cumulative change in a corporation’s ownership by “5 percent shareholders” that exceeds 50 percentage points (by value) over a rolling three-year period. A corporation that experiences an ownership change will generally be subject to an annual limitation on the use of its pre-ownership change NOLs equal to the value of the corporation immediately before the ownership change, multiplied by the long-term tax-exempt rate (subject to certain adjustments).
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Furthermore, our ability to utilize NOLs of companies that we have acquired or may acquire in the future may be subject to similar limitations. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs by federal or state taxing authorities or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities. For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance sheet, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our operating results and financial condition.

A significant portion of our total outstanding shares may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

Although ITHAX Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”), the members of the Sponsor, the Mondee Stockholders and the members of the Mondee Stockholder were prohibited, through January 19, 2023, from transferring any of our securities, in each case, subject to certain customary exceptions, these shares may now be sold and we have filed, and may in the future file or amend, registration statements to provide for the resale of such shares from time to time. If any of these shareholders or another large institutional shareholder were to sell a substantial number of shares of our common stock at once or in large blocks, or are perceived by the market as intending to sell them, the market price of our common stock could decline.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.
(Dollars in thousands, except price per share data Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
Stock Repurchases1
Quarter Ended September 30, 2023
  July 1 to July 31 —  $ —  —  $ — 
  August 1 to August 31 —  $ —  —  $ — 
  September 1 to September 30 215,350  $ 3.54  215,350  $ 39,234 
For the three months ended September 30 215,350  $ 3.54  215,350  $ 39,234 
Stocks Retained in Net Settlement2
  July 1 to July 31 4,184 
  August 1 to August 31 50,720 
  September 1 to September 30 26,405 
For the three months ended September 30 81,309 
1 On September 21, 2023, the Company’s Board of Directors authorized a share repurchase program to purchase up to $30 million of the Company’s Class A Common Stock (the “Share Repurchase Program”). The Share Repurchase Program has no expiration date.
2 The Company’s Stock Plan permits net settlement of stock issuances relating to equity awards for purposes of settling a grantee’s tax withholding obligations. Stock Retained in Net Settlement was at the vesting price of the corresponding restricted stock unit.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. Other Information




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Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.

Exhibit No Description Form File No Exhibit Filing Date
2.1 8-K 001-39943 2.1 December 20, 2021
2.2 8-K 001-39943 2.1 February 1, 2023
2.3† 8-K 001-39943 2.1 May 16, 2023
2.4† 8-K 001-39943 2.1 May 16, 2023
2.5†*
3.1 8-K 001-39943 3.1 July 20, 2022
3.2 8-K 001-39943 3.2 July 13, 2023
3.3 8-K 001-39943 3.1 September 30, 2022
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10.1+†*
10.2+*
31.1*
31.2*
32.1*
32.2*
101.INS* Inline XBRL Instance Document
101.SCH* Inline XBRL Taxonomy Extension Schema Document.
101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF* XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* XBRL Taxonomy Extension Labels Linkbase Document
101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document
104** Cover Page Interactive Data File, formatted in Inline XBRL (formatted as inline XBRL and contained in Exhibit 101)

* Filed herewith.
** Furnished herewith.
+ Indicates management contract or compensatory plan.
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† Portions of exhibit have been omitted pursuant to Regulation S-K Item 601(a)(5) promulgated under the Exchange Act. The Registrant agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request.





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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MONDEE HOLDINGS, INC.
Date: November 14, 2023
 By: /s/ Prasad Gundumogula
Name: Prasad Gundumogula
Title: Chief Executive Officer
(Principal Executive Officer)
Date: November 14, 2023
 By: /s/ Jesus Portillo
Name: Jesus Portillo
Title: Chief Financial Officer
(Principal Financial and Accounting Officer)
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EX-2.5 2 mondee01amendedstockpurcha.htm EX-2.5 Document
CERTAIN IDENTIFIED INFORMATION MARKED WITH "[***]" HAS BEEN OMITTED FROM THIS DOCUMENT BECAUSE IT IS BOTH (I) NOT MATERIAL AND THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL

STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of September 29, 2023 (the “Execution Date”), and effective as of July 1, 2023 (the “Effective Date”), is made by and among LBF Travel Management Corp., a Delaware corporation (the “Buyer”), LBF Travel, Inc., a Delaware corporation (the “Company”), and Mondee, Inc., a Delaware corporation (the “Seller”). The Company and the Seller are sometimes referred to herein as the “Seller Parties.” The Seller Parties and the Buyer are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
WHEREAS, the Company (f/k/a LBF Acquisition Corporation, Inc.) purchased the equity interests of LBF Travel Holdings, LLC, a Delaware limited liability company (“LBF Travel Holdings”), Mondee Tech Private Limited (f/k/a LBF Travel India Private Limited) (“Mondee India”), an India private company limited by shares, and BookingWiz (Thailand) Ltd., a Thailand private limited company (“BookingWiz”), pursuant to that certain Equity Interest Purchase Agreement, dated as of December 20, 2019 (the “Prior Purchase Agreement”), by and among the Company, Michael Thomas and the Buyer. As set forth in the Prior Purchase Agreement, BookingWiz was acquired directly from Michael Thomas.
WHEREAS, the Seller transferred control of the Company, including control over business financial and risk decisions, to Buyer, through its ultimate beneficial owner, Michael Thomas, , as of the Effective Date.
WHEREAS, the Seller was the current record and beneficial owner of one share of Common Stock of the Company, par value $0.01 (the “Shares”), which constitute all of the outstanding shares of capital stock of the Company.
WHEREAS, prior to the Effective Date, the Company has distributed, or caused to be distributed, the equity interests of BookingWiz and Mondee India to the Seller resulting in the Seller, directly or indirectly or through an affiliate, owning 99.99% of the equity interest of BookingWiz and all of the equity interest of Mondee India (collectively the “Pre-Closing Restructuring”).
WHEREAS, the Parties had agreed that for the period between the Effective Date and the Execution Date, as part of the consideration, Seller would fund all operating, marketing, charge backs and otherwise all losses relating to the Company up to an amount of $10,000,0001 (“Permitted Amount”).
WHEREAS, the Buyer desired to purchase all of the Shares from the Seller, and the Seller desired to sell such Shares to the Buyer as originally agreed on the Effective Date, all in accordance with the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants, conditions and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1 This amount was amended via side letter agreed by the parties hereto.
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ARTICLE 1:  PURCHASE AND SALE
1.1Agreement to Purchase and Sell. Subject to the terms and conditions set forth in this Agreement, effective as of the Effective Date, the Buyer purchases and acquires from the Seller, and the Seller sells, assigns, transfers, conveys and delivers to the Buyer, all of the right, title and interest in and to the Shares.
1.2Purchase Price. The aggregate consideration for the Shares (the “Purchase Price”) shall be 200,000 shares of Class A Common Stock of Mondee Holdings, Inc., par value $0.0001, held by Buyer (the “Holdings Shares”).
1.3Payment and Adjustments. Effective as of the Effective Date, the Buyer shall, in exchange for the Shares, sell, assign, transfer, convey and deliver to the Seller, all of the right, title and interest in and to the Holdings Shares.
1.4Revenue, Costs and Obligations between the Effective Date and the Execution Date. The Buyer shall be entitled to all Company revenue and be responsible for all Company operating costs, marketing costs, employee costs, working capital and all other costs and obligations of the Company in excess of the Permitted Amount for the period between the Effective Date and the Execution Date. To the extent that the Seller may have funded or will fund any such costs, working capital and other costs and obligations during the period between the Effective Date and the Execution Date, up to the Permitted Amount, such costs, working capital and other costs and obligations shall be deemed as additional consideration for the Shares under this Agreement. Seller shall be responsible for the costs of all chargebacks, debit memos, refunds, or other financial settlements of the Company for the period following to the Effective Date through the Execution Date, which shall be treated as working capital for accounting purposes. For any chargebacks or refunds recovered by Seller or Buyer for the period following the Effective date through Execution Date, 50% of such amounts shall be paid to the other party when received.
1.5Proration of Ad Valorem Taxes. The Buyer and the Seller shall apportion all real estate, personal property and similar ad valorem Taxes of the Company based upon the number of days in the applicable Tax period before and after the Effective Date. The Seller shall be responsible for all such costs for periods ending before the Effective Date, and the Buyer shall be responsible for all such costs for periods on and after the Effective Date. If the final prorated amounts are not known as of the Execution Date, such amounts shall be estimated and adjustments thereto shall be made after the Execution Date at such time as they are known to the Parties.
ARTICLE 2:  CLOSING
2.1Closing. The closing of the transactions contemplated by this Agreement (i) shall take place by electronic exchange of the closing deliverables on the Execution Date, and (ii) shall be deemed to be effective as of 12:01 a.m. (Eastern Standard Time) on the Effective Date, and to have taken place at the offices of Hutchison PLLC in Raleigh, North Carolina. All deliveries, payments and other tasks to be performed at the closing of the transactions contemplated by this Agreement are interdependent and none shall be fully and finally effective unless and until all are fully and finally effective (except to the extent waived by the Party entitled to the benefit thereof).
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2.2The Seller Parties Deliveries. On or prior to the Execution Date, the Seller Parties, as applicable, have delivered each of the following in form and substance reasonably acceptable to the Buyer:
(a)a duly executed stock power from Seller conveying the Shares to the Buyer, effective as of the Effective Date;
(b)a duly executed resignation from each director and officer of the Company and its subsidiaries, and from such other persons as specified by the Buyer;
(c)a Transition Services Agreement executed by the Seller (the “Transition Services Agreement”); and
(d)a duly executed copy of the Lock-up letter Agreement (the “Lock-Up Letter Agreement”).
2.3The Buyer Deliveries. On or prior to the Execution Date, the Buyer has delivered each of the following in form and substance reasonably acceptable to the Seller:
(a)a duly executed stock power from the Buyer conveying the Holdings Shares to the Seller, effective as of the Effective Date; and
(b)the Transition Services Agreement executed by the Company, Seller and Buyer.

ARTICLE 3:  REPRESENTATIONS AND WARRANTIES

3.1Representations and Warranties of the Company and the Seller Concerning the Company. The Seller Parties hereby represent and warrant to the Buyer, as of the Effective Date and as of the Execution Date, as follows:
(a)Existence and Qualification; Subsidiaries. The Company is duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite power and authority and all authorizations, licenses, Permits and certifications necessary to own all of its properties and assets and to carry on its business as it is now being conducted. The Company is in good standing in each of the jurisdictions in which the nature of its business requires it to be qualified as a foreign entity, except to the extent the failure to be in good standing or so qualified would not constitute a material adverse effect.

(b)Capitalization. The outstanding equity interests of the Company consist solely of the Shares. All of the Shares are duly authorized, validly issued, fully paid and non-assessable and were not issued in violation of: (i) any preemptive or other rights of any Person to acquire securities of the Company, or (ii) any applicable federal or state securities laws, and the rules and regulations promulgated thereunder. There are no outstanding subscriptions, options, convertible securities, rights (preemptive or otherwise), warrants, calls or agreements relating to any equity interests of the Company.
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(c)Authority; No Violation; Enforceability. The Company has all requisite power and authority necessary to enter into this Agreement and the other Transaction Documents to be executed and delivered by it pursuant to this Agreement and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the other Transaction Documents, and the performance by the Company of the transactions contemplated hereby and thereby, have been duly and validly authorized and approved by all necessary action on the part of the Company. The execution and delivery by the Company of this Agreement and the other Transaction Documents to which it is a party, and the consummation by it of the transactions contemplated hereby and thereby, do not and will not: (i) violate or conflict with any Applicable Law, (ii) violate, conflict with or result in a breach or default under its Certificate of Incorporation or Bylaws (iii) do not and will not conflict with or result in any breach of any of the provisions of, constitute a default under, result in a violation of or result in the creation of a right of termination or acceleration or any Lien upon any assets of the Company under the provisions of any Contract or Permit by which the Company is bound or affected, or, (iv) require the consent, waiver or approval of, or notice to any other Person, other than such consents, filings or notices made or obtained as of the date hereof. This Agreement and the other Transaction Documents to which the Company is a party (assuming the due execution by all other parties thereto) will constitute the legal, valid and binding obligations of the Company, enforceable against it in accordance with its and their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at Applicable Law).
(d)Assets. Except for the Transferred Assets, the shares of capital stock of BookingWiz and Mondee India and the assets and liabilities held by BookingWiz and Mondee India, the shares of capital stock, and related assets and liabilities, transferred pursuant to this Agreement constitute, in all material respects, the shares of capital stock, and related assets and liabilities, acquired by the Seller pursuant to the Prior Purchase Agreement.
(e)Brokerage Commissions. No Person is entitled to any brokerage commission, investment banking, or finder’s fee in connection with any of the transactions contemplated by this Agreement by reason of any act or omission of any of the Seller or the Company.
3.2Representations and Warranties of the Seller Concerning the Seller. The Seller represents and warrants to the Buyer, as of the Effective Date and as of the Execution Date, as follows:
(a)Valid Title. The Seller is the sole, true, and lawful owner of the Shares, free and clear of any and all Liens, other than [***]. Other than the Shares, the Seller owns no securities of the Company or options to purchase or rights to subscribe for or otherwise acquire any securities of the Company and has no other interest in or voting rights with respect to any securities of the Company.
(b)Authorization; Binding Effect. The Seller has the legal capacity to enter into this Agreement and the Transaction Documents contemplated hereby to which the Seller is a party and to consummate the transactions contemplated thereby. This Agreement, the Transaction Documents and each such document to which the Seller is or will be a party have been duly executed and delivered by the Seller and, when duly authorized, executed and delivered to all other parties thereto, will constitute a valid and binding agreement of the Seller enforceable against the Seller in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at Applicable Law).
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(c)Governmental Authorization and Consents. No consent by or filing with, or notice to, any Governmental Authority or any other Person, is required by the Seller in connection with the execution, delivery and performance by the Seller of this Agreement, other than such consents, filings or notices made or obtained as of the date hereof, and each of the documents, agreements, instruments and certificates to which the Seller is a party in connection with the transactions contemplated hereunder and thereunder.
(d)Non-contravention. The execution and delivery of this Agreement, and each of the documents, agreements, instruments and certificates to which the Seller is a party, by the Seller, the performance by the Seller of its obligations hereunder and thereunder, and the consummation of the transactions contemplated hereunder and thereunder, do not and will not (i) contravene or conflict with any applicable provision of any Applicable Law, regulation, rule, judgment, injunction, order or decree binding upon or applicable to the Seller, or (ii) contravene or constitute a default under any written agreement or obligation to which the Seller is a party by which any of its properties or assets are bound.
3.3Representations and Warranties of the Buyer. The Buyer hereby represents and warrants to the Seller, as of the Effective Date and as of the Execution Date, as follows:
(a)Valid Title. The Buyer is the sole, true, and lawful owner of the Holdings Shares, free and clear of any and all Liens, other than [***].
(b)Organization; Authorization. The Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Buyer has the power and authority to purchase the Shares from the Seller pursuant to this Agreement and to execute, deliver and otherwise perform this Agreement and the other Transaction Documents to be executed and delivered by the Buyer pursuant to this Agreement. This Agreement, the Transaction Documents and each such document to which the Buyer is or will be a party have been duly executed and delivered by the Buyer and, when duly authorized, executed and delivered to all other parties thereto, will constitute a valid and binding agreement of the Buyer enforceable against the Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at Applicable Law).
(c)Governmental Authorization and Consents. No consent by or filing with, or notice to, any Governmental Authority or any other Person, is required by the Buyer in connection with the execution, delivery and performance by the Buyer of this Agreement, other than such consents, filings or notices made or obtained as of the date hereof, and each of the documents, agreements, instruments and certificates to which the Buyer is a party in connection with the transactions contemplated hereunder and thereunder.
(d)Non-Contravention. The execution and delivery by the Buyer of this Agreement and the consummation by the Buyer of the transactions contemplated by this Agreement do not and will not (i) violate or conflict with any Applicable Law, or (ii) require the consent, waiver or approval of, or notice to any other Person, other than such approvals as have been obtained prior to the Execution Date.
(e)Brokerage Commissions. No Person is entitled to any brokerage commission, investment banking, or finder’s fee in connection with any of the transactions contemplated by this Agreement by reason of any act or omission of the Buyer.
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ARTICLE 4:  ADDITIONAL AGREEMENTS
4.1Tax Matters.
(a)The Seller shall be liable for all Taxes with respect to the Company, its business or its assets, and with respect to the Seller’s interests therein, for all taxable periods or portions thereof ending on or before the Effective Date, and shall indemnify and hold the Buyer, the Company, and their respective Affiliates harmless against all such Taxes.
(b)The Seller, at the Seller’s sole expense, shall prepare or cause to be prepared in accordance with past practices of the Company, unless otherwise required by Applicable Law, the income Tax Returns of the Company for any Tax period ending on or prior to the Effective Date. The Seller shall provide the Buyer the right to review and comment on any such income Tax Returns due after the Execution Date at least 30 days prior to the due date for such income Tax Returns and consider in good faith all changes to such income Tax Returns as are reasonably requested by the Buyer. Subject to Section 4.1(c), the Buyer shall cause the Company to timely file all such income Tax Returns.
(c)The Buyer, at the Buyer’s sole expenses, shall prepare or cause to be prepared in accordance with past practices of the Company, unless otherwise required by Applicable Law, the income Tax Returns of the Company for any taxable period that begins before and ends after the Effective Date (a “Straddle Period”). The Parties agree to use the following conventions for determining the amount of Taxes attributable to the portion of the Straddle Period ending on the Effective Date: (i) in the case of a Tax that is based on income, sales or gross receipts, payroll, or specific transactions, the amount attributable to the portion of the Straddle Period ending on the Effective Date shall be determined as if the Company filed a separate Tax Return with respect to such Taxes for the portion of the Straddle Period ending on the Effective Date (as of the end of the day) using a “closing of the books methodology;” and (ii) in the case of other Taxes, including real property Taxes, the amount attributable to the portion of the Straddle Period ending on the Effective Date shall be determined by multiplying the total amount of such Tax for the entire Straddle Period by a fraction, the numerator of which is the number of days in the taxable period up to and including the Effective Date, and the denominator of which is the total number of days in such Straddle Period.
(d)The Buyer shall not file any amendment to previously filed Tax Returns of the Company or otherwise change any election or any accounting method with respect to a Tax period that begins and ends before the Effective Date without the consent of the Seller, which shall not be unreasonably withheld.
(e)After the Execution Date, the Buyer and the Company, on the one hand, and the Seller, on the other hand, shall provide each other with such assistance as may be reasonably requested in connection with the preparation of any Tax Return, any audit or other examination by any Tax authority, or any judicial or administrative proceeding relating to liability for Taxes of the Company.
(f)All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement shall be paid by the Seller when due; provided that the payment of the India Transfer Tax Liability will be paid in accordance with Section 4.7(c).
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(g)Any income Tax refunds that are received by the Buyer or the Company or its subsidiaries and any amounts credited against income Taxes to which the Buyer, the Company or any of its subsidiaries become entitled, that relate to income Tax periods or portions thereof ending on or before the Effective Date shall be for the account of the Seller, and the Buyer shall pay over to the Seller any such refund or the amount of any such credit within 15 days after such receipt.]
4.2Termination of Restrictive Covenants. The Seller acknowledges and agrees that, from and after the Effective Date, Buyer and Michael Thomas (“Thomas”) are no longer subject to or bound by the restrictive covenants set forth in Sections 6.2(a) and 6.2(b) of the Prior Purchase Agreement, nor is Thomas subject to or bound by the restrictive covenant set forth in Section 3(a) of that certain Employment Agreement dated December 20, 2019 between Seller and Thomas.
4.3Acknowledgement of the Buyer. The Buyer acknowledges that it has conducted to its satisfaction an investigation and verification of the financial condition, results of operations, assets, liabilities, properties and projected operations of the Company, and that in making its determination to proceed with the transactions contemplated by this Agreement, the Buyer has relied on the results of its own investigation and verification and the representations and warranties of the Seller and the Company expressly set forth in Sections 3.1 and 3.2 and the representations and warranties set forth in the Transaction Documents. Such representations and warranties by the Seller and the Company constitute the sole and exclusive representations and warranties of the Seller and the Company to the Buyer in connection with the transactions contemplated by this Agreement, and the Buyer understands, acknowledges and agrees that all other representations and warranties of any kind or nature expressed or implied are specifically disclaimed by the Seller and the Company.
4.4Confidentiality; Public Announcements. The Buyer and the Seller agree that the terms and conditions of the transactions contemplated in this Agreement are to remain confidential, except that a Party and its Affiliates may disclose the terms and provisions of this Agreement (a) to such Party’s Affiliates, (b) to the extent that any Party or any of its Affiliates is required by Applicable Law or the listing rules of any securities exchange, including NASDAQ, to make public disclosure, or (c) in any Action, including any audit, to the extent necessary to enforce any rights under this Agreement. In any such case, the disclosing Party shall provide the other Party with prior notice of such disclosure and the content thereof. Notwithstanding the foregoing, the Seller and its Affiliates may issue a press release or make other public announcements disclosing that the transactions contemplated by this Agreement have been consummated and describing the Parties, the Company and the business, but shall not disclose any other terms of the transactions, unless otherwise required by Applicable Law or the listing rules of any securities exchange, including NASDAQ, or consented to by the Buyer.
4.5Expenses. Except as otherwise specifically provided in this Agreement, each Party will pay all costs and expenses incident to its negotiation and preparation of this Agreement and the other Transaction Documents and to its performance and compliance with all the agreements and conditions contained herein, including the fees, expenses and disbursements of its counsel, investment bankers and accountants.
4.6Transfer of Certain Assets. At the request of the Seller, the Company shall assign to the Seller, at the sole cost of the Seller, and the Seller shall assume from the Company, the contracts set forth on Schedule 4.6, in each case for no additional consideration (collectively, the “Transferred Assets”). Each Party will do such things as may be reasonably requested by the other Party hereto in order to consummate or document the assignments and transfers contemplated by this Section 4.6.
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4.7Reimbursement. The Seller shall reimburse the Company for:
(a)50% of all reasonable attorneys’ fees incurred by the Company in connection with Skylar Bishil, v. LBF Travel, Inc. et al., Superior Court of California, County of Los Angeles, Case No. 22STCV20224; and
(b)50% of all reasonable attorneys’ fees incurred by the Company in connection with Blue Ribbon Bags, LLC v. LBF Travel, Inc., Supreme Court of the State of New York, County of New York, Case No. 653411/2020.
(c) 50% of all India Transfer Tax Liability incurred by the Company on or before the Execution Date.

4.8Further Assurances. Upon the execution of this Agreement and thereafter, each Party will do such things as may be reasonably requested by the other Party hereto in order more effectively to consummate or document the transactions contemplated by this Agreement or the Pre-Closing Restructuring.
ARTICLE 5:  INDEMNIFICATION
5.1Indemnification by the Buyer. The Buyer shall indemnify, defend and hold the Seller, its officers, directors, stockholders, employees, Affiliates, successors and assigns harmless from and against any losses, claims, liabilities, obligations, costs, expenses (including reasonable attorneys’ and professional fees), penalties, fines, interest, damages, and monetary sanctions (“Losses”) incurred or sustained by any of them in connection with, arising out of, or relating to any lawsuit, claim, controversy, order, decree or other legal or equitable proceeding (“Proceeding”) by [***] or any stockholders of the Buyer, in connection with the consummation of the transactions contemplated by this Agreement.
5.2 Indemnification by the Seller. The Seller shall indemnify, defend and hold the Buyer, its officers, directors, stockholders, employees, Affiliates, successors and assigns harmless from and against any Losses incurred or sustained by any of them in connection with, arising out of, or relating to:
(a)any inaccuracy in or breach of any representation or warranty contained in Sections 3.1 and 3.2 and the representations and warranties set forth in the Transaction Documents;
(b)any breach or nonfulfillment of any covenants agreements or other provisions by the Seller set forth in the Transaction Documents; and
(c)the Pre-Closing Restructuring.
5.3Certain Limitations. Notwithstanding anything to the contrary contained in this Agreement, the maximum aggregate amount of indemnifiable Losses which may be recovered from the Seller arising out of or relating to the causes set forth in Sections 5.2(a) and 5.2(b), as the case may be, shall be equal to $2,000,000.
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ARTICLE 6:  MISCELLANEOUS
6.1Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) if delivered by hand, on the date delivered; (b) one business day after being sent, costs prepaid, by a nationally recognized overnight courier; or (c) on the date transmitted, if sent before 5:00 p.m. at recipient’s local time or, if later, on the next business day, if sent by facsimile or e-mail of a PDF document. Unless hand-delivered, such communications must be sent to the respective Parties at the address set forth beneath his or its signature below (or at such other address for a Party as may be specified in a notice given in accordance with this Section 6.1).
6.2Assignment; Binding Effect. No Party may assign or transfer its rights and obligations under this Agreement, except with the prior written consent of the other Parties. This Agreement is binding upon the Parties and their successors and assigns and inures to the benefit of the Parties and their permitted successors and assigns and, when appropriate to effect the binding nature of this Agreement for the benefit of the other parties, any other successor or assign.
6.3Certain Definitions. For purposes of this Agreement, the following terms have the meanings specified in this Section 6.3. Other terms are defined throughout the body of this Agreement.
“Affiliate” means, as to a specified Person, means a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Persons specified, where “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Applicable Law” means each provision of any constitution, statute, law, rule, regulation, decision, order, decree, judgment, release, license, permit, stipulation or other official pronouncement enacted, promulgated or issued by any Governmental Authority or arbitrator or arbitration panel.
“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banking institutions in the State of Texas are authorized or obligated by law or executive order to be closed.
“Code” means the Internal Revenue Code of 1986, as amended
“[***]” means, collectively (i) [***], and (ii) [***].
“Governmental Authority” means any legislative, executive, judicial, quasi-judicial or other public authority, agency, department, bureau, division, unit, court or other public body or Person.
“India Transfer Tax Liability” means any ownership transfer Taxes or charges associated with Mondee India owing or accrued in India as of December 20, 2019.
“Lien” means any mortgage, deed to secure debt, deed of trust, security interest, lien, pledge, charge, encumbrance, other rights of third parties, or adverse claim of any kind whatsoever, including any other security arrangement of any nature whatsoever, any conditional sale or title retention arrangement, any assignment, deposit arrangement or lease intended as, or having the effect of, security, and the interest of a lessor or lessee under a lease treated as a capitalized lease.
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“Permits” means licenses, permits, registrations, franchises, grants, authorizations, consents, approvals, orders and certificates from Governmental Entities.
“Person” means any individual, sole proprietorship, partnership, corporation, joint venture, limited liability company, estate, trust, unincorporated organization, association, institution, or other entity or Governmental Authority.
“Representatives” means, as applicable to any Person, any and all directors, officers, managers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.
“Tax” or “Taxes” means: (A) any and all federal, state, local, or non-U.S. income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar, including FICA), unemployment, disability, real property, personal property, sales, stamp duty land tax, stamp duty reserve tax, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind or any charge of any kind in the nature of (or similar to) taxes whatsoever, including any interest, penalty, or addition thereto, whether disputed or not and (B) any liability for the payment of any amounts of the type described in clause (A) of this definition as a result of being a member of an affiliated, consolidated, combined or unitary group for any period, as a result of any tax sharing or tax allocation agreement, arrangement or understanding, or as a result of being liable for another Person’s taxes as a transferee or successor, by contractual obligation or otherwise.
“Tax Return” means any return, declaration, report, form, claim for refund or credit or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
“Transaction Documents” means this Agreement, the Transition Services Agreement, the Lock-Up Letter Agreement and all other agreements, instruments, and documents contemplated hereby or delivered herewith.
6.4Severability. Any determination by any court of competent jurisdiction of the invalidity of any provision of this Agreement that is not essential for accomplishing its purposes will not affect the validity of any other provision of this Agreement, which will remain in full force and effect and which will be construed as to be valid under Applicable Law.
6.5Governing Law. This Agreement is governed by, and will be construed and enforced in accordance with, the laws of the State of Delaware
6.6Remedies Cumulative. The rights and remedies specified in any provision of this Agreement are in addition to all the rights and remedies a Party may have under any other provision of this Agreement or Applicable Law, including any right to equitable relief and any right to sue for damages under this Agreement, and all such rights and remedies are cumulative, provided no Person shall be entitled to more than one recovery for the same Loss. Without limiting the foregoing, no exercise of a remedy shall be deemed an election excluding any other remedy (any such claim by any other Party being hereby waived).
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6.7Entire Agreement; Amendment; Waiver. This Agreement and the other agreements contemplated by this Agreement supersede all prior negotiations, agreements and understandings between the Parties as to their subject matter, constitute the entire agreement between the Parties as to their subject matter, and may not be altered or amended except in writing signed by the Parties. The failure of any Party at any time or times to require performance of any provision of this Agreement will in no manner affect the right to enforce the same; and no waiver by any Party of any provision (or of a breach of any provision) of this Agreement, whether by conduct or otherwise, in any one of more instances will be deemed or construed either as a further or continuing waiver of any such provision or breach or as a waiver of any other provision (or of a breach of any other provision) of this Agreement.
6.8No Third Party Beneficiaries. The Parties do not intend to confer any benefit under this Agreement upon anyone other than the Parties, and nothing contained in this Agreement will be deemed to confer such benefit on any other Person.
6.9Rules of Construction. For purposes of this Agreement: (a) “including” and any variations thereof and any other words or phrases of inclusion will not be construed as terms of limitation, so that references to “including” shall be construed as “including without limitation” and references to “included” matters will be regarded as non-exclusive, non-characterizing illustrations; (b) titles and captions of or in this Agreement are inserted only as a matter of convenience and in no way define, limit, extend or describe the scope of this Agreement or the intent of any of its provisions; (c) whenever the context so requires, the singular includes the plural and the plural includes the singular, and the gender of any pronoun includes the other genders; and (d) each exhibit and schedule referred to in this Agreement and each attachment to any of them or this Agreement is hereby incorporated by reference into this Agreement and are made a part hereof as if such exhibits and schedules were fully set forth herein.
6.10Computation of Time. Time is of the essence with respect to all time periods and due dates in this Agreement. However, if the last day for the exercise of any privilege or the discharge of any duty under this Agreement falls upon a day which is not a Business Day, then the Party having such privilege or duty will have until 5:00 p.m. its local time on the next regular business day to exercise such privilege or to discharge such duty.
6.11Further Assurances. In connection with this Agreement and all transactions contemplated by this Agreement, each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement, the Prior Restructuring and all such transactions, which shall include, but not be limited to, providing director resignations with respect to Mondee India as requested by the Seller.
6.12Counterparts. This Agreement may be executed in any number of counterparts, each of which will constitute an original, and all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or Portable Document Format (PDF) shall be as effective as delivery of a manually executed counterpart.
[Signatures on following page]

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IN WITNESS WHEREOF, the Parties have executed this Stock Purchase Agreement as of the day and year first above written.

BUYER:

LBF TRAVEL MANAGEMENT CORP.
By: /s/ Michael Thomas
Name: Michael Thomas
Title:

SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT

IN WITNESS WHEREOF, the Parties have executed this Stock Purchase Agreement as of the day and year first above written.

COMPANY:

LBF TRAVEL, INC.
By: /s/ Prasad Gundumogula
Name: Prasad Gundumogula
Title: Chief Executive Officer



SELLER:
MONDEE, INC.
By: /s/ Prasad Gundumogula
Name: Prasad Gundumogula
Title: Chief Executive Officer
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT



EX-10.1 3 prasademploymentagreement2.htm EX-10.1 Document

Certain identified information marked with “[***]” has been omitted from this document because it is both (i) not material and (ii) the type that the registrant treats as private or confidential.
EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”) is made and entered into by and between Mondee, Inc., a Delaware corporation (the “Company”), and Prasad Gundumogula (“Employee”) effective as of September 14, 2023 (the “Effective Date”). As provided for in Section 17, this Agreement supersedes all prior employment agreements between the Company and Employee.
1.Employment. During the Employment Period (as defined in Section 4), the Company shall continue to employ Employee, and Employee shall continue to serve, as Chief Executive Officer of the Company and in such other position or positions as may be assigned from time to time by the Company or the board of directors of the Company (the “Board”).
2.Duties and Responsibilities of Employee.
(a)During the Employment Period, Employee shall devote Employee’s best efforts and full business time and attention to the businesses of the Company and its direct and indirect subsidiaries as may exist from time to time, including the Company (collectively, the Company and its direct and indirect subsidiaries are referred to as the “Company Group”) as may be requested by the Company or the Board from time to time. Employee’s duties and responsibilities shall include those normally incidental to the position(s) identified in Section 1, as well as such additional duties as may be assigned to Employee by the Company or the Board from time to time, which duties and responsibilities may include providing services to other members of the Company Group in addition to the Company. Employee may, without violating this Section 2(a), (i) as a passive investment, own publicly traded securities in such form or manner as will not require any services by Employee in the operation of the entities in which such securities are owned; (ii) engage in charitable and civic activities; or (iii) with the prior written consent of the Board, engage in other personal and passive investment activities, in each case, so long as such ownership, interests or activities do not interfere with Employee’s ability to fulfill Employee’s duties and responsibilities under this Agreement and are not inconsistent with Employee’s obligations to any member of the Company Group or competitive with the business of any member of the Company Group.
(b)Employee hereby represents and warrants that Employee is not the subject of, or a party to, any non-competition, non-solicitation, non-disclosure, restrictive covenant or other agreement, obligation or restriction that would prohibit Employee from executing this Agreement or fully performing each of Employee’s duties and responsibilities hereunder, or would in any manner, directly or indirectly, limit or affect any of the duties and responsibilities that may now or in the future be assigned to Employee hereunder. Employee expressly acknowledges and agrees that Employee is strictly prohibited from using or disclosing any confidential information belonging to any prior employer or other third party in the course of performing services for any member of the Company Group, and Employee promises that Employee shall not do so. Employee shall not introduce documents or other materials containing confidential information of any prior employer or other third party to the premises or property (including computers and computer systems) of any member of the Company Group.
(c)Employee owes each member of the Company Group fiduciary duties (including (i) duties of care, loyalty and disclosure and (ii) such fiduciary duties that an officer of the Company would have if the Company were a corporation organized under the laws of the State of Delaware), and the obligations described in this Agreement are in addition to, and not in lieu of, the obligations Employee owes each member of the Company Group under statutory and common law.
    

3.Compensation.
(a)Base Salary. During the Employment Period, the Company shall pay to Employee an annualized base salary of $1, payable on the last business day of each applicable calendar year hereunder (the “Base Salary”) in consideration for Employee’s services under this Agreement.
(b)Annual Bonus. Employee shall be eligible for discretionary bonus compensation at the discretion of the Board for each complete calendar year that Employee is employed by the Company hereunder (the “Annual Bonus”). The performance targets that must be achieved in order to be eligible for certain bonus levels shall be established by the Board (or a committee thereof) for each applicable calendar year (the “Bonus Year”) and provided to Employee. Each Annual Bonus, if any, shall be paid as soon as administratively feasible after the Board (or a committee thereof) determines whether the applicable performance targets for the applicable Bonus Year have been achieved, but in no event later than March 15 following the end of such Bonus Year. The form of consideration can be in cash or equity and change at the discretion of the Board (or a committee thereof). Notwithstanding anything in this Section 3(b) to the contrary, no Annual Bonus, if any, or any portion thereof, shall be payable for any Bonus Year unless Employee remains continuously employed by the Company from the Effective Date through the date on which such Annual Bonus is paid.
4.Term of Employment. The term of Employee’s employment under this Agreement shall commence on Effective Date and continue until Employee’s employment is terminated in accordance with Section 7. The period from the Effective Date through the termination of Employee’s employment pursuant to this Agreement, regardless of the time or reason for such termination, shall be referred to herein as the “Employment Period.”
5.Business Expenses. Subject to Section 23, the Company shall reimburse Employee for Employee’s reasonable and documented out-of-pocket business-related expenses actually incurred in the performance of Employee’s duties under this Agreement so long as such expenses are consistent with the Company’s expense policy as in effect from time to time and Employee timely submits all documentation for such expenses, as required by such policy. Any such reimbursement of expenses shall be made by the Company upon or as soon as practicable following receipt of such documentation (but in any event not later than the close of Employee’s taxable year following the taxable year in which the expense is incurred by Employee). In no event shall any reimbursement be made to Employee for any expenses incurred after the date of Employee’s termination of employment with the Company.
6.Benefits. During the Employment Period, Employee shall be eligible to participate in the same benefit plans and programs in which other similarly situated Company employees are eligible to participate, subject to the terms and conditions of the applicable plans and programs in effect from time to time. The Company shall not, however, by reason of this Section 6, be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such plan or policy.
7.Termination of Employment.
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(a)Company’s Right to Terminate Employee’s Employment for Cause. The Company shall have the right to terminate Employee’s employment hereunder at any time for Cause. For purposes of this Agreement, “Cause” shall mean, as determined by the Board:
(i)Employee’s material breach of this Agreement or any other written agreement between Employee and one or more members of the Company Group, including Employee’s material breach of any representation, warranty or covenant made under any such agreement;
(ii)Employee’s breach of any policy or code of conduct established by a member of the Company Group and applicable to Employee, including any policy or code of conduct provision relating to discrimination, harassment or retaliation;
(iii)Employee’s personal violation of any material law applicable to the workplace or any member of the Company Group (including any law regarding anti-discrimination, anti-harassment or anti-retaliation);
(iv)Employee’s gross negligence, willful misconduct, breach of fiduciary duty, fraud, theft or embezzlement that has or could reasonably be expected to have an adverse effect on any member of the Company Group;
(v)the commission by Employee of, or conviction or indictment of Employee for, or plea of nolo contendere by Employee to, any felony (or state law equivalent) or any crime or act involving moral turpitude; or
(vi)Employee’s willful failure or refusal, other than due to Disability, to perform Employee’s obligations pursuant to this Agreement or to follow any lawful directive from the Company or the Board, as determined by the Company or the Board (sitting without Employee, if applicable) in its sole discretion; provided, however, that if Employee’s actions or omissions as set forth in this Section 7(a)(vi) are of such a nature that the Company or the Board determines that they are curable by Employee, such actions or omissions must remain uncured thirty (30) days after the Company or the Board first provided Employee written notice of the obligation to cure such actions or omissions.
(b)Company’s Right to Terminate for Convenience. The Company shall have the right to terminate Employee’s employment for convenience at any time and for any reason, or no reason at all, upon written notice to Employee.
(c)Employee’s Right to Terminate for Good Reason. Employee shall have the right to terminate Employee’s employment with the Company at any time for Good Reason. For purposes of this Agreement, “Good Reason” shall mean:
(i)a material diminution in Employee’s compensation or authority, duties and responsibilities with the Company or its subsidiaries; provided, however, that if Employee is serving as an officer or member of the board of directors (or similar governing body) of any member of the Company Group or any other entity in which a member of the Company Group, other than the Company, holds an equity interest, in no event shall the removal of Employee as an officer or board member, regardless of the reason for such removal, constitute Good Reason; or
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(ii)the relocation of the geographic location of Employee’s principal place of employment by more than fifty (50) miles from the location of Employee’s principal place of employment as of the Effective Date (excluding for this purpose the move to Austin, TX in 2022-2023).
Notwithstanding the foregoing provisions of this Section 7(c) or any other provision of this Agreement to the contrary, any assertion by Employee of a termination for Good Reason shall not be effective unless all of the following conditions are satisfied: (A) the condition described in Section 7(c)(i), or (ii) giving rise to Employee’s termination of employment must have arisen without Employee’s consent; (B) Employee must provide written notice to the Board of the existence of such condition(s) within thirty (30) days after the initial occurrence of such condition(s); (C) the condition(s) specified in such notice must remain uncorrected for thirty (30) days following the Board’s receipt of such written notice; and (D) the date of Employee’s termination of employment must occur within sixty (60) days after the initial occurrence of the condition(s) specified in such notice. Further and notwithstanding the foregoing, no suspension of Employee or a reduction in Employee’s authority, duties and responsibilities in conjunction with any leave required, or other action taken, by the Company as part of any investigation into alleged wrongdoing by Employee shall give rise to Good Reason.
(d)Death or Disability. Upon the death or Disability of Employee, Employee’s employment with the Company shall automatically (and without any further action by any person or entity) terminate with no further obligation under this Agreement of either party hereunder. For purposes of this Agreement, a “Disability” shall exist if the Board determines that Employee is unable to perform the essential functions of Employee’s position (after accounting for reasonable accommodation, if applicable and required by applicable law), due to physical or mental impairment that continues, or can reasonably be expected to continue, for a period in excess of ninety (90) consecutive days or one hundred-twenty (120) days, whether or not consecutive (or for any longer period as may be required by applicable law), in any twelve (12)-month period.
(e)Employee’s Right to Terminate for Convenience. In addition to Employee’s right to terminate Employee’s employment for Good Reason, Employee shall have the right to terminate Employee’s employment with the Company for convenience at any time and for any other reason, or no reason at all, upon thirty (30) days’ advance written notice to the Company; provided, however, that if Employee has provided notice to the Company of Employee’s termination of employment, the Company may determine, in its sole discretion, that such termination shall be effective on any date prior to the effective date of termination provided in such notice (and, if such earlier date is so required, then it shall not change the basis for Employee’s termination of employment nor be construed or interpreted as a termination of employment pursuant to Section 7(b)) and any requirement to continue salary or benefits shall cease as of such earlier date.
(f)Effect of Termination.
(i)If Employee’s employment hereunder is terminated by the Company without Cause pursuant to Section 7(b), or is terminated by Employee for Good Reason pursuant to Section 7(c), then so long as (and only if) Employee: (A) executes on or before the Release Expiration Date (as defined below), and does not revoke within any time provided by the Company to do so, a separation agreement and release of all claims in a form provided to Employee by the Company (the “Release”), which Release shall, among other things, release each member of the Company Group and their respective affiliates, and the foregoing entities’ respective shareholders, members, partners, officers, managers, directors, fiduciaries, employees, representatives, agents and benefit plans (and fiduciaries of such plans) from any and all claims, including any and all causes of action arising out of Employee’s employment and relationship with the Company and any other member of the Company Group or the termination of such employment or relationship, but excluding all claims to severance payments Employee may have under this Section 7; and (B) abides by the terms of each of Sections 9, 10 and 11 and any other post-employment obligations that Employee may owe to any member of the Company Group, then:
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(A)The Company shall make a onetime compensatory payment of $10,000,000 to Employee immediately upon termination, if this termination occurs within the first five (5) years after the Effective Date. At the Boards discretion, this payment can be up to 50% in common stock and the balance in cash.
(B)The Company shall make severance payments to Employee in a total amount equal to 12-months’ worth of Employee’s Base Salary for the year in which such termination occurs (such total severance payments being referred to as the “Severance Payment”). The Severance Payment will be divided into substantially equal installments paid over the 12-month period (the “Severance Period”) following the date on which Employee’s employment terminates (the “Termination Date”). On the Company’s first regularly scheduled pay date that is on or after the date the Release has become irrevocable (the “First Payment Date”), the Company shall pay to Employee, without interest, the aggregate amount payable pursuant to any installments that would have been paid during the period beginning on the Termination Date and ending on the First Payment Date had the installments been paid on the Company’s regularly scheduled pay dates on or following the Termination Date, and, subject to Section 23, each of the remaining installments shall be paid on the Company’s regularly scheduled pay dates during the remainder of such 12-month period.
(C)During the portion, if any, of the Severance Period that Employee is eligible to and elects to continue coverage for Employee and Employee’s spouse and eligible dependents, if any, under the Company’s group health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company shall, at its option pay or reimburse Employee on a monthly basis for the difference between the amount Employee pays to effect and continue such coverage and the employee contribution amount that similarly situated employees of the Company pay for the same or similar coverage under such group health plans (the “COBRA Benefit”). Each payment of the COBRA Benefit shall be paid on or about the Company’s first regularly scheduled pay date in the calendar month immediately following the calendar month in which Employee submits to the Company documentation of the applicable premium payment having been paid by Employee, which documentation shall be submitted by Employee to the Company within thirty (30) days following the date on which the applicable premium payment is paid. Employee shall be eligible to receive such reimbursement payments until the earliest of: (i) the last day of the Severance Period; (ii) the date Employee is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which Employee becomes eligible to receive coverage under a group health plan sponsored by another employer (and any such eligibility shall be promptly reported to the Company by Employee); provided, however, that the election of COBRA continuation coverage and the payment of any premiums due with respect to such COBRA continuation coverage shall remain Employee’s sole responsibility, and the Company shall not assume any obligation for payment of any such premiums relating to such COBRA continuation coverage.
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(ii)If the Release is not executed and returned to the Company on or before the Release Expiration Date, and the required revocation period has not fully expired without revocation of the Release by Employee, then Employee shall not be entitled to any portion of the Severance Payment or the COBRA Benefit. As used herein, the “Release Expiration Date” is that date that is twenty-one (21) days following the date upon which the Company delivers the Release to Employee (which shall occur no later than seven (7) days after the Termination Date) or, in the event that such termination of employment is determined by the Company to be “in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date.
(g)After-Acquired Evidence. Notwithstanding any provision of this Agreement to the contrary, in the event that the Company determines that Employee is eligible to receive the Severance Payment pursuant to Section 7(f) but, during the Severance Period, the Company subsequently acquires evidence or determines that: (i) Employee has failed to abide by the terms of Sections 9, 10 or 11 or any other post-employment obligations that Employee may owe to any member of the Company Group; or (ii) a Cause condition existed prior to the Termination Date that, had the Company been fully aware of such condition, would have given the Company the right to terminate Employee’s employment pursuant to Section 7(a), then the Company shall have the right to cease the payment of any future installments of the Severance Payment and Employee shall promptly return to the Company the pre-tax value of all installments of the Severance Payment received by Employee prior to the date that the Company determines that the conditions of this Section 7(g) have been satisfied.
8.Disclosures.
(a)Employee hereby represents and warrants that as of the Effective Date, there exist (i) no actual or potential Conflicts of Interest and (ii) no current or pending lawsuits, claims or arbitrations filed by, against or involving Employee or any trust or vehicle owned or controlled by Employee.
(b)Promptly (and in any event, within three (3) business days) upon becoming aware of (i) any actual or potential Conflict of Interest or (ii) any lawsuit, claim or arbitration filed by, against or involving Employee or any trust or vehicle owned or controlled by Employee, in each case, Employee shall disclose such actual or potential Conflict of Interest or such lawsuit, claim or arbitration to the Board.
(c)A “Conflict of Interest” shall exist when Employee engages in, or plans to engage in, any activities, associations, or interests that conflict with, or create an appearance of a conflict with, Employee’s duties, responsibilities, authorities, or obligations for and to any member of the Company Group.
9.Confidentiality. In the course of Employee’s employment with the Company and the performance of Employee’s duties on behalf of the Company Group hereunder, Employee will be provided with, and will have access to, Confidential Information (as defined below). In consideration of Employee’s receipt and access to such Confidential Information, and as a condition of Employee’s employment, Employee shall comply with this Section 9.
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(a)Both during the Employment Period and thereafter, except as expressly permitted by this Agreement, Employee shall not disclose any Confidential Information to any person or entity and shall not use any Confidential Information except for the benefit of the Company Group. Employee acknowledges and agrees that Employee would inevitably use and disclose Confidential Information in violation of this Section 9 if Employee were to violate any of the covenants set forth in Section 10. Employee shall follow all Company Group policies and protocols regarding the security of all documents and other materials containing Confidential Information (regardless of the medium on which Confidential Information is stored). Except to the extent required for the performance of Employee’s duties on behalf of the Company Group, Employee shall not remove from facilities of any member of the Company Group any information, property, equipment, drawings, notes, reports, manuals, invention records, computer software, customer information, or other data or materials that relate in any way to the Confidential Information, whether paper or electronic and whether produced by Employee or obtained by the Company Group. The covenants of this Section 9(a) shall apply to all Confidential Information, whether now known or later to become known to Employee during the period that Employee is employed by or affiliated with the Company or any other member of the Company Group.
(b)Notwithstanding any provision of Section 9(a) to the contrary, Employee may make the following disclosures and uses of Confidential Information:
(i)disclosures to other employees, officers or directors of a member of the Company Group who have a need to know the information in connection with the businesses of the Company Group;
(ii)disclosures to customers and suppliers when, in the reasonable and good faith belief of Employee, such disclosure is in connection with Employee’s performance of Employee’s duties under this Agreement and is in the best interests of the Company Group;
(iii)disclosures and uses that are approved in writing by the Board; or
(iv)disclosures to a person or entity that has (x) been retained by a member of the Company Group to provide services to one or more members of the Company Group and (y) agreed in writing to abide by the terms of a confidentiality agreement.
(c)Upon the expiration of the Employment Period, and at any other time upon request of the Company, Employee shall promptly and permanently surrender and deliver to the Company all documents (including electronically stored information) and all copies thereof and all other materials of any nature containing or pertaining to all Confidential Information and any other Company Group property (including any Company Group-issued computer, mobile device or other equipment) in Employee’s possession, custody or control and Employee shall not retain any such documents or other materials or property of the Company Group. Within ten (10) days of any such request, Employee shall certify to the Company in writing that all such documents, materials and property have been returned to the Company.
    - 7 -    

(d)“Confidential Information” means all confidential, competitively valuable, non-public or proprietary information that is conceived, made, developed or acquired by or disclosed to Employee (whether conveyed orally or in writing), individually or in conjunction with others, during the period that Employee is employed by or otherwise affiliated with the Company or any other member of the Company Group (whether during business hours or otherwise and whether on the Company’s premises or otherwise) including: (i) technical information of any member of the Company Group, its affiliates, its investors, customers, vendors, suppliers or other third parties, including computer programs, software, databases, data, ideas, know-how, formulae, compositions, processes, discoveries, machines, inventions (whether patentable or not), designs, developmental or experimental work, techniques, improvements, work in process, research or test results, original works of authorship, training programs and procedures, diagrams, charts, business and product development plans, and similar items; (ii) information relating to any member of the Company Group’s businesses or properties, products or services (including all such information relating to corporate opportunities, operations, future plans, methods of doing business, business plans, strategies for developing business and market share, research, financial and sales data, pricing terms, evaluations, opinions, interpretations, acquisition prospects, the identity of customers or acquisition targets or their requirements, the identity of key contacts within customers’ organizations or within the organization of acquisition prospects, or marketing and merchandising techniques, prospective names and marks) or pursuant to which any member of the Company Group owes a confidentiality obligation; and (iii) other valuable, confidential information and trade secrets of any member of the Company Group, its affiliates, its customers or other third parties. Moreover, all documents, videotapes, written presentations, brochures, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, e-mail, voice mail, electronic databases, maps, drawings, architectural renditions, models and all other writings or materials of any type including or embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression are and shall be the sole and exclusive property of the Company or the other applicable member of the Company Group and be subject to the same restrictions on disclosure applicable to all Confidential Information pursuant to this Agreement. For purposes of this Agreement, Confidential Information shall not include any information that (A) is or becomes generally available to the public other than as a result of a disclosure or wrongful act of Employee or any of Employee’s agents; (B) was available to Employee on a non-confidential basis before its disclosure by a member of the Company Group; (C) becomes available to Employee on a non-confidential basis from a source other than a member of the Company Group; provided, however, that such source is not bound by a confidentiality agreement with, or other obligation with respect to confidentiality to, a member of the Company Group; or (D) is required to be disclosed by applicable law.
(e)Notwithstanding the foregoing, nothing in this Agreement shall prohibit or restrict Employee from lawfully: (i) initiating communications directly with, cooperating with, providing information to, causing information to be provided to, or otherwise assisting in an investigation by, any governmental authority regarding a possible violation of any law; (ii) responding to any inquiry or legal process directed to Employee from any such governmental authority; (iii) testifying, participating or otherwise assisting in any action or proceeding by any such governmental authority relating to a possible violation of law; or (iv) making any other disclosures that are protected under the whistleblower provisions of any applicable law. Additionally, pursuant to the federal Defend Trade Secrets Act of 2016, an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and (2) solely for the purpose of reporting or investigating a suspected violation of law; (B) is made to the individual’s attorney in relation to a lawsuit for retaliation against the individual for reporting a suspected violation of law; or (C) is made in a complaint or other document filed in a lawsuit or proceeding, if such filing is made under seal. Nothing in this Agreement requires Employee to obtain prior authorization before engaging in any conduct described in this paragraph, or to notify the Company that Employee has engaged in any such conduct.
    - 8 -    

10.Non-Competition; Non-Solicitation.
(a)The Company shall provide Employee access to Confidential Information for use only during the Employment Period, and Employee acknowledges and agrees that the Company Group will be entrusting Employee, in Employee’s unique and special capacity, with developing the goodwill of the Company Group, and in consideration of the Company providing Employee with access to Confidential Information, clients and customers and as an express incentive for the Company to enter into this Agreement and employ Employee, Employee has voluntarily agreed to the covenants set forth in this Section 10. Employee agrees and acknowledges that the limitations and restrictions set forth herein, including geographical and temporal restrictions on certain competitive activities, are reasonable in all respects, do not interfere with public interests, will not cause Employee undue hardship, and are material and substantial parts of this Agreement intended and necessary to prevent unfair competition and to protect the Company Group’s Confidential Information, goodwill and legitimate business interests.
(b)During the Prohibited Period, Employee shall not, without the prior written approval of the Board, directly or indirectly, for Employee or on behalf of or in conjunction with any other person or entity of any nature:
(i)engage in or participate in (or prepare to engage in or participate in) the Business within the Market Area, which prohibition shall prevent Employee from directly or indirectly: (A) owning, investing in, controlling, managing, operating, participating in, lending Employee’s name to, contributing to, providing assistance to or being an officer or director of, any person or entity engaged in or planning to engage in the Business in the Market Area, or (B) joining, becoming an employee or consultant of, or otherwise rendering services for or being affiliated with or engaged by, any person or entity engaged in, or planning to engage in, the Business in the Market Area in any capacity (with respect to this clause (B)) in which Employee’s customer or client relationships, duties or responsibilities are the same as or similar to the customer or client relationships, duties or responsibilities that Employee had on behalf of any member of the Company Group;
(ii)appropriate or interfere with or attempt to appropriate or interfere with any Business Opportunity of, or relating to, any member of the Company Group located in the Market Area;
(iii)solicit, canvass, approach, encourage, entice or induce any customer, vendor or supplier of any member of the Company Group with whom Employee had contact (including oversight responsibility) or learned Confidential Information about during Employee’s employment with any member of the Company Group to cease or lessen such customer’s, vendor’s or supplier’s business with any member of the Company Group or otherwise adversely affect such relationship, or attempt to do any of the foregoing; or
(iv)solicit, canvass, approach, encourage, entice or induce any employee or contractor of any member of the Company Group to terminate his,
    - 9 -    

her or its employment or engagement with any member of the Company Group, or hire or retain any such employee or contractor.
Notwithstanding the foregoing, nothing herein shall not limit Employee’s ability to accept employment and perform work with any person or entity where (x) the services provided by Employee to such person or entity are not, and do not directly or indirectly benefit any division or business of such person or entity that is, in competition with the Business or any other material business in which a member of the Company Group has made a significant financial investment on or prior to the date of termination to be engaged in on or after such date and (y) Employee does not own more than 5% of the equity securities of such person or entity.
(c)Because of the difficulty of measuring economic losses to the Company Group as a result of a breach or threatened breach of the covenants set forth in Section 9 and in this Section 10, and because of the immediate and irreparable damage that would be caused to the members of the Company Group for which they would have no other adequate remedy, the Company and each other member of the Company Group shall be entitled to enforce the foregoing covenants, in the event of a breach or threatened breach, by injunctions and restraining orders from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall not be the Company’s or any other member of the Company Group’s exclusive remedy for a breach but instead shall be in addition to all other rights and remedies available to the Company and each other member of the Company Group at law and equity. Employee further agrees that Employee will not challenge the reasonableness or enforceability of any of the covenants set forth in this Section 10, and that Employee will reimburse the Company Group for all costs (including reasonable attorneys’ fees) incurred in connection with any action to enforce any of the provisions of this Section 10 if Employee challenges the reasonableness or enforceability of any of the provisions of this Section 10.
(d)The covenants in this Section 10, and each provision and portion hereof, are severable and separate, and the unenforceability of any specific covenant (or portion thereof) shall not affect the provisions of any other covenant (or portion thereof). Moreover, in the event any arbitrator or court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent which such arbitrator or court deems reasonable, and this Agreement shall thereby be reformed.
(e)The following terms shall have the following meanings:
(i)“Business” shall mean the business and operations that are the same or similar to those performed by the Company and any other member of the Company Group for which Employee provides services or about which Employee obtains Confidential Information during the Employment Period.
(ii)“Business Opportunity” shall mean any actual or potential commercial, investment or other business opportunity of any member of the Company Group or relating to the Business about which Employee learned Confidential Information during Employee’s employment with any member of the Company Group.
(iii)“Market Area” shall mean each location where the Company Group operates as of the date the Employee is no longer employed by any member of the Company Group.
    - 10 -    

(iv)“Prohibited Period” shall mean the period during which Employee is employed by any member of the Company Group and continuing for a period of 12-months following the date that Employee is no longer employed by any member of the Company Group.
(f)Employee undertakes and agrees that following the date that Employee is no longer employed by any member of the Company Group and prior to entering into any relationship with any other party to serve as an officer, director, employee, consultant, partner, advisor, joint-venturer or in any other capacity with any other person or entity, Employee shall disclose to such other party the terms of the restrictive covenants set forth herein and hereby consents to the Company making any related disclosures.
11.Ownership of Intellectual Property.
(a)Employee agrees that the Company shall own, and Employee shall (and hereby does) assign, all right, title and interest relating to any and all inventions (whether or not patentable), discoveries, developments, improvements, innovations, works of authorship, mask works, designs, know-how, ideas, formulae, processes, techniques, data and information authored, created, contributed to, made or conceived or reduced to practice, in whole or in part, by Employee during the period in which Employee is or has been employed by or affiliated with the Company or any other member of the Company Group, whether or not registerable under U.S. law or the laws of other jurisdictions, that either (a) relate, at the time of conception, reduction to practice, creation, derivation or development, to any member of the Company Group’s businesses or actual or anticipated research or development, or (b) were developed on any amount of the Company’s or any other member of the Company Group’s time or with the use of any member of the Company Group’s equipment, supplies, facilities or Confidential Information (all of the foregoing collectively referred to herein as “Company Intellectual Property”), and Employee shall promptly disclose all Company Intellectual Property to the Company in writing. To support Employee’s disclosure obligation herein, Employee shall keep and maintain adequate and current written records of all Company Intellectual Property made by Employee (solely or jointly with others) during the period in which Employee is or has been employed by or affiliated with the Company or any other member of the Company Group in such form as may be specified from time to time by the Company. These records shall be available to, and remain the sole property of, the Company at all times. For the elimination of doubt, the foregoing ownership and assignment provisions apply without limitation to patent rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world.
(b)All of Employee’s works of authorship and associated copyrights created during the period in which Employee is employed by or affiliated with the Company or any other member of the Company Group and in the scope of Employee’s employment or engagement shall be deemed to be “works made for hire” within the meaning of the Copyright Act. To the extent any right, title and interest in and to Company Intellectual Property cannot be assigned by Employee to the Company, Employee shall grant, and does hereby grant, to the Company Group an exclusive, perpetual, royalty-free, transferable, irrevocable, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, use, sell, offer for sale, import, export, reproduce, practice and otherwise commercialize such rights, title and interest.
(c)Employee recognizes that this Agreement will not be deemed to require assignment of any invention or intellectual property that Employee developed entirely on Employee’s own time without using the equipment, supplies, facilities, trade secrets, or Confidential Information of any member of the Company Group. In addition, this Agreement does not apply to any invention that qualifies fully for protection from assignment to the Company under any specifically applicable state law or regulation.
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(d)To the extent allowed by law, this Section applies to all rights that may be known as or referred to as “moral rights,” “artist’s rights,” “droit moral,” or the like, including without limitation those rights set forth in 17 U.S.C. §106A (collectively, “Moral Rights”). To the extent Employee retain any Moral Rights under applicable law, Employee hereby ratifies and consents to any action that may be taken with respect to such Moral Rights by or authorized by the Company or any member of the Company Group, and Employee hereby waives and agrees not to assert any Moral Rights with respect to such Moral Rights. Employee shall confirm any such ratifications, consents, waivers, and agreements from time to time as requested by the Company.
(e)Employee shall perform, during and after the period in which Employee is or has been employed by or affiliated with the Company or any other member of the Company Group, all acts deemed necessary or desirable by the Company to permit and assist each member of the Company Group, at the Company’s expense, in obtaining and enforcing the full benefits, enjoyment, rights and title throughout the world in the Company Intellectual Property and Confidential Information assigned, to be assigned, or licensed to the Company under this Agreement.. Such acts may include execution of documents and assistance or cooperation (i) in the filing, prosecution, registration, and memorialization of assignment of any applicable patents, copyrights, mask work, or other applications, (ii) in the enforcement of any applicable patents, copyrights, mask work, moral rights, trade secrets, or other proprietary rights, and (iii) in other legal proceedings related to the Company Intellectual Property or Confidential Information.
(f)In the event that the Company (or, as applicable, a member of the Company Group) is unable for any reason to secure Employee’s signature to any document required to file, prosecute, register, or memorialize the assignment of any patent, copyright, mask work or other applications or to enforce any patent, copyright, mask work, moral right, trade secret or other proprietary right under any Confidential Information or Company Intellectual Property, Employee hereby irrevocably designates and appoints the Company and each of the Company’s duly authorized officers and agents as Employee’s agents and attorneys-in-fact to act for and on Employee’s behalf and instead of Employee, (i) to execute, file, prosecute, register and memorialize the assignment of any such application, (ii) to execute and file any documentation required for such enforcement, and (iii) to do all other lawfully permitted acts to further the filing, prosecution, registration, memorialization of assignment, issuance, and enforcement of patents, copyrights, mask works, moral rights, trade secrets or other rights under the Confidential Information or Company Intellectual Property, all with the same legal force and effect as if executed by Employee. For the avoidance of doubt, the provisions of this Section 11(f) apply fully to all derivative works, improvements, renewals, extensions, continuations, divisionals, continuations in part, continuing patent applications, reissues, and reexaminations of all Company Intellectual Property.
(g)In the event that Employee enters into, on behalf of any member of the Company Group, any contracts or agreements relating to any Confidential Information or Company Intellectual Property, Employee shall assign such contracts or agreements to the Company (or the applicable member of the Company Group) promptly, and in any event, prior to Employee’s termination. If the Company (or the applicable member of the Company Group) is unable for any reason to secure Employee’s signature to any document required to assign said contracts or agreements, or if Employee does not assign said contracts or agreements to the Company (or the applicable member of the Company Group) prior to Employee’s termination, Employee hereby irrevocably designates and appoints the Company (or the applicable member of the Company Group) and each of the Company’s duly authorized officers and agents as Employee’s agents and attorneys-in-fact to act for and on Employee’s behalf and instead of Employee to execute said assignments and to do all other lawfully permitted acts to further the execution of said documents.
    - 12 -    

12.Arbitration.
(a)Subject to Section 12(b), any dispute, controversy or claim between Employee and any member of the Company Group arising out of or relating to this Agreement or Employee’s employment or engagement with any member of the Company Group (“Disputes”) will be finally settled by confidential arbitration in the State of Tennessee in accordance with the then-existing American Arbitration Association (“AAA”) Employment Arbitration Rules. The arbitration award shall be final and binding on both parties. Any arbitration conducted under this Section 12 shall be private, shall be heard by a single arbitrator (the “Arbitrator”) selected in accordance with the then-applicable rules of the AAA and shall be conducted in accordance with the Federal Arbitration Act. The Arbitrator shall expeditiously hear and decide all matters concerning the Dispute. Except as expressly provided to the contrary in this Agreement, the Arbitrator shall have the power to (i) gather such materials, information, testimony and evidence as the Arbitrator deems relevant to the Dispute before him or her (and each party will provide such materials, information, testimony and evidence requested by the Arbitrator), and (ii) grant injunctive relief and enforce specific performance. All Disputes shall be arbitrated on an individual basis, and each party hereto hereby foregoes and waives any right to arbitrate any Dispute as a class action or collective action or on a consolidated basis or in a representative capacity on behalf of other persons or entities who are claimed to be similarly situated, or to participate as a class member in such a proceeding. The decision of the Arbitrator shall be reasoned, rendered in writing, be final and binding upon the disputing parties and the parties agree that judgment upon the award may be entered by any court of competent jurisdiction. The parties acknowledge and agree that in connection with any such arbitration and regardless of outcome, except as provided under this Section 12, each party will pay all of its own costs and expenses, including its own legal fees and expenses, and the arbitration costs will be shared equally by the Company and Employee.
(b)Notwithstanding Section 12(a), either party may make a timely application for, and obtain, judicial emergency or temporary injunctive relief to enforce any of the provisions of Sections 9 through 11; provided, however, that the remainder of any such Dispute (beyond the application for emergency or temporary injunctive relief) shall be subject to arbitration under this Section 12.
(c)By entering into this Agreement and entering into the arbitration provisions of this Section 12, THE PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE THAT THEY ARE KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVING THEIR RIGHTS TO A JURY TRIAL.
(d)Nothing in this Section 12 shall prohibit a party to this Agreement from (i) instituting litigation to enforce any arbitration award, or (ii) joining the other party to this Agreement in a litigation initiated by a person or entity that is not a party to this Agreement. Further, nothing in this Section 12 precludes Employee from filing a charge or complaint with a federal, state or other governmental administrative agency.
    - 13 -    

13.Defense of Claims; Cooperation. During the Employment Period and thereafter, upon request from the Company, Employee shall cooperate with the Company Group in the defense of any claims or actions that may be made by or against any member of the Company Group that relate to Employee’s actual or prior areas of responsibility or knowledge. Employee shall further provide reasonable and timely cooperation in connection with any actual or threatened claim, action, inquiry, review, investigation, process, or other matter (whether conducted by or before any court, arbitrator, regulatory, or governmental entity, or by or on behalf of any Company Group member), that relates to Employee’s actual or prior areas of responsibility or knowledge.
14.Withholdings; Deductions. The Company is authorized to withhold and deduct from any benefits, amounts, or payments related to this Agreement or Employee’s employment (a) all federal, state, local and other taxes and (b) any applicable deductions or withholdings.
15.Title and Headings; Construction. Titles and headings to Sections hereof are for the purpose of reference only and shall in no way limit, define or otherwise affect the provisions hereof. Any and all Exhibits or Attachments referred to in this Agreement are, by such reference, incorporated herein and made a part hereof for all purposes. Unless the context requires otherwise, all references to laws, regulations, contracts, documents, agreements and instruments refer to such laws, regulations, contracts, documents, agreements and instruments as they may be amended, restated or otherwise modified from time to time, and references to particular provisions of laws or regulations include a reference to the corresponding provisions of any succeeding law or regulation. All references to “dollars” or “$” in this Agreement refer to United States dollars. The words “herein”, “hereof”, “hereunder” and other compounds of the word “here” shall refer to the entire Agreement, including all Exhibits attached hereto, and not to any particular provision hereof. Unless the context requires otherwise, the word “or” is not exclusive. Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely. All references to “including” shall be construed as meaning “including without limitation.” Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against any party hereto, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each of the parties hereto and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of the parties hereto.
16.Applicable Law; Submission to Jurisdiction. This Agreement shall in all respects be construed according to the laws of the State of Texas without regard to its conflict of laws principles that would result in the application of the laws of another jurisdiction. With respect to any claim or dispute related to or arising under this Agreement, the parties hereby consent to the arbitration provisions of Section 12 and recognize and agree that should any resort to a court be necessary and permitted under this Agreement, then they consent to the exclusive jurisdiction, forum and venue of the state and federal courts (as applicable) located in Tennessee.
17.Entire Agreement and Amendment. This Agreement contains the entire agreement of the parties with respect to the matters covered herein and supersede all prior and contemporaneous agreements and understandings, oral or written, between the parties hereto concerning the subject matter hereof; provided, however, that the provisions of this Agreement are in addition to and complement (and do not replace or supersede) any other written agreement(s) or parts thereof between Employee and any member of the Company Group that create restrictions on Employee with respect to confidentiality, non-disclosure, non-competition, non-solicitation or non-disparagement. Without limiting the scope of the preceding sentence, except as otherwise expressly provided in this Section 17, all understandings and agreements preceding the Effective Date and relating to the subject matter hereof are hereby null and void and of no further force or effect, and this Agreement shall supersede all other agreements, written or oral, that purport to govern the terms of Employee’s employment (including Employee’s compensation) with any member of the Company Group. This Agreement may be amended only by a written instrument executed by both parties hereto.
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18.Waiver of Breach. Any waiver of this Agreement must be executed by the party to be bound by such waiver. No waiver by either party hereto of a breach of any provision of this Agreement by the other party, or of compliance with any condition or provision of this Agreement to be performed by such other party, will operate or be construed as a waiver of any subsequent breach by such other party or any similar or dissimilar provision or condition at the same or any subsequent time. The failure of either party hereto to take any action by reason of any breach will not deprive such party of the right to take action at any time.
19.Assignment. This Agreement is personal to Employee, and neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise transferred by Employee. The Company may assign this Agreement without Employee’s consent, including to any member of the Company Group and to any successor to or acquirer of (whether by merger, purchase or otherwise) all or substantially all of the equity, assets or businesses of the Company.
20.Notices. Notices provided for in this Agreement shall be in writing and shall be deemed to have been duly received (a) when delivered in person, (b) when sent by facsimile transmission (with confirmation of transmission) or email on a business day to the number or email address set forth below, if applicable; provided, however, that if a notice is sent by facsimile transmission or email after normal business hours of the recipient or on a non-business day, then it shall be deemed to have been received on the next business day after it is sent, (c) on the first business day after such notice is sent by express overnight courier service, or (d) on the second business day following deposit with an internationally-recognized second-day courier service with proof of receipt maintained, in each case, to the following address, as applicable:
If to the Company, addressed to:
Mondee, Inc.
10800 Pecan Park Blvd.
Suite 315
Austin, TX 78750
With a copy (which shall not itself constitute notice) to:
Hutchison PLLC
700 Corporate Center Drive, Suite 250
Raleigh, North Carolina 27607
Attention:    [***]
E-Mail:    [***]
If to Employee, addressed to:
Prasad Gundumogula
[***]
Email: [***]
21.Counterparts. This Agreement may be executed in any number of counterparts, including by electronic mail or facsimile, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a copy hereof containing multiple signature pages, each signed by one party, but together signed by both parties hereto. Electronic copies shall have the same force and effect as the originals.
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22.Deemed Resignations. Except as otherwise determined by the Board or as otherwise agreed to in writing by Employee and any member of the Company Group prior to the termination of Employee’s employment with the Company or any member of the Company Group, any termination of Employee’s employment shall constitute, as applicable, an automatic resignation of Employee: (a) as an officer of the Company and each member of the Company Group; (b) from the Board; and (c) from the board of directors or board of managers (or similar governing body) of any member of the Company Group and from the board of directors or board of managers (or similar governing body) of any corporation, limited liability entity, unlimited liability entity or other entity in which any member of the Company Group holds an equity interest and with respect to which board of directors or board of managers (or similar governing body) Employee serves as such Company Group member’s designee or other representative. Employee agrees to take any further actions that any member of the Company Group reasonably requests to effectuate or document the foregoing.
23.Section 409A. Notwithstanding any provision of this Agreement to the contrary:
(a)All provisions of this Agreement are intended to comply with Section 409A of the Internal Revenue Code of 1986 (the “Code”), and the applicable Treasury regulations and administrative guidance issued thereunder (collectively, “Section 409A”) or an exemption therefrom and shall be construed and administered in accordance with such intent. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement shall be treated as a separate payment. Any payments to be made under this Agreement upon a termination of Employee’s employment shall only be made if such termination of employment constitutes a “separation from service” under Section 409A.
(b)To the extent, if any, that the aggregate amount of the installments of the Severance Payment that would otherwise be paid pursuant to Section 7(f)(i) after March 15 of the calendar year following the calendar year in which the Termination Date occurs (the “Applicable March 15”) exceeds the maximum exemption amount under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A), then such excess shall be paid to Employee in a lump sum on the Applicable March 15 (or the first business day preceding the Applicable March 15 if the Applicable March 15 is not a business day) and the installments of the Severance Payment payable after the Applicable March 15 shall be reduced by such excess (beginning with the installment first payable after the Applicable March 15 and continuing with the next succeeding installment until the aggregate reduction equals such excess).
(c)To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A), (i) any such expense reimbursement shall be made by the Company no later than the last day of Employee’s taxable year following the taxable year in which such expense was incurred by Employee, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided, that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period in which the arrangement is in effect.
    - 16 -    

(d)If any payment or benefit provided for herein would be subject to additional taxes and interest under Section 409A if Employee’s receipt of such payment or benefit is not delayed until the earlier of (i) the date of Employee’s death or (ii) the date that is six (6) months after the Termination Date (such date, the “Section 409A Payment Date”), then such payment or benefit shall not be provided to Employee (or Employee’s estate, if applicable) until the Section 409A Payment Date. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement are exempt from, or compliant with, Section 409A and in no event shall any member of the Company Group be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by Employee on account of non-compliance with Section 409A.
24.Certain Excise Taxes. Notwithstanding anything to the contrary in this Agreement, if Employee is a “disqualified individual” (as defined in Section 280G(c) of the Code), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which Employee has the right to receive from the Company or any of its affiliates, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by Employee from the Company or any of its affiliates shall be one dollar ($1.00) less than three times Employee’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by Employee shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to Employee (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in-kind hereunder in a similar order. The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by the Company in good faith. If a reduced payment or benefit is made or provided and through error or otherwise that payment or benefit, when aggregated with other payments and benefits from the Company or any of its affiliates used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times Employee’s base amount, then Employee shall immediately repay such excess to the Company upon notification that an overpayment has been made. Nothing in this Section 24 shall require any member of the Company Group to be responsible for, or have any liability or obligation with respect to, Employee’s excise tax liabilities under Section 4999 of the Code.
25.Clawback. To the extent required by applicable law or any applicable securities exchange listing standards, or as otherwise determined by the Board (or a committee thereof), amounts paid or payable under this Agreement shall be subject to the provisions of any applicable clawback policies or procedures adopted by any member of the Company Group, which clawback policies or procedures may provide for forfeiture and/or recoupment of amounts paid or payable under this Agreement. Notwithstanding any provision of this Agreement to the contrary, each member of the Company Group reserves the right, without the consent of Employee, to adopt any such clawback policies and procedures, including such policies and procedures applicable to this Agreement with retroactive effect.
    - 17 -    

26.Effect of Termination. The provisions of Sections 7, 9-14 and 22, 24 and 25 and those provisions necessary to interpret and enforce them, shall survive any termination of this Agreement and any termination of the employment relationship between Employee and the Company.
27.Third-Party Beneficiaries. Each member of the Company Group that is not a signatory to this Agreement shall be a third-party beneficiary of Employee’s obligations under Sections 8, 9, 10, 11, 12 and 22 and shall be entitled to enforce such obligations as if a party hereto.
28.Severability. If an arbitrator or court of competent jurisdiction determines that any provision of this Agreement (or portion thereof) is invalid or unenforceable, then the invalidity or unenforceability of that provision (or portion thereof) shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect. It is the intention of the parties that any such invalid or unenforceable provision be reformed and enforced to the fullest extent permitted by law.
[Remainder of Page Intentionally Blank;
Signature Page Follows]

    - 18 -    

IN WITNESS WHEREOF, Employee and the Company each have caused this Agreement to be executed and effective as of the Effective Date.
EMPLOYEE
    
Prasad Gundumogula
MONDEE, INC.
By:     
Jesus Portillo, CFO

Signature Page to
Employment Agreement
EX-10.2 4 mondeersuprasad0923.htm EX-10.2 mondeersuprasad0923
RESTRICTED STOCK UNIT AGREEMENT PURSUANT TO THE MONDEE HOLDINGS, INC. 2022 EQUITY INCENTIVE PLAN * * * * * Participant: Prasad Gundumogula Grant Date: September 14, 2023 Number of Restricted Stock Units Granted: 1,560,000 * * * * * THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between Mondee Holdings, Inc., a Delaware corporation (the “Company”), and the Participant specified above, pursuant to the Mondee Holdings, Inc. 2022 Equity Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Committee; and WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Restricted Stock Units (“RSUs”) provided herein to the Participant. NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows: 1. Incorporation by Reference; Plan Document Receipt. This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time, unless such amendments are expressly intended not to apply to the Award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein. Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Participant hereby acknowledges receipt of a true copy of the Plan, and that the Participant has read the Plan carefully and fully understands its content. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control. 2. Grant of Restricted Stock Unit Award. The Company hereby grants to the Participant, as of the Grant Date specified above, the number of RSUs specified above. Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of the shares of Common Stock underlying the RSUs, except as otherwise specifically provided for in the Plan or this Agreement. DocuSign Envelope ID: 9B7C0A6D-89BE-421B-9244-09E0D76AF4E5

 
2 3. Vesting. (a) Subject to the provisions of Sections 3(b) and Error! Reference source not found. hereof, the RSUs subject to this Award shall become vested as follows, provided that the Participant has not incurred a termination prior to each such vesting date: Vesting Date Number of RSUs Date Hereof 27,288 January 1, 2024 510,904 January 1, 2025 510,904 January 1, 2026 510,904 There shall be no proportionate or partial vesting in the periods prior to each vesting date and all vesting shall occur only on the appropriate vesting date, subject to the Participant’s continued service with the Company or any of its Subsidiaries on each applicable vesting date. (b) Acceleration of Vesting. The foregoing vesting schedule notwithstanding, upon Participant’s termination due to Participant’s death, Disability or involuntary termination by the Company, 100% of the unvested RSUs shall vest as of the date of such termination. Notwithstanding the foregoing, the Committee may, in its sole discretion, provide for accelerated vesting of the RSUs at any time and for any or no reason. (c) Forfeiture. Subject to the provisions of Section 3(b) hereof, all unvested RSUs shall be immediately forfeited upon the Participant’s termination. 4. Delivery of Shares. (a) General. Subject to the provisions of Sections 4(b) and 4(c) hereof, within thirty (30) days following the vesting of the RSUs, the Participant shall receive the number of shares of Common Stock that corresponds to the number of RSUs that have become vested on the applicable vesting date. (b) Blackout Periods. If the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 4(a) hereof, such distribution shall be instead made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (A) the end of the calendar year in which such distribution would otherwise have been made and (B) a date that is immediately prior to the expiration of two and one-half months following the date such distribution would otherwise have been made hereunder. (c) Deferrals. If permitted by the Company, the Participant may elect, subject to the terms and conditions of the Plan and any other applicable written plan or procedure adopted by the Company from time to time for purposes of such election, to defer the distribution of all or any portion of the shares of Common Stock that would otherwise be distributed to the Participant hereunder (the “Deferred Shares”), consistent with the requirements of Section 409A of the Code. Upon the vesting of RSUs that have been so deferred, the DocuSign Envelope ID: 9B7C0A6D-89BE-421B-9244-09E0D76AF4E5

 
3 applicable number of Deferred Shares shall be credited to a bookkeeping account established on the Participant’s behalf (the “Account”). Subject to Section 5 hereof, the number of shares of Common Stock equal to the number of Deferred Shares credited to the Participant’s Account shall be distributed to the Participant in accordance with the terms and conditions of the Plan and the other applicable written plans or procedures of the Company, consistent with the requirements of Section 409A of the Code. 5. Dividend Equivalent Rights; Rights as Stockholder. Cash dividends on shares of Common Stock issuable hereunder shall be credited to a dividend book entry account on behalf of the Participant with respect to each RSU granted to the Participant, provided that such cash dividends shall not be deemed to be reinvested in shares of Common Stock and shall be held uninvested and without interest and paid in cash at the same time that the shares of Common Stock underlying the RSUs are delivered to the Participant in accordance with the provisions hereof. Stock dividends on shares of Common Stock shall be credited to a dividend book entry account on behalf of the Participant with respect to each RSU granted to the Participant, provided that such stock dividends shall be paid in shares of Common Stock at the same time that the shares of Common Stock underlying the RSUs are delivered to the Participant in accordance with the provisions hereof. Except as otherwise provided herein, the Participant shall have no rights as a stockholder with respect to any shares of Common Stock covered by any RSUs unless and until the Participant has become the holder of record of such shares. 6. Non-Transferability. No portion of the RSUs may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the RSUs as provided herein, unless and until payment is made in respect of vested RSUs in accordance with the provisions hereof and the Participant has become the holder of record of the vested shares of Common Stock issuable hereunder. 7. Governing Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law principles thereof. 8. Withholding of Tax. The Company shall have the power and the right to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Participant’s FICA and SDI obligations), which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law, rule or regulation with respect to the RSUs, and, if the Participant fails to do so, the Company may otherwise refuse to issue or transfer any shares of Common Stock otherwise required to be issued pursuant to this Agreement. Any statutorily required withholding obligation with regard to the Participant may be satisfied by reducing the amount of cash or shares of Common Stock otherwise deliverable to the Participant hereunder, but solely to the extent that such satisfaction does not result in adverse accounting treatment of the RSUs granted hereunder. 9. Legend. The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of Common Stock issued pursuant to this Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares of DocuSign Envelope ID: 9B7C0A6D-89BE-421B-9244-09E0D76AF4E5

 
4 Common Stock acquired pursuant to this Agreement in the possession of the Participant in order to carry out the provisions of this Section 9. 10. Securities Representations. This Agreement is being entered into by the Company in reliance upon the following express representations and warranties of the Participant. The Participant hereby acknowledges, represents and warrants that: (a) The Participant has been advised that the Participant may be an “affiliate” within the meaning of Rule 144 under the Securities Act, and in this connection, the Company is relying in part on the Participant’s representations set forth in this Section 10. (b) If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the shares of Common Stock issuable hereunder must be held indefinitely, unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to such shares of Common Stock and the Company is under no obligation to register such shares of Common Stock (or to file a “re-offer prospectus”). (c) If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the Participant understands that (i) the exemption from registration under Rule 144 will not be available, unless (A) a public trading market then exists for the Common Stock of the Company, (B) adequate information concerning the Company is then available to the public, and (C) other terms and conditions of Rule 144 or any exemption therefrom are complied with, and (ii) any sale of the shares of Common Stock issuable hereunder may be made only in limited amounts in accordance with the terms and conditions of Rule 144 or any exemption therefrom. 11. Entire Agreement; Amendment. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Participant. The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof. 12. Notices. Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel of the Company. Any notice hereunder by the Company shall be given to the Participant in writing, and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company. 13. No Right to Employment. Any questions as to whether and when there has been a termination and the cause of such termination shall be determined in the sole discretion of the Committee. Nothing in this Agreement shall interfere with or limit in any way DocuSign Envelope ID: 9B7C0A6D-89BE-421B-9244-09E0D76AF4E5

 
5 the right of the Company, its Subsidiaries or its Affiliates to terminate the Participant’s employment or service at any time, for any reason and with or without Cause. 14. Transfer of Personal Data. The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary) of any personal data information related to the RSUs awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Participant. 15. Compliance with Laws. The grant of RSUs and the issuance of shares of Common Stock hereunder shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and, in each case, any respective rules and regulations promulgated thereunder) and any other law, rule regulation or exchange requirement applicable thereto. The Company shall not be obligated to issue the RSUs or any shares of Common Stock pursuant to this Agreement if any such issuance would violate any such requirements. As a condition to the settlement of the RSUs, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation. 16. Binding Agreement; Assignment. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Participant shall not assign (except in accordance with Section 6 hereof) any part of this Agreement without the prior express written consent of the Company. 17. Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement. 18. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument. 19. Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder. 20. Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law. 21. Acquired Rights. The Participant acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the Award of RSUs made under this DocuSign Envelope ID: 9B7C0A6D-89BE-421B-9244-09E0D76AF4E5

 
6 Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the RSUs awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Participant’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation. 22. Compliance with Company Trading Policy. The Participant acknowledges and agrees that any Common Stock acquired by the Participant on account of the Award set forth herein shall be subject to each of the terms and conditions of the Company’s Trading Policy, as the same may be amended or otherwise modified from time to time, including any blackout periods, or lock-up periods imposed in connection with any primary or secondary public offering of the Company’s Common Stock. By accepting the Award, the Participant authorizes the Company to take such actions as the Company determines to be reasonably appropriate to implement the terms of the Company’s Trading Policy. [Remainder of Page Intentionally Left Blank] DocuSign Envelope ID: 9B7C0A6D-89BE-421B-9244-09E0D76AF4E5

 
7 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. MONDEE HOLDINGS, INC. By: Name: Jesus Portillo Title: Chief Financial Officer PARTICIPANT Name: Prasad Gundumogula DocuSign Envelope ID: 9B7C0A6D-89BE-421B-9244-09E0D76AF4E5

 
EX-31.1 5 mond-form10xqq32023xex311.htm EX-31.1 Document

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Prasad Gundumogula, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Mondee Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

b)Designed such internal control over financial reporting, or cause such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principals;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2023

/s/ Prasad Gundumogula
Prasad Gundumogula
Chief Executive Officer
(Principal Executive Officer)


EX-31.2 6 mond-form10xqq32023xex312.htm EX-31.2 Document

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Jesus Portillo, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Mondee Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

b)Designed such internal control over financial reporting, or cause such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principals;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2023

/s/ Jesus Portillo
Jesus Portillo
Chief Financial Officer
(Principal Financial and Accounting Officer)



EX-32.1 7 mond-form10xqq323xex321.htm EX-32.1 Document

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Mondee Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2023, as filed with the Securities and Exchange Commission (the “Report”), I, Prasad Gundumogula, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 14, 2023

/s/ Prasad Gundumogula
Prasad Gundumogula
Chief Executive Officer
(Principal Executive Officer)



EX-32.2 8 mond-form10xqq32023xex322.htm EX-32.2 Document

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Mondee Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2023, as filed with the Securities and Exchange Commission (the “Report”), I, Jesus Portillo, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 14, 2023

/s/ Jesus Portillo
Jesus Portillo
Chief Financial Officer
(Principal Financial and Accounting Officer)