UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of August
Commission File Number:
(Translation of registrant’s name into English)
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐ |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): N/A
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): N/A
Explanatory Note
This Report of Foreign Private Issuer on Form 6-K (this “Form 6-K”) is being furnished by Perion Network Ltd. (“Perion”) to the Securities and Exchange Commission (the “SEC”) for the sole purposes of: (i) furnishing, as Exhibit 99.1 to this Form 6-K, unaudited condensed consolidated financial statements of Perion as of and for the six-month period ended June 30, 2021; and (ii) furnishing, as Exhibit 99.2 to this Form 6-K, Management’s Discussion and Analysis of Financial Condition and Results of Operations, which discusses and analyzes Perion’s financial condition and results of operations as of and for the six-month period ended June 30, 2021.
The following exhibits are furnished as part of this Form 6-K:
Exhibit No. |
Description |
Unaudited Condensed Consolidated Financial Statements for the Six Months Ended June 30, 2021 | |
|
|
Management's Discussion and Analysis of Financial Condition and Results of Operations | |
|
|
101 |
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets, (ii) Interim Consolidated Statements of Income (Loss), (iii) Interim Consolidated Statements of Comprehensive Income (Loss); (iv) Interim Consolidated Statements of Changes in Shareholders' Equity, (v) Interim Consolidated Statements of Cash Flows, and (vi) the Notes to Interim Consolidated Financial Statements |
Exhibit 99.1 and 99.2 to this Report on Form 6-K shall be deemed to be incorporated by reference into Perion’s registration statements on Form F-3 (File No. 333-254706) and Form S-8 (File Nos. 333-133968, 333-152010, 333-171781, 333-188714, 333-192376, 333-193145, 333-203641, 333-208278, 333-216494, 333-237196 and 333-249846).
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PERION NETWORK LTD. | ||
|
||
By: |
/s/ Maoz Sigron | |
Name: |
Maoz Sigron | |
Title: |
Chief Financial Officer |
Date: August 31, 2021
Exhibit 99.1
PERION NETWORK LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
IN U.S. DOLLARS
UNAUDITED
INDEX
PERION NETWORK LTD. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30, |
December 31, | |||||||
2021 |
2020 | |||||||
|
(Unaudited) |
(Audited) | ||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents |
$ |
|
$ |
| ||||
Restricted cash |
|
| ||||||
Short-term bank deposits |
|
| ||||||
Accounts receivable (net of allowance of $ |
|
| ||||||
Prepaid expenses and other current assets |
|
| ||||||
Total Current Assets |
|
| ||||||
| ||||||||
Long-Term Assets: | ||||||||
Property and equipment, net |
|
| ||||||
Operating lease right-of-use assets |
|
| ||||||
Intangible assets, net |
|
| ||||||
Goodwill |
|
| ||||||
Deferred taxes |
|
| ||||||
Other assets |
|
| ||||||
Total Long-Term Assets |
|
| ||||||
Total Assets |
$ |
|
$ |
| ||||
| ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable |
$ |
|
$ |
| ||||
Accrued expenses and other liabilities |
|
| ||||||
Short-term operating lease liability |
|
| ||||||
Short-term loans and current maturities of long-term loans |
|
| ||||||
Deferred revenues |
|
| ||||||
Short-term payment obligation related to acquisitions |
|
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Total Current Liabilities |
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| ||||||||
Long-Term Liabilities: | ||||||||
Payment obligation related to acquisition |
|
| ||||||
Long-term operating lease liability |
|
| ||||||
Other long-term liabilities |
|
| ||||||
Total Long-Term Liabilities |
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| ||||||
Total Liabilities |
|
| ||||||
| ||||||||
Shareholders' equity: | ||||||||
Ordinary shares of ILS |
|
| ||||||
Additional paid-in capital |
|
| ||||||
Treasury shares at cost ( |
( |
) |
( |
) | ||||
Accumulated other comprehensive gain |
|
| ||||||
Accumulated deficit |
( |
) |
( |
) | ||||
Total Shareholders' Equity |
|
| ||||||
Total Liabilities and Shareholders' Equity |
$ |
|
$ |
|
The accompanying notes are an integral part of the interim consolidated financial statements.
F - 1
PERION NETWORK LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
U.S. dollars in thousands (except share and per share data)
Six months ended | ||||||||
June 30, | ||||||||
2021 |
|
|
2020 | |||||
(Unaudited) |
(Unaudited) | |||||||
| ||||||||
Revenues: | ||||||||
Display and Social Advertising |
$ |
|
$ |
| ||||
Search Advertising and other |
|
| ||||||
Total Revenues |
|
| ||||||
| ||||||||
Costs and Expenses: | ||||||||
Cost of revenues |
|
| ||||||
Traffic acquisition costs and media buy |
|
| ||||||
Research and development |
|
| ||||||
Selling and marketing |
|
| ||||||
General and administrative |
|
| ||||||
Depreciation and amortization |
|
| ||||||
Total Costs and Expenses |
|
| ||||||
| ||||||||
Income (loss) from Operations |
|
( |
) | |||||
Financial expense, net |
|
| ||||||
Income (loss) before Taxes on income |
|
( |
) | |||||
Taxes on income (benefit) |
|
( |
) | |||||
Net Income (loss) |
$ |
|
$ |
( |
) | |||
| ||||||||
Net Earnings (loss) per Share | ||||||||
Basic |
$ |
|
$ |
( |
) | |||
Diluted |
$ |
|
$ |
( |
) | |||
| ||||||||
Weighted average number of shares | ||||||||
Basic |
|
| ||||||
Diluted |
|
|
The accompanying notes are an integral part of the interim consolidated financial statements.
F - 2
PERION NETWORK LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
U.S. dollars in thousands
Six months ended June 30, | ||||||||
2021 |
|
|
2020 | |||||
(Unaudited) |
(Unaudited) | |||||||
| ||||||||
Net Income (Loss) |
$ |
|
$ |
( |
) | |||
| ||||||||
Other comprehensive loss: | ||||||||
Change in foreign currency translation |
( |
) |
( |
) | ||||
Cash Flow Hedge: | ||||||||
Unrealized gain from cash-flow hedges, net of taxes |
|
| ||||||
Less: reclassification adjustment for net losses included in net income |
|
| ||||||
| ||||||||
Net change |
|
| ||||||
| ||||||||
Other comprehensive income (loss): |
( |
) |
| |||||
| ||||||||
Comprehensive Income (Loss) |
$ |
|
$ |
( |
) |
The accompanying notes are an integral part of the interim consolidated financial statements.
F - 3
PERION NETWORK LTD. AND ITS SUBSIDIARIES
INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands (except share data)
Common stock |
Additional paid-in capital |
Accum. other comprehensive income (loss) |
Accumulated deficit |
Treasury shares |
Total shareholders' equity | |||||||||||||||||||||||
Number of Shares |
$ |
$ |
$ |
$ |
$ |
$ | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Balance as of December 31, 2019 (audited) |
|
|
|
|
( |
) |
( |
) |
| |||||||||||||||||||
| ||||||||||||||||||||||||||||
Stock-based compensation |
- |
- |
|
- |
- |
- |
| |||||||||||||||||||||
Proceeds from exercise of stock-based compensation |
|
|
|
- |
- |
- |
| |||||||||||||||||||||
Other comprehensive loss |
- |
- |
- |
( |
) |
- |
- |
( |
) | |||||||||||||||||||
Net Income |
- |
- |
- |
- |
|
- |
| |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Balance as of December 31, 2020 (audited) |
|
|
|
|
( |
) |
( |
) |
| |||||||||||||||||||
| ||||||||||||||||||||||||||||
Offering of ordinary shares *) |
|
|
|
- |
- |
- |
| |||||||||||||||||||||
Stock-based compensation |
- |
- |
|
- |
- |
- |
| |||||||||||||||||||||
Proceeds from exercise of stock-based compensation |
|
|
|
- |
- |
- |
| |||||||||||||||||||||
Other comprehensive loss |
- |
- |
- |
( |
) |
- |
- |
( |
) | |||||||||||||||||||
Net Income |
- |
- |
- |
- |
|
- |
| |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Balance as of June 30, 2021 (unaudited) |
|
|
|
|
( |
) |
( |
) |
|
*)
The accompanying notes are an integral part of the interim consolidated financial statements.
F - 4
PERION NETWORK LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
U.S. dollars in thousands
Six months ended | ||||||||
June 30, | ||||||||
2021 |
2020 | |||||||
(Unaudited) |
(Unaudited) | |||||||
Cash flows from operating activities: | ||||||||
Net Income (Loss) |
$ |
|
$ |
( |
) | |||
| ||||||||
Adjustments required to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization |
|
| ||||||
Stock-based compensation expense |
|
| ||||||
Foreign currency translation |
( |
) |
( |
) | ||||
Accrued interest, net |
( |
) |
| |||||
Deferred taxes, net |
|
( |
) | |||||
Accrued severance pay, net |
|
| ||||||
Loss (gain) from sale of property and equipment |
( |
) |
| |||||
Net changes in operating assets and liabilities | ||||||||
Accounts receivable, net |
|
| ||||||
Prepaid expenses and other current assets |
( |
) |
| |||||
Other assets |
|
| ||||||
Operating Lease right-of-use assets |
|
| ||||||
Operating Lease liabilities |
( |
) |
( |
) | ||||
Accounts payable |
|
( |
) | |||||
Accrued expenses and other liabilities |
( |
) |
( |
) | ||||
Deferred revenues |
( |
) |
( |
) | ||||
Payment obligation related to acquisition |
|
| ||||||
Net cash provided by operating activities |
$ |
|
$ |
| ||||
| ||||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment, net of sales |
( |
) |
( |
) | ||||
Short-term deposits, net |
( |
) |
| |||||
Cash paid in connection with acquisitions, net of cash acquired |
( |
) |
( |
) | ||||
Obligation in connection with acquisitions |
|
| ||||||
Net cash used in investing activities |
$ |
( |
) |
$ |
( |
) | ||
| ||||||||
Cash flows from financing activities: | ||||||||
Proceeds from follow-on offering, net |
|
| ||||||
Proceeds from exercise of stock-based compensation |
|
| ||||||
Repayment of long-term loans |
( |
) |
( |
) | ||||
Net cash provided by (used in) financing activities |
$ |
|
$ |
( |
) | |||
| ||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
( |
) |
( |
) | ||||
| ||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash |
|
( |
) | |||||
| ||||||||
Cash and cash equivalents and restricted cash at beginning of period |
|
| ||||||
| ||||||||
Cash and cash equivalents and restricted cash at end of period |
$ |
|
$ |
|
The accompanying notes are an integral part of the interim consolidated financial statements.
F - 5
PERION NETWORK LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
U.S. dollars in thousands
Six months ended June 30, | ||||||||
2021 |
2020 | |||||||
(Unaudited) |
(Unaudited) | |||||||
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheet | ||||||||
| ||||||||
Cash and cash equivalents |
$ |
|
$ |
| ||||
Restricted cash included in Long-term interest-bearing bank deposits |
|
| ||||||
Total cash, cash equivalents, and restricted cash |
$ |
|
$ |
| ||||
| ||||||||
Supplemental Disclosure of Cash Flow Activities: | ||||||||
| ||||||||
Cash paid during the year for: | ||||||||
Income taxes |
$ |
|
$ |
| ||||
Interest |
$ |
|
$ |
| ||||
| ||||||||
Non-cash investing and financing activities: | ||||||||
Purchase of property and equipment on credit |
$ |
|
$ |
|
The accompanying notes are an integral part of the consolidated financial statements.
F - 6
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 1:GENERAL
Perion Network Ltd. ("Perion") and its wholly-owned subsidiaries (collectively referred to as the "Company"), is a global technology company that provides agencies, brands and publishers with innovative solutions that cover the three main pillars of digital advertising – ad search, social media, and display/video and CTV advertising.
On January 14, 2020, the Company completed the acquisition of Content IQ LLC (see Note 3) and on July 22, 2020, the Company consummated the assets acquisition of Pub Ocean (see Note 3).
NOTE 2:SIGNIFICANT ACCOUNTING POLICIES
a.Interim Financial Statements
The accompanying consolidated balance sheet as of June 30, 2021, the consolidated statements of income (loss), the consolidated statements of comprehensive income (loss) and the consolidated statements of cash flows for the six months ended June 30, 2020 and 2021, as well as the statement of changes in shareholders' equity for the six months ended June 30, 2021, are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the "SEC") regarding interim financial reporting. In the management’s opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s financial position as of June 30, 2021, as well as its results of operations and cash flows for the six months ended June 30, 2020 and 2021. The results of operations for the six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021.
The accompanying unaudited interim financial statements should be read in conjunction with the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2020, filed with the SEC on March 25, 2021 (the "Annual Report").
b.There have been no changes to the significant accounting policies described in the Annual Report that have had a material impact on the unaudited interim consolidated financial statements and related notes.
c.Use of estimates
The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, the Company's management evaluates its estimates, including those related to sales allowances and allowance for credit losses, fair value of intangible assets and goodwill, useful lives of intangible assets, fair value of share-based awards, realizability of deferred tax assets, tax uncertainties, and contingent liabilities, among others. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of the Company’s assets and liabilities, determination of the product (or the service) specifications, separately negotiates each revenue service agreement or publisher agreement and can have several additional indicators, revenue is recorded on a gross basis.
F - 7
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Contract balances are presented separately on the consolidated balance sheets as either Accounts receivable or Deferred revenues. The Company does not have contract assets.
Accounts receivable includes amounts billed and currently due from customers.
Deferred revenues are recorded when payments are received from customers in advance of the Company's rendering of services.
d.Recent Adopted Accounting Pronouncements
In June 2016 the FASB issued Accounting Standards Update (ASU) No. 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments". The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2020. This standard requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings and report credit losses using an expected losses model rather than the incurred losses model that was previously used, and establishes additional disclosures related to credit risks.
The Company adopted Topic 326 effective January 1, 2020. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.
The interim Consolidated Financial Statements for the six months ended June 30, 2021 are presented under the new standard, while comparative periods presented are not adjusted and continue to be reported in accordance with the Company’s historical accounting policy.
The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.
In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement (Topic 820)—Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. This guidance removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements.
F - 8
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:SIGNIFICANT ACCOUNTING POLICIES (Cont.)
The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Certain disclosures required by this guidance must be applied on a retrospective basis and others on a prospective basis. The guidance was adopted for interim and annual periods beginning after December 15, 2019, although early adoption is permitted.
The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.
e.Recent Accounting Pronouncements not yet adopted
In December 2019, the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): “Simplifying the Accounting for Income Taxes” (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.
NOTE 3:ACQUISITIONS
A.Content IQ LLC
On January 14, 2020, the Company consummated the acquisition of Content IQ LLC (“Content IQ”), a privately held company founded in 2014, based in New York City. Content IQ has created data algorithm and analytics tools that deconstruct content, revenue and distribution to solve current major digital publishing challenges.
The total consideration for the acquisition was $
F - 9
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 3:ACQUISITIONS (Cont.)
B.Pub Ocean
On July 22, 2020, the Company acquired the net assets of Pub Ocean Limited, also known as “Pub Ocean” (the “Pub Ocean Acquisition"), a rapidly growing digital publisher-focused technology company with scalable content distribution and real-time revenue analytics technology.
The total consideration for the acquisition was $
NOTE 4:FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of financial instruments carried at cost, including cash and cash equivalents, short-term deposits, restricted cash, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses and other liabilities approximate their fair value due to the short-term maturities of such instruments.
The following table present assets and liabilities measured at fair value on a recurring basis as of June 30, 2021:
June 30, 2021 | ||||||||||||||||
Fair value measurements using input type | ||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total | |||||||||||||
Assets: | ||||||||||||||||
Derivative assets |
$ |
|
$ |
|
$ |
|
$ |
| ||||||||
| ||||||||||||||||
Total financial assets |
$ |
|
$ |
|
$ |
|
$ |
| ||||||||
| ||||||||||||||||
Liabilities: | ||||||||||||||||
Contingent consideration in connection to the acquisitions |
|
|
|
| ||||||||||||
| ||||||||||||||||
Total financial liabilities |
$ |
|
$ |
|
$ |
|
$ |
|
F - 10
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 4:FAIR VALUE OF FINANCIAL INSTRUMENTS (Cont.)
The following table present liabilities measured at fair value on a recurring basis as of December 31, 2020:
|
December 31, 2020 | |||||||||||||||
Fair value measurements using input type | ||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total | |||||||||||||
Liabilities: | ||||||||||||||||
Contingent consideration in connection to the acquisitions |
|
|
|
| ||||||||||||
| ||||||||||||||||
Total financial liabilities |
$ |
|
$ |
|
$ |
|
$ |
|
NOTE 5:GOODWILL AND INTANGIBLE ASSETS, NET
a.Goodwill
The changes in the net carrying amount of goodwill in 2020 and six months ended June 30, 2021 were as follows:
Balance as of January 1, 2020 |
$ |
| ||
| ||||
Acquisition of Content IQ |
$ |
| ||
| ||||
Acquisition of Pub Ocean |
$ |
| ||
| ||||
Balance as of December 31, 2020 |
$ |
| ||
| ||||
Balance as of June 30, 2021 |
$ |
|
Goodwill has been recorded as a result of prior acquisitions and represents excess of the consideration over the net fair value of the assets of the businesses acquired. As of June 30, 2021, the Company had two reporting units – Advertising and Search monetization. The Company performs tests for impairment of goodwill at the reporting unit level at least annually, or more frequently if events or changes in circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value. As of June 30, 2021, the Company determined that there were no indicators of potential impairment with regards to its reporting units which required interim goodwill impairment analysis.
F - 11
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 5:GOODWILL AND INTANGIBLE ASSETS, NET (Cont.)
b.Intangible assets, net
The following is a summary of intangible assets as of June 30, 2021:
December 31, 2020 |
Amortization |
June 30, 2021 | ||||||||||
| ||||||||||||
Acquired technology |
$ |
|
$ |
|
$ |
| ||||||
Accumulated amortization |
( |
) |
( |
) |
( |
) | ||||||
Impairment |
( |
) |
|
( |
) | |||||||
Acquired technology, net |
|
( |
) |
| ||||||||
| ||||||||||||
Customer relationships |
|
|
| |||||||||
Accumulated amortization |
( |
) |
( |
) |
( |
) | ||||||
Impairment |
( |
) |
|
( |
) | |||||||
Customer relationships, net |
|
( |
) |
| ||||||||
| ||||||||||||
Tradename and other |
|
|
| |||||||||
Accumulated amortization |
( |
) |
( |
) |
( |
) | ||||||
Impairment |
( |
) |
|
( |
) | |||||||
Tradename and other, net |
|
( |
) |
| ||||||||
| ||||||||||||
Intangible assets, net |
$ |
|
$ |
( |
) |
$ |
|
The following is a summary of intangible assets as of December 31, 2020:
December 31, 2019 |
Additions |
Amortization |
OCI |
December 31, 2020 | ||||||||||||||||
| ||||||||||||||||||||
Acquired technology |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
| ||||||||||
Accumulated amortization |
( |
) |
|
( |
) |
( |
) |
( |
) | |||||||||||
Impairment |
( |
) |
|
|
|
( |
) | |||||||||||||
Acquired technology, net |
|
|
( |
) |
( |
) |
| |||||||||||||
| ||||||||||||||||||||
Customer relationships |
|
|
|
|
| |||||||||||||||
Accumulated amortization |
( |
) |
|
( |
) |
|
( |
) | ||||||||||||
Impairment |
( |
) |
|
|
|
( |
) | |||||||||||||
Customer relationships, net |
|
|
( |
) |
|
| ||||||||||||||
| ||||||||||||||||||||
Tradename and other |
|
|
|
|
| |||||||||||||||
Accumulated amortization |
( |
) |
|
( |
) |
( |
) |
( |
) | |||||||||||
Impairment |
( |
) |
|
|
|
( |
) | |||||||||||||
Tradename and other, net |
|
|
( |
) |
( |
) |
| |||||||||||||
| ||||||||||||||||||||
Intangible assets, net |
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
F - 12
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 6:SHORT-TERM AND LONG-TERM DEBT
On December 17, 2018, ClientConnect Ltd., a former Israeli subsidiary of Perion, which merged into Perion on June 30, 2020, executed a new loan facility, in the amount of $
On March 8, 2021, the Company early repaid the full amount of its loan facility with bank Mizrachi of a principal amount of $
NOTE 7:COMMITMENTS AND CONTINGENT LIABILITIES
Legal Matters
On December 22, 2015, Adtile Technologies Inc. filed a lawsuit against the Company and Intercept Interactive Inc. (“Intercept”), a subsidiary of Interactive Holding Corp., in the United States District Court for the District of Delaware. The lawsuit alleges various causes of action against Perion and Undertone related to Undertone’s alleged unauthorized use and misappropriation of Adtile’s proprietary information and trade secrets. Adtile is seeking injunctive relief and, unspecified monetary damages. On June 23, 2016, the court denied Adtile’s motion for a preliminary injunction. On June 24, 2016, the court (i) granted the Company’s motion to dismiss, and (ii) granted Intercept’s motion to stay the action and compel arbitration. In November 2017, the court dismissed the case for administrative reasons, since Adtile had not commenced arbitration proceedings. The Company is still unable to predict the outcome or range of possible loss as of the date of these financial statements, since to date Adtile had not commenced arbitration procedures. Regardless, the Company believes it has strong defenses against this lawsuit and intends to defend against it vigorously.
F - 13
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 8:SHAREHOLDERS' EQUITY
a.Ordinary shares
The ordinary shares of the Company entitle their holders to voting rights, the right to receive cash dividend and the right to a share in excess assets upon liquidation of the Company.
b.Stock Options, Restricted Share Units and Warrants
In 2003, the Company's Board of Directors approved the 2003 Equity Incentive Plan (the "Plan") for an initial term of
The contractual term of the stock options is generally no more than
As of June 30, 2021, there were
The following table summarizes the activities for the Company’s service-based stock options for the six months ended June 30, 2021:
Weighted average | ||||||||||||||||
Number of options |
Exercise price |
Remaining contractual term (in years) |
Aggregate intrinsic value | |||||||||||||
| ||||||||||||||||
Outstanding at January 1, 2021 |
|
$ |
|
|
$ |
| ||||||||||
Granted |
|
|
- |
- | ||||||||||||
Exercised |
( |
) |
|
- |
| |||||||||||
Cancelled |
( |
) |
|
- |
- | |||||||||||
Outstanding at June 30, 2021 |
|
$ |
|
|
$ |
| ||||||||||
| ||||||||||||||||
Exercisable at June 30, 2021 |
|
$ |
|
|
$ |
| ||||||||||
| ||||||||||||||||
Vested and expected to vest at June 30, 2021 |
|
$ |
|
|
$ |
|
F - 14
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 8:SHAREHOLDERS' EQUITY (Cont.)
The following table summarizes the activities for the Company’s performance-based stock options for the six months ended June 30, 2021:
Weighted average | ||||||||||||||||
Number of options |
Exercise price |
Remaining contractual term (in years) |
Aggregate intrinsic value | |||||||||||||
| ||||||||||||||||
Outstanding at January 1, 2021 |
|
$ |
|
|
$ |
| ||||||||||
Granted |
|
|
) |
- |
- | |||||||||||
Exercised |
( |
) |
|
- |
| |||||||||||
Cancelled |
( |
) |
|
) |
- |
- | ||||||||||
Outstanding at June 30, 2021 |
|
$ |
|
|
$ |
| ||||||||||
| ||||||||||||||||
Exercisable at June 30, 2021 |
|
$ |
|
|
$ |
| ||||||||||
| ||||||||||||||||
Vested and expected to vest at June 30, 2021 |
|
$ |
|
|
$ |
|
*)
The performance-based stock options’ vesting is contingent upon achieving specific financial targets of the Company, set at the grant date.
NOTE 9:INCOME TAXES
The Company had a tax expenses of $
F - 15
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 10:EARNINGS PER SHARE
The table below presents the computation of basic and diluted net earnings per common share:
Six months ended June 30, | ||||||||
2021 |
2020 | |||||||
| ||||||||
Numerator: | ||||||||
Net income (loss) attributable to ordinary shares - basic |
$ |
|
$ |
( |
) | |||
Net income (loss) - diluted |
$ |
|
$ |
( |
) | |||
| ||||||||
Denominator: | ||||||||
Number of ordinary shares outstanding during the year |
|
| ||||||
Weighted average effect of dilutive securities: | ||||||||
Employee options and restricted share units |
|
| ||||||
| ||||||||
Diluted number of ordinary shares outstanding |
|
| ||||||
| ||||||||
Basic net earnings (loss) per ordinary share |
$ |
|
$ |
( |
) | |||
| ||||||||
Diluted net earnings (loss) per ordinary share |
$ |
|
$ |
( |
) | |||
| ||||||||
Ordinary shares equivalents excluded because their effect would have been anti-dilutive |
|
|
F - 16
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 11:MAJOR CUSTOMER
A substantial portion of the Company’s revenue is derived from search fees and online advertising, the market for which is highly competitive and rapidly changing. Significant changes in this industry or in customer buying behavior would adversely affect the Company’s operating results.
The following table sets forth the customers that represent 10% or more of the Company’s total revenues in each of the periods presented below:
Six months ended June 30, | ||||||||
2021 |
2020 | |||||||
| ||||||||
Customer A |
|
% |
|
% |
NOTE 12:GEOGRAPHIC INFORMATION
The following table presents the total revenues for six months ended June 30, 2021 and 2020, allocated to the geographic areas in which they were generated:
Six months ended June 30, | ||||||||
2021 |
2020 | |||||||
| ||||||||
North America (mainly U.S.) |
$ |
|
$ |
| ||||
Europe |
|
| ||||||
Other |
|
| ||||||
| ||||||||
$ |
|
$ |
|
The following table presents the locations of the Company’s long-lived assets as of June 30, 2021 and December 31, 2020:
June 30, |
December 31, | |||||||
2021 |
2020 | |||||||
| ||||||||
Israel |
$ |
|
$ |
| ||||
U.S. |
|
| ||||||
Europe |
|
| ||||||
| ||||||||
$ |
|
$ |
|
F - 17
1. |
Operational Savings – Shared Resources
|
2. |
Media Cost (TAC) Optimization
|
3. |
Customer Value Increase
|
• |
The growth in search driven by the growing shift to digital and contactless commerce activity;
|
• |
The move towards in-house advertising;
|
• |
The inevitable disappearance of the cookie in an increasing privacy-centric world and the corresponding imperative of first-party data; and
|
• |
The need for high-engagement creatives in what is called the “Attention Economy.”
|