A financial dispute erupted between Perion Networks Inc. (Nasdaq:PERI: TASE:PERI) and the shareholdrers of SweetIM, which Perion acquired at the end of 2012. Perion's detailed annual report for 2014 reveals that the parties did not agree over an additional $5 million in milestone payments.
Perion, managed by CEO Josef Mandelbaum, provides software solutions and services that assist software application developers in distributing and monetizing their products. SweetIM (also known as SweetPacks), whose shareholders include Gigi Levy, developed applications for free downloads. The terms of Perion's acquisition deal included a $10 million immediate cash payment, and 2 million Perion shares then worth $16 million. $7.5 million more was paid after 12 months and a further $7.5 million, 18 months after completion of the deal, contingent on certain milestones. Thus the total deal was worth up to $41 million.
The deal concerned the final payment scheduled for May 2014. In its 2014 financial report, Perion claimed it owed SweetIM's shareholders only $2.5 million out of the final payment. However, SweetIM's shareholders think otherwise and are demanding the full $7.5 million. Perion said, "Perion believes there is no substance to the claim and plans to strenuously defend itself against the claim." Until the claim is settled, Perion has recorded $5 million as a liability in its balance sheet.
Perion has also announced the appointment of Michael Waxman-Lenz as its chief strategy officer.
Published by Globes [online], Israel business news - www.globes-online.com - on April 8, 2015
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