Company: PERI
Filing Date: 2025-03-25
Form Type: 20-F
Source: 0001178913-25-001021
Chunk: 134

Company: Perion Network Ltd.
Filing Date: 2025-03-25
Form: 20-F
Item: Item 10
Chunk 134
---
.S. federal, state, local and non-U.S. tax consequences of owning and disposing of our ordinary shares in their particular circumstances.
 

Passive Foreign Investment Company Rules
 
 In general, a non-U.S. corporation is a PFIC for any taxable year in which (i) 75% or more of its gross income consists of passive income or (ii) 50% or more of the value of its assets (generally determined on an average quarterly basis) consists of assets that produce, or are held for the production of, passive income. For purposes of the above calculations, a non-U.S. corporation that owns (or is treated as owning for U.S. federal income tax purposes), directly or indirectly, at least 25% by value of the shares or equity interests of another corporation is treated as if it held its proportionate share of the assets of the other corporation  and received directly its proportionate share of the income of the other corporation . Passive income generally includes dividends, interest, rents, royalties and certain gains. Cash and marketable securities are generally passive assets for these purposes. Goodwill and other intangible assets are generally characterized as non-passive or passive assets based on the nature of the income produced in the activity to which the goodwill and other intangible assets relate.
 
  Because we hold a substantial amount of cash and other passive assets, our PFIC status for any taxable year generally will depend on the average value of our goodwill and other intangible assets (as well as the value of our other active assets). If the value of our assets were determined by reference to the sum of our market capitalization and liabilities, we would likely be a PFIC for 2024 due to the low average value of our market capitalization during 2024. However, because, among other considerations,  the market price of our ordinary shares was significantly volatile throughout 2024, we believe that alternative valuation methods are appropriate. Specifically, we believe that if our assets were valued based on the discounted cash flows or revenue multiples methods, our enterprise value for 2024 would be significantly larger than the value derived from using the market capitalization method. Accordingly, we believe that we were likely not a PFIC for 2024. However, our position is not binding on the U.S. Internal Revenue Service and there can be no assurance that it will agree with our valuation approach.
 
 In addition, we may also be a PFIC for any future taxable year if the portion of our financial income out of our gross income