Incredimail 2014 Annual Report Download - page 89

Download and view the complete annual report

Please find page 89 of the 2014 Incredimail annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 166

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166

PAR T II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 15. CONTROLS AND PROCEDURES
Our chief executive officer and chief financial officer, after evaluating the effectiveness of our disclosure controls and procedures as of
December 31, 2014, have concluded that, as of such date, our disclosure controls and procedures were effective and ensured that information
required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management,
including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure and is recorded,
processed, summarized and reported within the time periods specified by the SEC's rules and forms.
This annual report does not include a report of management's assessment regarding internal control over financial reporting or an
attestation report of the company's registered public accounting firm due to the following circumstances:
The ClientConnect Acquisition was consummated in January 2014. Until then, ClientConnect was a private company and, as such,
many of its processes and approaches to documentation and performance of controls required improvements in order to enable an
assessment of the effectiveness of such internal control over financial reporting under Section 404 of Sarbanes-
Oxley Act. In addition,
the management of the ClientConnect business, as well as other corporate functions, such as Finance, Human Resources and
Administration, remained with Conduit. We therefore had to recruit many employees while learning the business acquired and
planning its integration with Perion.
The ClientConnect business was much larger in scale as compared to our legacy business, which required us to assess and revise most
of our processes and controls that were in place prior to the acquisition in order to incorporate and integrate both
businesses. Specifically, based on our audited consolidated financial statements as of and for the year ended December 31, 2014, the
legacy Perion assets represented approximately 13% of our total consolidated assets, and the legacy Perion revenues represented
approximately 8% of our consolidated revenues. The only legacy business processes that were unaffected by the ClientConnect
Acquisition were the SmileBox and Perion legacy products sales, which together constitute less than 5% of our consolidated revenues.
Accordingly, the information in such financial statements is based largely on the processes that were integrated and designed after the
acquisition.
Although the ClientConnect Acquisition occurred early in the year and plans to integrate the ClientConnect business with our legacy
Perion business were formulated at the time, actual integration of employees, systems, processes and therefore, internal controls,
occurred over an extended period of time after closing of the acquisition. In addition, during the process of integration, we implemented
a new ERP system for both ClientConnect and Perion. This new system and our new Finance team were in place only at the end of
July. Following that, we integrated and finalized the design for most of our processes, such as Financial Reporting & Tax, Treasury,
Expenditures, Fixed Assets, HR & Payroll, Media Buying, Revenues and IT General Controls).
None.
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
(a)
Disclosure controls and procedures
(b)
Management annual report on internal control over financial reporting
83