Enom 2011 Annual Report Download - page 101

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and is in the process of discussing a resolution with the plaintiff. The Company intends to vigorously defend its position and does not expect to incur a
material loss in respect of this matter.
In addition, from time to time the Company is a party to other various litigation matters incidental to the conduct of its business. There is no pending or
threatened legal proceeding to which Company is a party that, in our opinion, is likely to have a material adverse effect on the Company’s future financial
results.
Taxes
From time to time, various federal, state and other jurisdictional tax authorities undertake review of the Company and its filings. In evaluating the
exposure associated with various tax filing positions, the Company accrues charges for possible exposures. The Company believes any adjustments that may
ultimately be required as a result of any of these reviews will not be material to its consolidated financial statements.
Domain Name Agreement
On April 1, 2011, the Company amended its existing agreement with a customer to provide domain name registration services and manage certain
domain names owned and operated by the customer over a twenty seven month term (the "Amended Domain Agreement"). In conjunction with the Amended
Domain Agreement, the Company committed to purchase at least $175 of expired domain names every calendar quarter or a total of $1,575 over the term of
the agreement. The contract can be terminated by either the Company or the counter party within 60 days prior to the end of each annual renewal period. The
aggregate value of expired domain names purchased by the Company from inception through December 31, 2011 was $642.
Indemnifications
In its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make
payments in relation to certain transactions. Those indemnities include intellectual property indemnities to the Company’s customers, indemnities to directors
and officers of the Company to the maximum extent permitted under the laws of the State of Delaware and indemnifications related to the Company’s lease
agreements. In addition, the Company’s advertiser and distribution partner agreements contain certain indemnification provisions which are generally
consistent with those prevalent in the Company’s industry. The Company has not incurred significant obligations under indemnification provisions
historically and does not expect to incur significant obligations in the future. Accordingly, the Company has not recorded any liability for these indemnities,
commitments and guarantees in the accompanying balance sheets.
8. Income Taxes
Income/(loss) before income taxes for the years ended December 31, 2009, 2010 and 2011 consisted of the following:
December 31,
2009 December 31,
2010 December 31,
2011
Domestic $ (19,856) $ (1,530) $ (13,820)
Foreign 156 102 (527)
Loss before income taxes $ (19,700) $ (1,428) $ (14,347)
The income tax benefit (expense) consists of the following:
F-22