Enom 2011 Annual Report Download - page 104

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U.S. subsidiaries for an indefinite period of time. It is not practicable to compute the amount of incremental taxes that would result from the repatriation of
those earnings.
The Company is subject to the accounting guidance for uncertain income tax positions. The Company believes that its income tax positions and
deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company's financial
condition, results of operations, or cash flow. The Company acquired an $85 uncertain tax position as a result of a business acquisition during 2011.
The Company's policy for recording interest and penalties associated with audits and uncertain tax positions is to record such items as a component of
income tax expense, and amounts recognized to date are insignificant. No uncertain income tax positions were recorded during 2010 or 2011 other than one
related to a business acquisition during the year, and the Company does not expect its uncertain tax position to change during the next twelve months.
During 2011 and 2010, the aggregate changes in our total gross amount of unrecognized tax benefits are summarized as follows:
Year ended December 31, 2010 Year ended December 31, 2011
Beginning balance $ — $ —
Gross increase in unrecognized tax benefits - prior year tax position — 85
Gross decrease in unrecognized tax benefits - prior year tax position — —
Gross increase in unrecognized tax benefits - current year tax position — —
Gross decrease in unrecognized tax benefits - current year tax position — —
Settlements with tax authorities — —
Lapse of statute of limitations — —
Ending balance — 85
The Company files a U.S. federal and many state tax returns. The tax years 2007 to 2010 remain subject to examination by the IRS and most tax years
since the Company's incorporation are subject to examination by various state authorities.
9. Related Party Transactions
The Company’s Chairman and Chief Executive Officer and certain members of the board of directors of the Company also sit on the board of directors
of The FRS Company (“FRS”). The Company recognized approximately $151, $378 and $513 in revenue from FRS for advertising and creative services
during the years ended December 31, 2009, 2010 and 2011, respectively. As of December 31, 2010 and December 31, 2011 , the Company’s receivable
balance due from FRS was $164 and $45, respectively. The creative services agreement was terminated by the parties effective May 31, 2011.
In May 2009, the Company entered into a Master Relationship Agreement with Mom, Inc. (“Modern Mom”), a corporation that is co-owned and
operated by the wife of the Company’s Chairman and Chief Executive Officer. In March 2010, the Company agreed to provide Modern Mom with ten
thousand units of articles, to be displayed on the Modern Mom website, for an aggregate fee of up to $500. In March 2011, the parties agreed to discontinue
the agreement and as a result, the Company no longer has an obligation to provide Modern Mom with any additional articles. The Company recognized
revenue of approximately $57, $242 and $20 in the years ended December 31, 2009, 2010 and 2011, respectively, and amounts due from Modern Mom as of
December 31, 2010 and December 31, 2011 were $44 and $0 respectively.
In May 2011, the Company entered into a Database Development and License Agreement with RSS Graffiti, LLC ("RSS Graffiti") to develop a data
warehouse and analytics platform. Michael Blend, one of the Company's executive vice presidents, had an approximate 40% ownership interest in RSS
Graffiti through his equity holding in an investment group that controlled RSS Graffiti as of the date of the transaction. In consideration for the services to be
provided under the agreement, the Company agreed to pay RSS Graffiti $700 over a seven month period commencing May 2011, and received a two year
warrant to purchase 10% of RSS Graffiti for an aggregate exercise price of $2,000. During the year ended December 31, 2011, the Company paid RSS
Graffiti $100. On August 5, 2011, the Company acquired RSS Graffiti thereby effectively terminating the agreement (see Note 13-Business Acquisitions).
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