Incredimail 2009 Annual Report Download - page 33

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C. ORGANIZATIONAL STRUCTURE
During 2006, we formed a wholly-
owned subsidiary in Delaware, operating out of New York, for marketing and other activities, and
formed another wholly owned subsidiary in Israel to acquire the business of our transaction processing provider, operating primarily out of
Israel. In 2009 we refocused the transaction processing activity to deal exclusively with internally generated activity. The current activity in
these subsidiaries is minimal. Except for such subsidiaries, we do not have other subsidiaries.
D. PROPERTY, PLANTS AND EQUIPMENT
We lease our facility, located in Tel Aviv, Israel, pursuant to a lease that was entered into during 2006 and expires in 2011, with an
option to extend the lease for 2 more years. The lease is for a total area of 1,700 square meters, at a monthly rent of approximately $22.9 per
square meter.
We own 63 servers that are hosted in a server farm by Bezeq International Ltd., which we refer to herein as "Bezeq". Our servers
include mainly web servers, application servers, ad servers, mail servers and database servers. Bezeq provides the Internet and related
telecommunications services, including hosting and location facilities, needed to operate our website. Bezeq is Israel’
s largest provider of such
services and is a member of Bezeq Group, Israel’
s national telecommunications provider. Bezeq provides these services through standard
purchase orders and invoices. We add servers and expand our systems located at their facilities as our operations require, and are currently
looking into possibly replacing Bezeq with an alternative service provider available in Israel. We believe there are many alternative providers of
these services both within and outside of Israel.
ITEM 4.A UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion of our financial condition and results of operations should be read in conjunction with our financial
statements and the related notes to the financial statements included elsewhere in this annual report. In addition to historical financial
information, the following discussion and analysis contains forward looking statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding the Company’
s
expectations, beliefs, intentions, or future strategies that are signified by the words “expects,” “anticipates,” “intends,” “believes,”
or similar
language. These forward looking statements involve risks, uncertainties and assumptions. Our actual results and timing of selected events may
differ materially from those anticipated in these forward looking statements as a result of many factors, including those discussed under “
Item
3.D Risk Factors” and elsewhere in this annual report.
A. OPERATING RESULTS
Overview
We design and market an integrated suite of customized and entertaining email software products, a graphic add-
on to instant
messaging software, wallpaper and screensaver software, and software for presenting digital personal photos for the consumer or home user
markets. We believe we are a global technology leader in enriching email interactions by offering users the ability to design highly personalized
email presentations. We believe that our innovations in entertaining email technology and graphic instant messaging capabilities, along with our
large collection of multimedia content for email and instant messaging communication, have made our website one of the top Internet
destinations in the world for downloading entertaining email solutions.
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