Incredimail 2012 Annual Report Download - page 37

C. ORGANIZATIONAL STRUCTURE
IncrediMail, Inc., our wholly-
owned Delaware subsidiary, owns all of the outstanding shares of common stock of Smilebox Inc., a
Washington corporation. SweetIM Ltd., our wholly-
owned Belize subsidiary, owns all of the outstanding ordinary shares of SweetIM
Technologies Ltd.
D. PROPERTY, PLANTS AND EQUIPMENT
We lease three facilities, located in Tel Aviv, Israel, Ra'anana, Israel and Redmond, Washington. One lease in Tel Aviv for a total area
of 18,300 square feet expires in 2015, with a monthly rent of approximately $18 per square foot. In December 2012, we increased the area leased
by 8,310 square feet with a monthly rent of approximately $19 per square foot, also set to expire in 2015. The lease in Ra'anana is for a total area
of 10,753 square feet and expires in 2013, with a monthly rent of approximately $15 per square foot. We began to pay for this lease in December
2012, as part of the SweetIM acquisition, and we do not expect to renew this lease when it expires in December 31, 2013. The lease in Redmond
for a total area of 8,300 square feet expires in 2015, with an option to extend for another 2 to 5 years, and a monthly rent of approximately $19
per square foot.
We believe that our current facilities are adequate to meet our current needs and we believe that suitable additional space will be
available as needed to accommodate ongoing operations and any such growth.
We own approximately 196 servers located in Israel and Seattle, Washington. We also rent the services of approximately 90 additional
servers located around the world. Our servers include mainly web servers, application servers, mail servers and database servers. Bezeq provides
our Internet and related telecommunications services in Israel, including hosting and location facilities, needed to operate our websites. Bezeq is
Israel’s largest provider of such services and is a member of Bezeq Group, Israel’
s incumbent 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. We believe there are many alternative providers of these services both within and outside of Israel. In addition to local
servers, we have begun to use cloud based services provided by Amazon and other companies.
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 Exchange Act, 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 a suite of downloadable consumer products that are simple, safe and useful. These include primarily, customized
and entertaining email software products, software for sharing digital photo creations, instant messaging enhancement software and a variety of
free, fun, easy to use and safe application and downloadable expression content. We believe we are unique in addressing our demographic
market of second wave adopters. We believe that the user experience we have created has been successful in attracting a unique underserved
demographic segment, seeking software applications that make their life a little simpler and more enjoyable. In addition, together with our
products, we offer users consumer software products owned by other companies, which are distributed in conjunction with our products and
search services provided by our search engine partners.
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