Incredimail 2008 Annual Report Download - page 7

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Not applicable.
Not applicable.
Investing in our ordinary shares involves a high degree of risk. You should consider carefully the following risk factors, as well as the other
information in this annual report before deciding to invest in our ordinary shares. Our business, financial condition or results of operations could
be affected adversely by any of these risks. The trading price of our ordinary shares could decline due to any of these risks and you might lose all
or part of your investment in our ordinary shares.
Risks Related to Our Business
If we are unable to continually enhance our existing products and develop new products that achieve widespread market acceptance, our
ability to attract and retain customers could be impaired, our competitive position may be harmed and we may be unable to generate
additional revenues.
We believe that the number of downloads of our free products indicates that many consumers are interested in having a customized and
entertaining email or instant messaging experience. Our future revenue and profit growth will depend, in part, on increasing the number of
downloads and acceptance of the search properties offered with them, and subsequently, the percentage of registered or active users of our free
product who become actual purchasers of our products and services, as well as making our products and services attractive to new users. In order
to induce those consumers to use our products, accept the search properties offered, and subsequently, to a certain extent, purchase or license our
products, we must continually enhance our existing products by offering additional features and content and we must continue to introduce novel
products. The enhancement of existing products and the development and commercialization of new products can be very complex. Software
product development and commercialization depends upon a number of factors, including:
5
Net earnings (loss) per share (1):
Basic
$
0.44
$
0.17
$
0.27
$
(0.29
)
$
0.47
Diluted
$
0.39
$
0.16
$
0.27
$
(0.29
)
$
0.46
Weighted average number of shares used
in net earnings (loss) per share (1):
Basic
4,606,657
4,869,698
8,982,201
9,442,658
9,427,424
Diluted
5,197,558
5,280,003
9,146,393
9,442,658
9,516,477
As of December 31,
2004
2005
2006
2007
2008
(in thousands)
Balance Sheet Data:
Cash and cash equivalents
$
4,342
$
2,428
$
8,366
$
4,611
$
7,835
Working capital
6,238
2,966
21,561
19,756
25,143
Total assets
8,264
8,460
31,424
31,766
37,651
Total short
-
term debt
12
4
-
-
-
Total liabilities
2,349
5,465
8,847
10,995
12,107
Redeemable convertible preferred shares
3,063
3,030
-
-
-
Shareholders' equity (deficiency)
2,852
(35
)
22,577
20,771
25,544
(1) All references to shares and per share amounts have been retroactively restated to reflect our 38-for-one ordinary share dividend on
January 30, 2006, as if such event had occurred as of the beginning of the earliest period presented.
B.
CAPITALIZATION AND INDEBTEDNESS
C.
REASONS FOR OFFER AND USE OF PROCEEDS
D.
RISK FACTORS
—
accurate prediction of market requirements, market preferences and content trends and evolving standards;
—
development of advanced technologies and capabilities;
—
timely completion and introduction of new product designs and features that incorporate market requirements and preferences;