Incredimail 2009 Annual Report Download - page 23

Although we have paid dividends in the past, and we expect to pay certain dividends in the future, our ability to pay dividends may be
adversely affected by the risk factors described in this report; if we fail to, or to extent we do not, pay dividends then the return on
investment will be limited to the value of our stock.
We have paid dividends in the past, and have announced a dividend policy for distributing at least 50% of our net income as a
dividend. Our ability to distribute dividends may be adversely affected by the risk factors described in this report. Any dividend will depend on
our earnings, financial condition and other business and economic factors affecting us at the time as our board of directors may consider
relevant. We may pay dividends in any fiscal year only out of “profits,”
as defined by the Israeli Companies Law, unless otherwise authorized by
an Israeli court, and provided that the distribution is not reasonably expected to impair our ability to fulfill our outstanding and expected
obligations. If we do not pay dividends, our stock may be less valuable because a return on your investment will only occur if our stock price
appreciates. See “Item 8.A Consolidated Statements and Other Financial Information — Policy on Dividend Distribution”
for additional
information regarding the payment of dividends.
U.S. investors in our Company could suffer adverse tax consequences if we are characterized as a passive foreign investment company.
If, for any taxable year, our passive income or our assets that produce passive income exceed levels provided by law, we may be
characterized as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes. This characterization could result in
adverse U.S. tax consequences to our shareholders. If we were classified as a passive foreign investment company, a U.S. holder of our ordinary
shares could be subject to increased tax liability upon the sale or other disposition of ordinary shares or upon the receipt of amounts treated as
“excess distributions.” Under these rules, the excess distribution and any gain would be allocated ratably over the U.S. holder’
s holding period
for the ordinary shares, and the amount allocated to the current taxable year and any taxable year prior to the first taxable year in which we were
a passive foreign investment company would be taxed as ordinary income. The amount allocated to each of the other taxable years would be
subject to tax at the highest marginal rate in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed
deferral benefit would be imposed on the resulting tax allocated to such other taxable years. The tax liability with respect to the amount allocated
to years prior to the year of the disposition, or “excess distribution,”
cannot be offset by any net operating losses. In addition, holders of shares in
a passive foreign investment company may not receive a “step-up”
in basis on shares acquired from a decedent. U.S. shareholders should consult
with their own U.S. tax advisors with respect to the U.S. tax consequences of investing in our ordinary shares, as well as the specific application
of the “excess distribution”
and other rules discussed in this paragraph. For a discussion of how we might be characterized as a PFIC and related
tax consequences, please see “Item 10.E Taxation — United States Federal Income Tax Considerations —
Passive Foreign Investment Company
Considerations.”
ITEM 4. INFORMATION ON THE COMPANY
A. HISTORY AND DEVELOPMENT OF THE COMPANY
Our History
We were incorporated in the State of Israel in November 1999 under the name Verticon Ltd. We changed our name to IncrediMail Ltd.
in November 2000 to better reflect the nature of our business. We operate under the laws of the State of Israel. Our headquarters are located at 4
HaNechoshet Street, Tel-Aviv 69710, Israel. Our phone number is (972-3) 769-
6100. Our agent for service of process in the United States is
Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19715. Our website addresses are www.incredimail-
corp.com and www.incredimail.com . The information on our websites do not constitute part of this annual report.
We completed the initial public offering of our ordinary shares in the United States on February 3, 2006, whereby we became a “
limited
liability public company” under the Israeli Companies Law. The registration statement on Form F-
1 relating to our initial public offering became
effective on January 30, 2006. Immediately prior to the effectiveness of our registration statement, we increased our authorized share capital to
15 million ordinary shares and completed a 38-for-
one ordinary share split affected as a dividend on our ordinary shares. In addition, upon the
closing of our initial public offering, our then outstanding redeemable convertible preferred shares were automatically converted, on a 38-for-
one
basis, into an aggregate of 1,764,948 ordinary shares.
Since November 20, 2007 the Company’s ordinary shares are also traded on the Tel Aviv Stock Exchange.
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