Based in Redwood Shores, California, Imperva (proposed IMPV) scheduled a $75 million IPO with a market capitalization of $332 million at a price range mid-point of $15 for Wednesday, November 9, 2011.

SUMMARY

IMPV is a data security company whose sales increased 45% for the nine months ended September 30, 2011, to $55 million from $38 million. Losses held steady at $9 million.

However, revenue for the last two quarters, September and June, were $18.8mm and $19.7mm: the September quarter was essentially flat in top line revenue

Major competition includes Citrix (CTXS), F5 Networks (FFIV) International Business Machines (IBM), McAfee, Inc. (a subsidiary of Intel, INTC), Oracle (ORCL) and Symantec (SYMC).

CONCLUSION & VALUATION

IMPV has never made money although it has increased top line revenue.

IMPV makes a big case about deferred revenue -- future monies due on service and maintenance contracts – which increased 51% for the September, 2011 nine months, to $26 million from the year earlier $17 million number.

However, the last four quarters are essentially flat.

Quarterly results	June '10	Sept '10	Dec, '10	March, '10	June, '11	Sept '11
Revenues ($mm)	$13.4	$13.6	$17.0	$16.4	$18.8	$19.7
Gross profit % of rev	77%	78%	79%	80%	79%	78%
Net income (loss) %	-$2.8	-$2.8	-$3.1	-$3.2	-$2.9	-$2.6
Net income (loss) %	-21%	-21%	-18%	-20%	-15%	-13%

Therefore, we believe the IMPV IPO will happen, but for the time being at least it seems prudent to watch IMPV from the sidelines.

BUSINESS

IMPV is leader of a new category of data security solutions focused on providing visibility and control over high-value business data across critical systems within the data center.

INCAPSULA MAJORITY OWNED SUBSIDIARY

IMPV believes there is a significant opportunity to provide data security solutions to smaller businesses faced with increasing security threats and compliance mandates.

Incapsula delivers on-demand web application security that IMPV believes is cost-effective and reduces the need for customers to deploy additional hardware or augment IT staff.

IMPV plans to increase its business with mid-market enterprises and SMBs by expanding distribution channels and promoting the cloud-based web application firewall service that IMPV provides through Incapsula, optimized for mid-market enterprises and small businesses.

However, Incapsula appears to e development stage operation: "This limited operating history, as well as the early stage of our relationships with many of our channel partners, makes financial forecasting and evaluation of our business difficult."

S-1 page 10

http://www.sec.gov/Archives/edgar/data/1364962/000119312511284815/d189646ds1a.htm#rom189646_9

DEFERRED REVENUE

Deferred revenue consists of amounts that have been invoiced but that have not yet been recognized as revenue. The majority of deferred revenue balance consists of the unamortized portion of services revenue from maintenance and support contracts.

IMPV monitors deferred revenue balance because it represents a significant portion of revenue to be recognized in future periods.

IMPV also assesses the increase in deferred revenue balance plus revenue recognized in a particular period as a measure of sales activity for that period.

				Sept 9 mos	Sept 9 mos
	2008	2009	2010	2010	2011
Deferred revenue ($mm)	$8	$13	$21	$17	$26
Deferred rev % of total rev	25%	34%	38%	45%	47%
# of customers	587	926	1,309	1,181	1,584
Rev per customer ($mm)	$55	$42	$42	$33	$35
Deferred rev per cus ($000)	$13.6	$14.5	$16.0	$14.4	$16.2

INTELLECTUAL PROPERTY

IMPV currently has four issued patents in the United States, relatively small number compared to competitors. As of September 30, 2011, IMPV had nine pending U.S. patent applications, and may file additional patent applications in the future

Third party software reliance

IMPV relies on the availability of licenses to third-party software and other intellectual property. Many of IMPV’s products and services include software or other intellectual property licensed from third parties, and IMPV otherwise uses software and other intellectual property licensed from third parties in our business.

IMPV products, services and other technologies contain software modules licensed from third-party authors under so-called "open source" licenses,

COMPETITION

Competitors include companies Citrix Systems (CTXS), F5 Networks, Inc., International Business Machines (IBM), McAfee, Inc. (a subsidiary of Intel, INTC), Oracle (ORCL), Symantec (SYMC).

Current or potential competitors may be acquired by third parties with greater available resources, such as IBM’s acquisition of Guardium, Inc., Oracle’s acquisition of Secerno, Ltd. and McAfee’s acquisition of Sentrigo, Inc.

USE OF IPO PROCEEDS

$62mm from sale of 4.75mm shares by IMPV. Shareholders will sell 250,000 shares

$3.5 million is allocated to buy by 4,375,000 preferred shares of Incapsula, a majority owned subsidiary

The balance for working capital and general corporate purposes.

>

Imperva	IMPV, C, 7					Post PO shares: 22mm
Data security				Sept 9 mos	Sept 9 mos
Redwood Shores, CA	2008	2009	2010	2010	2011	IPO Mkt
Revenues ($mm)	$32	$39	$55	$38	$55	Cap (mm)
Gross Margin % of revenue	78%	76%	76%	77%	78%	$332
Net loss ($mm)	-$7.6	-$12.3	-$12.0	-$9.0	-$8.7	@$15
Net income (loss) % of revenue	-24%	-32%	-22%	-24%	-16%
				Sept 9 mos	Sept 9 mos
	2008	2009	2010	2010	2011
Deferred revenue ($mm)	$8	$13	$21	$17	$26
Deferred rev % of total rev	25%	34%	38%	45%	47%
# of customers	587	926	1,309	1,181	1,584
Rev per customer ($mm)	$55	$42	$42	$33	$35
Deferred reve per cus ($000)	$13.6	$14.5	$16.0	$14.4	$16.2
Quarterly results	Mrch '10	June '10	Sept, '10	Dec, '10	March, '11	June '11
Revenues ($mm)	$13.4	$13.6	$17.0	$16.4	$18.8	$19.7
Gross profit % of rev	77%	78%	79%	80%	79%	78%
Net income (loss) %	-$2.8	-$2.8	-$3.1	-$3.2	-$2.9	-$2.6
Net income (loss) %	-21%	-21%	-18%	-20%	-15%	-13%
Valuation Ratios	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
Annualizing Sept 3 mos	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Imperva (IMPV)	$332	4.1	-32	6.0	6.0	23%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	1	2	7