FORM
(MARK ONE)
For the quarter ended
For the transition period from to
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(State or other jurisdiction of | (I.R.S. Employer |
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(Issuer’s telephone number) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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| Name of each exchange on which registered |
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Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 14, 2023, there were
TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION
Item 1. Interim Financial Statements.
ISRAEL ACQUISITIONS CORP
CONDENSED BALANCE SHEETS
(UNAUDITED)
June 30, | December 31, | |||||
| 2023 |
| 2022 | |||
ASSETS | ||||||
Current assets |
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Cash and cash equivalents | $ | | $ | | ||
Prepaid expenses – current |
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| — | ||
Cash and Marketable Securities held in Trust Account |
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| — | ||
Total Current Assets |
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Non-current assets |
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Deferred offering costs associated with the proposed public offering | — | | ||||
Total Non-current Assets | — | | ||||
Total Assets | $ | | $ | | ||
LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT | ||||||
Current liabilities |
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Accrued expenses | $ | | $ | | ||
Accounts payable |
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| — | ||
Accrued offering costs | — | | ||||
Deferred underwriting commissions | | — | ||||
Promissory note - related party | — | | ||||
Total Current Liabilities | | | ||||
Total Liabilities |
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Commitments and Contingencies (Note 5) |
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Class A Ordinary Shares Subject to Possible Redemption | ||||||
Class A ordinary shares subject to possible redemption, $ | | — | ||||
Shareholders’ Deficit |
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Preference shares, $ |
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Class A ordinary shares, $ |
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| — | ||
Class B ordinary shares, $ |
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Additional paid-in capital |
| — |
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Accumulated deficit |
| ( |
| ( | ||
Total Shareholders’ Deficit |
| ( |
| ( | ||
TOTAL LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT | $ | | $ | |
The accompanying notes are an integral part of these unaudited condensed financial statements.
- 2 -
ISRAEL ACQUISITIONS CORP
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three | For the Three | For the Six | For the Six | |||||||||
Months Ended | Months Ended | Months Ended | Months Ended | |||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
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| (as restated) | ||||||||
Formation and Operating expense | $ | — | $ | — | $ | — | $ | | ||||
Marketing and advertising expense | — | — | | — | ||||||||
Administrative expense | | — | | — | ||||||||
Legal and accounting expense | | | | | ||||||||
Dues and subscriptions expense | | — | | — | ||||||||
Listing fee expense | | — | | — | ||||||||
Insurance expense | | — | | — | ||||||||
Loss from operations | ( | ( | ( | ( | ||||||||
Other income: | ||||||||||||
Unrealized gain on marketable securities held in Trust Account | | — | | — | ||||||||
Dividend income on marketable securities held in Trust Account | | — | | — | ||||||||
Dividend income | | — | | — | ||||||||
Interest income | | — | | — | ||||||||
Other income, net | | — | | — | ||||||||
Net income (loss) | $ | | $ | ( | $ | | $ | ( | ||||
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption |
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| — |
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| — | ||||
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption | $ | | $ | — | $ | | $ | — | ||||
Basic and diluted weighted average shares outstanding, non-redeemable Class A ordinary shares | | — | | — | ||||||||
Basic and diluted net loss per share, non-redeemable Class A ordinary shares | $ | ( | $ | — | $ | ( | $ | — | ||||
Basic and diluted weighted average shares outstanding, non-redeemable Class B ordinary shares | | | | | ||||||||
Basic and diluted net loss per share, non-redeemable Class B ordinary shares | $ | ( | $ | ( | $ | ( | $ | ( |
The accompanying notes are an integral part of these unaudited condensed financial statements.
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ISRAEL ACQUISITIONS CORP
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT
Class A |
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Ordinary Shares Subject to Possible | Class A | Class B | Additional | Total | |||||||||||||||||||||
Redemption | Ordinary Shares | Ordinary Shares | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||
| Shares |
| Amount |
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| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | |||||||
Balance – December 31, 2022 |
| $ |
| $ |
| | $ | | $ | | $ | ( | $ | ( | |||||||||||
Issuance of Class A ordinary shares in initial public offering |
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| — |
| — |
| — |
| — |
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| — |
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Sale of private placement units | — | — | | | — | — | | — | | ||||||||||||||||
Remeasurement of Class A ordinary shares to redemption value | — | | — | — | — | — | ( | ( | ( | ||||||||||||||||
Net income |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
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Balance - March 31, 2023 (unaudited) | | | | $ | | | $ | | $ | — | $ | ( | $ | ( | |||||||||||
Transfer of Founder Shares | — | — | — | — | — | — | | — | | ||||||||||||||||
Remeasurement of Class A ordinary shares to redemption value | — | | — | — | — | — | ( | ( | ( | ||||||||||||||||
Net income | — | — | — | — | — | — | — | | | ||||||||||||||||
Balance - June 30, 2023 (unaudited) |
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| | $ | |
| | $ | | $ | — | $ | ( | $ | ( |
Class A |
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Ordinary Shares Subject to Possible | Class A | Class B | Additional | Total | |||||||||||||||||||||
Redemption | Ordinary Shares | Ordinary Shares | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||
| Shares |
| Amount |
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| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | |||||||
Balance - December 31, 2021 |
| | $ | |
| | $ | |
| | $ | | $ | | $ | ( | $ | ( | |||||||
Issuance of Class B ordinary shares to Sponsor(1) | — | — | — | — | | | | — | | ||||||||||||||||
Net loss |
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| — |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||||
Balance - March 31, 2022 (unaudited) | — | — | — | $ | — | | $ | | $ | | $ | ( | $ | ( | |||||||||||
Net loss (as restated) | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||
Balance - June 30, 2022 (unaudited) (as restated) |
| — | — |
| — | $ | — |
| | $ | | $ | | $ | ( | $ | ( |
The accompanying notes are an integral part of these unaudited condensed financial statements.
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ISRAEL ACQUISITIONS CORP
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
Six Months | Six Months | |||||
Ended | Ended | |||||
June 30, | June 30, | |||||
| 2023 |
| 2022 | |||
(as restated) | ||||||
Cash Flows from Operating Activities: |
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Net income (loss) | $ | | $ | ( | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
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Unrealized gain on marketable securities held in Trust Account |
| ( |
| — | ||
Excess fair value on transfer of Founder Shares | | — | ||||
Changes in operating assets and liabilities: |
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Prepaid expenses |
| ( |
| — | ||
Accounts payable | | — | ||||
Accrued expenses | | | ||||
Net cash used in operating activities |
| ( |
| ( | ||
Cash Flows from Investing Activities: | ||||||
Purchase of marketable securities held in Trust Account | ( | — | ||||
Reinvestment of marketable securities held in Trust Account | ( | — | ||||
Net cash used in investing activities | ( | — | ||||
Cash Flows from Financing Activities: |
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Proceeds from issuance of Class B ordinary shares to Sponsor |
| — |
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Proceeds from issuance of ordinary shares |
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| — | ||
Proceeds from sale of private placement units |
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| — | ||
Proceeds from promissory note – related party | — | | ||||
Payment of promissory note – related party | ( | — | ||||
Payment of offering costs | ( | ( | ||||
Net cash provided by financing activities |
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Net Change in Cash and Cash Equivalents |
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Cash and Cash Equivalents - Beginning |
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| — | ||
Cash and Cash Equivalents - Ending | $ | | $ | | ||
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Non-Cash Investing and Financing Activities: |
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Issuance of promissory note by the Sponsor to pay offering costs | $ | — | $ | | ||
Remeasurement of Class A ordinary shares subject to possible redemption | $ | | $ | — | ||
Deferred underwriter fee payable | $ | | $ | — | ||
Deferred offering costs included in accrued offering costs | $ | — | $ | |
The accompanying notes are an integral part of these unaudited condensed financial statements.
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ISRAEL ACQUISITIONS CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Description of Organization, Business Operations and Liquidity and Capital Resources
Israel Acquisitions Corp (the “Company”) was incorporated as a blank check company in the Cayman Islands on August 24, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with
As of June 30, 2023, the Company had not commenced any operations. All activity through June 30, 2023, relates to the Company’s formation and the initial public offering (“Initial Public Offering”) described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s Initial Public Offering was declared effective on January 12, 2023 (the “Effective Date”). On January 18, 2023, the Company consummated its Initial Public Offering of
Following the closing of the Initial Public Offering on January 18, 2023, $
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least
The Company will provide its holders of the outstanding Public Shares (the “public shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. Except as required by law or the rules of Nasdaq, the decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account. There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
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The Company will proceed with a Business Combination if the Company has net tangible assets of at least $
The Sponsor has agreed (a) to waive their redemption rights with respect to their Founder Shares, Private Shares and Public Shares held by them in connection with the completion of a Business Combination, (b) to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares and Private Shares if the Company fails to consummate a Business Combination, and (c) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect a public shareholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem
If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes, divided by the number of then outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Cayman Island law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s rights or warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below $
Risks and Uncertainties
In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements and the specific impact on the Company’s financial condition, results of operations, and/or search for a target company is also not determinable as of the date of these financial statements.
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In addition, Management is currently evaluating the impact of the effects of inflation and disruptions in the global supply chain. The specific impact of these ongoing events is not readily determinable as of the date of these financial statements and these financial statements do not include any adjustments that may result from the outcomes of these uncertainties.
Going Concern
As of June 30, 2023, the Company had $
The Company’s liquidity needs through June 30, 2023 had been satisfied through a payment from the Sponsor of $
Further, the Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statement. Although no formal agreement exists, the Sponsor is committed to extend Working Capital Loans as needed (defined in Note 4 below). The Company cannot assure that its plans to raise capital or to consummate an initial Business Combination will be successful. In addition, management is currently evaluating the impact of the Russia and Ukraine conflict and inflation on the industry and its effect on the Company’s financial position, results of its operations and/or search for a target company.
These factors, among others, raise substantial doubt about the Company’s ability to continue as going concern one year from the date the financial statement is issued. The financial statement does not include any adjustments that might result from the outcome of this uncertainty.
Note 2 - Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, the financial statements do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2022 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The interim results for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future interim periods.
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Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, the Company is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company intends to take advantage of the benefits of this extended transition period.
Use of Estimates
The preparation of the unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $
Cash and Marketable Securities held in Trust Account
Following the closing of the Initial Public Offering on January 18, 2023, an amount of $
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. At June 30, 2023, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
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Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at June 30, 2023,
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable Class A ordinary shares to equal the redemption value at the end of each reporting period. Such changes are reflected in additional paid-in capital, or in the absence of additional paid-in capital, in accumulated deficit.
The Class A ordinary shares subject to possible redemption is reflected on the balance sheet at June 30, 2023 as follows:
Gross proceeds from initial public offering |
| $ | |
Less: |
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Proceeds allocated to public warrants |
| ( | |
Offering costs allocated to Class A ordinary shares subject to possible redemption |
| ( | |
Plus: |
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Accretion of Class A ordinary shares subject to possible redemption |
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Class A ordinary shares subject to possible redemption | $ | |
Offering Costs associated with the Initial Public Offering
The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A – “Expenses of Offering”. Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. The Company incurred offering costs from the Initial Public Offering of $
Fair Value Measurements
FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value as the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants. Fair value measurements are classified on a three-tier hierarchy as follows:
● | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
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Financial Instruments
The fair value of the Company’s assets and liabilities which qualify as financial instruments under ASC 820 approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Derivative Financial Instruments
The Company accounts for derivative financial instruments in accordance with ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value upon issuance and remeasured at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative financial instruments is evaluated at the end of each reporting period. There were no derivative financial instruments accounted for as liabilities as of June 30, 2023 and December 31, 2022.
Warrants
The Company accounts for the public and private warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in FASB ASC Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). Pursuant to the Company’s evaluation, the Company concluded that the public and private do not meet the criteria to be accounted for as liability under ASC 480. The Company further evaluated the public and private warrants and rights under “ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity” (“ASC 815-40”) and concluded that the public warrants, private placement warrants are indexed to the Company’s own stock and meet the criteria to be classified in shareholders’ equity.
Income Taxes
The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
FASB ASC 740, “Income Taxes”, prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were
There is currently no taxation imposed by the Government of the Cayman Islands. The Company has no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. Consequently, income taxes are not reflected in the Company’s financial statement.
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Net Income (Loss) per Ordinary Share
The Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share”. The statement of operations includes a presentation of income (loss) per Class A redeemable ordinary share and loss per non-redeemable ordinary share following the two-class method of income per ordinary share. In order to determine the net income (loss) attributable to both the Class A redeemable ordinary shares and non-redeemable ordinary shares, the Company first considered the total net income (loss) allocable to both sets of shares. This is calculated using the total net income (loss) less any dividends paid. For purposes of calculating net income (loss) per share, any remeasurement of the Class A ordinary shares subject to possible redemption was treated as dividends paid to the public shareholders.
Net income (loss) per ordinary share is computed by dividing net income (loss) by class by the weighted average number of ordinary shares outstanding during the period. The Company has not considered the effect of the
The following tables reflect the calculation of basic and diluted net income (loss) per ordinary share for the three months ended June 30, 2023 (in dollars, except share amounts):
| Three Months Ended | ||
June 30, 2023 | |||
Net income | $ | | |
Accretion of temporary equity to redemption value |
| ( | |
Net loss including accretion of temporary equity to redemption value | $ | ( |
Three Months Ended | |||||||||
June 30, 2023 | |||||||||
Class B Non- | |||||||||
| Class A Redeemable |
| Class A Non-redeemable |
| redeemable | ||||
Basic and diluted net income (loss) per share: |
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Numerator: |
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Allocation of net income by class | $ | | $ | | $ | | |||
Less: Accretion allocation based on ownership percentage | $ | ( | $ | ( |
| ( | |||
Allocation of accretion of temporary equity to redeemable shares |
| |
| — |
| — | |||
Total net income (loss) by class | $ | | $ | ( |
| ( | |||
Denominator: |
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Weighted average shares outstanding |
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Basic and diluted net income per share | $ | | $ | ( |
| ( |
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The following tables reflect the calculation of basic and diluted net income (loss) per ordinary share for the six months ended June 30, 2023 (in dollars, except share amounts):
| Six Months Ended | ||
June 30, 2023 | |||
Net loss from beginning on the year to date of initial public offering | $ | ( | |
Net income from date of initial public offering to period end |
| | |
Total income for the three months ended June 30, 2023 |
| | |
Accretion of temporary equity to redemption value |
| ( | |
Net loss including accretion of temporary equity to redemption value | $ | ( |
| Six Months Ended | ||||||||
June 30, 2023 | |||||||||
Class B Non- | |||||||||
| Class A Redeemable |
| Class A Non-redeemable |
| redeemable | ||||
Basic and diluted net income (loss) per share: |
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Numerator: |
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Allocation of net loss from inception to date of initial public offering | $ | — | $ | — | $ | ( | |||
Allocation of net income from date of initial public offering to period end |
| |
| |
| | |||
Total income allocated by class |
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Less: Accretion allocation based on ownership percentage | $ | ( | $ | ( | ( | ||||
Allocation of accretion of temporary equity to redeemable shares |
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| — |
| — | |||
Total net income (loss) by class | $ | | $ | ( | ( | ||||
Denominator: |
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Weighted average shares outstanding |
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Basic and diluted net income per share | $ | | $ | ( | ( |
The earnings per share presented in the statement of operations for the three and six months ended June 30, 2022 is based on the following:
| Three Months Ended | Six Months Ended | ||||
June 30, 2022 |
| June 30, 2022 | ||||
Net loss | $ | ( | $ | ( | ||
Weighted average Class B ordinary shares outstanding |
| |
| | ||
Basic and diluted net income per share | $ | ( | $ | ( |
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. As a result of ASU 2020 – 06, more convertible debt instruments will be accounted for as a single liability measured at its amortized cost and more convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no features require bifurcation and recognition as derivatives. The amendments are effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company early adopted ASU 2020-06 and it did not have an impact on the Company’s financial statements.
The Company’s management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the accompanying financial statements.
- 13 -
Note 3 - Initial Public Offering
On January 18, 2023 the Company sold
An aggregate of $
Note 4 - Related Party Transactions
Founder Shares
On January 26, 2022, the Sponsor purchased
On March 4, 2022, the Company effected a share capitalization with respect to our Class B ordinary shares of
On May 7, 2023, the Sponsor transferred
The Founder Shares will automatically convert into Class A ordinary shares at the time of the Company’s initial Business Combination and are subject to certain transfer restrictions, as described in Note 6. Holders of Founder Shares may also elect to convert their Class B ordinary shares into an equal number of Class A ordinary shares, subject to adjustment, at any time.
Private Placement
The Sponsor and the Company’s underwriter purchased an aggregate of
- 14 -
Related Party Loans
In addition, in order to finance transaction costs in connection with a Business Combination, the Initial Shareholders, or certain of the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but
Promissory Note – Related Party
On January 26, 2022, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $
Note 5 – Commitments and Contingencies
Registration and Stockholder Rights
The holders of the Founder Shares, as well as the holders of the Private Units and any units that may be issued in payment of Working Capital Loans made to Company, will be entitled to registration rights. The holders of a majority of these securities are entitled to make up to
Administrative Services Agreement
The Company entered into an Administrative Services Agreement with the Sponsor commencing on the date the securities of the Company are first listed on the Nasdaq Global Market, pursuant to a Registration Statement on Form S-1 filed by the Company with the SEC and continuing until the earlier of the consummation by the Company of an initial business combination or the Company’s liquidation. The Company will pay $
Underwriting Agreement
The Company granted the underwriters a
- 15 -
Note 6 — Shareholder’s Deficit
Preference shares - The Company is authorized to issue
Class A Ordinary shares - The Company is authorized to issue
Class B Ordinary shares - The Company is authorized to issue
On March 4, 2022, the Company effected a share capitalization with respect to our Class B ordinary shares of
Only holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of the Company’s shareholders except as otherwise required by law.
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the initial Business Combination on a
Warrants - Each whole warrant entitles the registered holder to purchase one whole share of the Class A ordinary shares at a price of $
- 16 -
The Company agrees that as soon as practicable, but in no event later than
Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
● | in whole and not in part; |
● | at a price of $ |
● | provided that the reference value of the Class A ordinary shares equals or exceeds $ |
● | either there is an effective registration statement covering the issuance of the shares of Ordinary Shares issuable upon exercise of the Public Warrants, and a current prospectus relating thereto, available throughout the |
● | the Company has elected to require the exercise of the Public Warrants on a “cashless basis” |
If (x) the Company issues additional shares of Ordinary Shares or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants may be exercised for cash or on a “cashless basis”, the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants may be subject to certain transfer restriction, and the Private Placement Warrants are not redeemable at the option of the Company. The Private Placement Warrants shall not become Public Warrants as a result of any transfer of the Private Placement Warrants, regardless of the transferee.
- 17 -
If a tender offer, exchange or redemption offer shall have been made to and accepted by the holders of the Class A ordinary shares and upon completion of such offer, the offeror owns beneficially more than
Note 7 — Fair Value Measurements
At June 30, 2023, the Company’s marketable securities held in the Trust Account were valued at $
The following table presents the fair value information, as of June 30, 2023, of the Company’s financial assets that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. The Company’s marketable securities held in the Trust Account are based on dividend and interest income and market fluctuations in the value of invested marketable securities, which are considered observable. The fair value of the marketable securities held in trust is classified within Level 1 of the fair value hierarchy.
The following table sets forth by level within the fair value hierarchy the Company’s assets and liabilities that were accounted for at fair value on a recurring basis:
| (Level 1) |
| (Level 2) |
| (Level 3) | ||||
Assets |
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Cash equivalents(1) | $ | | $ | — | $ | — | |||
Cash and marketable securities held in trust account(2) | $ | | $ | — | $ | — |
(1) | The fair value of money market funds have been measured on a recurring basis using Level 1 inputs, which are based on unadjusted quoted market prices within active markets. |
(2) | The fair value of the marketable securities held in the Trust Account approximates the carrying amount primarily due to their short-term nature. |
Measurement
The Company established the initial fair value for the cash and marketable securities held in the Trust Account on January 18, 2023, the date of the consummation of the Company’s Initial Public Offering. As the cash was transferred to the Trust Account on January 18, 2023, the value at that date is the value of the cash transferred. Changes in fair value will result from dividend and interest income and market fluctuations in the value of invested marketable securities which will be reflected on each month end bank statement.
- 18 -
Note 8 — Restatement of Previously Issued Financial Statements (Unaudited)
In connection with the preparation of the Company’s financial statements as of December 31, 2022, management identified an error made in its historical financial statements where, certain accounting costs not direct or incremental to the preparation of the Company’s initial public offering were incorrectly accounted for as offering costs. The Company restated the Balance Sheets, Statements of Operations, and Statements of Cash Flows by reclassifying certain accounting costs not direct or incremental to the preparation of the Company’s initial public offering from deferred offering costs to formation and operating costs for the unaudited interim periods for the six-months ended June 30, 2022, previously included in the Company’s Registration Statement on Form S-1.
As Previously | ||||||
| Reported |
| Adjustment |
| As Restated | |
As of June 30, 2022 |
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Balance Sheet: |
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Deferred offering costs |
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Accrued offering costs |
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Accrued expenses |
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Accumulated deficit |
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For the six months ended June 30, 2022 |
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Statement of Operations: |
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Formation and operating costs |
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Net loss |
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Basic and diluted net loss per Class B ordinary share |
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| ( |
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Statement of Cash Flows |
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Net loss |
| ( |
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| ( |
Cash flow from operating activities |
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Accrued expenses |
| — |
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Supplemental disclosure of non-cash financing activities |
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Deferred offering costs included in accrued offering costs |
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| ( |
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- 19 -
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
We refer to this report as our “Quarterly Report on Form 10-Q” and references to “we,” “us” or the “Company” herein reference Israel Acquisitions Corp, a Cayman Islands exempted company. Reference to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Israel Acquisitions Sponsor LLC, a Delaware limited liability company. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of a merger, capital share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (an “Initial Business Combination”), the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and “variations” and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including that the conditions of an Initial Business Combination are not satisfied. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section in Item 1A. to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (our “Annual Report”), filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company formed under the laws of the Cayman Islands as an exempted limited company on August 24, 2021, for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. We intend to effectuate our Initial Business Combination using cash from the proceeds of our Initial Public Offering (as defined below) and the sale of the Private Placement Units (as defined below), the proceeds of the sale of our securities in connection with our Initial Business Combination (pursuant to forward purchase agreements or backstop agreements we may enter), securities issued to the owners of the target of our Initial Business Combination, debt issued to bank or other lenders or the owners of the target of our Initial Business Combination, or a combination of the foregoing or other sources.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete an Initial Business Combination will be successful.
Recent Developments
On January 12, 2023, the SEC declared the Company’s registration statement on Form S-1 effective. On January 18, 2023, we consummated our initial public offering (the “Initial Public Offering”) of 14,375,000 units (the “Public Units”), which included the full exercise the underwriters’ over-allotment option in the amount of 1,875,000 units, at $10.00 per unit, generating gross proceeds of $143,750,000. Each unit is comprised of one Class A ordinary share (the “Public Shares”) and one public warrant.
Simultaneously with the closing of the Initial Public Offering, we consummated the sale of (i) 637,500 private placement units (the “Private Placement Units”) at a price of $10.00 per Private Placement Unit in a private placement to the Sponsor, (ii) 75,000 Private Placement Units at price of $10.00 per Private Placement Unit in a private placement to BTIG, LLC, (iii) 25,000 Private Placement Units at price of $10.00 per Private Placement Unit in a private placement to Exos Capital LLC, and (iv) 75,000 Private Placement Units at price of $10.00 per Private Placement Unit in a private placement to JonesTrading Institutional Services LLC.
- 20 -
Following the closing of our Initial Public Offering on January 18, 2023, an amount of $146,625,000 ($10.00 per unit sold in our Initial Public Offering) from the net proceeds of the sale of the Public Units in the Initial Public Offering and the sale of the Private Placement Units was placed in the trust account established for the benefit of the holders of Public Shares maintained by American Stock Transfer & Trust Company, acting as trustee (the “Trust Account”).
Effective April 30, 2023, Roy Zisapel resigned from his role as a member of and as Chairman of our audit committee (the “Audit Committee”). Pursuant to the Audit Committee charter, the Audit Committee must consist of at least three directors, one of which shall be the Chairman, and all of which must be “independent directors” in accordance with the rules of the Nasdaq Global Market and Rule 10A-3 of the Exchange Act. Simultaneously with Roy Zisapel’s resignation from the Audit Committee, the Board appointed Daniel Recanati as Chairman of the Audit Committee and appointed Peter Cohen as a member of the Audit Committee.
Results of Operations
As of June 30, 2023, we had not commenced any operations. All activity from inception through June 30, 2023 relates to our formation and initial public offering, and, since the completion of the initial public offering, our search for a target to consummate a business combination. We will not generate any operating revenues until after the completion of a business combination, at the earliest. We will generate non-operating income in the form of interest income from the proceeds derived from the initial public offering and placed in a U.S.-based trust account (the “Trust Account”). We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended June 30, 2023, we had net income of $1,435,806, which consisted of listing expenses of $5,550, administrative expenses of $129,963, legal and accounting expenses of $115,887, dues and subscriptions expense of $3,198, and insurance expense of $64,167, offset by an unrealized gain and dividend income on marketable securities held in the Trust Account of $1,743,579, dividends and interest on cash and cash equivalents of $10,992. For the three months ended June 30, 2022, the Company had net loss of $10,278 consisting of legal and accounting expenses.
For the six months ended June 30, 2023, we had net income of $2,579,771, which consisted of listing expenses of $10,763, administrative expenses of $160,848, legal and accounting expenses of $244,071, marketing and advertising expense of $3,732, dues and subscriptions expense of $5,848, and insurance expense of $120,054, offset by an unrealized gain and dividend income on marketable securities held in the Trust Account of $3,102,894, dividends and interest on cash and cash equivalents of $22,193. For the six months ended June 30, 2022, the Company had net loss of $36,247 consisting of $35,278 in legal and accounting expenses and $969 of formation and operating costs.
Liquidity, Capital Resources and Going concern
As of June 30 2023, we had $901,165 in cash and cash equivalents held outside of the Trust Account and working capital of $1,034,882.
Until the consummation of the initial public offering, our only source of liquidity was from the $25,000 of proceeds from our sponsor’s purchase of Class B ordinary shares, par value $0.0001 per share, and a loan of $237,234 from our sponsor pursuant to a promissory note to cover certain expenses. The promissory note was repaid in full on January 18, 2023.
Following our initial public offering and the sale of Private Placement Units (the “Private Units”) to the sponsor, a total of $146,625,000 was placed in the Trust Account.
For the six months ended June 30, 2023, net cash used in operating activities was $632,495. Net income of $2,579,771 was adjusted by unrealized gains on marketable securities held in Trust Account of $3,102,884, excess fair value of founder shares sold of $95,990, and $205,372 changes in operating assets and liabilities. Net cash used in investing activities was $146,625,010 related to the funding of the Trust Account, as well as dividends received from and reinvestment of marketable securities. Net cash provided by financing activities included $141,250,000 of net proceeds from the issuance of ordinary shares and $7,625,000 of proceeds from Private Placement Warrants, offset by $237,234 payment of the outstanding promissory note balance at the date of the Initial Public Offering, and $487,401 payments of deferred offering costs.
As of June 30, 2023, we had marketable securities held in the Trust Account of $149,727,894 (including approximately $3,102,894 of gains on marketable securities) consisting of securities held in a money market fund that invests in U.S. Treasury securities with a maturity of 185 days or less.
- 21 -
As of June 30, 2023, we had cash and cash equivalents of $901,165 held outside the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.
We may need to raise additional funds in order to meet the expenditures required for operating our business prior to our initial business combination. We expect to incur significant costs related to identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination. These conditions raise substantial doubt about our ability to continue as a going concern for a period of time within one year from the date that the financial statements accompanying this Quarterly Report are issued.
In order to fund working capital deficiencies or finance transaction costs in connection with a business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a business combination, we may repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that a business combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units of the post-business combination entity at a price of $10.00 per unit, at the option of the lender. As of June 30, 2023, we did not have any outstanding working capital loans.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities as of June 30, 2023.
The underwriters of the Initial Public Offering are entitled to a deferred discount of $0.35 per Unit, or $5,406,250 in the aggregate. The deferred discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
Common Stock Subject to Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that are within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, ordinary shares is classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at June 30, 2023, 14,375,000 shares of Class A ordinary shares subject to possible redemption are presented, at redemption value equal to the amount held in the Trust Account, as temporary equity, outside of the shareholders’ deficit section of the Company’s balance sheet.
Net Income (Loss) per Common Stock
The Company complies with the accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share”. The statement of operations includes a presentation of income (loss) per Class A redeemable ordinary shares and loss per non-redeemable ordinary shares following the two-class method of income per ordinary share. In order to determine the net income (loss) attributable to both the Class A redeemable ordinary shares and non-redeemable ordinary shares, the Company first considered the total income (loss) allocable to both sets of shares. This is calculated using the total net income (loss) less any dividends paid. For purposes of calculating net income (loss) per share, any remeasurement of the Class A ordinary shares subject to possible redemption was treated as dividends paid to the public stockholders.
- 22 -
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. As a result of ASU 2020 – 06, more convertible debt instruments will be accounted for as a single liability measured at its amortized cost and more convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no features require bifurcation and recognition as derivatives. The amendments are effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company early adopted ASU 2020-06 and it did not have an impact on the Company’s financial statements.
The Company’s management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the accompanying financial statements
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information that is required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer (who serves as our principal executive officer) and Chief Financial Officer (who serve as our principal financial and accounting officer), to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended June 30, 2023, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2023, because of a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness identified relates to the fact that we have not yet designed and maintained effective controls relating to the accounting for offering costs related to the Company’s Initial Public Offering. Specifically, certain accounting costs incurred not directly or incrementally related to the Initial Public Offering were incorrectly recorded as deferred offering costs rather than expensed as incurred.
- 23 -
Remediation Plan
Our Chief Financial Officer will perform additional post-closing review procedures including a review of the expenses classified as offering costs.
Changes in Internal Control over Financial Reporting
Other than the remediation plan, as set forth above, there were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2023, covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting except for the below:
The Chief Executive Officer and Chief Financial Officer performed additional accounting and financial analyses and other post-closing procedures including consulting with subject matter experts related to the accounting for certain offering expenses. Our management has expended, and will continue to expend, a substantial amount of effort and resources for the remediation and improvement of our internal control over financial reporting. While we have processes to properly identify and evaluate the appropriate accounting technical pronouncements and other literature for all significant or unusual transactions, we have expanded and will continue to improve these processes to ensure that the nuances of such transactions are effectively evaluated in the context of the increasingly complex accounting standards.
- 24 -
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1.A. Risk Factors
There have been no material changes to the Risk Factors previously disclosed in Item 1A. to Part I of our Annual Report. The risks described in our Annual Report are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
None.
- 25 -
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
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Exhibit |
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| SEC File |
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3.1 |
| Second Amended and Restated Memorandum and Articles of Association, dated November 17, 2022. | 10-K | 001-41593 | 3.1 | April 17, 2023 | ||||
4.1 | 8-K | 001-41593 | 4.1 | January 19, 2023 | ||||||
10.1 | 8-K | 001-41593 | 10.1 | January 19, 2023 | ||||||
10.2 | 8-K | 001-41593 | 10.2 | January 19, 2023 | ||||||
10.3 | 8-K | 001-41593 | 10.3 | January 19, 2023 | ||||||
10.4 | 8-K | 001-41593 | 10.4 | January 19, 2023 | ||||||
10.5 | 8-K | 001-41593 | 10.5 | January 19, 2023 | ||||||
10.6 | 8-K | 001-41593 | 10.6 | January 19, 2023 | ||||||
10.7 | 8-K | 001-41593 | 10.7 | January 19, 2023 | ||||||
10.8 | 8-K | 001-41593 | 10.8 | January 19, 2023 | ||||||
31.1* |
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101.INS* | XBRL Instance Document | |||||||||
101.SCH* | XBRL Taxonomy Extension Schema Document | |||||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |||||||||
101.LAB* |
| XBRL Taxonomy Extension Labels Linkbase Document |
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101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||
104 | Cover Page Interactive Data File. Formatted in Inline XBRL and contained in exhibit 101. |
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PART III – SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ISRAEL ACQUISITIONS CORP | ||
Date: August 14, 2023 | By: | /s/ Ziv Elul |
Name: | Ziv Elul | |
Title: | Chief Executive Officer and Director | |
(Principal Executive Officer) | ||
Date: August 14, 2023 | By: | /s/ Sharon Barzik Cohen |
Name: | Sharon Barzik Cohen | |
Title: | Chief Financial Officer and Director | |
(Principal Financial and Accounting Officer) |
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