Company: KCHVR
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001213900-25-109292
Chunk: 61

Company: Kochav Defense Acquisition Corp.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 61
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 balance sheet.

Share-Based
Compensation

The
Company records share-based compensation in accordance with FASB ASC Topic 718, “Compensation-Share Compensation” (“ASC
718”), guidance to account for its share-based compensation. It defines a fair value-based method of accounting for an employee
share option or similar equity instrument. The Company recognizes all forms of share-based payments at their fair value on the grant
date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments are valued by multiplying
the marketable value per Founder Share by the probability of successfully closing an initial Business Combination. Grants of share-based
payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is
the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally
the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the
period related to the termination of service. Share-based compensation expenses are included in costs and operating expenses depending
on the nature of the services provided in the accompanying unaudited condensed statements of operations.

10

KOCHAV
DEFENSE ACQUISITION CORP.

NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

SEPTEMBER
30, 2025

Class
A Ordinary Shares Subject to Possible Redemption

The
Public Shares contain a redemption feature that allows for the redemption of such Public Shares in connection with the Company’s
liquidation, or if there is a shareholder vote or tender offer in connection with the initial Business Combination. In accordance with
FASB ASC Topic 480-10-S99, “Distinguishing Liabilities from Equity,” the Company classifies Public Shares subject to possible
redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. The Company recognizes
changes in redemption value immediately as it occurs and will adjust the carrying value of redeemable shares to equal the redemption
value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion
from initial book value to redemption amount value. The change in the carrying value of redeemable shares will result in charges against
additional paid-in capital (to the extent available) and accumulated deficit. Accordingly, at September 30, 2025, Class A