Company: KCHVR
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076631
Chunk: 59

Company: Kochav Defense Acquisition Corp.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 59
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 disclosure of contingent assets and liabilities at the date of the accompanying unaudited condensed
financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

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 accompanying unaudited 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. 

Concentration of Credit Risk

Financial instruments that potentially subject
the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal
Deposit Insurance Corporation coverage limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant
adverse impact on the Company’s financial condition, results of operations, and cash flows.

8

KOCHAV DEFENSE ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2025

Deferred Offering Costs

The Company complies with the requirements of
FASB ASC Topic 340-10-S99 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering.” Deferred
offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC Topic
470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt
into its equity and debt components. The Company applied this guidance to allocate Initial Public Offering proceeds from the Units between
Public Shares and Public Rights, using the residual method by allocating Initial Public Offering proceeds first to assigned value of the
Public Rights and then to the Public Shares. Offering costs allocated to the Public Shares were charged to temporary equity. Offering
costs allocated to the Public Rights were charged to shareholders’ deficit. After Management’s evaluation, the Public Rights
included in the Public Units were accounted for under equity treatment.

Fair Value of Financial Instruments

The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates
the carrying amounts represented in the accompanying unaudited condensed balance sheet, primarily due to its short