Company: KCHVR
Filing Date: 2025-07-09
Form Type: 10-Q
Source: 0001213900-25-062351
Chunk: 11

Company: Kochav Defense Acquisition Corp.
Filing Date: 2025-07-09
Form: 10-Q
Item: Part I, Item 1
Chunk 11
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 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.

Deferred Offering Costs

The Company complies with the requirements of
the ASC 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. Financial Accounting
Standards Board (“FASB”) ASC 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 applies this guidance to allocate Initial Public
Offering proceeds from the Units between Class A ordinary shares and Share Rights, using the residual method by allocating Initial Public
Offering proceeds first to the assigned value of the rights and then to the Class A ordinary shares. Offering costs allocated to the Public
Shares are charged to temporary equity and offering costs allocated to Share Rights included in the Public and Private Placement Units
are charged to shareholders’ equity as the Share Rights included in the Public and Private Placement Units after management’s
evaluation are accounted for under equity treatment at the closing of the Initial Public Offering.

Fair Value of Financial Instruments

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

Income taxes

The Company accounts for income taxes under 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.

ASC Topic 740 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. The Company’s management determined that the Cayman Islands is the Company