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

Company: Kochav Defense Acquisition Corp.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 14
---
 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-term nature.

Investments Held in Trust Account

At June 30, 2025, investments held in the Trust
Account were held in mutual funds that are invested primarily in money market funds. Investments held in the Trust Account are classified
as trading securities. Trading securities are presented on the accompanying unaudited condensed balance sheet at fair value at the end
of the reporting period. The estimated fair values of investments held in Trust Account are determined using available market information.
Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical
assets.

Income Taxes

The Company accounts for income taxes under FASB
ASC Topic 740, “Income Taxes” (“ASC 740”), 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 statements
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 740 prescribes a recognition threshold and
a measurement attribute for the financial statements 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.
Management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and
penalties related to unrecognized tax benefits as income tax expense. As of June 30, 2025, there were no unrecognized tax benefits and
no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could