Company: KCHVR
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001213900-25-109292
Chunk: 66

Company: Kochav Defense Acquisition Corp.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 66
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 Company in exchange for their services as independent directors through the initial Business
Combination. In addition, on May 6, 2025, the Sponsor granted membership interests equivalent to 10,000 Founder Shares to the Chief Financial
Officer in exchange for services through the initial Business Combination. The Founder Shares, represented by such membership interests,
will remain with the Sponsor if the holder of such membership interests is no longer serving the Company prior to the initial Business
Combination. The membership interest assignment of the Founder Shares to the holders of such interests are within the scope of ASC 718.
Under ASC 718, share-based compensation associated with equity-classified awards is measured at fair value upon the assignment date.
The total fair value of the 70,000 Founder Shares represented by such membership interests assigned to the holders of such interests
on May 6, 2025 was $102,521, or $1.465 per share. The membership interests were assigned subject to a performance condition (i.e., providing
services through the Business Combination). Share-based compensation will be recognized at the date a Business Combination is considered
probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of membership interests that ultimately
vest times the assignment date fair value per share (unless subsequently modified) less the amount initially received for the assignment
of the membership interests. The Company determined that the initial Business Combination is not considered probable and therefore no
compensation expense has been recognized.

13

KOCHAV
DEFENSE ACQUISITION CORP.

NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

SEPTEMBER
30, 2025

The
Founder Shares are designated as Class B Ordinary Shares and, except as described below, are identical to the Class A Ordinary
Shares included in the Public Units, and holders of Founder Shares have the same shareholder rights as Public Shareholders, except that
(i) the Founder Shares are subject to certain transfer restrictions, as described in more detail below, (ii) the Founder Shares
are entitled to registration rights; (iii) the Sponsor, officers and directors have agreed to certain restrictions on any Founder Shares
they hold pursuant to the Letter Agreement (see Note 1), (iv) the Founder Shares are automatically convertible into Class A
Ordinary Shares in connection with the consummation of the initial Business Combination or earlier at the option of the holder on a one-for-one
basis