UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




Form
10-K


(Mark
One)




x
              ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
fiscal year ended December 31, 2008




OR





 ̈
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
transition period from  _________  to
_____________




Commission
file number: 001-33544




ADVANCED
TECHNOLOGY ACQUISITION CORP.


(Exact
name of registrant as specified in its charter)





Delaware
            68-0635064(State
      or other jurisdiction of
              incorporation
      or organization)
            (I.R.S.
      Employer Identification No.)




14 A
Achimeir Street


Ramat
Gan, Israel 52587


(Address
of principal executive offices, including ZIP Code)




011-972-3-751-3707


(Registrant’s
telephone number, including area code)







Securities
registered pursuant to Section 12(b) of the Act:





Title of each class
            
            Name of each exchange on which
      registeredCommon
      Stock
            
            NYSE
      Alternext US LLCWarrants
            
            NYSE
      Alternext US LLCUnits,
      each consisting of one share of
              Common
      Stock and one Warrant
            
            NYSE
      Alternext US LLCCommon
      Stock included in the Units
            
            NYSE
      Alternext US LLCWarrants
      included in the Units
            
            NYSE
      Alternext US LLC




Securities
registered pursuant to Section 12(g) of the Act:


None




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act:    Yes   ̈    No
x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Securities
Act:    Yes   ̈    No  x









Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days:    Yes  x    No   ̈




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.    x




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act (Check one):




Large
accelerated filer   ̈    Accelerated
filer  x   Non-accelerated
filer   ̈   Smaller
reporting company   ̈




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act):    Yes  x    No   ̈




The
aggregate market value of common stock held by non-affiliates of the registrant
as of June 30, 2008 was approximately $169,442,650.




As of
March 30, 2009, the registrant had 26,953,125 shares of common stock
outstanding.




DOCUMENTS
INCORPORATED BY REFERENCE


None.




ADVANCED
TECHNOLOGY ACQUISITION CORP.




TABLE
OF CONTENTS




PagePART IItem 1.
                BUSINESS
                2Item 1A.
                RISK
      FACTORS
                14Item 1B.
                UNRESOLVED
      STAFF COMMENTS
                32Item 2.
                PROPERTIES
                32Item 3.
                LEGAL
      PROCEEDINGS
                32Item 4.
                SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
                32PART IIItem 5.
                MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES
                33Item 6.
                SELECTED
      FINANCIAL DATA
                34Item 7.
                MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                34Item 7A.
                QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                37Item 8.
                FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
                38Item 9.
                CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL
    DISCLOSURE
                38Item 9A.
                CONTROLS
      AND PROCEDURES
                38Item 9B.
                OTHER
      INFORMATION
                39PART IIIItem 10.
                DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
                40Item 11.
                EXECUTIVE
      COMPENSATION
                44Item 12.
                SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
                45Item 13.
                CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE
                47Item 14.
                PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
                49Item 15.
                EXHIBITS,
      FINANCIAL STATEMENT SCHEDULES
                50




i




PART
I




Unless otherwise stated in this Annual
Report on Form 10-K, or this “Annual Report”, references to the “Company”, “we,”
“us” or “our” refer to Advanced Technology Acquisition Corp. Unless we tell you
otherwise, the term “business combination” as used in this Annual Report means
an acquisition of, through a merger, capital stock exchange, asset acquisition,
stock purchase or other similar business combination with a technology or
technology-related business that has operations or facilities located in Israel,
or that intends to establish operations or facilities in Israel, such as
research and development, manufacturing or executive offices, following our
initial business combination. The term “initial stockholders” as used in this
Annual Report refers to persons that held shares of our common stock immediately
prior to the date of our initial public offering. In addition, unless we tell
you otherwise, the term “public stockholders” as used in this Annual Report
refers to the holders of the shares of common stock that were sold as part of
the units in the initial public offering, including any of our initial
stockholders, directors and officers to the extent that they purchased such
shares.




Forward-Looking
Statements




This
Annual Report contains forward-looking statements within the meaning of the
federal securities laws. These statements relate to future events or our future
financial performance and involve known and unknown risks, uncertainties and
other factors that may cause our actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by the
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as “may,” “will,” “should,” “expect,” “plan,”
“anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or the
negative of these terms or other comparable terminology. These forward-looking
statements include, but are not limited to, the statements regarding: our
ability to complete a business combination with one or more target businesses;
success in retaining or recruiting, or changes required in, our officers, key
employees or directors following a business combination; our officers and
directors allocating their time to other businesses and potentially having
conflicts of interest with our business or in approving a business combination;
our potential inability to obtain additional financing to complete a business
combination; liquidation if no business combination occurs; the addition of an
independent director to our board of directors and audit committee; limited pool
of prospective target businesses; potential change in control if we acquire one
or more target businesses for stock; interest to be earned on the trust account;
uses of our working capital; and risks associated with operations in Israel. In
evaluating these statements, you should specifically consider various factors,
including the risks outlined under Item 1A, “Risk Factors.” All forward-looking
statements included in this document are based on information available to us on
the date hereof, and we assume no obligation to revise or publicly release the
results of any revision to any such forward-looking statement, except as may
otherwise be required by law.




Item
      1.
            BUSINESS




General




We are a
blank check company organized under the laws of the State of Delaware on August
24, 2006. We were formed for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase or other similar business
combination with a technology or technology-related business that has operations
or facilities located in Israel, or that intends to establish operations or
facilities in Israel, such as research and development, manufacturing or
executive offices, following our initial business combination. To date, our
efforts have been limited to organizational activities. We have neither engaged
in any operations nor generated any revenues to date.




We intend
to utilize cash derived from the proceeds of our completed initial public
offering, our capital stock, debt or a combination of cash, capital stock and
debt, in effecting a business combination.




We do not
have a corporate website at this time. Our annual report on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K, as well as any amendments
or exhibits to those reports, are available free of charge at
www.sec.gov.




Our
initial business combination must be with an operating business whose fair
market value is equal to at least 80% of our net assets (excluding deferred
underwriting fees) at the time of such acquisition. We may seek to raise
additional funds through the private sale of securities or the incurrence of
indebtedness that would enable us to effect a business combination with an
operating business having a fair market value of at least, or greater than, 80%
of our net assets at the time of such an acquisition. There is no limitation on
our ability to raise such additional funds through the sale of securities or the
incurrence of indebtedness. We have not entered into any financing arrangements
or had discussions, formal or otherwise, with any third parties with respect to
such financing arrangements.




2




We entered into a letter of intent,
dated December 19, 2008 (the “LOI”), with Bioness Inc., a Delaware corporation
(“Bioness”), that provides for a business combination between Bioness (or an
entity controlled by Bioness) and us by means of a merger (the “merger”), with
us as the surviving entity.  Upon the consummation of the merger, we
will change our name to “Bioness Inc.”  The LOI provides that, upon
consummation of the merger, all of the fully diluted share capital of Bioness
(including all outstanding shares of common stock of Bioness), all Bioness stock
options (calculated on a cashless exercise basis) and Bioness warrants (not
calculated on a cashless exercise basis) and any other equity securities of
Bioness or securities convertible into or exchangeable for an equity securities
of Bioness will be converted into an aggregate of 32,343,750 shares of our
common stock, par value $.0001 per share (which number includes shares of our
common stock issuable upon the exercise of Bioness options and Bioness warrants
that will be assumed by us).




In addition and in consideration of the
establishment by Alfred E. Mann, an affiliate of Bioness, of the Additional
Trust (as described below), upon the closing of the merger, we will issue to Mr.
Mann 1,000,000 shares of common stock, which 1,000,000 shares of common stock in
the aggregate will be delivered to us by certain of our initial stockholders
(together with their transferees, “certain founders”) immediately prior to the
execution of a merger agreement.




The LOI provides that each beneficial
holder of common stock that (a) purchased shares of common stock in our initial
public offering (“IPO Shares”) or subsequently purchased IPO Shares on a stock
exchange, (b) voted in favor of the merger, and (c) holds any IPO Shares
immediately following the closing of the merger, will be granted a
non-transferable put option to sell such shares to the surviving entity at a
price of $8.20 per share.  Such put option will be exercisable during
the 30-day period commencing on the second anniversary of the closing of the
merger.  For securing payment with respect to the aggregate shares
subject to the put option, all of our available funds (minus all transaction
costs and expenses) on the date the merger closes minus the working capital
(defined as an amount equal to $50 million as required for funding the surviving
entity’s operations, which shall be in addition to funds required for payment of
all debts and commitments outstanding on January 1, 2009 and for payment of all
transaction costs and expenses, which are estimated to be approximately $12
million) will be set aside in trust (the “Option
Trust”).  Additionally, the LOI provides that at the closing of the
merger, Mr. Alfred E. Mann will both give a personal guaranty for the repayment
of any “Shortfall” (defined below) and also establish a trust (the “Additional
Trust”) to ensure payment of any such Shortfall to holders of the put
option.  The Additional Trust will be funded in an amount equal to (x)
$8.20 multiplied by the number of shares subject to the put option, minus (y)
the funds deposited in the Option Trust.  The Additional Trust will be
funded with collateral consisting of publicly traded securities with a market
value at the date of deposit equal to 125% of the amount required to be held in
the Additional Trust.  If the value of the securities falls below such
125% coverage at any time, Mr. Mann will be given notice and will deposit
additional collateral within three business days (and, conversely, he can remove
excess collateral if the value increases above such 125% amount).  The
LOI also provides that, if at the time of the exercise of the put option, there
are insufficient funds available in the Option Trust to fully pay put option
holders (a “Shortfall”), then, (without limiting his personal guaranty) Mr. Mann
will be given notice of the Shortfall and (a) Mr. Mann will fund the Additional
Trust with cash in the amount of the Shortfall or (b) we (or the trustee of the
Additional Trust) will sell a portion of collateral in the Additional Trust to
cover such Shortfall and Mr. Mann will fund any remaining Shortfall after such
sale of collateral.




The LOI further provides that,
following execution of the merger agreement, Bioness will commence a tender
offer to purchase our remaining outstanding warrants for four cents per
warrant.  As a condition to the tender offer, 100% of the outstanding
warrants will be tendered and not withdrawn.  It is anticipated that
the merger agreement will provide that it can be terminated by either party if
the conditions to the tender offer are not satisfied or waived by
Bioness.  It is a condition to the commencement of the tender offer
that, not later than one business day prior to the announcement by Bioness of
the tender offer, all of the warrants purchased by certain founders in
connection with our initial public offering and unit purchase option issued to
the underwriters of our initial public offering (consisting of common stock and
warrants to purchase common stock ) will be canceled without further
consideration with the consent of the holders thereof.  All warrants
purchased in the tender offer will be cancelled following their
purchase.  Bioness’ obligation to consummate the merger is conditioned
upon satisfaction of the foregoing conditions to the tender
offer.  All costs and expenses related to the tender offer will be
paid by Bioness.




Pursuant
to our amended and restated certificate of incorporation, the merger is subject
to the approval of our stockholders.  We will file a preliminary proxy
statement/prospectus with the SEC relating to the merger.




A
registration statement for our initial public offering was declared effective on
June 18, 2007. On June 22, 2007, we closed our initial public offering of
21,562,500 units (including the underwriters’ over-allotment option of 2,812,500
units) with each unit consisting of one share of our common stock, par value
$0.0001 per share, and one warrant, each to purchase one share of our common
stock at an exercise price of $6.00 per share. The units from the initial public
offering (including the underwriters’ over-allotment option) were sold at an
offering price of $8.00 per unit. On June 22, 2007, we also consummated the
private sale of 3,625,000 warrants at a price of $1.00 per warrant to certain of
our initial stockholders. Our common stock and warrants started trading
separately on July 11, 2007.




We
generated gross proceeds of $176,125,000 from the sale of the units in our
initial public offering and the private placements. After deducting the
underwriting discounts and commissions, non-accountable expense allowance and
the offering expenses, the total net proceeds to us from the offering (including
the underwriters’ over-allotment option) were $163,430,000, of which
$163,050,000 was deposited into the trust account at Lehman Brothers Inc.,
maintained by Continental Stock Transfer & Trust Company, acting as trustee,
and the remaining proceeds of $380,000 became available to be used by us to
provide for business, legal and accounting due diligence or prospective business
combinations and continuing general and administrative expenses. In addition,
$6,468,750, representing the deferred underwriting discounts and commissions,
were deposited into the trust account for a total of $169,518,750 deposited into
the trust account. The amounts deposited into the trust account remain on
deposit in the trust account earning interest.




3




The funds
held in the trust account, other than the deferred underwriting discounts and
commissions, may be used as consideration to pay the sellers of a target
business with which we ultimately complete a business combination. Up to
one-half of the interest earned on the trust account, net of taxes, may be
released to us to complete a business combination. Up to one-half of the
interest earned on the trust account, net of taxes, may be released to us to
fund our working capital requirements. Any amounts not paid as consideration to
the sellers of the target business or to the underwriters as deferred
underwriting discounts and commissions may be used to finance the operations of
the target business.




Our
offices are located at 14 A Achimeir Street, Ramat Gan 52587 Israel, and our
telephone number is 011-972-3-751-3707.




Focus
on Israel




Over the
course of the past decade, Israel has emerged as a favorable environment for
technology and technology-related companies. Based on information publicly
available from the Israel Venture Capital (IRC) Research Center, the Israel
Venture Association (IVA) and the Government of Israel’s Ministry of Industry,
Trade and Labor, we believe that Israel represents an attractive environment for
a target business for several reasons, including:




·
            Israel’s
      Central Bureau of Statistics reported that Israel’s Gross Domestic Product
      grew by 5.3% in 2007 and by 2.7% in the first nine months of 2008 (on an
      annualized basis), ranking it as one of the fastest growing economies in
      the Western world;




·
            Israel’s
      Central Bank reported that foreign investments in Israel have risen
      consecutively in the last three years, reaching $10.3 billion in 2007 and
      $8.6 billion in the first nine months of
2008;




·
            According
      to the Israeli Ministry of Industry, Trade and Labor, Israeli companies
      are offered favorable tax incentives and government funding
      plans;




·
            According
      to the Israeli Ministry of Industry, Trade and Labor, Israel offers the
      modern infrastructure, protection and services required for businesses to
      compete effectively including protection of trademarks and patents, a
      transparent financial and legal system and sophisticated capital markets
      that allow companies to simultaneously list their securities on Israeli
      and foreign exchanges;




·
            Fitch
      and other rating agencies have maintained Israel’s credit rating at “A-”,
      noting the rapid growth of the Israeli economy, Israel’s low government
      deficit and a decrease in the Israeli government’s debt level as positive
      factors in the country’s risk
profile;




·
            According
      to the Israeli Ministry of Foreign Affairs, Israeli universities and
      research institutions have produced significant research and innovations
      and, due to their outstanding reputation, have attracted prominent
      scientists, researchers, and professors from outside of
      Israel;




·
            According
      to the Israeli Ministry of Finance, Israel has one of the highest
      per-capita ratios of engineers in the
world;




·
            According
      to the Consulate General of Israel, Israel has more startup companies, in
      absolute terms, than any other country in the world other than the United
      States; and




·
            Israeli-based
      technology companies rank as the most listed non-U.S. based technology
      companies on the Nasdaq Stock Market, according to the Nasdaq Stock
      Market, and also rank highly in the number of listed technology companies
      on many European stock exchanges.







To
amplify these reasons, it is worth noting that Israel offers:




·
            A highly educated and trained
      work force: Israeli companies have access to a large pool of
      software and hardware engineers, a majority of whom were trained in Israel
      Defense Forces’ elite technology units or in the former Soviet Union. In
      addition, due mainly to the highly talented and technically educated
      workforce, many global technology companies have established research and
      development facilities in Israel, including: Microsoft, Intel, Hewlett
      Packard, IBM, Motorola, 3Com, Lucent, Cisco, Applied Materials, AOL,
      National Semiconductors and others. These global technology companies also
      serve as a source of seasoned managers and entrepreneurs for emerging
      growth companies.




4




·
            Commercialization and
      adaptation of defense technologies: Cutting-edge technologies are
      being developed in Israel for use by the Israeli defense forces. Israeli
      technology companies have successfully converted and adapted defense
      technologies to civilian applications. This is due in part to the highly
      trained engineers and technicians who enter the private sector after
      having completed their military service and contribute to the advancement
      of Israeli technology companies.




·
            Government incentives:
      In order to boost investment in the technology sector, the Israeli
      government initiated various incentives to both the investment community
      and to technology companies. Various tax breaks and grants from the Office
      of the Chief Scientist are provided to emerging growth companies. These
      initiatives led to tremendous growth in the technology industry during the
      past decade.




Additionally,
according to the Israel Venture Capital Research Center, since 1999, $16 billion
in venture capital has been invested in Israel’s technology industry, which
funded more than 1,500 technology companies.




We
believe that this high degree of venture capital being invested in Israel, when
compared to other countries, makes Israel a favorable environment for making
acquisitions, as there should be a greater number of prospective target
businesses searching for a way to provide their investors with a return on their
investment, or a liquidity event. Typical liquidity events include an initial
public offering, a sale or merger, or the payment of a dividend.




We will
not enter into a business combination unless the target company already has
operations or facilities located in Israel, or that intends to establish
operations or facilities in Israel, such as research and development,
manufacturing or executive offices, following our initial business
combination.




Effecting
a Business Combination




General




We are
not presently engaged in, and we will not engage in, any substantive commercial
business until such time as a business combination is consummated, if ever. We
intend to use cash derived from the proceeds of our initial offering and the
sale of the founder warrants simultaneously with the closing of our initial
offering, and issuances of our capital stock, debt or any combination thereof to
effect a business combination. Although substantially all of the net proceeds of
our initial offering (excluding the amount held in the trust account
representing the deferred portion of the underwriter’s fees) are intended to be
generally applied toward effecting a business combination as described in this
annual report, the proceeds are not otherwise designated for any more specific
purpose. A business combination may involve the acquisition of, or merger with,
an operating business that does not need substantial additional capital but
desires to establish a public trading market for its shares, while avoiding what
it may deem to be adverse consequences of undertaking a public offering itself.
These consequences include time delays, significant expense, loss of voting
control and compliance with various federal and state securities laws. In the
alternative, a business combination may involve a company that may be
financially unstable or may possess weak management, but, in our belief,
possesses long-term growth potential. While we may seek to effect business
combinations with more than one target business, we will probably have the
ability, as a result of our limited resources, to effect only a single business
combination.




We
have not consummated a business combination




We have
entered into a LOI with Bioness, pursuant to which we hope to consummate a
merger.  We believe that Bioness meets the requirements that a target
business (a) have operations or facilities located in Israel, or intends to
establish operations or facilities in Israel, such as research and development,
manufacturing or executive offices, following our initial business combination,
(b) be in a technology or technology-related industry and (c) have a fair market
value of at least 80% of our net assets (excluding deferred underwriting fees)
at the time of the acquisition, as described below in more detail. We have not
established any other specific attributes or criteria (financial or otherwise)
for prospective target businesses. There is no basis for investors to evaluate
the possible merits or risks of Bioness at this time. Although our management
has and will continue to endeavor to evaluate the risks inherent in a business
combination with Bioness, we cannot make any assurances that we will properly
ascertain or assess all significant risk factors. Pursuant to our amended and
restated certificate of incorporation, the merger is subject to the approval of
our stockholders.  We will file a preliminary proxy
statement/prospectus with the SEC relating to the merger.




5




Sources
of target businesses




Target
business candidates have and will continue to be brought to our attention from
various unaffiliated sources, including securities broker-dealers, investment
bankers, venture capitalists, bankers and other members of the financial
community. Target businesses may be brought to our attention by such
unaffiliated sources as a result of being solicited by us through calls or
mailings. These sources may also introduce us to target businesses in which they
think we may be interested on an unsolicited basis since many of these sources
will have read this report and know what types of business we are targeting. Our
management team has extensive experience in the technology and
technology-related industries, and has the experience and skills necessary to
identify, acquire and assist the appropriate target business or businesses.
Furthermore, through their considerable experience in technology and
technology-related businesses, our management team has acquired extensive
contacts and sources from which to generate acquisition opportunities. These
contacts and sources include private equity and venture capital funds, public
and private companies, business brokers, investment bankers, attorneys and
accountants.




In the
event that we do not consummate a business combination with Bioness, our initial
stockholders, our officers and directors, and their affiliates may bring to our
attention target business candidates that they become aware of through their
business contacts as a result of formal or informal inquiries or discussions
they may have, as well as attending trade shows or conventions. While we do not
presently anticipate engaging the services of professional firms that specialize
in business acquisitions on any formal basis, we may engage these firms in the
future, in which event we may pay a finder’s fee or other compensation to be
determined in an arm’s length negotiation based on the terms of the transaction.
In no event, however, will our initial stockholders, our officers and directors,
or any entity with which they are affiliated, be paid any finder’s fee,
consulting fee or other compensation prior to, or for services they render in
order to effectuate, the consummation of a business combination; provided,
however, that we are permitted to pay a finder’s fee or other compensation to
Shrem, Fudim Group Ltd. and/or to Shrem, Fudim Technologies Ltd. should they
provide us services prior to or in connection with a business
combination.




Selection
of a target business and structuring of a business combination




Subject
to the requirements that a target business (a) have operations or facilities
located in Israel, or intends to establish operations or facilities in Israel,
such as research and development, manufacturing or executive offices, following
our initial business combination, (b) be in a technology or technology-related
industry and (c) have a fair market value of at least 80% of our net assets
(excluding deferred underwriting fees) at the time of the acquisition, as
described below in more detail, our management will have virtually unrestricted
flexibility in identifying and selecting prospective target business. We have
not established any other specific attributes or criteria (financial or
otherwise) for prospective target businesses.




In
evaluating a prospective target business, our management team will likely
consider one or more of the following factors:




·
            financial
      condition and results of operations (including whether a business could be
      improved with new management and changes to operational and capital
      strategies);




·
            both
      long-term and short-term growth potential (including the degree to which
      opportunities for growth exist through internal expansion, industry
      consolidation, globalization or innovative business
      strategies);




·
            experience
      and skill of the target’s management and availability of additional
      personnel;




·
            competitive
      position (including strength of brands, if any, customer loyalty and
      product quality relative to its
competitors);




·
            regulatory
      or technical barriers to entry, and their potential effect on the
      long-term competitive environment of the target
  business;




·
            stage
      of development of the products, processes or services including the degree
      of current or potential market acceptance of the products, processes or
      services;




·
            capital
      requirements (including required working capital and capital expenditures,
      and their effect on the company’s cash
flows);




·
            earnings
      and operating margins;




·
            nature
      of the customers and contracts;




6


·
            stability
      and continuity in customer
relationships;




·
            degree
      of current or potential market acceptance of the products, processes or
      services;




·
            proprietary
      features and degree of intellectual property or other protection of the
      products, processes or services;




·
            regulatory
      environment of the relevant industry sector;
and




·
            costs
      associated with effecting the business
  combination




These
criteria are not intended to be exhaustive. Any evaluation relating to the
merits of a particular business combination with an operating business will be
based on the above factors as well as other considerations deemed relevant by
our management team in effecting a business combination consistent with our
business objective. In evaluating a prospective target business, we intend to
conduct an extensive due diligence review of the target business that will
encompass, among other things, meetings with incumbent management and inspection
of facilities, as well as review of financial and other information that will be
made available to us. This due diligence review will be conducted either by our
management or by unaffiliated third parties we may engage, although we have no
current intention to engage such third parties. We will also seek to have all
prospective target businesses execute agreements with us waiving any right,
title, interest or claim of any kind in or to any monies held in the trust. If
any prospective target business refuses to execute such agreement, it is
unlikely we would continue negotiations with such target business. However, we
would weigh the risks of potential liability and amount of exposure to the trust
fund against the attractiveness of the particular business opportunity in making
any such decision.




We will
endeavor to structure a business combination so as to achieve the most favorable
tax treatment to us, the target business and their stockholders, as well as our
own stockholders. We cannot make any assurances, however, that the Internal
Revenue Service or appropriate state tax authority will agree with our tax
treatment of the business combination.




The time
and costs required to structure and complete the business combination with
Bioness cannot presently be ascertained with any degree of certainty. Any costs
incurred with respect to the identification and evaluation of a prospective
target business with which a business combination is not ultimately completed
will result in a loss to us and reduce the amount of capital available to
otherwise complete a business combination. We will not pay any finders or
consulting fees to our initial stockholders, directors or officers or special
advisors, or any of their respective affiliates, for services rendered in
connection with a business combination; provided, however, that we are permitted
to pay a finder’s fee or other compensation to Shrem, Fudim Group Ltd. and/or to
Shrem, Fudim Technologies Ltd. should they provide us services prior to or in
connection with a business combination, though no such finder’s fee or other
compensation would be paid in the event that the merger with Bioness is
consummated. However, our initial stockholders, directors and officers will
receive reimbursement for any reasonable out-of-pocket expenses incurred by them
in connection with activities on our behalf.




Fair
market value of target business




The
initial target business that we acquire must have a fair market value equal to
at least 80% of our net assets (excluding deferred underwriting fees) at the
time of such acquisition. The fair market value of such business will be
determined by our board of directors based upon standards generally accepted by
the financial community, such as actual and potential sales, earnings and cash
flow and book value. If our board is not able to independently determine that
the target business has a sufficient fair market value or if a conflict of
interest exists with respect to such determination - which is likely to occur
only in those situations in which the target business is outside the scope of
the expertise of our officers or in those situations in which the proposed
business combination was with an entity which is affiliated with any of our
initial stockholders - we will obtain an opinion from an unaffiliated,
independent financial services firm with respect to the satisfaction of such
criteria. Since any opinion, if obtained, would merely state that fair market
value meets the 80% of net assets threshold, it is not anticipated that copies
of such opinion would be distributed to our stockholders, although copies will
be provided to stockholders who request it. We will not be required to obtain an
opinion from an investment banking firm as to the fair market value if our board
of directors independently determines that the target business complies with the
80% threshold.




Probable
lack of business diversification




While we
may seek to effect business combinations with more than one target business, our
initial business combination must be with a target business which satisfies the
minimum valuation standard at the time of such acquisition, as discussed above.
Consequently, initially, it is probable that we will have the ability to effect
only a single business combination. Accordingly, the prospects for our success
may be entirely dependent upon the future performance of a single business.
Unlike other entities which may have the resources to complete several business
combinations of entities operating in multiple industries or multiple areas of a
single industry, it is probable that we will not have the resources to diversify
our operations or benefit from the possible spreading of risks or offsetting of
losses. By consummating a business combination with only a single entity, our
lack of diversification:




7




·
            will
      result in our dependency upon the performance of a single operating
      business;




·
            will
      result in our dependency upon the development or market acceptance of a
      single or limited number of products, processes or services;
      and




·
            may
      subject us to numerous economic, competitive and regulatory developments,
      any or all of which may have a substantial adverse impact upon the
      particular industry in which we may operate subsequent to a business
      combination. We may not be able to diversify our operations or benefit
      from the possible spreading of risks or offsetting of losses, unlike other
      entities which may have the resources to complete several business
      combinations in different industries or different areas of a single
      industry so as to diversify risks and offset losses. Further, the
      prospects for our success may be entirely dependent upon the future
      performance of the initial target business we
  acquire.




Limited ability to evaluate the target
business’ management




Although
we intend to closely scrutinize the management of prospective target businesses
when evaluating the desirability of effecting a business combination, we cannot
make any assurances that our assessment of the target business’ management will
prove to be correct. In addition, we cannot make any assurances that the target
business’ management will have the necessary skills, qualifications or abilities
to manage a public company. Furthermore, although our directors and officers
intend to remain associated with us after the consummation of our initial
business combination, the future role, if any, of our directors and officers in
the target business cannot presently be stated with any certainty since we
cannot predict the structure of the business combination or the operations of
the target company we will pursue. Although we expect one or more members of our
management to serve on our board of directors following a business combination,
subject to continued election by the stockholders, it is unlikely that any of
our officers or directors will devote their full efforts to our affairs
subsequent to a business combination. We may request continued representation of
our management on the board of directors in our negotiation with a target
company. We will consider a target company’s response to this request in
determining whether the acquisition is in the best interest of our shareholders.
Moreover, we cannot make any assurances that our directors and officers will
have significant experience or knowledge relating to the operations of the
particular target business acquired. For example, if we were to acquire a target
business with diverse operations or a division of a company that has a
specialized operation, we may have to hire additional management personnel for
our post-business combination operations.




Following
a business combination, we may seek to recruit additional managers to supplement
the incumbent management of the target business. We cannot make any assurances
that we will have the ability to recruit additional managers, or that additional
managers will have the requisite skills, knowledge or experience necessary to
enhance the incumbent management of the target business.




Opportunity
for stockholder approval of business combination




Prior to
the completion of a business combination, we will submit the transaction to our
stockholders for approval, even if the structure of the business combination is
such that it would not ordinarily require stockholder approval under applicable
state law. In connection with seeking stockholder approval of a business
combination, we will furnish our stockholders with proxy solicitation materials
prepared in accordance with the Securities Exchange Act of 1934, as amended, or
the Exchange Act, which, among other matters, will include a description of the
operations of the target business and certain required financial information
regarding the target business.




In
connection with any vote required for our initial business combination, all of
our initial stockholders, directors and officers, have agreed to vote the shares
of common stock then owned by them, including any shares of common stock
purchased in or following our initial offering, in accordance with the majority
of the shares of common stock voted by the public stockholders other than our
initial stockholders, directors and officers. As a result, our initial
stockholders, directors and officers will not have any conversion rights
attributable to their shares in the event that a business combination
transaction is approved by a majority of our public stockholders other than our
initial stockholders, directors and officers. We will proceed with the initial
business combination only if both a majority of the shares of common stock voted
by the public stockholders are voted in favor of the business combination and
public stockholders owning less than 40% of the shares sold in our initial
offering exercise their conversion rights.




8




Conversion
rights




At the
time we seek stockholder approval of any business combination, we will offer
each public stockholder, other than our initial stockholders, directors and
officers, the right to have such stockholder’s shares of common stock converted
into cash if the stockholder votes against the business combination and the
business combination is approved and completed. Our initial stockholders,
directors and officers will not have this right with respect to the shares owned
by them, because they have agreed to vote their shares of common stock in
accordance with the majority of the shares of common stock voted by the public
stockholders other than our initial stockholders, directors and officers. The
actual per-share conversion price will be equal to the amount in the trust
account, including the amount held in the trust account representing the
deferred portion of the underwriter’s fee, but excluding one-half of the
interest earned on the trust account, net of taxes payable on such interest,
that will be released to us on a monthly basis to fund our working capital
requirements, as of two business days prior to the consummation of the business
combination, divided by the number of units sold in our initial offering.
Without taking into account any interest earned on the trust account, the
initial per-share conversion price would be approximately $7.64, or $0.36 less
than the per-unit offering price of $8.00. There may be a disincentive for
public stockholders to exercise their conversion rights due to the fact that the
amount available to such stockholders is likely to be less than the purchase
price paid for the unit in the offering. Voting against the business combination
alone will not result in an election to exercise a stockholder’s conversion
rights. A stockholder must also affirmatively exercise such conversion rights at
or prior to the time the business combination is voted upon by the stockholders.
An eligible stockholder may request conversion at any time after the mailing to
our stockholders of the proxy statement at or prior to the vote taken with
respect to a proposed business combination at a meeting held for that purpose,
but the request will not be granted unless the stockholder votes against the
business combination and the business combination is approved and completed. Any
request for conversion, once made, may be withdrawn at any time up to the date
of the meeting. It is anticipated that the funds to be distributed to eligible
stockholders who elect conversion will be distributed promptly after completion
of the business combination. Public stockholders who convert their stock into
their share of the trust account retain their warrants. We will not complete any
proposed business combination for which our public stockholders owning 40% or
more of the shares sold in our initial offering, other than our initial
stockholders, directors and officers, both vote against a business combination
and exercise their conversion rights.




We will
not complete any business combination if public stockholders owning 40% or more
of the shares sold in our initial public offering exercise their conversion
rights. Accordingly, it is our understanding and intention in every case to
structure and consummate a business combination in which approximately 40% of
the public stockholders may exercise their conversion rights and the business
combination will still go forward.




Liquidation
if no business combination




Pursuant
to the terms of our amended and restated certificate of incorporation, if we do
not complete a business combination by December 22, 2008 (18 months after June
22, 2007, the date we consummated our initial offering), or by June 22, 2009 if
the extension criteria described below have been satisfied, as part of any plan
of dissolution and distribution in accordance with the applicable provisions of
the Delaware General Corporation Law, we will dissolve and distribute to all of
our public stockholders, in proportion to their respective equity interests, an
aggregate sum equal to the amount in the trust account, including the amount
representing the deferred portion of the underwriter’s fees, but excluding
one-half of the interest earned on the trust account, net of taxes payable on
such interest, that will be released to us on a monthly basis to fund our
working capital requirements, plus any remaining net assets. In the event we
seek stockholder approval for a plan of dissolution and distribution and do not
obtain such approval, we will nonetheless continue to pursue stockholder
approval for our dissolution. Pursuant to the terms of our amended and restated
certificate of incorporation, our board has agreed to dissolve after the expiry
of those time periods (assuming that there has been no business combination
consummated), and furthermore, our powers following the expiration of the
permitted time periods for consummating a business combination will
automatically thereafter be limited to acts and activities relating to
dissolving and winding up our affairs, including liquidation. The funds held in
the trust account may not be distributed except upon our dissolution and, unless
and until such approval is obtained from our stockholders, the funds held in the
trust account will not be released. Consequently, holders of a majority of our
outstanding stock must approve our dissolution in order to receive the funds
held in the trust account and the funds will not be available for any other
corporate purpose. Upon the approval by our stockholders of our plan of
dissolution and distribution, we will liquidate the trust account to our public
stockholders. Our initial stockholders, directors and officers have agreed to
waive their respective rights to participate in any liquidation distribution
occurring upon our failure to consummate a business combination, but only with
respect to those shares of common stock owned by them prior to our initial
offering; they will participate in any liquidation distribution with respect to
any shares of common stock acquired in connection with or following our initial
offering. There will be no distribution from the trust account with respect to
the warrants and all rights with respect to the warrants will effectively
terminate upon our liquidation.




Without
taking into account interest, if any, earned on the trust account, the initial
per-share liquidation value of the trust account would be approximately $7.64,
or $0.36 less than the per-unit offering price of $8.00. We also will have
access to any funds available outside the trust account and to one-half of the
interest earned on the trust account, net of taxes payable on such interest,
that will be released to us on a monthly basis to fund our working capital
requirements with which to pay any such potential claims (including costs and
expenses incurred in connection with our plan of dissolution and liquidation
currently estimated at approximately $50,000 to $75,000). However, we cannot
make any assurances that the actual per-share liquidation value of the trust
account will not be less than approximately $7.64, plus interest, due to claims
of creditors that exceed the funds available outside the trust account or
released to us to fund working capital requirements.




Placing
of funds in a trust account may not protect those funds from third-party claims
against us. Although we will seek to have all vendors, prospective acquisition
targets and other entities with whom we engage in business enter into agreements
with us waiving any right in or to any monies held in the trust account for the
benefit of our public stockholders, there is no guarantee that they will execute
such agreements, or even if they execute such agreements, that such waivers will
be enforceable or they would otherwise be prevented from bringing claims against
the trust account.




9




If any
third party refused to execute an agreement waiving such claims to the monies
held in the trust account, we would perform an analysis of the alternatives
available to us if we chose not to engage such third party and evaluate if such
engagement would be in the best interest of our stockholders if such third party
refused to waive such claims. Examples of possible instances in which we may
engage a third party that refused to execute a waiver include the engagement of
a third-party consultant whose particular expertise or skills are believed by
management to be significantly superior to those of other consultants that would
agree to execute a waiver or in cases where management is unable to find a
provider of required services willing to provide the waiver. In any event, our
management would perform an analysis of the alternatives available to it and
would enter into an agreement with a third party that did not execute a waiver
only if management believed that such third party’s engagement would be
significantly more beneficial to us than any alternative.




In
addition, there is no guarantee that such entities will agree to waive any
claims they may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with us and not seek recourse against the
trust account for any reason. Furthermore, creditors may seek to interfere with
the distribution process under state or federal creditor and bankruptcy laws,
which could delay the actual distribution of such funds or reduce the amount
ultimately available for distribution to our public stockholders. If we are
required to file a bankruptcy case or an involuntary bankruptcy case is filed
against us that is not dismissed, the funds held in the trust account will be
subject to applicable bankruptcy law and may be included in our bankruptcy
estate and subject to the claims of third parties with priority over the claims
of our stockholders.




Accordingly,
the proceeds held in trust could be subject to claims that could take priority
over the claims of our public stockholders and the per-share liquidation price
could be less than approximately $7.64, plus one-half of the interest earned on
the trust account, net of taxes payable on such interest, for the relevant
period, due to claims of such creditors or other entities.




Our
founding stockholders, M.O.T.A. Holdings Ltd., FSGL Holdings Ltd and OLEV
Holdings Ltd, have agreed that, subject to the qualifications stated below, they
will be liable to cover claims made by vendors for services rendered or
contracted for, or for products sold to us, but only if, and to the extent, the
claims reduce the amounts in the trust account available for payment to our
stockholders in the event of a liquidation. This indemnification is limited to
claims of vendors that do not execute a waiver of all right in or to the monies
held in the trust account. Claims by vendors or other entities that executed
such a waiver agreement would not be indemnified by our founding stockholders.
For the avoidance of doubt, our founding stockholders will not have any
liability as to any claimed amounts owed - directly or indirectly - including,
without limitation, liabilities to an acquisition target, any third party who
executed a waiver or the underwriter of our initial offering, except as set
forth above.




The
indemnification provision described above is set forth in the insider letter
agreements, dated September 29, 2006, which are filed as exhibits to the
registration statement that was declared effective on June 18,
2007.




Our
amended and restated certificate of incorporation provides for our mandatory
liquidation if we do not consummate a business combination within 18 months from
the date of the consummation of our initial public offering (December 22, 2008)
or 24 months from the consummation of our initial public offering (June 22,
2009) if a letter of intent (such as the LOI), agreement in principle or
definitive agreement has been executed within 18 months after the consummation
of the offering and a business combination relating thereto has not yet been
consummated within such 18-month period.  Accordingly, if we do not
consummate a merger prior to June 22, 2009, we must liquidate in the manner set
forth in our amended and restated certificate of incorporation. Upon notice from
us, the trustee of the trust account will commence liquidating the investments
constituting the trust account and will turn over the proceeds to our transfer
agent for distribution to our public stockholders as part of our plan of
dissolution and distribution. We will promptly instruct the trustee to commence
liquidating the investments constituting the trust account after the expiration
of the 24-month period and upon the approval by our stockholders of our plan of
dissolution and distribution.




Under the
Delaware General Corporation Law, stockholders may be held liable for claims by
third parties against a corporation to the extent of distributions received by
them in a dissolution. If the corporation complies with certain procedures set
forth in Section 280 of the Delaware General Corporation Law intended to ensure
that it makes reasonable provision for all claims against it, including a 60-day
notice period during which any third-party claims can be brought against the
corporation, a 90-day period during which the corporation may reject any claims
brought, and an additional 150-day waiting period before any liquidating
distributions are made to stockholders, any liability of stockholders with
respect to a liquidating distribution is limited to the lesser of such
stockholder’s pro rata share of the claim or the amount distributed to the
stockholder, and any liability of the stockholder would be barred after the
third anniversary of the dissolution. Although we will make liquidating
distributions to our stockholders as soon as reasonably possible as part of our
plan of dissolution, we do not intend to comply with those procedures. As such,
our stockholders could potentially be liable for any claims to the extent of
distributions received by them in a dissolution and any liability of our
stockholders may extend beyond the third anniversary of such dissolution.
Because we will not be complying with Section 280, we will seek stockholder
approval to comply with Section 281(b) of the Delaware General Corporation Law,
requiring us to adopt a plan of dissolution that will provide for our payment,
based on facts known to us at such time, of (i) all existing claims, (ii) all
pending claims and (iii) all claims that may be potentially brought against us
within the subsequent 10 years. However, because we are a blank check company,
rather than an operating company, and our operations will be limited to
searching for prospective target businesses to acquire, the only likely claims
to arise would be from our vendors (such as accountants, lawyers, investment
bankers, etc.) or potential target businesses. As described above, we are
obligated to have all vendors, service providers and prospective target
businesses execute agreements with us waiving any right, title, interest or
claim of any kind they may have in or to any monies held in the trust account.
As a result, the claims that could be made against us are significantly limited
and the likelihood that any claim would result in any liability extending to the
trust is remote. Moreover, because we are obligated to obtain the waiver
agreements described above, the funds held in trust should be excluded from the
claims of any creditors who executed such agreements in connection with any
bankruptcy proceeding.




10




We expect
that all costs associated with the implementation and completion of our
dissolution and distribution, which currently estimate to be approximately
$50,000 to $75,000, will be funded by any funds not held in our trust account,
although we cannot make any assurances that there will be sufficient funds for
such purpose. To the extent such funds are not available, M.O.T.A. Holdings
Ltd., FSGL Holdings Ltd and OLEV Holdings Ltd have agreed to advance the
necessary funds. However, there can be no assurance that M.O.T.A. Holdings Ltd.,
FSGL Holdings Ltd and OLEV Holdings Ltd will be able to meet their obligations
under this agreement.




We
currently believe that any plan of dissolution and distribution subsequent to
the expiration of the 24-month deadline would proceed in the following
manner:




·
            our
      board of directors will, consistent with its obligations described in our
      amended and restated certificate of incorporation to dissolve, prior to
      the passing of such deadline, convene and adopt a specific plan of
      dissolution and distribution, which it will then vote to recommend to our
      stockholders; at such time it will also cause to be prepared a preliminary
      proxy statement setting out such plan of dissolution and distribution and
      the board’s recommendation of such
plan;




·
            upon
      such deadline, we would file the preliminary proxy statement with the
      Securities and Exchange Commission, or the
SEC;




·
            if
      the SEC does not review the preliminary proxy statement, then 10 days
      following the passing of such deadline, we will mail the proxy statements
      to our stockholders, and 30 days following the passing of such deadline we
      will convene a meeting of our stockholders at which they will either
      approve or reject our plan of dissolution and distribution;
      and




·
            if
      the SEC does review the preliminary proxy statement, we currently estimate
      that we will receive their comments 30 days following the passing of such
      deadline. We will mail the proxy statements to our stockholders following
      the conclusion of the comment and review process (the length of which we
      cannot predict with any certainty), and we will convene a meeting of our
      stockholders at which they will either approve of reject our plan of
      dissolution and distribution.




In the
event we seek stockholder approval for a plan of dissolution and distribution
and do not obtain such approval, we will nonetheless continue to pursue
stockholder approval for our dissolution. Pursuant to the terms of our amended
and restated certificate of incorporation, our powers following the expiration
of the permitted time periods for consummating a business combination will
automatically thereafter be limited to acts and activities relating to
dissolving and winding up our affairs, including liquidation. Other than in the
event of a public stockholder seeking to convert its shares into cash upon a
business combination that such stockholder voted against and that is actually
completed by us, the funds held in our trust account may not be distributed
except upon our dissolution and, unless and until such approval is obtained from
our stockholders, the funds held in our trust account will not be released. In
addition, if we seek approval from our stockholders to consummate a business
combination within 90 days of June 22, 2009 (assuming that the period in which
we need to consummate a business combination has been extended, as provided in
our amended and restated certificate of incorporation), the proxy statement
related to such a business combination will also seek stockholder approval for
our board’s recommended plan of distribution and dissolution, in the event our
stockholders do not approve such a business combination. If no proxy statement
seeking the approval of our stockholders for a business combination has been
filed 30 days prior to June 22, 2009, our board will, prior to such date,
convene, adopt and recommend to our stockholders a plan of dissolution and
distribution, and on such date file a proxy statement with the SEC seeking
stockholder approval for such plan. Upon the approval by our stockholders of our
plan of dissolution and distribution, we will liquidate our trust account to our
public stockholders.




In
connection with the vote required for any business combination, our initial
stockholders have agreed to vote the shares of common stock then owned by them,
including any shares of common stock purchased in or following our initial
offering, in accordance with the vote of the public stockholders owning a
majority of the shares of our common stock sold in our initial offering. In
addition, they have agreed to waive their respective rights to participate in
any liquidation distribution but only with respect to their initial shares and
the shares of common stock underlying any founder warrants held by them at the
time of such liquidation.




11




Competition




Should
the merger with Bioness not be consummated, we may encounter intense competition
in connection with identifying, evaluating and pursuing a target business, we
expect to encounter intense competition from other entities having a business
objective similar to ours, including other blank check companies, venture
capital funds, leveraged buyout funds, private equity firms, operating
businesses and other entities and individuals, both foreign and domestic,
competing for acquisitions. Many of these entities and individuals are well
established and have extensive experience identifying and effecting business
combinations directly or through affiliates. Many of these competitors possess
greater technical, human and other resources than us and our financial resources
will be relatively limited when contrasted with those of many of these
competitors. Our ability to compete in acquiring certain sizable target
businesses will be limited by our available financial resources. This inherent
competitive limitation gives others an advantage in pursuing the acquisition of
a target business. Further, the following may not be viewed favorably by certain
target businesses:




·
            our
      obligation to seek stockholder approval of a business combination may
      impede or delay the completion of a
transaction;




·
            our
      obligation to convert shares of common stock into cash in certain
      instances may reduce the resources available to effect a business
      combination; and




·
            our
      outstanding warrants and the future dilution they potentially represent
      may not be viewed favorably by a target
  business.




Any of
these factors may place us at a competitive disadvantage in consummating a
business combination. Our management believes, however, that our status as a
public entity and potential access to the United States public equity markets
may give us a competitive advantage over privately held entities having a
similar business objective as ours in acquiring a target business on favorable
terms.




If we
succeed in effecting a business combination (with Bioness or otherwise), there
will, in all likelihood, be intense competition from competitors of the target
business. We cannot make any assurances that, subsequent to a business
combination, we will have the resources to compete effectively.




Israeli
Government Programs




Israeli
companies are generally subject to income tax on their taxable income at the
rate of 29% for 2007, 27% for 2008, 26% for 2009 and 25% for year 2010 and
thereafter.




We do not
intend to restrict our search for a business combination to companies that could
benefit from favorable Israeli government programs. However, it is possible that
we would effectuate a business combination with such a company. The Israeli
government currently provides tax and capital investment incentives to qualified
domestic companies. Additionally, the Israeli government currently provides
grant and loan programs relating to research and development, marketing and
export activities. In recent years, the Israeli government has reduced the
benefits available under these programs and Israel Government authorities have
indicated that the government may in the future further reduce or eliminate the
benefits of those programs. We cannot make any assurances that such benefits and
programs would continue to be available following a business combination, or if
available, to what extent. If such benefits and programs were terminated or
further reduced, it could have an adverse effect on our results of operations
following a business combination or make a specific business combination less
attractive.




The
Companies Law




Under the Companies Law, Israeli
companies are subject to certain restrictions with respect to changes in control
of the company:




Tender Offer. The Companies
Law provides that an acquisition of shares of a public company must be made by
means of a special tender offer if as a result of the acquisition the purchaser
would become a holder of 25% or more of the voting power of the company. This
rule does not apply if there is already another 25% shareholder of the company.
Similarly, the Companies Law provides that an acquisition of shares in a public
company must be made by means of a special tender offer if as a result of the
acquisition the purchaser would become a holder of 45% or more of the voting
power of the company, if there is no 45% or greater shareholder of the company.
An acquisition from a 25% or 45% holder, which turns the purchaser into a 25% or
45% holder respectively, does not require a tender offer. An exception to the
tender offer requirement may also apply when the additional voting power is
obtained by means of a private placement approved by the general meeting of
shareholders (which approval shall also refer to the purchaser becoming a holder
of 25% or 45%, as the case may be, of the voting power in the subject company).
These special tender offer requirements do not apply to companies whose shares
are listed for trading outside of Israel if, under local law or the rules of the
stock exchange on which their shares are traded, there is a limitation on the
percentage of control which may be acquired or the purchaser is required to make
a tender offer to the public.




12




Furthermore,
under the Companies Law, a person may not acquire shares in a public company if,
after the acquisition, he will hold more than 90% of the shares or more than 90%
of any class of shares of that company, unless a full tender offer is made to
purchase all of the shares or all of the shares of the particular class. The
Companies Law also provides that as long as a shareholder in a public company
holds more than 90% of the company’s shares or of a class of shares, that
shareholder shall be precluded from purchasing any additional shares (an
exception exists where the shareholder held on February 1, 2000 over 90% of the
shares or of any class of shares, in which case he may purchase additional
shares by means of a full tender offer, provided that such tender offer is
accepted by the holders of a majority of the shares or the class of shares, as
the case may be, with respect to which the tender offer is made). If a full
tender offer is accepted such that less than 5% of the shares of the company are
not tendered, all of the shares will be transferred to the ownership of the
purchaser. If 5% or more of the shares of the company are not tendered, the
purchaser may not purchase shares in a manner which will grant him more than 90%
of the shares of the company. If a full tender offer is successful, any
shareholder may petition the court to alter the consideration for the
acquisition.




Merger. The Companies Law
permits merger transactions if approved by each party’s board of directors and,
unless certain requirements described in the Companies Law are met, by the
holders of a majority of each party’s shares voted on the proposed merger at a
shareholders’ meeting called on at least 21 days’ prior notice. Under the
Companies Law, merger transactions may be approved by holders of a simple
majority of our shares present, in person or by proxy, at a general meeting and
voting on the transaction (unless the company was incorporated prior to the
Companies Law, and did not change its articles of association to allow for a
simple majority, in which case the approval of 75% of the voting power present
at the meeting, is necessary for approval). In determining whether the required
majority has approved the merger, if shares of a company are held by the other
party to the merger, or by any person holding at least 25% of the outstanding
voting shares or 25% of the means of appointing directors of the other party to
the merger, then a vote against the merger by holders of the majority of the
shares present and voting, excluding shares held by the other party or by such
person, or anyone acting on behalf of either of them, is sufficient to reject
the merger transaction. If the transaction would have been approved but for the
exclusion of the votes of certain shareholders as provided above, a court may
still approve the merger upon the request of holders of at least 25% of the
voting rights of a company, if the court holds that the merger is fair and
reasonable, taking into account the value of the parties to the merger and the
consideration offered to the shareholders. Upon the request of a creditor of
either party to the proposed merger, the court may delay or prevent the merger
if it concludes that there exists a reasonable concern that, as a result of the
merger, the surviving company will be unable to satisfy the obligations of the
party not surviving the merger. In addition, a merger may not be completed
unless at least 30 days have passed from the receipt of approval of each merging
company’s shareholders and 50 days have passed from the time that a proposal for
approval of the merger has been filed by each merging company with the Israeli
Registrar of Companies.




Additional
Israeli laws may be applicable to us depending on the industry and operations of
the target business.




Enforceability
of Certain Civil Liabilities and Agent for Service of Process in the United
States




We have
appointed Corporation Service Company as our agent to receive service of process
in any action against us in the United States. Each of our officers and
directors has consented to service of process in the State of New York and has
appointed Corporation Service Company as his agent in the State of New York upon
which service of process against him may be made.




Each of
our directors and officers reside outside the United States. As described above,
each of our officers or directors has consented to service of process in the
State of New York and to the jurisdiction of the courts of the State of New York
or of the United States of America for the Southern District of New York.
However, since most of our and such persons’ assets are outside the United
States, it may not be possible for investors to enforce against them judgments
of United States courts predicated upon civil liability provisions of the United
States federal or state securities laws, and the enforceability in Israel of a
judgment obtained in the United States against us or our officers and directors
may be difficult. Moreover, there is substantial doubt as to the enforceability
in Israel against us or any of our directors and officers who are not residents
of the United States, in original actions in Israel of civil liabilities
predicated solely on the Securities Act of 1933, as amended (referred to herein
as the Securities Act), or the Exchange Act. This is due to the fact that
Israeli courts may refuse to hear a claim based on a violation of U.S.
securities laws because Israel is not the most appropriate forum to bring such a
claim, and even if it would hear the claim it may determine that Israeli law and
not U.S. law is applicable to the claim. If U.S. law is found to be applicable,
the content of applicable U.S. law must be proved as a fact which can be
time-consuming and costly.




13




Facilities




We
maintain our executive offices at 14 A Achimeir Street, Ramat Gan 52587 Israel.
The cost for this space is included in the $10,000 per month fee that LMS Nihul,
an affiliate of M.O.T.A. Holdings Ltd., FSGL Holdings Ltd and OLEV Holdings Ltd,
three of our initial stockholders, charges us for general and administrative
service pursuant to a letter agreement between us and LMS Nihul. This
arrangement is solely for our benefit and is not intended to provide LMS Nihul
or our officers or directors compensation in lieu of salary. We believe, based
on rents and fees for similar services in Israel, that the fee charged by LMS
Nihul is at least as favorable as we could have obtained from an unaffiliated
person. We consider our current office space adequate for our current
operations.




Legal
Proceedings




We are
not a party to any pending legal proceedings.




Employees




We
currently have three officers, two of whom are members of our board of
directors. These individuals will not receive any compensation prior to the
consummation of our initial business combination other than reimbursement for
reasonable out-of-pocket expenses incurred by them on our behalf. These
individuals are not obligated to devote any specific number of hours to our
matters and intend to devote only as much time as they deem necessary to our
affairs. We do not intend to have any full-time employees prior to the
consummation of a business combination.




Item
      1A.
            RISK
      FACTORS




In
addition to the other information contained in this Annual Report, we have
identified the following risks and uncertainties that may have a material
adverse effect on our business, financial condition, or results of operation.
Investors should carefully consider the risks described below before making an
investment decision. The trading price of our securities could decline due to
any of these risks, and investors may lose all or part of their
investment.




Risks
Associated with Our Business




We
are a development stage company with no operating history and, accordingly, you
will have no basis upon which to evaluate our ability to achieve our business
objective.




We are an
incorporated development stage company with no operating results to date.
Therefore, our ability to begin operations is dependent upon obtaining financing
through the public offering of our securities. Since we do not have an operating
history, there is no basis upon which to evaluate our ability to achieve our
business objective, which is to acquire a technology or technology-related
business that has operations or facilities located in Israel, or that intends to
establish operations or facilities in Israel, such as research and development,
manufacturing or executive offices, following our initial business combination.
We will not generate any revenues until, at the earliest (if at all), after the
consummation of a business combination. We cannot make any assurances as to
when, or if, a business combination will occur.




We
may not be able to consummate a business combination within the required time
frame, in which case we will be forced to liquidate.




We must
complete a business combination with a fair market value equal to at least 80%
of our net assets (excluding deferred underwriting fees) at the time of the
business combination.  Our amended and restated certificate of
incorporation provides for our mandatory liquidation if we do not consummate a
business combination within 18 months from the date of the consummation of our
initial public offering (December 22, 2008) or 24 months from the consummation
of our initial public offering (June 22, 2009) if a letter of intent (such as
the LOI), agreement in principle or definitive agreement has been executed
within 18 months after the consummation of the offering and a business
combination relating thereto has not yet been consummated within such 18-month
period.  Accordingly, if we do not consummate a merger prior to June
22, 2009, we must liquidate in the manner set forth in our amended and restated
certificate of incorporation.  If we fail to consummate a business
combination within the required time frame, we will be forced to liquidate our
assets. We may not be able to find a suitable target business within the
required time frame. In addition, our negotiating position and our ability to
conduct adequate due diligence on any potential target may be reduced as we
approach the deadline for the consummation of a business
combination.




If
we are forced to dissolve and liquidate before a business combination, our
public stockholders are likely to receive less than $8.00 per share upon
distribution of the funds held in the trust account and our warrants will expire
with no value.




If we are
unable to complete a business combination and are forced to dissolve and
liquidate our assets, the per-share liquidation amount is likely to be less than
$8.00, assuming current rates of interest, because of the expenses related to
our initial offering, our general and administrative expenses and the
anticipated costs of seeking a business combination. Furthermore, there will be
no distribution with respect to our outstanding warrants which will expire
worthless if we liquidate before the completion of a business
combination.




14




If
the proceeds held outside the trust are insufficient to allow us to operate
until at least June 18, 2009, we may be unable to complete a business
combination.




We
anticipated that prior to the consummation of a business combination, the
$380,000 of proceeds initially held outside of the trust account, as well as one
half of the interest earned on the trust account, net of taxes payable on such
interest, up to a maximum of $2.0 million, would be sufficient to cover our
operating expenses through June 18, 2009 and to cover the expenses incurred in
connection with a business combination.  As of March 15, 2009,
$2,000,000 of the interest earned on the trust account has been released to us
to fund our working capital requirements in connection with our search for a
business combination.  These amounts are based on our management’s
estimate of the amount needed to fund our operations for the 24-month period
following June 18, 2007, the date our registration statement was declared
effective, to consummate a business combination and to fund our working capital
requirements. This estimate may prove inaccurate, especially if we expend a
significant portion of the available funds in pursuit of a business combination
that is not consummated. Additionally, although we have no present intention to
do so, it is possible that we will in the future find it necessary or desirable
to use a portion of these funds to make a down payment or deposit or fund a
lock-up or “no-shop” provision, with respect to a potential business
combination. If so, any such amount would be based on the terms of the specific
transaction and the amount of available funds at the time. If we use a
significant portion of our funds for such a purpose and we are required to
forfeit such funds (whether as a result of our breach of the agreement relating
to the original payment or otherwise), we could, if such payment was large
enough and we had already used some or all of the funds allocated to due
diligence and related expenses in connection with the aborted transaction, be
left with insufficient funds to continue searching for, or to conduct due
diligence with respect to, other potential target businesses. In that event, we
may be required to liquidate before the completion of a business combination. If
we do not have sufficient proceeds available to fund our expenses, we may be
forced to obtain additional financing, either from our initial stockholders,
directors and officers or from third parties. We may not be able to obtain
additional financing, and our initial stockholders, directors and officers are
not obligated to provide any additional financing to us. If we do not have
sufficient funds and are unable to obtain additional financing, we may be forced
to liquidate prior to consummating a business combination. If we are able to
obtain additional financing in order to fund due diligence and other expenses
associated with locating a target business, and if such additional financing
were in the form of a loan, such loan would be incurred by us. To the extent
that a business combination is not ultimately consummated and that the funds
held outside of the trust account are not sufficient to repay such loan,
M.O.T.A. Holdings Ltd., FSGL Holdings Ltd and OLEV Holdings Ltd have agreed to
advance the funds necessary to repay such loan. In the event that M.O.T.A
Holdings Ltd., FSGL Holdings Ltd and OLEV Holdings Ltd are unable to repay such
loan and to the extent that there are not funds available outside of the trust
account for such purpose, then Moshe Bar-Niv, Dr. Shuki Gleitman and Liora Lev
have agreed that they will be personally liable to repay such loan.




You
will not be entitled to protections normally afforded to investors of blank
check companies.




Since the
net proceeds of our initial offering are intended to be used to complete a
business combination with an operating business that has not been identified, we
are deemed to be a “blank check” company under the United States securities
laws. However, since we have net tangible assets in excess of $5,000,000 upon
the successful consummation of our initial offering and subsequently filed a
Current Report on Form 8-K with the SEC, including an audited balance sheet
demonstrating this fact, we believe that we are exempt from the rules
promulgated by the SEC to protect investors in blank check companies, such as
Rule 419. Accordingly, investors will not be afforded the benefits or
protections of those rules.




Failure
to comply with the NYSE Alternext US LLC’s requirements regarding the
composition of our board of directors and audit committee could result in the
delisting of our common stock from NYSE Alternext US LLC and adversely affect
the market for our common stock.




In order
for our common stock to continue to be listed on NYSE Alternext US LLC
(“Alternext”), we must comply with listing standards regarding the independence
of our board of directors and members of our audit committee. In particular,
Alternext’s rules require that a majority of our directors and all of the
members of our audit committee be “independent,” as defined under Alternext’s
rules, by no later than the first anniversary following the completion of our
initial offering. We reconstituted our board of directors prior to the first
anniversary of the completion of our initial offering in order to comply with
these requirements by appointing Yoram Buki, Nathan Sharony and Yacov Rozen as
independent directors. If we are unable to continue to have the composition of
our board of directors and our board committees comply with these requirements,
our common stock may be delisted from Alternext and the liquidity and trading
price of common stock may be adversely affected.





On February 10, 2009, we received a
notice from Alternext indicating that we were not in compliance with Section 704
of the NYSE Alternext US LLC Company Guide (the “Company Guide”), because we did
not hold an annual meeting of our stockholders during 2008.  In order
to maintain our Alternext listing, we submitted a plan of compliance advising
Alternext of the action we have taken, or will take, that would bring us into
compliance with Section 704 of the Company Guide by August 11,
2009.  The Corporate Compliance Department of Alternext will evaluate
the plan and make a determination as to whether we have made a reasonable
demonstration in the plan of an ability to regain compliance with the continued
listing standards by August 11, 2009, in which case the plan will be
accepted.  If the plan is accepted, we may be able to continue our
listing during the plan period up to August 11, 2009, during which time we will
be subject to periodic review to determine whether we are making progress
consistent with the plan.  If our plan is not accepted or if the plan
is accepted but we are not in compliance with the continued listing standards at
the conclusion of the plan period or do not make progress consistent with the
plan during the plan period, we may become subject to delisting proceedings in
accordance with Section 1010 and Part 12 of the Company Guide.




15




Because
of our limited resources and the significant competition for business
combination opportunities, we may not be able to consummate an attractive
business combination.




We expect
to encounter intense competition from entities other than blank check companies
having a business objective similar to ours, including venture capital funds,
leveraged buyout funds and operating businesses competing for acquisitions. Many
of these entities are well established and have extensive experience in
identifying and effecting business combinations directly or through affiliates.
Many of these competitors possess greater technical, human and other resources
than we do and our financial resources will be relatively limited when
contrasted with those of many of these competitors. Our ability to compete in
acquiring certain sizable target businesses will be limited by our available
financial resources. This inherent competitive limitation gives others an
advantage in pursuing the acquisition of certain target businesses. Furthermore,
the obligation we have to seek stockholder approval of a business combination
may delay the consummation of a transaction. Additionally, our outstanding
warrants, and the future dilution they potentially represent, may not be viewed
favorably by certain target businesses. Any of these obligations may place us at
a competitive disadvantage in successfully negotiating a business combination.
Because only 46 of the 101 blank check companies that have gone public in the
United States since August 2003 have either consummated a business combination
or entered into definitive agreements or letters of intent with respect to
potential business combinations, it may indicate that there are fewer attractive
target businesses available to such entities like our company or that many
privately held target businesses are not inclined to enter into these types of
transactions with publicly held blank check companies like ours. Our amended and
restated certificate of incorporation provides for our mandatory liquidation if
we do not consummate a business combination within 18 months from the date of
the consummation of our initial public offering (December 22, 2008) or 24 months
from the consummation of our initial public offering (June 22, 2009) if a letter
of intent (such as the LOI), agreement in principle or definitive agreement has
been executed within 18 months after the consummation of the offering and a
business combination relating thereto has not yet been consummated within such
18-month period.  Accordingly, if we do not consummate a merger prior
to June 22, 2009, we must liquidate in the manner set forth in our amended and
restated certificate of incorporation.




Under
Delaware law, the requirements and restrictions relating to our initial offering
contained in our amended and restated certificate of incorporation may be
amended, which could reduce or eliminate the protection afforded to our
stockholders by such requirements and restrictions.




Our
amended and restated certificate of incorporation contains certain requirements
and restrictions relating to our initial offering that will apply to us until
the consummation of a business combination. Specifically, our amended and
restated certificate of incorporation provides, among other things,
that:




·
            upon
      consummation of our initial offering and the private placement of the
      founder warrants, the net proceeds of $147,750,000 were placed into the
      trust account, which proceeds may not be disbursed from the trust account
      except in connection with, or following, a business combination, upon our
      liquidation or as otherwise permitted in our amended and restated
      certificate of incorporation;




·
            prior
      to the consummation of a business combination, we will submit such
      business combination to our stockholders for
  approval;




·
            we
      may consummate the business combination only if approved by a majority of
      our stockholders and public stockholders owning less than 40% of the
      shares sold in our initial offering exercise their conversion
      rights;




·
            if
      a business combination is approved and consummated, public stockholders
      who voted against the business combination and exercised their conversion
      rights will receive their pro rata share (based on the number of units
      sold in our initial offering) of the trust
  account;




·
            if
      a business combination is not consummated or a letter of intent, an
      agreement in principle or a definitive agreement is not signed within the
      time periods specified in this report, then we will be dissolved and
      distribute to all of our public stockholders their pro rata share (based
      on the number of units sold in our initial offering) of the trust account
      and any remaining net assets; and




16




·
            we
      may not consummate any other merger, acquisition, stock purchase, asset
      purchase or similar transaction other than a business combination that
      meets the conditions specified in this report, including the requirement
      that the business combination be with a technology or technology-related
      business that has operations or facilities located in Israel, or that
      intends to establish operations or facilities in Israel, such as research
      and development, manufacturing or executive offices, following our initial
      business combination, and whose fair market value is equal to at least 80%
      of our net assets at the time of such business
  combination.




Under
Delaware law, the foregoing provisions may be amended if our board of directors
adopts a resolution declaring the advisability of an amendment and calls a
shareholders meeting, at which the holders of a majority of our outstanding
stock vote in favor of such amendment. Any such amendment could reduce or
eliminate the protection afforded to our stockholders by such requirements and
restrictions. However, we view these provisions as obligations to our
stockholders, and neither we nor our board of directors will propose, or seek
stockholder approval of, any amendment of these provisions.




Our
amended and restated certificate of incorporation and by-laws contain certain
provisions that may make it more difficult, expensive or otherwise discourage, a
tender offer or a change in control or takeover attempt by a third party, even
if such a transaction would be beneficial to our stockholders.




The
existence of certain provisions in our amended and restated certificate of
incorporation and bylaws may have a negative impact on the price of our common
stock by discouraging a third party from purchasing our common stock. These
provisions could also have the effect of discouraging a third party from
pursuing a non-negotiated takeover of our company and preventing certain changes
of control. In addition to our staggered board, our by-laws require that,
subject to certain exceptions, any stockholder desiring to propose business or
nominate a person to the board of directors at a stockholders meeting must give
notice of any proposals or nominations within a specified time frame. Our bylaws
also limit the ability of stockholders to remove directors, call stockholders
meetings and act by written consent and provide that vacancies of the board of
directors may only be filled by a majority of the remaining
directors.




If
third parties bring claims against us, the proceeds held in the trust account
could be reduced and the per share liquidation price received by stockholders is
likely to be less than the approximately $7.88 per share held in
trust.




Placing
of funds in a trust account may not protect those funds from third-party claims
against us. Although we will seek to have all vendors, prospective acquisition
targets and other entities with whom we engage in business enter into agreements
with us waiving any right in or to any monies held in the trust account for the
benefit of our public stockholders, there is no guarantee that they will execute
such agreements, or even if they execute such agreements, that such waivers will
be enforceable or they would otherwise be prevented from bringing claims against
the trust account.




If any
third party refused to execute an agreement waiving such claims to the monies
held in the trust account, we would perform an analysis of the alternatives
available to us if we chose not to engage such third party and evaluate if such
engagement would be in the best interest of our stockholders if such third party
refused to waive such claims. Examples of possible instances in which we may
engage a third party that refused to execute a waiver include the engagement of
a third-party consultant whose particular expertise or skills are believed by
management to be significantly superior to those of other consultants that would
agree to execute a waiver or in cases where management is unable to find a
provider of required services willing to provide the waiver. In any event, our
management would perform an analysis of the alternatives available to it and
would enter into an agreement with a third party that did not execute a waiver
only if management believed that such third party’s engagement would be
significantly more beneficial to us than any alternative.




In
addition, there is no guarantee that such entities will agree to waive any
claims they may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with us and not seek recourse against the
trust account for any reason. Furthermore, creditors may seek to interfere with
the distribution process under state or federal creditor and bankruptcy laws,
which could delay the actual distribution of such funds or reduce the amount
ultimately available for distribution to our public stockholders. If we are
required to file a bankruptcy case or an involuntary bankruptcy case is filed
against us that is not dismissed, the funds held in the trust account will be
subject to applicable bankruptcy law and may be included in our bankruptcy
estate and subject to the claims of third parties with priority over the claims
of our stockholders.




The
ability of our public stockholders to receive the proceeds held in the trust
account is subject to any valid claims by our creditors which are not covered by
amounts held in the trust account or the indemnification provided by certain of
our initial stockholders (described below). Furthermore, no distributions may be
made from the trust account until provisions for the payment of creditors have
first been made in accordance with the applicable provisions of Delaware law.
Accordingly, the proceeds held in trust could be subject to claims that could
take priority over the claims of our public stockholders and the per-share
liquidation price could be less than approximately $7.88, plus one-half of the
interest earned on the trust account, net of taxes payable on such interest, for
the relevant period, due to claims of such creditors or other
entities.




17




If we are
unable to complete a business combination, and are forced to liquidate and
distribute the proceeds held in trust to our stockholders, certain of our
executive officers - specifically, Moshe Bar-Niv, Shuki Gleitman and Liora Lev -
have agreed, subject to the qualifications and exceptions stated below, that
they will be personally liable, on a joint and several basis, to ensure that the
proceeds in the trust fund are not reduced by claims made by (and only by) a
vendor or service provider for services rendered, or products sold, to us, or by
a prospective acquisition target (each, a “Guaranteed Creditor”). However,
neither Moshe Bar-Niv, Shuki Gleitman and Liora Lev will have any personal
liability as to (i) any claimed amounts owed to a Guaranteed Creditor who
executed a agreement waiving any right, title, claim or interest of any kind in
and to all monies held in the trust, or (ii) as to any claims under our
indemnity of the underwriters of our initial offering against certain
liabilities, including liabilities under the Securities Act. They will not be
personally liable to pay any of our debts and obligations except as described
above.




We cannot
make any assurances that Messrs. Bar-Niv and Gleitman and Ms. Lev have
sufficient funds to satisfy these indemnification obligations or that the
proceeds in the trust account will not be reduced by such claims.




In
addition, even after our liquidation (including the distribution of the funds
held in the trust account), under the Delaware General Corporation Law,
stockholders may be held liable for claims by third parties against a
corporation to the extent of distributions received by them in a dissolution.
Accordingly, we cannot make any assurances that third parties will not seek to
recover from our stockholders amounts owed to them by us. Our stockholders may
be held liable for claims by third parties against us to the extent of
distributions received by them in a dissolution.




We
may have insufficient funds not held in our trust account to implement and
complete our dissolution and distribution.




We expect
that all costs associated with the implementation and completion of our
dissolution and distribution, which we currently estimate to be approximately
$50,000 to $75,000, will be funded by any funds not held in our trust account,
although we cannot make any assurances that there will be sufficient funds for
such purpose. In addition, our initial shareholders have not provided any
written indemnity or guarantee with respect to these costs other than with
respect to costs for vendors or service providers that have not signed a waiver.
In the event that insufficient funds exist to cover these costs, we would
commence appropriate litigation if doing so would be in the best interests of
our stockholders, which is a decision that would be made by our board of
directors based on its fiduciary duties as set forth under Delaware
law.




Our
stockholders may be held liable for claims by third parties against us to the
extent of distributions received by them in a dissolution.




If we do
not complete a business combination by June 22, 2009, 24 months after the date
we consummated our initial public offering if a letter of intent, agreement in
principle or definitive agreement is executed within 18 months after the
consummation of our initial public offering and the business combination
relating thereto is not consummated within such 18-month period (such as the
LOI)), we will dissolve. Under Sections 280 through 282 of the Delaware General
Corporation Law, stockholders may be held liable for claims by third parties
against a corporation to the extent of distributions received by them in a
dissolution. If the corporation complies with certain procedures intended to
ensure that it makes reasonable provision for all claims against it, including a
60-day notice period during which any third-party claims can be brought against
the corporation, a 90-day period during which the corporation may reject any
claims brought, and an additional 150-day waiting period before any liquidating
distributions are made to stockholders, any liability of stockholders with
respect to a liquidating distribution is limited to the lesser of such
stockholder’s pro rata share of the claim or the amount distributed to the
stockholder, and any liability of the stockholder would be barred after the
third anniversary of the dissolution. Although we will seek stockholder approval
to liquidate the trust account to our public stockholders as part of our plan of
dissolution and distribution, we do not intend to comply with those procedures.
In the event that our board recommends and our stockholders approve a plan of
dissolution and distribution where it is subsequently determined that the
reserve for claims and liabilities was insufficient, stockholders who received a
return of funds could be liable for claims made by creditors. As such, our
stockholders could potentially be liable for any claims to the extent of
distributions received by them in a dissolution and any liability of our
stockholders may extend beyond the third anniversary of such dissolution.
Accordingly, we cannot make any assurances that third parties will not seek to
recover from our stockholders amounts owed to them by us.




In
certain circumstances, our board of directors may be viewed as having breached
their fiduciary duties to our creditors, thereby exposing itself and our company
to claims of punitive damages.




If we are
forced to file a bankruptcy case or an involuntary bankruptcy case is filed
against us which is not dismissed, any distributions received by stockholders
could be viewed under applicable debtor/creditor and/or bankruptcy laws as
either a “preferential transfer” or a “fraudulent conveyance.” As a result, a
bankruptcy court could seek to recover all amounts received by our stockholders.
Furthermore, because we intend to distribute the proceeds held in the trust
account to our public stockholders promptly upon the expiration of the 18-month
or 24-month time periods, this may be viewed or interpreted as giving preference
to our public stockholders over any potential creditors with respect to access
to or distributions from our assets. Furthermore, our board of directors may be
viewed as having breached their fiduciary duties to our creditors and/or may
have acted in bad faith, and thereby exposing itself and our company to claims
of punitive damages, by paying public stockholders from the trust account prior
to addressing the claims of creditors and/or complying with certain provisions
of the Delaware General Corporation Law with respect to our dissolution and
liquidation. We cannot make any assurances that claims will not be brought
against us for these reasons.




18




If
we do not consummate a business combination and dissolve, payments from the
trust account to our public stockholders may be delayed.




We
currently believe that any plan of dissolution and distribution subsequent to
the expiration of the 24-month deadline would proceed in approximately the
following manner:




·
            our
      board of directors will, consistent with its obligations described in our
      amended and restated certificate of incorporation to dissolve, prior to
      the passing of such deadline, convene and adopt a specific plan of
      dissolution and distribution, which it will then vote to recommend to our
      stockholders; at such time it will also cause to be prepared a preliminary
      proxy statement setting out such plan of dissolution and distribution as
      well as the board’s recommendation of such
plan;




·
            upon
      such deadline, we would file our preliminary proxy statement with the
      SEC;




·
            if
      the SEC does not review the preliminary proxy statement, then, 10 days
      following the passing of such deadline, we will mail the proxy statements
      to our stockholders, and 30 days following the passing of such deadline we
      will convene a meeting of our stockholders, at which they will either
      approve or reject our plan of dissolution and distribution;
      and




·
            if
      the SEC does review the preliminary proxy statement, we currently estimate
      that we will receive their comments 30 days following the passing of such
      deadline. We will mail the proxy statements to our stockholders following
      the conclusion of the comment and review process (the length of which we
      cannot predict with any certainty, and which may be substantial) and we
      will convene a meeting of our stockholders at which they will either
      approve or reject our plan of dissolution and
  distribution.




In the
event we seek stockholder approval for a plan of dissolution and distribution
and do not obtain such approval, we will nonetheless continue to pursue
stockholder approval for our dissolution. Pursuant to the terms of our amended
and restated certificate of incorporation, our powers following the expiration
of the permitted time periods for consummating a business combination will
automatically thereafter be limited to acts and activities relating to
dissolving and winding up our affairs, including liquidation. The funds held in
our trust account may not be distributed except upon our dissolution and, unless
and until such approval is obtained from our stockholders, the funds held in our
trust account will not be released. Consequently, holders of a majority of our
outstanding stock must approve our dissolution in order to receive the funds
held in our trust account and the funds will not be available for any other
corporate purpose.




These
procedures, or a vote to reject any plan of dissolution and distribution by our
stockholders, may result in substantial delays in the liquidation of our trust
account to our public stockholders as part of our plan of dissolution and
distribution.




There
is no basis to evaluate the merits or risks of a business combination with
Bioness at this time.




There is
no basis to evaluate the possible merits or risks of Bioness’ operations,
financial condition or prospects at this time. To the extent we complete a
business combination, we may be affected by numerous risks inherent in the
business operations of the acquired company or companies. Although our
management has and will continue to endeavor to evaluate the risks inherent in a
business combination with Bioness, we cannot make any assurances that we will
properly ascertain or assess all significant risk factors. Pursuant to our
amended and restated certificate of incorporation, the merger is subject to the
approval of our stockholders.  We will file a preliminary proxy
statement/prospectus with the SEC relating to the merger.




A
significant portion of working capital could be expended in pursuing
acquisitions that are not consummated.




It is
anticipated that the investigation of each specific target business and the
negotiation, drafting, and execution of relevant agreements, disclosure
documents, and other instruments will require substantial time and attention and
substantial costs for accountants, attorneys and others. In addition, we may opt
to make down payments or pay exclusivity or similar fees in connection with
structuring and negotiating a business combination. If a decision is made not to
complete a specific business combination, the costs incurred up to that point in
connection with the abandoned transaction, potentially including down payments
or exclusivity or similar fees, would not be recoverable. Furthermore, even if
an agreement is reached relating to a specific target business, we may fail to
consummate the transaction for any number of reasons, including those beyond our
control such as that 40% or more of our public stockholders vote against the
transaction even though a majority of our public stockholders approve the
transaction. Any such event will result in a loss to us of the related costs
incurred, which could adversely affect subsequent attempts to locate and acquire
or merge with another business.




19




We
may issue additional shares of our capital stock, including through convertible
debt securities, to complete a business combination, which would reduce the
equity interest of our stockholders and may cause a change in control of our
ownership.




Our
amended and restated certificate of incorporation authorizes the issuance of up
to 100,000,000 shares of common stock, par value $0.0001 per share, and
1,000,000 shares of preferred stock, par value $0.0001 per share. Immediately
after our initial offering and the sale of the founder warrants, there were
30,875,000 authorized but unissued shares of our common stock available for
issuance (after appropriate reservation of shares issuable upon full exercise of
our outstanding warrants, including the founder warrants, and the purchase
option issued to CRT Capital Group LLC and I-Bankers Securities, Inc. and all of
the 1,000,000 shares of preferred stock available for issuance. Although we have
no commitments as of the date hereof to issue any additional securities (other
than as contemplated by the LOI), we may issue a substantial number of
additional shares of our common stock or preferred stock, or a combination of
both, including through convertible debt securities, to complete a business
combination. The issuance of additional shares of our common stock or any number
of shares of preferred stock, including upon conversion of any debt
securities:




·
            may
      significantly reduce the equity interest of investors in our initial
      offering;




·
            may
      subordinate the rights of holders of common stock if preferred stock is
      issued with rights senior to those afforded to our common
      stock;




·
            will
      likely cause a change in control if a substantial number of our shares of
      common stock or voting preferred stock are issued, which may affect, among
      other things, our ability to use our net operating loss carryforwards, if
      any, and most likely also result in the resignation or removal of our
      present directors and officers; and




·
            may
      adversely affect prevailing market prices for our common stock and
      warrants.




If we
consummate the merger with Bioness, we have agreed to issue 32,343,750 shares of
our common stock in exchange for 100% of the fully diluted share capital of
Bioness.




We
may issue notes or other debt securities, or obtain bank financing, to complete
a business combination, which may adversely affect our leverage and financial
condition.




Although
we have no commitments as of the date hereof to incur any debt, we may choose to
issue notes or other debt securities, or obtain bank financing, to finance a
business combination. The incurrence of debt may:




·
            lead
      to default and foreclosure on our assets if our operating revenues after a
      business combination are insufficient to pay our debt
      obligations;




·
            cause
      an acceleration of our obligation to repay the debt, even if we make all
      principal and interest payments when due, if we breach the covenants
      contained in the terms of any debt;




·
            require
      us to execute documents that contain covenants such as ones that require
      the maintenance of certain financial ratios or reserves, without a waiver
      or renegotiation of such covenants;




·
            create
      an obligation to immediately repay all principal and accrued interest, if
      any, upon demand to the extent any debt securities are payable on
      demand;




·
            hinder
      our ability to obtain additional financing, if necessary, to the extent
      any debt securities contain covenants restricting our ability to obtain
      additional financing while such security is outstanding, or to the extent
      our existing leverage discourages other potential
    investors;




·
            limit
      our flexibility in planning for and reacting to changes in our business
      and in the industry in which we
operate;




·
            make
      us more vulnerable to adverse changes in general economic, industry and
      competitive conditions and adverse changes in government
      regulation;




·
            limit
      our ability to borrow additional amounts for working capital, capital
      expenditures, acquisitions, debt service requirements, execution of our
      strategy, or other purposes; and




·
            place
      us at a disadvantage compared to our competitors who have less
      debt.




20




Unlike
most other blank check offerings, we allow up to approximately 39.99% of our
public stockholders to exercise their conversion rights. This higher threshold
will make it easier for us to consummate a business combination with which our
stockholders may not agree, and our stockholders may not receive the full amount
of your original investment upon exercise of your conversion
rights.




When we
seek stockholder approval of a business combination, we will offer each public
stockholder (other than our initial stockholders) the right to have his, her or
its shares of common stock converted to cash if the stockholder votes against
the business combination and the business combination is approved and
consummated. We will consummate the initial business combination only if the
following two conditions are met: (i) a majority of the shares of common stock
voted by the public stockholders are voted in favor of the business combination
and (ii) public stockholders owning 40% or more of the shares sold in our
initial offering do not vote against the business combination and exercise their
conversion rights. Most other blank check companies have a conversion threshold
of 20%, which makes it more difficult for such companies to consummate their
initial business combination. Thus, because we permit a larger number of
stockholders to exercise their conversion rights, it will be easier for us to
consummate an initial business combination with a target business which you may
believe is not suitable for us, and you may not receive the full amount of your
original investment upon exercise of your conversion rights.




Unlike
most other blank check offerings, we allow up to approximately 39.99% of our
public stockholders to exercise their conversion rights. The ability of a larger
number of our stockholders to exercise their conversion rights may not allow us
to consummate the most desirable business combination or optimize our capital
structure.




When we
seek stockholder approval of a business combination, we will offer each public
stockholder (other than our initial stockholders) the right to have his, her or
its shares of common stock converted to cash if the stockholder votes against
the business combination and the business combination is approved and
consummated. Such holder must both vote against such business combination and
then exercise his, her or its conversion rights to receive a pro rata share of
the trust account. Unlike most other blank check offerings which have a 20%
threshold, we allow up to approximately 39.99% of our public stockholders to
exercise their conversion rights. Accordingly, if our business combination
requires us to use substantially all of our cash to pay the purchase price,
because we will not know how many stockholders may exercise such conversion
rights, we may either need to reserve part of the trust account for possible
payment upon such conversion, or we may need to arrange third-party financing to
help fund our business combination in case a larger percentage of stockholders
exercise their conversion rights than we expect. In the event that the
acquisition involves the issuance of our stock as consideration, we may be
required to issue a higher percentage of our stock to make up for a shortfall in
funds. Raising additional funds to cover any shortfall may involve dilutive
equity financing or incurring indebtedness at higher than desirable levels. This
may limit our ability to effectuate the most attractive business combination
available to us.




Our
ability to successfully effect a business combination and to be successful
afterwards will be totally dependent upon the efforts of our key personnel, some
of whom may join us following a business combination.




Our
ability to be successful following a business combination will depend upon the
efforts of our key personnel. The future role of our key personnel following a
business combination, however, cannot presently be ascertained. In making the
determination whether current management should remain with us following the
business combination, management will analyze the experience and skill set of
the target business’ management and negotiate as part of the business
combination that certain members of current management remain if it is believed
that doing so is in the best interests of the combined company post-business
combination. While we intend to closely scrutinize any individuals we engage
after a business combination, we cannot make any assurances that our assessment
of these individuals will prove to be correct. Furthermore, these individuals
may be unfamiliar with the requirements of operating a public company which
could cause us to have to expend time and resources helping them become familiar
with such requirements. This could be expensive and time-consuming and could
lead to various regulatory issues which may adversely affect our
operations.




The
loss of key directors and officers could adversely affect our ability to
consummate a business combination.




Our
operations are dependent upon a relatively small group of key directors and
officers consisting of Moshe Bar-Niv, our Chairman and director; Liora Lev, our
Chief Executive Officer and director; and Shuki Gleitman, our Chief Technology
Officer and director. We believe that our success depends on the continued
service of our key directors and officers. We cannot make any assurances that
such individuals will remain with us for the immediate or foreseeable future. We
do not have employment contracts with any of our current officers. The
unexpected loss of the services of one or more of these key officers or
directors could adversely affect our ability to consummate a business
combination.




Our
directors and officers will allocate their time to other businesses, and,
accordingly, may have conflicts of interest in determining as to how much time
to devote to our affairs. This could have a negative impact on our ability to
consummate a business combination.




Our
directors and officers are not required to, and will not, commit their full time
to our affairs, which may result in a conflict of interest in allocating their
time between our operations and other businesses. We do not intend to have any
full-time employees prior to the consummation of a business combination. Each of
our officers is engaged in several other business endeavors and is not obligated
to contribute any specific number of hours per week to our affairs. If our
officers’ and directors’ other business affairs require them to devote
substantial amounts of time to such affairs, it could limit their ability to
devote time to our affairs and could have a negative impact on our ability to
consummate a business combination.




21




Our
directors and officers are and may in the future become affiliated with other
businesses in, or investing in, technology or technology-related industries and,
accordingly, may have conflicts of interest in determining to which entity a
particular business opportunity should be presented.




Following
the consummation of our initial offering and until we consummate a business
combination, we intend to engage in the business of identifying and acquiring a
potential target business in a technology or technology-related industry. Our
directors and officers are, and may in the future, become affiliated with
entities, including other blank check companies, that are engaged in a similar
business. Further, certain of our directors and officers are currently involved
in other businesses in, or investing in, technology or technology-related
industries. In the event that we do not consummate the merger with Bioness, our
directors and officers may become aware of business opportunities that may be
appropriate for presentation to us as well as the other entities with which they
are or may be affiliated. Due to these existing and potential future
affiliations with these and other entities, they may have fiduciary obligations
to present potential business opportunities to those entities prior to
presenting them to us, which could cause additional conflicts of interest. We
cannot make any assurances that these conflicts will be resolved in our favor.
At this time, none of our officers or directors are or have been affiliated with
another blank check company.




While
we currently have no plans to combine with an entity affiliated with one or more
of our initial stockholders, we are not prohibited from doing so. As a result,
our officers and directors may have personal financial interests in approving a
specific business combination.




We
currently have no plans to combine with an entity affiliated with one or more of
our initial stockholders and our management is not aware of any potential
business combination opportunity with any such affiliated entities.




If,
however, it is later determined that this is in the best interest of our
stockholders, we may propose to acquire an affiliated company as a “business
combination.” In particular, there is nothing in our amended and restated
certificate of incorporation or any contractual arrangements to which we are a
party that would prohibit us from doing so.




In the
event that we were to propose a business combination with an entity affiliated
with one or more of our initial stockholders, purchasers of the shares being
offered in our initial offering would have two protections:




·
            In
      connection with the vote required for any business combination, our
      initial stockholders have agreed to vote their respective initial shares
      of common stock in accordance with the vote of the public stockholders
      holding a majority of the shares of common stock sold in our initial
      offering. Consequently, unless a majority of the shares held by
      non-affiliates are voted in favor of any proposed acquisition, the
      acquisition will not be
consummated.




·
            We
      have agreed not to consummate a business combination with an entity which
      is affiliated with any of our initial stockholders unless we obtain an
      opinion from an independent investment banking firm stating that the
      business combination is fair to our stockholders from a financial point of
      view.




Despite
the foregoing, potential conflicts of interest may still exist and, as a result,
the terms of the business combination may not be as advantageous to our public
stockholders as they would be absent any conflicts of interest.




Because
all of our directors and officers own shares of our securities that will not
participate in liquidation distributions, they may have a conflict of interest
in determining whether a particular target business is appropriate for a
business combination.




All of
our directors and officers own stock in our company. Our directors and officers,
as well as our initial stockholders, have waived their right to receive
distributions upon our liquidation in the event we fail to complete a business
combination. Furthermore, certain of our initial stockholders (specifically,
M.O.T.A. Holdings Ltd.; FSGL Holdings Ltd; OLEV Holdings Ltd; Shrem, Fudim
Technologies Ltd.; Shrem, Fudim Group Ltd.; and Elisha Yanay) purchased an
aggregate of 3,625,000 warrants in a private placement simultaneously with the
consummation of our initial offering. The shares of common stock and warrants
owned by such directors and officers and their affiliates will be worthless if
we do not consummate a business combination. The personal and financial
interests of our directors and officers may influence their motivation in
identifying and selecting a target business and completing a business
combination in a timely manner. Consequently, our directors’ and officers’
discretion in identifying and selecting a suitable target business may result in
a conflict of interest when determining whether the terms, conditions and timing
of a particular business combination are appropriate and in our stockholders’
best interest.




22




Our
directors’ and officers’ interests in obtaining reimbursement for any reasonable
out-of-pocket expenses incurred by them may lead to a conflict of interest in
determining whether a particular target business is appropriate for a business
combination and in the public stockholders’ best interest.




Our
initial stockholders, directors and officers will not receive reimbursement for
any out-of-pocket expenses incurred by them to the extent that such expenses
exceed the sum of one-half of the interest earned on the trust account, net of
taxes payable on such interest, up to a maximum of $2.0 million, and the
$380,000 of proceeds held outside of the trust account, unless a business
combination is consummated. The amounts of available proceeds and the interest
earned on the trust account, net of taxes payable on such interest, available to
us to fund our working capital requirements are based on our management’s
estimate of the amount needed to fund our operations until June 22, 2009 and to
consummate a business combination. This estimate may prove to be inaccurate,
especially if a portion of the available proceeds and the interest on the trust
account available for working capital purposes is used to make a down payment in
connection with a business combination or pay exclusivity or similar fees or if
we expend a significant portion in pursuit of an acquisition that is not
consummated. The financial interest of our directors and officers could
influence their motivation in selecting a target business, and thus there may be
a conflict of interest when determining whether a particular business
combination is in our public stockholders’ best interest.




If
our common stock becomes subject to the SEC’s penny stock rules, broker-dealers
may experience difficulty in completing customer transactions and trading
activity in our securities may be adversely affected.




If at any
time we have net tangible assets of $5,000,000 or less and our common stock has
a market price per share of less than $5.00, transactions in our common stock
may be subject to the “penny stock” rules promulgated under the Exchange Act.
Under these rules, broker-dealers who recommend such securities to persons other
than institutional accredited investors must:




·
            make
      a special written suitability determination for the
    purchaser;




·
            receive
      the purchaser’s written agreement to a transaction prior to
      sale;




·
            provide
      the purchaser with risk disclosure documents that identify certain risks
      associated with investing in “penny stocks” and that describe the market
      for these “penny stocks,” as well as a purchaser’s legal remedies;
      and




·
            obtain
      a signed and dated acknowledgment from the purchaser demonstrating that
      the purchaser has actually received the required risk disclosure document
      before a transaction in “penny stock” can be
  completed.




If our
common stock becomes subject to these rules, broker-dealers may find it
difficult to effect customer transactions and trading activity in our securities
may be adversely affected. As a result, the market price of our securities may
be depressed, and you may find it more difficult to sell our
securities.




Initially,
it is probable that we will only be able to complete one business combination,
which will cause us to be solely dependent on a single business and a limited
number of products or services.




Our
initial business combination must be with an operating business with a fair
market value of at least 80% of our net assets at the time of such business
combination. Consequently, initially, it is a probability that we will have the
ability to complete a business combination with only a single operating
business.




It is
probable that the company we acquire in our initial business combination will
have only a limited number of services or products. The resulting lack of
diversification:




·
            will
      result in our dependency upon the performance of a single or small number
      of operating businesses;




·
            may
      result in our dependency upon the development or market acceptance of a
      single or limited number of products, processes or services;
      and




·
            may
      subject us to numerous economic, competitive and regulatory developments,
      any or all of which may have a substantial adverse impact upon the
      particular industry in which we may operate subsequent to a business
      combination.




In this
case, we will not be able to diversify our operations or benefit from the
possible spreading of risks or offsetting of losses, unlike other entities that
may have the resources to complete several business combinations in different
industries or different areas of a single industry so as to diversify risks and
offset losses. Further, the prospects for our success may be entirely dependent
upon the future performance of the initial target business we acquire, if
any.




23




The
ability of our stockholders to exercise their conversion rights may not allow us
to effectuate the most desirable business combination or optimize our capital
structure.




When we
seek stockholder approval of any business combination, we will offer each public
stockholder (but not our initial stockholders) the right to have his, her or its
shares of common stock converted to cash if the stockholder votes against the
business combination and the business combination is approved and completed.
Such holder must both vote against such business combination and then exercise
his, her or its conversion rights to receive a pro rata portion of the trust
fund. Accordingly, if our business combination requires us to use substantially
all of our cash to pay the purchase price, because we will not know how many
stockholders may exercise such conversion rights, we may either need to reserve
part of the trust fund for possible payment upon such conversion, or we may need
to arrange third-party financing to help fund our business combination in case a
larger percentage of stockholders exercise their conversion rights than we
expected. Therefore, we may not be able to consummate a business combination
that requires us to use all of the funds held in the trust account as part of
the purchase price, or we may end up having a leverage ratio that is not optimal
for our business combination. This may limit our ability to effectuate the most
attractive business combination available to us.




We
will be dependent upon interest earned on the trust account, net of taxes
payable on such interest, to fund our search for a target company and
consummation of a business combination.




Only
$380,000 of the net proceeds of our initial offering and the private placement
are available to us to fund our working capital requirements. We will be
dependent upon one-half of the interest earned on the trust account, net of
taxes payable on such interest, up to a maximum of $2.0 million, and the
$380,000 of proceeds held outside of the trust account, to provide us with the
working capital we will need to search for a target company and consummate a
business combination. If interest rates were to decline substantially, we may
not have sufficient funds available to provide us with the working capital
necessary to complete a business combination. In such event, we would need to
raise additional equity capital or borrow funds from our initial stockholders,
including officers and directors, or others or be forced to
liquidate.




We
may be unable to obtain additional financing, if required, to complete a
business combination or to fund the operations and growth of the target
business, which could compel us to restructure or abandon a particular business
combination.




Although
we believe that the net proceeds of our initial offering and the sale of the
founder warrants, and one-half of the interest earned on the trust account, net
of taxes payable on such interest, will be sufficient to allow us to consummate
a business combination, in as much as we have not yet selected or approached any
prospective target businesses, we cannot ascertain the capital requirements for
any particular business combination. If the net proceeds of our initial offering
and the sale of the founder warrants, and one-half of the interest earned on the
trust account, net of taxes payable on such interest, prove to be insufficient,
either because of the size of the business combination or the depletion of
available funds in search of a target business, or because we become obligated
to convert into cash a significant number of shares from dissenting stockholders
as a result of the exercise of conversion rights, we will be required to seek
additional financing through the issuance of equity or debt securities or other
financing arrangements. We cannot make any assurances that such financing would
be available on acceptable terms, if at all. To the extent that additional
financing proves to be unavailable when needed to consummate a particular
business combination, we would be compelled to re-negotiate or abandon that
particular business combination and seek an alternative target business
candidate. In addition, if we consummate a business combination, we may require
additional financing to fund the operations or growth of the target business.
The failure to secure additional financing could adversely affect the continued
development or growth of the target business. None of our officers, directors or
stockholders is required to provide any financing to us in connection with or
after the consummation of a business combination.




Our
initial stockholders, directors and officers control a substantial interest in
us and thus may influence certain actions requiring stockholder
vote.




Upon
consummation of our initial offering, our initial stockholders, directors and
officers collectively own 20% of our issued and outstanding shares of common
stock. In addition, certain of our initial stockholders (specifically, M.O.T.A.
Holdings Ltd.; FSGL Holdings Ltd; OLEV Holdings Ltd; Shrem, Fudim Technologies
Ltd.; Shrem, Fudim Group Ltd.; and Elisha Yanay) purchased 3,625,000 warrants
from us in a private placement concurrently with the consummation of our initial
offering. Any exercise of these warrants by our directors and officers would
increase their ownership percentage. These holdings could allow the initial
stockholders, directors and officers to influence the outcome of matters
requiring stockholder approval, including the election of directors and approval
of significant corporate transactions after completion of our initial business
combination.




Our board
of directors has been divided into three classes, each of which will generally
serve for a term of three years with only one class of directors being elected
in each year. It is unlikely that there will be an annual meeting of
stockholders to elect new directors prior to the consummation of a business
combination, in which case all of the current directors will continue in office
at least until the consummation of the business combination. If there is an
annual meeting, as a consequence of our “staggered” board of directors, only a
minority of the board of directors will be considered for election and our
initial stockholders, directors and officers, because of their ownership
position, will have considerable influence regarding the outcome. Accordingly,
our initial stockholders, directors and officers will continue to exert control
at least until the consummation of a business combination and may continue to
exercise substantial control after a business combination due to their
significant ownership. In connection with the vote required for our initial
business combination, all of our initial stockholders, directors and officers,
have agreed to vote the shares of common stock then owned by them, including any
shares of common stock purchased in or following our initial offering, in
accordance with the majority of the shares of common stock voted by the public
stockholders. However, the affiliates and relatives of our initial stockholders,
directors and officers are not prohibited from purchasing units in the
aftermarket, and they will have full voting rights with respect to any shares of
common stock they may acquire in subsequent market transactions. If they do, we
cannot make any assurances that our initial stockholders, directors and
officers, through their affiliates and relatives, will not have considerable
influence upon the vote in connection with a business combination.




24




Our
outstanding warrants may have an adverse effect on the market price of our
common stock and make it more difficult to effect a business
combination.




In
connection with our initial offering, as part of the units, we issued warrants
to purchase 18,750,000 shares of common stock. We also sold a total of 3,625,000
warrants to M.O.T.A. Holdings Ltd.; FSGL Holdings Ltd; OLEV Holdings Ltd; Shrem,
Fudim Technologies Ltd.; Shrem, Fudim Group Ltd.; and Elisha Yanay, certain of
our initial stockholders, in a private placement concurrently with the
consummation of our initial offering. To the extent we issue shares of common
stock to effect a business combination, the potential for the issuance of
substantial numbers of additional shares upon exercise of these warrants could
make us a less attractive acquisition vehicle in the eyes of a target business
as such securities, when exercised, will increase the number of issued and
outstanding shares of our common stock and reduce the value of the shares issued
to complete the business combination. Accordingly, our warrants may make it more
difficult to effectuate a business combination or increase the acquisition cost
of a target business. Additionally, the sale, or even the possibility of sale,
of the shares underlying the warrants could have an adverse effect on the market
price for our securities or on our ability to obtain future public financing. If
and to the extent these warrants are exercised, you may experience dilution to
your holdings.




If
our initial stockholders exercise their registration rights, it may have an
adverse effect on the market price of our common stock and the existence of
these rights may make it more difficult to effect a business
combination.




The
majority of our initial stockholders are entitled to make up to two demands that
we register the resale of their shares of common stock at any time after their
shares are released from escrow. In addition, each of (a) the holder of the
underwriters’ purchase option and (b) Shrem, Fudim Technologies Ltd. and Shrem,
Fudim Group Ltd., acting together, will be entitled to one demand and unlimited
piggy-back registration rights. The increase in the number of shares of common
stock eligible for trading in the public market may have an adverse effect on
the market price of our common stock. In addition, the existence of these rights
may make it more difficult to effect a business combination or increase the
acquisition cost of a target business, as the stockholders of a particular
target business may be discouraged from entering into a business combination
with us or will request a higher price for their securities as a result of these
registration rights and the potential future effect their exercise may have on
the trading market for our common stock.




An
effective registration statement may not be in place when an investor desires to
exercise warrants, thus precluding such investor from being able to exercise
his, her or its warrants and causing such warrants to be practically
worthless.




No
warrant held by public stockholders or issuable upon exercise of the
underwriters’ purchase option will be exercisable and we will not be obligated
to issue shares of common stock unless at the time a holder seeks to exercise
such warrant, a prospectus relating to the common stock issuable upon exercise
of the warrant is current and the common stock has been registered or qualified
or deemed to be exempt under the securities laws of the state of residence of
the holder of the warrants. Under the terms of the warrant agreement, we have
agreed to use our best efforts to maintain a current prospectus relating to the
common stock issuable upon exercise of the warrants until the expiration of the
warrants and to take such action as is necessary to qualify the common stock
under the securities laws of the states in which the warrants are initially
offered. However, we cannot make any assurances that we will be able to do so or
that each such holder will be resident in a state in which the warrants are
initially offered. If we do not maintain a current prospectus related to the
common stock issuable upon exercise of the warrants, holders will be unable to
exercise their warrants and we will not be required to settle any such warrant
exercise. If the prospectus relating to the common stock issuable upon the
exercise of the warrants is not current or if the common stock is not qualified
or exempt from qualification in the jurisdictions in which the holders of the
warrants reside, the warrants held by public stockholders or issuable upon
exercise of the underwriters’ purchase option may have no value, the market for
such warrants may be limited and such warrants may expire worthless. Even if the
prospectus relating to the common stock issuable upon exercise of the warrants
is not current, the founder warrants may be exercisable for unregistered shares
of common stock.




25




If
we are deemed to be an investment company, we may be required to institute
burdensome compliance requirements and our activities may be restricted, which
may make it difficult for us to complete a business combination.




In order
not to be regulated as an investment company under the Investment Company Act of
1940, or the Investment Company Act, unless we can qualify for an exclusion, we
must ensure that we are engaged primarily in a business other than investing,
reinvesting or trading of securities and that our activities do not include
investing, reinvesting, owning, holding or trading “investment securities.” Our
business will be to identify and consummate a business combination and
thereafter to operate the acquired business or businesses. We invest the funds
in the trust account only in treasury bills issued by the United States having a
maturity of 180 days or less or money market funds meeting the criteria under
Rule 2a-7 under the Investment Company Act until we use them to complete a
business combination. By limiting the investment of the funds to these
instruments, we believe that we are not considered an investment company under
the Investment Company Act. The trust account and the purchase of government
securities for the trust account is intended as a holding place for funds
pending the earlier to occur of either: (i) the consummation of our primary
business objective, which is a business combination, or (ii) absent a business
combination, our dissolution, liquidation and distribution of our assets,
including the proceeds held in the trust account, as part of our plan of
dissolution and liquidation. If we fail to invest the proceeds as described
above or if we cease to be primarily engaged in our business as set forth above
(for instance, if our stockholders do not approve a plan of dissolution and
liquidation and the funds remain in the trust account for an indeterminable
amount of time), we may be considered to be an investment company and thus be
required to comply with the Investment Company Act.




If we are
deemed to be an investment company under the Investment Company Act, our
activities may be restricted, including:




·
            restrictions
      on the nature of our investments;




·
            restrictions
      on the issuance of securities; and




·
            which
      may make it difficult for us to complete a business
      combination;




each of
which may make it difficult for us to consummate a business combination. We
would also become subject to burdensome regulatory requirements, including
reporting, record keeping, voting, proxy and disclosure requirements and the
costs of meeting these requirements would reduce the funds we have available
outside the trust account to consummate a business combination.




Alternext
may delist our securities from quotation on its exchange which could limit
investors’ ability to make transactions in our securities and subject us to
additional trading restrictions.




Our
securities are listed on Alternext, a national securities exchange. We cannot
make any assurances that our securities will continue to be listed on Alternext
in the future. Additionally, in connection with our business combination, it is
likely that Alternext may require us to file a new initial listing application
and meet its initial listing requirements as opposed to its more lenient
continued listing requirements. We cannot make any assurances that we will be
able to meet those initial listing requirements at that time. If Alternext
delists our securities from trading on its exchange, we could face significant
material adverse consequences including:




·
            reduced
      liquidity with respect to our
securities;




·
            a
      determination that our common stock is a “penny stock” which will require
      brokers trading in our common stock to adhere to more stringent rules and
      possibly resulting in a reduced level of trading activity in the secondary
      trading market for our common
stock;




·
            limited
      amount of news and analyst coverage for our company;
  and




·
            a
      decreased ability to issue additional securities or obtain additional
      financing in the future.




In the
event that our securities are not listed on Alternext, we anticipate that our
units, common stock and warrants will be quoted on the OTC Bulletin Board, but
we cannot assure that our securities will be so quoted, or, if quoted, will
continue to be quoted.




Because
any target business that we attempt to complete a business combination with will
be required to provide our stockholders with financial statements prepared in
accordance with and reconciled to United States generally accepted accounting
principles, prospective target businesses may be limited.




In
accordance with requirements of United States federal securities laws, in order
to seek stockholder approval of a business combination, a proposed target
business will be required to have certain financial statements which are
prepared in accordance with, or which can be reconciled to, United States
generally accepted accounting principles and audited in accordance with United
States generally accepted auditing standards. Many foreign companies do not have
financial statements prepared in accordance with United States generally
accepted accounting principles and would need to incur significant time and
expense in order to obtain financial statements prepared in accordance with
those principles. To the extent that a prospective target business does not have
financial statements which have been prepared with, or which can be reconciled
to, United States generally accepted accounting principles, and audited in
accordance with United States generally accepted auditing standards, we will not
be able to acquire such target business. We will enter into a business
combination only with a target business that has such financial statements.
These financial statement requirements may limit the pool of potential target
businesses which we may acquire.




26




If
we determine to change domiciles in connection with a business combination, the
new jurisdiction’s laws will likely govern all of our material agreements
relating to the operations of the target business and we may not be able to
enforce our legal rights.




In
connection with a business combination, we may determine to relocate the home
jurisdiction of our business from Delaware to a jurisdiction outside of the
United States, including Israel. If we determine to do this, the new
jurisdiction’s corporate law will control our corporate governance requirements
and will determine the rights of our shareholders. The new jurisdiction’s
corporate law may provide less protection to our shareholders than is afforded
by Delaware law. Any such reincorporation will also likely subject us to foreign
regulation, including foreign taxation. In addition, upon reincorporation, we
may become a “foreign private issuer” for purposes of United States securities
laws, which means that we may be subject to less stringent reporting
requirements and that some provisions of the United States securities laws (such
as the proxy rules and the short-swing trading rules) would not apply to us.
Furthermore, whether or not we reincorporate outside the United States, the new
jurisdiction’s laws will likely govern all of our material agreements relating
to the operations of the target business. We cannot make any assurances that the
system of laws and the enforcement of existing laws in such jurisdiction would
be as certain in implementation and interpretation as in the United States. The
inability to enforce or obtain a remedy under any of our future agreements in a
new jurisdiction could result in a significant loss of business, business
opportunities or capital.




Risks
Associated with the Industry




We
rely on the experience and skills of our management team to identify future
trends in the technology and technology-related industries, and to take
advantage of these trends, but there is no guarantee that they will be able to
do so.




The
process of predicting technological trends, especially in sectors developing as
fast as the technology and technology-related sectors, is complex and uncertain.
After our initial business combination, we may commit significant resources to
developing new products before knowing whether our investments will result in
products the market will accept. Furthermore, we may not execute successfully
our vision because of, among other things, errors in product planning or timing,
technical hurdles that we fail to overcome in a timely fashion or a lack of
appropriate resources. If we are unable to identify and take advantage of future
trends in the technology and technology-related sectors, our business, financial
condition and results of operations will be adversely affected.




Our
investments in one or more companies in the technology or technology-related
industries may be extremely risky and we could lose all or part of our
investments.




An
investment in companies in the technology or technology-related industries may
be extremely risky relative to an investment in other businesses because, among
other things, the companies we are likely to focus on:




·
            typically
      have limited operating histories, narrower product lines and smaller
      market shares than larger businesses, which tend to render them more
      vulnerable to competitors’ actions and market conditions, as well as
      general economic downturns;




·
            tend
      to be privately owned and generally have little publicly available
      information and, as a result, we may not learn all of the material
      information we need to know regarding these
  businesses;




·
            are
      more likely to depend on the management talents and efforts of a small
      group of people; and, as a result, the death, disability, resignation or
      termination of one or more of these people could have an adverse impact on
      the operations of any company we may
acquire;




·
            generally
      have less predictable operating
results;




·
            may
      from time to time be parties to
litigation;




·
            may
      be engaged in rapidly changing businesses with products subject to a
      substantial risk of obsolescence;
and




·
            may
      require substantial additional capital to support their operations,
      finance expansion or maintain their competitive
  position.




27




If
we are unable to keep pace with changes in technology or consumer tastes and
preferences, the products or services of any target business that we acquire
could become obsolete.




The
technology and technology-related industries are generally characterized by
intense, rapid technological changes, evolving industry standards and new
product and service introductions, often resulting in product obsolescence or
short product life cycles. Further, these sectors are very sensitive to changes
in consumer tastes and preferences. Our ability to compete after the
consummation of a business combination will be dependent upon our ability to
develop and introduce products and services that keep pace with changes in
technology and consumer tastes and preferences. The success of new products or
services depends on several factors, including proper new product or service
definition, low component costs, timely completion and introduction of the new
product or service, differentiation of the new product or service from those of
our competitors and market acceptance of the new product or service. There can
be no assurance that we will successfully identify new product or service
opportunities, develop and bring new products and services to the market in a
timely manner or achieve market acceptance of our products and services or that
products, services and technologies developed by others will not render our
products, services and technologies obsolete or noncompetitive. Our business,
financial condition and results of operations following a business combination
will depend on our ability to develop and introduce new products and services
into existing and emerging markets and to reduce the costs of existing products
and services. If we are unable to keep pace with these changes, our business,
financial condition and results of operations will be adversely
affected.




Consolidation
in the technology and technology-related industries may affect our ability to
consummate a business combination and may result in increased competition
following a business combination.




There has
been a trend toward consolidation in the technology and technology-related
industries for several years. We expect this trend to continue as companies
attempt to strengthen or hold their market positions in an evolving market and
as companies are acquired or are unable to continue operations. The trend
towards consolidation will increase demand for target businesses. Furthermore,
we believe that industry consolidation will result in stronger competitors.
Additionally, rapid industry consolidation will lead to fewer customers, with
the effect that loss of a major customer could have a material impact on results
not anticipated in a customer marketplace composed of many participants. This
could lead to more variability in operating results and could adversely affect
on our business, operating results and financial condition following a business
combination.




Companies
in technology and technology-related industries require highly-skilled personnel
and if we are unable to attract and retain key personnel following a business
combination, we will be unable to effectively conduct our business.




The
market for technical, creative, marketing and other personnel essential to the
development and marketing of technology and technology-related products and
services and to the management of technology and technology-related businesses
is extremely competitive. Further, companies that have been the target of an
acquisition are often a prime target for recruiting of executives and key
creative talent. If we cannot successfully recruit and retain the employees we
need following consummation of our business combination, or replace key
employees after their departure, our ability to develop and manage our
businesses will be impaired.




We
may be unable to protect or enforce the intellectual property rights of any
target business that we acquire or the target business may become subject to
claims of intellectual property infringement.




After
completing a business combination, the procurement and protection of trademarks,
copyrights, patents, domain names, trade dress and trade secrets may be critical
to our success. We will likely rely on a combination of copyright, trademark,
trade secret laws and contractual restrictions to protect any proprietary
technology and rights that we may acquire. Despite our efforts to protect those
proprietary technology and rights, we may not be able to prevent
misappropriation of those proprietary rights or deter independent development of
technologies that compete with the business we acquire. Furthermore, key aspects
of networking technology are governed by industry-wide standards, which are
usable by all market entrants. Our competitors may file patent applications or
obtain patents and proprietary rights that block or compete with our patents.
Litigation may be necessary in the future to enforce our intellectual property
rights, to protect our trade secrets, or to determine the validity and scope of
the proprietary rights of others. It is also possible that third parties may
claim we have infringed their patent, trademark, copyright or other proprietary
rights. Claims or litigation, with or without merit, could result in substantial
costs and diversions of resources, either of which could have an adverse effect
on our competitive position and business. Further, depending on the target
business or businesses that we acquire, it is likely that we will have to
protect trademarks, patents, and domain names in an increasing number of
jurisdictions, a process that is expensive and may not be successful in every
location.




With
respect to certain proprietary rights of the target business or businesses that
we acquire, such as trademarks and copyrighted materials, we expect that the
target business or businesses will have licensed such rights to third parties in
the past and we may continue to enter into such agreements in the future. These
licensees may, unknowingly to us or the target business or businesses, take
actions that diminish the value of the target business or businesses’
proprietary rights or cause harm to the target business or businesses’
reputation. Also, products of the target business or businesses may include
software or other intellectual property licensed from third parties. It may be
necessary in the future to seek or renew licenses relating to various aspects of
these products. There can be no assurance that the necessary licenses would be
available on acceptable terms, if at all. The inability to obtain certain
licenses or other rights or to obtain such licenses or rights on favorable
terms, or the need to engage in litigation regarding these matters, could have
an adverse effect on our business, operating results and financial condition
following a business combination. Moreover, the inclusion in our products of
software or other intellectual property licensed from third parties on a
nonexclusive basis could limit our ability to protect our proprietary rights in
our products.




28




The
technology and technology-related industries are highly cyclical, which may
affect our future performance and ability to sell our products or services, and
in turn, hurt our profitability.




Technology
and technology-related products and services tend to be relatively expensive and
buyers tend to defer purchases during periods of economic weakness, opting
instead to continue to use what they already own. Conversely, during periods of
economic strength, sales of technology and technology-related products and
services frequently exceed expectations. As a consequence, revenues and earnings
for these companies may fluctuate more than those of less economically sensitive
companies. Further, companies in the consumer segments of these industries are
sensitive to a number of factors that influence the levels of consumer spending,
including economic conditions such as the rate of unemployment, inflation,
recessionary environments, the levels of disposable income, debt, interest rates
and consumer confidence. Due to the cyclical nature of the technology and
technology-related industries, inventories may not always be properly balanced,
resulting in lost sales when there are shortages or write-offs when there are
excess inventories. This may adversely affect the business, financial condition
and results of operations of any target businesses that we may
acquire.




Government
regulation of certain technology or technology-related industries and the
uncertainty over government regulation of the Internet could harm our operating
results and future prospects.




Certain
technology or technology-related industries, including the telecommunications
and media sectors, have historically been subject to substantial government
regulation, both in the United States and overseas. If we consummate a business
combination with a target business or businesses in these sectors, changes in
telecommunications requirements in the United States or other countries could
affect the sales of our products, limit the growth of the markets we serve or
require costly alterations of current or future products. Future changes in
tariffs by regulatory agencies or application of tariff requirements to
currently untariffed services could affect the sales of our products for certain
classes of customers.




On the
other hand, few laws or regulations currently apply directly to access of or
commerce on the Internet. The growth of the technology and technology-related
industries is closely tied to the growth of Internet use and new regulations
governing the Internet and Internet commerce could have an adverse effect on our
business, operating results and financial condition following a business
combination. New regulations governing the Internet and Internet commerce could
include matters such as changes in encryption requirements, sales taxes on
Internet product sales and access charges for Internet service
providers.




Risks
Related to Operations in Israel




Acquisitions
of companies with operations in Israel entail special considerations and risks.
If we are successful in acquiring a target business with operations in Israel,
we will be subject to, and possibly adversely affected by, the following
risks:




If
there are significant shifts in the political, economic or military conditions
in Israel, it could have a material adverse effect on our
profitability.




If we
consummate a business combination with a target business in Israel, it will be
directly influenced by the political, economic and military conditions affecting
Israel at that time. Since the establishment of the State of Israel in 1948, a
number of armed conflicts have taken place between Israel and its Arab
neighbors. A state of hostility, varying in degree and intensity, has caused
security and economic problems in Israel. Since September 2000, there has been a
marked increase in violence, civil unrest and hostility, including armed
clashes, between the State of Israel and the Palestinians, primarily but not
exclusively in the West Bank and Gaza Strip, and negotiations between the State
of Israel and Palestinian representatives have effectively ceased. The election
of representatives of the Hamas movement to a majority of seats in the
Palestinian Legislative Council in January 2006 created additional unrest and
uncertainty. In July and August of 2006, Israel was involved in a full-scale
armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group and
political party, in southern Lebanon, which involved missile strikes against
civilian targets in northern Israel that resulted in economic losses. On August
14, 2006, a ceasefire was declared relating to that armed conflict. Continued
hostilities between Israel and its neighbors and any failure to settle the
conflict could have a material adverse effect on the target business and its
results of operations and financial condition. Further deterioration of the
situation might require more widespread military reserve service by some of the
target business’s Israeli employees and might result in a significant downturn
in the economic or financial condition of Israel. Israel is also a party to
certain trade agreements with other countries, and material changes to these
agreements could have an adverse effect on our business. Furthermore, several
Arab countries still restrict business with Israeli companies. The operations of
the target business in Israel could be adversely affected by restrictive laws or
policies directed towards Israel and Israeli businesses.




29




In
addition, the target business’s insurance may not cover losses that may occur as
a result of events associated with the security situation in the Middle East.
Although the Israeli government currently covers the reinstatement value of
direct damages that are caused by terrorist attacks or acts of war, there is no
assurance that such government coverage will be maintained. Any of these factors
could have a material adverse effect on the target business and on our results
of operations and financial condition following a business combination with the
target business.




Our
operations could be disrupted as a result of the obligation of personnel to
perform military service.




Generally,
all nonexempt male adult citizens and permanent residents of Israel, including
one of our officers and directors, are obligated to perform military reserve
duty annually for extended periods of time through the age of 45 (or older for
citizens with certain occupations), and are subject to being called to active
duty at any time under emergency circumstances. Executive officers or key
employees of a target business may also reside in Israel and be required to
perform similar annual military reserve duty. In response to increases in
terrorist activity and the recent armed conflict with Hezbollah, there have been
periods of significant call-ups of military reservists. It is possible that
there will be additional call-ups in the future. Our and the target business’s
operations could be disrupted by the absence for a significant period of one or
more of these directors, officers or key employees due to military service. Any
such disruption could adversely affect our operations and
profitability.




Because
a substantial portion of many Israeli companies’ revenues is generated in
dollars and euros, while a significant portion of their expenses is incurred in
Israeli currency, the revenues of a target business may be reduced due to
inflation in Israel and currency exchange rate fluctuations.




A
substantial portion of many Israeli companies’ revenues is generated in dollars
and euros, while a significant portion of their expenses, principally salaries
and related personnel expenses, are paid in Israeli currency. As a result, a
target business will likely be exposed to the risk that the rate of inflation in
Israel will exceed the rate of devaluation of Israeli currency in relation to
the dollar or the euro, or that the timing of this devaluation will lag behind
inflation in Israel. Because inflation has the effect of increasing the dollar
and euro costs of an Israeli company’s operations, it would therefore have an
adverse effect on our dollar-measured results of operations following a business
combination.




The
termination or reduction of tax and other incentives that the Israeli government
provides to qualified domestic companies may increase the costs involved in
operating a company in Israel.




The
Israeli government currently provides tax and capital investment incentives to
qualified domestic companies. The availability of these tax benefits, however,
is subject to certain requirements, including, among other things, making
specified investments in fixed assets and equipment, financing a percentage of
those investments with capital contributions by the entity receiving the tax
benefits, compliance with a marketing program submitted to the Investment Center
of Israel’s Ministry of Industry, Trade and Labor, filing of certain reports
with the Investment Center and compliance with Israeli intellectual property
laws. Additionally, the Israeli government currently provides grant and loan
programs relating to research and development, marketing and export activities.
In recent years, the Israeli government has reduced the benefits available under
these programs and Israeli governmental authorities have indicated that the
government may in the future further reduce or eliminate the benefits of those
programs. We cannot make any assurances that such benefits and programs would
continue to be available to the target business following a business
combination, or if available, to what extent. If such benefits and programs were
terminated or further reduced, it could have an adverse effect on our results of
operations following a business combination or make a specific business
combination less attractive. Without limiting the foregoing, if the foregoing
tax benefits were terminated or reduced, the amount of taxes payable by the
target business would likely increase, which could adversely affect our results
of operations.




Any
Israeli government grants received by the target business for research and
development expenditures limit the ability of the target business to manufacture
products and transfer know-how outside of Israel. In addition, our acquisition
of the target business may be subject to the approval of certain Israeli
governmental entities.




The
target business we may acquire may be receiving, or may receive following the
business combination, grants from the government of Israel through the Office of
the Chief Scientist of Israel’s Ministry of Industry, Trade and Labor for the
financing of a portion of its research and development expenditures in Israel.
Upon our acquisition of such entity, the Office of Chief Scientist will
determine whether the entity will be eligible to continue receiving grants
following the business combination. When know-how or products are developed
using Chief Scientist grants, the terms of these grants limit the transfer of
the know-how out of Israel and the ability of the entity receiving such grants
to manufacture products based on this know-how outside of Israel without the
prior approval of the Office of the Chief Scientist. Any approval, if given, may
be subject to additional obligations or limitations. If the target business
fails to comply with the conditions imposed by the Office of the Chief
Scientist, including the payment of royalties with respect to grants received,
it may be required to refund any payments previously received, together with
interest and penalties. The difficulties in obtaining the approval of the Office
of the Chief Scientist for the transfer of manufacturing rights out of Israel
could have a material adverse effect on strategic alliances or other
transactions that we may wish the target business to enter into in the future
that provide for such a transfer. In addition, our acquisition of a target
business that shall have received, prior to such acquisition, any tax benefits
from the Investment Center and/or research and development grants from the
Office of the Chief Scientist, may be subject to the approval of such entities,
which approval may be subject to, among other things, an undertaking to observe
the law governing the grant programs of the Office of the Chief
Scientist.




30




The
anti-takeover effects of Israeli laws may delay or deter a change of control of
the target business.




Under the
Israeli Companies Law—1999, referred to as the Companies Law, a merger is
generally required to be approved by the board of directors and, unless certain
requirements described under the Companies Law are met, the shareholders of each
of the merging companies. If the share capital of the company that will not be
the surviving company is divided into different classes of shares, the approval
of each class is also required. A court may disapprove or delay the consummation
of a merger if it determines that there is a reasonable concern that the
surviving company will be unable to satisfy the obligations of the company not
surviving the merger. In addition, a merger may not be completed unless at least
50 days shall have passed from the date that a proposal for approval of the
merger was filed by each merging company with the Israeli Registrar of Companies
and 30 days have elapsed since shareholder approval of both merging companies
was obtained.




The
Israeli Companies Law provides that an acquisition of shares in an Israeli
public company must be made by means of a special tender offer, if as a result
of the acquisition, the purchaser would become a holder of 25% or more of the
voting power at general meetings, and no other shareholder owns a 25% stake in
the company. Similarly, the Companies Law provides that an acquisition of shares
in a public company must be made by means of a special tender offer if, as a
result of the acquisition, the purchaser would become a holder of 45% or more of
the voting power at general meetings, unless someone else already holds 45% of
the voting power. An acquisition from a 25% or 45% holder, which turns the
purchaser into a 25% or 45% holder, respectively, does not require a tender
offer. An exception to the tender offer requirement may also apply when the
additional voting power is obtained by means of a private placement approved by
the general meeting of shareholders (which approval shall also refer to the
purchaser becoming a holder of 25% or 45%, as the case may be, of the voting
power in the subject company). These rules also do not apply if the acquisition
is made by way of a merger.




The
Companies Law also provides specific rules and procedures for the acquisition of
shares held by minority shareholders, if the majority shareholder shall hold
more than 90% of the outstanding shares. Such acquisition shall be made through
a tender offer to all of the company’s shareholders for the purchase of all of
the issued and outstanding shares of the company. If the dissenting and
non-responsive shareholders hold more than 5% of the issued and outstanding
share capital of the company, the acquirer may not acquire additional shares of
the company from shareholders who accepted the tender offer if following such
acquisition the acquirer would then own over 90% of the company’s issued and
outstanding share capital.




These
laws may have the effect of delaying or deterring a change in control of an
Israeli company, and should we desire to acquire control of a target business
that is an Israeli company we may encounter difficulties achieving such
control.




We
may be deemed to be effectively managed and controlled from Israel, and thus be
treated as an Israeli entity for tax purposes.




Although
we were formed under Delaware law and are a U.S. corporation, our directors and
officers are all Israeli residents, and shall be managing our affairs from
Israel. Additionally, as we will be searching for a target business that has
operations or facilities located in Israel, or that intends to establish
operations or facilities in Israel, such as research and development,
manufacturing or executive offices, following our initial business combination,
most of our activities shall be in Israel. Therefore, we may be deemed to be
effectively managed and controlled from Israel, and thus be treated as an
Israeli entity for tax purposes, in which case we will be taxed according to
Israeli law.




Risks
Relating to Enforcement of Legal Process




Third
parties are likely to have difficulty in enforcing judgments obtained in the
United States against us, our officers or our directors.




We, as
well as each of our officers and directors, have appointed Corporation Service
Company as our agent to receive service of process in any action against us in
the United States.




After the
consummation of a business combination, it is possible that substantially all of
our assets will be located outside of the United States. As a result, it may not
be possible for investors in the United States to enforce their legal rights
against us or to enforce judgments of United States courts given that
substantially all of our assets may be located outside of the United
States.




Each of
our directors and officers resides outside the United States. Each of our
officers or directors has consented to service of process in the State of New
York and to the jurisdiction of the courts of the State of New York or of the
United States of America for the Southern District of New York.




31




However,
since most of our and such persons’ assets are outside the United States, any
judgment obtained in the United States against us or such persons may not be
collectible within the United States. Furthermore, there is substantial doubt as
to the enforceability of civil liabilities under the Securities Act or the
Exchange Act in original actions instituted in Israel, and the enforceability of
a judgment obtained in the United States against us or our officers and
directors may be difficult.




Item
      1B.
            UNRESOLVED
      STAFF COMMENTS




Not
applicable.




Item
      2.
            PROPERTIES




We
maintain our principal executive offices at 14 A Achimeir Street, Ramat Gan
52587 Israel. We pay LMS Nihul, an affiliate of M.O.T.A. Holdings Ltd., FSGL
Holdings Ltd and OLEV Holdings Ltd, three of our initial stockholders, a monthly
fee of $10,000 for general and administrative services, including office space,
utilities and secretarial support. We believe, based on rents and fees for
similar services in Israel, that the fee charged by LMS Nihul is at least as
favorable as we could have obtained from an unaffiliated third
party.




Item
      3.
            LEGAL
      PROCEEDINGS




We are
currently not a party to any legal proceedings.




Item
      4.
            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY
HOLDERS




None.




32




PART
II




Item
      5.
            MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES




Price
Range of Securities




Our
units, common stock and warrants are listed on NYSE Alternext US LLC
(“Alternext”) under the symbols “AXC.U,” “AXC” and “AXC.WS,” respectively. Our
initial public offering was completed on June 22, 2007 at $8.00 per unit. Prior
to June 22, 2007, there was no public trading market for our
securities.





Units
                        
                        
                        Common Stock
                        
                        
                        WarrantsHigh
                        
                        
                        Low
                        
                        
                        High
                        
                        
                        Low
                        
                        
                        High
                        
                        
                        Low2008:Fourth
      Quarter
                        
                        $
                        7.62
                        
                        
                        $
                        6.30
                        
                        
                        $
                        7.60
                        
                        
                        $
                        7.06
                        
                        
                        $
                        0.11
                        
                        
                        $
                        0.0001Third
      Quarter
                        
                        
                        7.94
                        
                        
                        
                        7.62
                        
                        
                        
                        7.85
                        
                        
                        
                        7.30
                        
                        
                        
                        0.30
                        
                        
                        
                        0.06Second
      Quarter
                        
                        
                        7.79
                        
                        
                        
                        7.50
                        
                        
                        
                        7.61
                        
                        
                        
                        7.38
                        
                        
                        
                        0.30
                        
                        
                        
                        0.21First
      Quarter
                        
                        
                        8.15
                        
                        
                        
                        6.98
                        
                        
                        
                        7.92
                        
                        
                        
                        7.32
                        
                        
                        
                        0.70
                        
                        
                        
                        0.20012007:Fourth
      Quarter
                        
                        
                        8.18
                        
                        
                        
                        7.81
                        
                        
                        
                        7.51
                        
                        
                        
                        7.30
                        
                        
                        
                        0.72
                        
                        
                        
                        0.50Third
      Quarter
                        
                        
                        8.15
                        
                        
                        
                        7.81
                        
                        
                        
                        7.50
                        
                        
                        
                        7.25
                        
                        
                        
                        0.79
                        
                        
                        
                        0.52




Holders
of Record




At March
25, 2009, there were 11 holders of record of our common stock, 1 holder of
record of our units and 6 holders of record of our warrants.




Sales
of Unregistered Securities




On June
22, 2007, we consummated the private sale of 3,625,000 warrants at a price of
$1.00 per warrant, generating total proceeds of approximately $3,625,000. The
warrants were purchased by M.O.T.A. Holdings Ltd., FSGL Holdings Ltd, OLEV
Holdings Ltd, Shrem, Fudim Technologies Ltd., Shrem, Fudim Group Ltd. and Elisha
Yanay. The warrants are identical to the warrants included in the units sold in
the initial public offering except that they may also be exercised on a cashless
basis at the discretion of the holder. Each warrant entitles the holder to
purchase one share of our common stock at a price of $6.00, commencing on the
later of the completion of a business combination with a target business, and
June 18, 2008. The warrants will expire at 5:00 p.m., New York City time, on
June 18, 2011 or earlier upon redemption. In addition, the purchasers of these
warrants have agreed that the warrants and the underlying securities will not be
sold or transferred by them until after we have completed a business
combination.




No
underwriting discounts or commissions were paid with respect to such sales. The
recipients in such transactions acquired the securities for investment only and
not with a view to or for sale in connection with any distribution
thereof.




Use
of Proceeds of Initial Public Offering




We
registered the initial public offering of our units, common stock and warrants
on a Registration Statement on Form S-1 (Registration No. 333-137863), that was
declared effective on June 18, 2007. On June 22, 2007 we closed the initial
public offering of our units by selling 21,562,500 units (including the
underwriters’ over-allotment option of 2,812,500 units) at $8.00 per unit. On
June 22, 2007, immediately prior to the closing of the initial public offering,
we also closed on private placements of an additional 3,625,000 warrants at a
price of $1.00 per warrant to certain of our initial stockholders. Gross
proceeds from the offering and private placements were $176,125,000. Total
expenses from the offering and private placements were approximately
$12,695,000, which included underwriting discounts and commissions and
non-accountable expense allowance and other offering-related expenses. Net
proceeds, after deducting total expenses were $163,430,000, of which
$163,050,000 was deposited into the trust account and the remaining proceeds of
$380,000 became available to be used to provide for business, legal and
accounting due diligence on prospective business combinations and continuing
general and administrative expenses. The amount deposited into the trust account
includes $6,468,750 representing the deferred underwriting discounts and
commissions. The amounts deposited into the trust account remain on deposit in
the trust account earning interest. Up to $2,000,000 of the interest earned on
the trust account was available to be, and since has been, released to us to
fund our working capital requirements in connection with our search for a
business combination. The managing underwriter of the public offering was CRT
Capital Group LLC.




33




Dividend
Policy




We have
not paid any dividends on our common stock to date and do not intend to pay
dividends prior to the completion of a business combination. The payment of
dividends in the future will be contingent upon our revenues and earnings, if
any, capital requirements and general financial condition subsequent to
completion of a business combination. The payment of any dividends subsequent to
a business combination will be within the discretion of our then board of
directors. It is the present intention of our board of directors to retain all
earnings, if any, for use in our business operations and, accordingly, our board
does not anticipate declaring any dividends in the foreseeable
future.




Item
      6.
            SELECTED
      FINANCIAL DATA




The
following table summarizes the relevant financial data for our business and
should be read in conjunction with our financial statements and related notes
contained elsewhere in this Annual Report. From January 1, 2008 to December 31,
2008, we have not had any significant operations to date, so only balance sheet
data is presented.




December 31, 2008
              
              
              December 31, 2007
              
              
              December 31, 2006*Balance
      Sheet Data:Working
      capital
              
              $
              1,016,182
              
              
              $
              909,008
              
              
              $
              20,000Interest
      income
              
              
              3,911,842
              
              
              
              3,136,241
              
              
              -Total
      assets
              
              
              175,874,712
              
              
              
              172,533,141
              
              
              
              313,842Total
      liabilities
              
              
              316,119
              
              
              
              68,022,200
              
              
              
              293,842Value
      of common stock that may be converted for cash ($7.86 per
      share)
              
              
              67,807,500
              
              
              
              67,807,500
              
              
              
              6,250Stockholders’
      equity
              
              
              107,751,093
              
              
              
              104,660,915
              
              
              
              13,750




* We were
formed on August 24, 2006




Item
      7.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS




Overview




We were
formed on August 24, 2006, for the purpose of effecting a merger, capital stock
exchange, asset acquisition or other similar business combination with a
technology or technology-related business that has operations or facilities
located in Israel, or that intends to establish operations or facilities in
Israel, such as research and development, manufacturing or executive officer,
following our initial business combination. We intend to utilize cash derived
from the proceeds of our initial public offering, our capital stock, debt, or a
combination of cash, capital stock and debt, in effecting a business
combination.




We have
neither engaged in any operations nor generated any revenues through December
31, 2007. Our entire activity since inception through June 22, 2007 was related
to our formation and our initial public offering on June 22, 2007. Since that
date, we have been searching for prospective target businesses to
acquire.




On June
22, 2007, we closed our initial public offering of 21,562,500 units (including
the underwriters’ over-allotment option of 2,812,500 units) with each unit
consisting of one share of our common stock and one warrant, each to purchase
one share of our common stock at an exercise price of $6.00 per share. The units
from the initial public offering (including the underwriters’ over-allotment
option) were sold at an offering price of $8.00 per unit. On June 22, 2007, we
also closed on private placements of an additional 3,625,000 warrants at $1.00
per warrant to certain of our initial stockholders. Our common stock and
warrants started trading separately on July 11, 2007.




We
generated gross proceeds of $176,125,000 from the sale of the units in the
initial public offering and the private placements. Total expenses from the
offering and private placements were approximately $12,695,000, which included
underwriting discounts and commissions, non-accountable expense allowance, and
other offering-related expenses. Net proceeds, after deducting total expenses
were $163,430,000, of which $163,050,000 was deposited into the trust account
and the remaining proceeds of $380,000 became available to be used to provide
for business, legal and accounting due diligence on prospective business
combinations and continuing general and administrative expenses. The amount
deposited into the trust account includes $6,468,750 representing the deferred
underwriting discounts and commissions and non-accountable expenses. The amounts
deposited into the trust account remain on deposit in the trust account earning
interest.  Up to $2,000,000 of the interest earned on the trust
account was available to be, and since has been, released to us to fund our
working capital requirements in connection with our search for a business
combination.




34




Critical
Accounting Policies




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
expenses during the reporting period. Actual results could differ from these
estimates.




Deferred
income taxes are provided for temporary differences between the carrying amount
of assets and liabilities for financial reporting purposes and the amounts for
tax purposes. Valuation allowances are provided against the deferred tax asset
amounts when the realization is uncertain.




The
proceeds of the initial public offering that are in our trust account are used
to purchase U.S. Treasury Bills and money market investments and held until the
investments reach maturity. The investments are recorded at market value which
approximates their carrying amount and includes accrued interest.




We must
seek stockholder approval to effect any business combination. We will proceed
with a business combination only if a majority of the shares of common stock
voted by the public stockholders are voted in favor of the business combination,
and public stockholders owning less than 40% of the shares sold in the initial
public offering exercise their conversion rights and vote against the business
combination. Public stockholders voting against the combination may demand that
we convert his or her shares at an initial conversion price of $7.88 per share
plus interest earned thereon in the trust account, net of taxes payable and
$2,000,000 of interest income that has been released from the trust account to
fund our working capital. Accordingly, we have classified the contingent shares
at $7.86 and related deferred interest outside of permanent equity and
liabilities in the mezzanine area on the balance sheet.




Results
of Operations for the Year Ended December 31, 2008




We
reported net income of $3,095,463 for the year ended December 31, 2008,
consisting of $3,911,842 of interest income, offset by $816,379 of operating
expenses and $0 of income tax.




Our trust
account earned interest of $3,890,725 for the year ended December 31, 2008, and
its funds outside the trust account earned interest of $21,117.  Until
we enter into a business combination, we will not generate operating
revenues.




For the
year ended December 31, 2008, we incurred expenses of $160,938 for consulting
and professional fees, $169,950 for insurance expense, $120,000 for rental
expense pursuant to our lease of office space and other operating costs of
$365,431.




The
consulting and professional fees of $160,938 for the year ended December 31,
2008 relate primarily to legal fees of approximately $119,133, and auditing, tax
and accounting fees of approximately $41,805.




The
insurance expense of $169,950 for the year ended December 31, 2008 relates to
the amortization of the prepaid directors and officers insurance policy which
was acquired May 1, 2008.




The other operating costs of $365,431
for the year ended December 31, 2008 relate primarily to travel expenses of
approximately $47,959, franchise tax expenses of approximately $253,500,
Alternext annual fees of approximately $32,300 and other miscellaneous costs of
approximately $31,472.




Results
of Operations for the Year Ended December 31, 2007




We
reported net income of $2,861,322 for the year ended December 31, 2007,
consisting of $3,136,241 of interest income, offset by $274,919 of operating
expenses and $0 of income tax.




Our trust
account earned interest of $3,131,435 for the year ended December 31, 2007, and
its funds outside the trust account earned interest of $4,806.  Until
we enter into a business combination, we will not generate operating
revenues.




For the
year ended December 31, 2007, we incurred expenses of $86,755 for consulting and
professional fees, $91,650 for insurance expense, $65,000 for rental expense
pursuant to our lease of office space and other operating costs of
$31,514.




The
consulting and professional fees of $86,755 for the year ended December 31, 2007
relate primarily to legal fees of approximately $66,755, and auditing, tax and
accounting fees of approximately $20,000.




The
insurance expense of $91,650 for the year ended December 31, 2007 relates to the
amortization of the prepaid directors and officers insurance policy which was
acquired May 1, 2007.




35




The other
operating costs of $31,514 for the year ended December 31, 2007 relate primarily
to travel expenses of approximately $21,595, and other miscellaneous costs of
approximately $9,919.




Results
of Operations for the Period from August 24, 2006 (inception) to December 31,
2006




We had a
net loss of $5,000 for the period ended December 31, 2006 as a result of
formation and operating costs.  Additionally, deferred offering costs
of approximately $307,855 were incurred in 2006.  These costs
consisted of professional fees of approximately $140,000, road show and travel
expenses of approximately $75,176, and regulatory and filing fees of
approximately $92,679.  We had no income in 2006.  We had no
funds in trust as of December 31, 2006.




Liquidity
and Capital Resources




We have
neither engaged in any operations nor generated any revenues through December
31, 2008. Our entire activity since inception through June 22, 2007 was related
to our formation and our initial public offering on June 22, 2007. Since that
date, we have been searching for prospective target businesses to
acquire.




On June
22, 2007, we closed our initial public offering of 21,562,500 units (including
the underwriters’ over-allotment option of 2,812,500 units) with each unit
consisting of one share of our common stock and one warrant, each to purchase
one share of our common stock at an exercise price of $6.00 per share. The units
from the initial public offering (including the underwriters’ over-allotment
option) were sold at an offering price of $8.00 per unit. On June 22, 2007, we
also closed on private placements of an additional 3,625,000 warrants at $1.00
per warrant to certain of our initial stockholders. Our common stock and
warrants started trading separately on July 11, 2007.




We
generated gross proceeds of $176,125,000 from the sale of the units in the
initial public offering and the private placements. Total expenses from the
offering and private placements were approximately $12,695,000, which included
underwriting discounts and commissions, non-accountable expense allowance, and
other offering-related expenses. Net proceeds, after deducting total expenses
were $163,430,000, of which $163,050,000 was deposited into the trust account
and the remaining proceeds of $380,000 became available to be used to provide
for business, legal and accounting due diligence on prospective business
combinations and continuing general and administrative expenses. The amount
deposited into the trust account includes $6,468,750 representing the deferred
underwriting discounts and commissions and non-accountable expenses. The amounts
deposited into the trust account remain on deposit in the trust account earning
interest. Up to $2,000,000 of the interest earned on the trust account was
available to be, and since has been, released to us to fund our working capital
requirements in connection with our search for a business
combination.




In
connection with our initial public offering, we issued an option, for $100 in
the aggregate, to I-Bankers Securities, Inc. and CRT Capital Group LLC,
underwriters in the offering, to purchase up to 1,125,000 units in the
aggregate, consisting of one share of common stock and one warrant, at $8.80 per
unit, commencing on the later of the consummation of the business combination
and June 18, 2008 and expiring June 18, 2012. The warrants underlying the units
will have terms that are identical to those issued in the offering, except that
the warrants underlying such units will expire on June 18, 2012. The purchase
option, the 1,125,000 units, the 1,125,000 shares of common stock and the
1,125,000 warrants underlying the units, and the 1,125,000 shares of common
stock underlying the warrants, have been deemed compensation by the NASD and
were therefore subject to a 180-day lock-up under Rule 2710(g)(1) of the NASD
Conduct Rules. Additionally, such securities may not be sold, transferred,
assigned, pledged or hypothecated, or be the subject of any hedging, short sale,
derivative, put or call transaction that would result in the effective economic
disposition of the securities by any person, until December 18, 2008, 18 months
following June 18, 2007, the date our registration statement was declared
effective, except to any underwriter and selected dealer participating in the
offering and their bona fide officers or partners.




Although
the purchase option and its underlying securities have been registered under the
registration statement, the holder of the purchase option will be entitled to
one demand and unlimited piggy-back registration rights for a period of five and
seven years, respectively, following the completion of the
offering.




We will
use substantially all of the net proceeds of the initial public offering and
private placements to acquire a target business, including identifying and
evaluating prospective acquisition candidates, selecting the target business,
and structuring, negotiating and consummating the business combination. The
proceeds held in the trust account will not be released until the earlier of the
completion of a business combination or our dissolution. Upon consummation of
our initial business combination, the proceeds held in the trust account will be
used to pay the underwriters a deferred fee equal to 3.75% of the gross proceeds
of the offering, or $6,468,750, less $0.30 for each share of common stock
converted to cash in connection with our initial business
combination.




We
anticipated that prior to the consummation of a business combination, the
$380,000 of proceeds initially held outside of the trust account, as well as one
half of the interest earned on the trust account, net of taxes payable on such
interest, up to a maximum of $2.0 million, would have been sufficient to cover
our operating expenses through June 18, 2009 and to cover the expenses incurred
in connection with a business combination.  $2,000,000 of the interest
earned on the trust account has been released to us to fund our working capital
requirements in connection with our search for a business
combination.   The LOI provides for up to $1 million of our fees
and expenses incurred in connection with the proposed business combination to be
paid by Bioness.




36




Assuming
that a business combination is not consummated during that time, we anticipate
making the following expenditures during this time period:




·
            approximately
      $1,380,000 of expenses for legal, accounting and other expenses attendant
      to the due diligence investigations, structuring and negotiating of a
      business combination, including without limitation third party fees for
      assisting us in performing due diligence investigations of perspective
      target businesses;




·
            approximately
      $300,000 of expenses in legal and accounting fees relating to our SEC
      reporting obligations;




·
            approximately
      $240,000 of expenses in fees relating to our office space and certain
      general and administrative
services;




·
            approximately
      $460,000 for general working capital that will be used for miscellaneous
      expenses, including reimbursement of any out-of-pocket expenses incurred
      by our existing stockholders, directors and officers in connection with
      activities on our behalf, of which approximately $400,000 is for director
      and officer liability and other insurance premiums;
  and




·
            if
      we must dissolve and liquidate, $50,000 to $75,000 for dissolution and
      liquidation costs.




We do not
believe we will need additional financing in order to meet the expenditures
required for operating our business. However, we may need to obtain additional
financing to the extent such financing is required to consummate a business
combination, in which case we may issue additional securities or incur debt in
connection with such business combination, although we have not entered into any
such arrangement and have no current intention of doing so.




M.O.T.A.
Holdings Ltd., FSGL Holdings Ltd and OLEV Holdings Ltd have loaned us an
aggregate of $219,000 the payment of a portion of the offering expenses and have
incurred an additional $120,930 of liabilities relating to our initial offering.
These non-interest bearing loans were initially payable on September 14, 2007,
were deferred to October 2007 and were thereafter repaid. The last payment on
the loans was made on October 10, 2007.




Commencing
on June 18, 2007, we began paying a fee of $10,000 per month for certain general
and administrative services including office space, utilities and secretarial
support to LMS Nihul, an affiliate of M.O.T.A. Holdings Ltd., FSGL Holdings Ltd
and OLEV Holdings Ltd, three of our initial stockholders. In addition, in June
2006, certain of our officers and directors and their affiliates loaned us an
aggregate of $200,000 to us for payment of offering expenses on our behalf.
These loans were repaid following our initial public offering from the proceeds
of the offering.




Contractual
Obligations




We do not
have any long-term debt, capital-lease obligations, purchase obligations or
other long-term liabilities.  However, as discussed above, we incur a
fee for general and administrative services including office space, utilities
and secretarial support in the amount of $10,000 per month until the earlier of
a our consummation of a business combination or liquidation.




Off-Balance
Sheet Arrangements




We do not
have any off-balance sheet arrangements.




Item
      7A.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Market risk is the sensitivity of
income to changes in interest rates, foreign exchanges, commodity prices, equity
prices, and other market-driven rates or prices. We are not presently engaged in
and, if a suitable business target is not identified by us prior to the
prescribed liquidation date of the trust fund, we may not engage in, any
substantive commercial business. Accordingly, we are not and, until such time as
we consummate a business combination, we will not be, exposed to risks
associated with foreign exchange rates, commodity prices, equity prices or other
market-driven rates or prices. The net proceeds of our initial public offering
held in the Trust Account are to be invested only in money market funds meeting
certain conditions under Rule 2a-7 promulgated under the Investment Company Act
of 1940 or United States treasury bills. Given our limited risk in our exposure
to money market funds and treasury bills, we do not view the interest rate risk
to be significant.




37




Item
      8.
            FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA




The
following financial statements and the footnotes thereto are included in the
section beginning on page F-1:


1.  Report
of Independent Registered Public Accounting Firm.


2.  Balance
Sheets as of December 31, 2008 and 2007.


3.  Statements
of Operations for the years ended December 31, 2008 and 2007, for the period
August 24, 2006 (inception) to December 31, 2006, and for the period August 24,
2006 (inception) to December 31, 2008.


4.  Statement
of Changes in Stockholders’ Equity for the period from December 31, 2006 to
December 31, 2008.


5.  Statement
of Cash Flows for the years ended December 31, 2008 and 2007, for the period
August 24, 2006 (inception) to December 31, 2006, and for the period August 24,
2006 (inception) to December 31, 2008.


6.  Notes
to Consolidated Financial Statements.




Item
      9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL
    DISCLOSURE




Not
applicable.




Item
      9A.
            CONTROLS
      AND PROCEDURES




Evaluation
of Disclosure Controls and Procedures




Our chief executive officer and chief
financial officer have evaluated the effectiveness of our disclosure controls
and procedures (as defined in Rule 13a-15(e) and 15d-15(e)) under the Exchange
Act, as of the end of the period covered by this report.  Our chief
executive officer and chief financial officer have concluded that all material
information required to be disclosed by us in this Annual Report was recorded,
processed, summarized, reported and properly disclosed in the time periods
specified in the rules and regulations of the SEC, and that such information was
accumulated and communicated to our management (including our chief executive
officer and chief financial officer) to allow timely decisions regarding
required disclosure.  Based on their evaluation, our chief executive
officer and chief financial officer have concluded that, as of December 31,
2008, we are in compliance with Rule 13-15(e) of the Exchange Act.




Management’s
Annual Report on Internal Control over Financial Reporting




Management
is responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act.  Internal control over financial reporting is
defined under the Exchange Act as a process designed by, or under the
supervision of, our chief executive and principal financial officer and effected
by our board of directors and management to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles and includes those policies and procedures
that:




·
            Pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of our
      assets;




·
            Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that our receipts and expenditures are being
      made only in accordance with authorizations of our management and
      directors; and




·
            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of our assets that could have
      a material effect on the financial
statements.




Internal
control over financial reporting has inherent limitations and may not prevent or
detect misstatements.  Also, projections of any evaluation of
effectiveness to future periods are subject to the risks that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.




Under the
supervision and with the participation of our management, including our chief
executive and principal financial officer, we conducted an evaluation of the
effectiveness of our internal control over financial reporting based on the
framework in Internal Control - Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on our evaluation,
our chief executive and principal officer has concluded that during the period
covered by this annual Report, our internal controls over financial reporting
were not effective for the reasons stated below based on the criteria
established in Internal Control-Integrated Framework issued by the
COSO.




38








The
effectiveness of our internal control over financial reporting as of December
31, 2008 has been audited by Brightman Almagor Zohar & Co., a member of
Deloitte Touche Tohmatsu, an independent registered public accounting firm, as
stated in their report included in this Annual Report on Form
10-K.


Upon the
consummation of a business combination, management will have additional staff to
implement procedures aimed at minimizing the risk of material error in financial
reporting due to the lack of segregation of duties and to make any other
additional improvements necessary to minimize the risk of material error in our
financial reporting.




Changes
in Internal Controls Over Financial Reporting




There
have been no significant changes in our internal controls over financial
reporting during the during the fourth quarter ended December 31, 2008 that have
materially affected or are reasonably likely to materially affect our internal
control over financial reporting.




Item
      9B.
            OTHER
      INFORMATION




Not
applicable.




39




PART
III




Item
      10.
            DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE





Our
current directors and executive officers are as follows:




Name
                
                Age
                
                PositionMoshe
      Bar-Niv
                
                60
                
                Chairman
      of the Board of DirectorsLiora
      Lev
                
                55
                
                Chief
      Executive Officer and DirectorYehoshua
      (Shuki) Gleitman
                
                59
                
                Chief
      Technology Officer and DirectorElisha
      Yanay
                
                64
                
                DirectorYoram
      Buki
                
                55
                
                DirectorNathan
      Sharony
                
                74
                
                DirectorYacov
      Rozen
                
                56
                
                DirectorIdo
      Bahbut
                
                34
                
                Chief
      Financial Officer, Secretary and
Treasurer




Moshe Bar-Niv has served as
our Chairman and director since our inception. Since 1998, Mr. Bar-Niv has
served as a General Partner, along with Ms. Lev, of Ascend Technology Ventures,
an Israel-based venture capital fund that he co-founded, whose investors are
primarily U.S. investors, including both large institutions as well as
individuals in the technology industry. As a General Partner of Ascend
Technology Ventures, Mr. Bar-Niv led fundraising efforts, and was involved in
investment decisions and the management of various Ascend portfolio companies,
including the following: Bitband Technologies Ltd., which provides video content
distribution and delivery solutions over IP broadband networks for
telecommunications companies; Decru Inc., which helps many of the world’s
largest enterprise and government organizations secure their vital data assets
via its storage security appliances, and which was later sold to Network
Appliance, Inc. (Nasdaq: “NTAP”), which provides enterprise storage and data
management software and hardware products and services; NextNine, Ltd. which
provides automated remote customer support and adaptive service solutions for
large-scale, mission-critical systems deployed in enterprises; P-Cube, Inc.
which provides IP service control solutions powered by a programmable network
element that creates an intelligent overlay for any IP network, and which was
later sold to Cisco Systems Inc. (Nasdaq: “CSCO”), which is engaged in the
manufacture and sale of networking and communications products worldwide;
Provigent Inc., which develops integrated silicon solutions for the broadband
wireless transmission industry; and Widemed Ltd., which leverages its innovative
signal processing algorithms, offering comprehensive signal analysis and
workflow management solutions to the fast growing cardio-sleep market. From 1993
to 1997, Mr. Bar-Niv served as a Managing Director of Trinet Venture Capital, an
Israel-based venture capital fund which he co-founded. From 1976 through 1992,
Mr. Bar-Niv held various executive positions at Fibronics International, Inc.,
Motorola Communications Israel Ltd., Intel Electronics Ltd. and Israel Aircraft
Industries Ltd. Mr. Bar-Niv currently serves on the Board of Directors of
Widemed Ltd. (TASE), a biomedical company. Mr. Bar-Niv also serves on the boards
of directors of Bitband Technologies Ltd.; Intellinx Ltd.; NextNine, Ltd.; and
Provigent Inc., each of which is a privately held company. Mr. Bar-Niv has B.Sc.
and M.Sc. degrees in Industrial Engineering and Management from Ben-Gurion
University, Israel.




Liora Lev has served as our
Chief Executive Officer and director since our inception. Since 1998, Ms. Lev
has served as a General Partner, along with Mr. Bar-Niv, of Ascend Technology
Ventures, an Israel-based venture capital fund which she co-founded, whose
investors are primarily U.S. investors, including both large institutions as
well as individuals in the technology industry. As a General Partner, Ms. Lev
plays an active role as a lead investor and a board member with various
portfolio companies. Prior to 1998, Ms. Lev served in executive positions for a
number of Israeli companies, including as Corporate Chief Financial Officer of
Ashtrom Group Ltd., one of the largest private development and manufacturing
groups based in Israel with major international projects, and as Chief Financial
Officer of M.L.I. Lasers Ltd., a laser technology company. From 1994 through
2000, Ms. Lev served as a Commissioner of the Israeli Securities Authorities.
She also served as a member of the Accounting Standard Board. Ms. Lev serves on
the board of directors of: Can Fite BioPharma Ltd. (TASE), a biopharmaceutical
company, and RadVision Ltd. (Nasdaq: “RVSN”), a telecommunications company; and
of several private companies including: Sintec Media Ltd., a broadcast
management systems company; and Intellinx Ltd., an insider threat intelligence
solutions company. Ms. Lev is a CPA, holds dual Bachelors degrees in Accounting
and Economics and a Masters of Management Science, specializing in information
systems management from Tel Aviv University. She is also a graduate of Harvard
Business School’s Advanced Management Program.




40




Dr. Yehoshua (Shuki) Gleitman
has served as our director since our inception and as our Chief Technology
Officer since February 2007. Since August 2000, Dr. Gleitman has served as the
Managing Partner of Platinum Venture Capital Fund, a venture capital fund
investing in Israeli high technology companies, which he founded. Dr. Gleitman
is also the Chairman and Chief Executive Officer of Danbar Technology Ltd., an
investment corporation listed on the Tel Aviv Stock Exchange (TASE), a position
he has held since January 2001. From February 2000 through December 2005, Dr.
Gleitman was the Chief Executive Officer of Shrem, Fudim Technologies Ltd., a
TASE listed investment corporation, which he co-founded. Prior to that, Dr.
Gleitman was the Chief Executive Officer of AMPAL Investment Corporation, a
Nasdaq listed company, from 1997 through 2000, and the Chief Scientist of the
Israeli Ministry of Industry and Trade from 1992 to 1997. From 1996 to 1997, Dr.
Gleitman was also the Director General of the Ministry. The Office of the Chief
Scientist, which Dr. Gleitman led, is the division of the Israeli Government
responsible for setting up and executing the national policy of creating and
investing into the technology industries in Israel. In addition to Danbar
Technology, Dr. Gleitman currently serves on the boards of directors of the
following public traded companies: Capitol Point Ltd., a technology incubation
company (TASE); Walla Ltd., an Internet portal (TASE); Teuza Ventures Ltd., a
publicly-traded venture capital firm (TASE); Mer Telemanagement Solutions Ltd.,
a billing solution company for the telecommunication industry (Nasdaq: MTS); and
Widemed Ltd, a biomedical company (TASE), of which Dr. Gleitman is Chairman of
the Board. Dr. Gleitman holds B.Sc., M.Sc. and Ph.D. degrees in Physical
Chemistry from the Hebrew University of Jerusalem. Dr. Gleitman is the Honorary
Consul General of Singapore in Israel since 1998.




Elisha Yanay has been a
director since our inception. Since July 2004, Mr. Yanay has served as a Senior
Vice President of Motorola, Inc., a global communications company. Mr. Yanay has
been the General Manager of Motorola Israel Ltd. since 1990 and has been its
Chairman since 2001. Prior to that, in the course of his 36 years with Motorola,
Mr. Yanay served in a variety of positions, including as marketing manager for
all signaling products in Israel and as Motorola Israel’s representative in the
U.S. Mr. Yanay has served as the Chairman of the Israel Association of
Electronics and Information Industries since January 2004. Mr. Yanay is also
leading Education 2000, a forum for the expansion and enhancement of
technological and scientific education in Israel, and is the Industry
Representative on the Council for Higher Education, a position he has held since
January 2002. Mr. Yanay received the Rothschild Prize for Innovation in 1980 for
the computerized irrigation system that he designed and developed. Mr. Yanay has
a B.Sc. in Electronics Engineering from the Technion Institute of Technology in
Haifa, Israel. In June 1997, in recognition of his personal initiative and
contribution to the development and promotion of technological education in
Israel, Mr. Yanay was named a Distinguished Fellow of the Technion Faculty of
Electrical Engineering and an Honorary Fellow of the Tel-Aviv University Faculty
of Engineering. In May 1998, Mr. Yanay was awarded Honorary Fellow of the
Technion.


Yoram Buki has served as our
director since June 2008. From January 2003 through December 2007, Mr. Buki
served as a Partner of Kost Forer & Gabbay, C.P.A. (Ernst &
Young).  From January 1995 to March 2003, Mr. Buki served as a Partner
of Luboshitz, Kasierer & Co., C.P.A. (Arthur Andersen).  Mr. Buki
currently serves on the board of directors and on the audit committee of Dikla
Insurance Company Ltd. Mr. Buki studied accounting at Hamichlala Lminhal from
1976 through 1981, though he did not receive any degree.   Mr.
Buki has been a member of the liaison committee with the Supervisor of Banks of
Israel and with the Bankers Association of Israel since 2004.
  Yacov Rozen has served as our
director since June 2008. From July 2008 through the present, Mr. Rozen served
as Chief Executive Officer of Menora Mivtahim Pension LTD, where he also serves
on the board of directors.  From April 2006 through December 2008, Mr.
Rozen served as Chief Financial Officer of Bank Hapoalim B.M., where he was also
a member of the board of management from 2006-2007, and where he was the head of
client asset management from September 2002 through April 2006.  Mr.
Buki currently serves on the boards of directors of Menora Mivtahim Finance LTD,
PostalGuard LTD and Vir-Tec Software LTD.  Mr. Rozen has previously
served on the board of directors of a number of other companies. Mr. Rozen
studied economics at Tel Aviv University from 1975 through 1979, where he
received his Bachelor’s degree.
  Nathan Sharony has served as
our director since June 2008. From January 1994 through January 1997, Mr.
Sharony has served as the President and Chief Executive Officer of State of
Israel Bonds.  From September 1992 through January 1994, Mr. Sharony
served as the Director General in the Ministry of Industry and Trade of the
government of Israel. During 1991 and 1992, Mr. Sharony was a private consultant
in the field of simulation applications. From September 1989 through September
1991, Mr. Sharony was the head of the Economic Mission for the Israeli
Government in North America.  From January 1986 through September
1989, Mr. Sharony served as the President and Chief Executive Officer of Electro
Optical Industries Ltd.  From January 1979 through January 1982, Mr.
Sharony served as Vice President of Logistics, Tadiran Electronics Industry
Ltd.  Mr. Sharony previously served on the board of directors of a
number of other companies.  Mr. Sharony was a student in the Field
Artillery Battery Officers Course in Fort Sill, Oklahoma from August 1958
through June 1959.  Mr. Sharony also studied military history at the
Staff and Command College, though he did not receive a
degree.




Ido Bahbut has served as our
Chief Financial Officer since February 2007. Since March 2005, Mr. Bahbut has
been a self-employed Israeli Certified Public Accountant in a partnership he
established with one other partner. In his firm he provides consulting and
accounting services, and in addition he performs as a CFO of several companies,
including Ascend Technology Ventures, an Israeli-based venture capital fund of
which Mr. Bar-Niv and Ms. Lev are general partners. From January 2004 to March
2005, Mr. Bahbut worked as senior audit manager at Ernst & Young in Israel,
were he was involved in audit work for both public and private companies. From
October 1999 to January 2004, Mr. Bahbut worked as an audit manager at Luboshitz
Kasierer, which was the Arthur Anderson affiliate in Israel, were he also was
involved in audit work for both public and private companies. Mr. Bahbut
received his B.A., Business Administration and Accounting from the College of
Management Academic Studies Division and his M.A. in Law from the Bar Ilan
University.




Composition
of the Board




Our board
of directors has seven directors and is divided into three classes with only one
class of directors being elected in each year and each class serving a
three-year term. Upon the expiration of the term of a class of directors,
directors in that class will be elected for three-year terms at the annual
meeting of stockholders in the year in which their term expires. The term of
office of the Class A directors, consisting of Mr. Buki and Mr. Yanay will
expire at our fourth annual meeting of stockholders. The term of office of the
Class B directors, consisting of Dr. Gleitman and Mr. Sharony, will expire at
the second annual meeting. The term of office of the Class C directors,
consisting of Mr. Bar-Niv and Ms. Lev, will expire at the third annual meeting.
With respect to each class, a director’s term will be subject to the election
and qualification of their successors, or their earlier death, resignation or
removal.




Pursuant
to an arrangement with his employer, Motorola Israel Ltd., Mr. Yanay has
informed us that if we acquire a competitor of Motorola, Inc., then he will
resign from our board of directors at such time.




Our
directors will play a key role in identifying and evaluating prospective
acquisition candidates, selecting the target business, and structuring,
negotiating and consummating its acquisition. None of our directors has been a
principal of or affiliated with a public company or blank check company that
executed a business plan similar to our business plan and none of our directors
is currently affiliated with such an entity. However, we believe that the skills
and expertise of our directors, their collective access to acquisition
opportunities and ideas, their contacts, and their transaction expertise should
enable them to successfully identify and effect an acquisition, although we
cannot make any assurances that they will, in fact, be able to do
so.




41




Director
Independence




Our board of directors has determined
that each of Messrs. Yanay , Buki, Sharony and Rozen, representing four of our
seven directors, are “independent” directors as defined in Rule 10A-3 of the
Exchange Act, and as defined by the rules of Alternext. Under the corporate
governance standards of Alternext, by no later than June 22, 2008, the first
anniversary of the completion of our initial public offering, a majority of our
directors must have been independent directors. We reconstituted our board of
directors prior to the first anniversary of the completion of our initial
offering in order to comply with these requirements by appointing Yoram Buki,
Nathan Sharony and Yacov Rozen as independent directors.




Board
Committees




Audit
Committee




Our audit
committee consists of Messrs. Yanay, Gleitman, Buki and Rozen. The audit
committee reviews the professional services and independence of our independent
registered public accounting firm and our accounts, procedures and internal
controls. The audit committee will also select the firm that will serve as our
independent registered public accounting firm, review and approve the scope of
the annual audit, review and evaluate with the independent public accounting
firm our annual audit and annual consolidated financial statements, review with
management the status of internal accounting controls, evaluate problem areas
having a potential financial impact on us that may be brought to the committee’s
attention by management, the independent registered public accounting firm or
the board of directors and evaluate all of our public financial reporting
documents. Our board of directors has adopted an audit committee charter, a form
of which is filed as Exhibit 99.1 to our Annual Report on Form 10-K filed for
the fiscal year ended December 31, 2007.




Our audit
committee is composed entirely of “independent” directors. Each of the members
of the audit committee is “financially literate” as defined under Alternext
listing standards. Alternext listing standards define “financially literate” as
being able to read and understand fundamental financial statements, including a
company’s balance sheet, income statement and cash flow statement.




In
addition, we have certified to Alternext that the committee will, and will
continue to have, at least one member who has past employment experience in
finance or accounting, requisite professional certification in accounting, or
other comparable experience or background that results in the individual’s
financial sophistication. Mr. Buki satisfies Alternext’s definition of financial
sophistication and also qualifies as an “audit committee financial expert,” as
defined under rules and regulations of the SEC.




Compensation
Committee




The
compensation committee consists of Messrs. Yanay and Rozen, each of whom is an
independent director under Alternext listing standards. This committee is
responsible for recommending the compensation of our executive
officers.




Guidelines
For Selecting Director Nominees




Director
nominees are selected and recommended to the board of directors by a majority of
the independent directors. We have established guidelines for selecting nominees
that generally provide that persons to be nominated should be actively engaged
in business endeavors, have an understanding of financial statements, corporate
budgeting and capital structure, be familiar with the requirements of a publicly
traded company, be familiar with industries relevant to our business endeavors,
be willing to devote significant time to the oversight duties of the board of
directors of a public company and be able to promote a diversity of views based
on the person’s education, experience and professional employment.




Code
of Conduct and Ethics




We are
committed to maintaining the highest standards of business conduct and ethics.
We have adopted a code of conduct and ethics applicable to our directors,
officers and employees. The code of conduct and ethics reflects our values and
the business practices and principles of behavior that support this commitment.
The code of conduct and ethics satisfies SEC rules for a “code of ethics”
required by Section 406 of the Sarbanes-Oxley Act of 2002, as well as Alternext
rules for a “code of conduct and ethics.” A form of the code of conduct and
ethics is filed as Exhibit 14.1 to our Annual Report of Form 10-K filed on March
26, 2008.  We will provide to any person without charge, upon request,
a copy of our code of ethics, which request may be made in writing to Mr. Ido
Bahbut at 14 A Achimeir Street, Ramat Gan, Israel 52587.




Conflicts
of Interest




Potential
investors should be aware of the following potential conflicts of
interest:




42




·
            None
      of our officers and directors is required to commit his or her full time
      to our affairs and, accordingly, they may have conflicts of interest in
      allocating management time among various business
    activities.




·
            In
      the course of their other business activities, our officers and directors
      may become aware of investment and business opportunities which may be
      appropriate for presentation to our company as well as the other entities
      with which they are affiliated. Our management may have conflicts of
      interest in determining to which entity a particular business opportunity
      should be presented.




·
            Our
      officers and directors may in the future become affiliated with entities,
      including other blank check companies, engaged in business activities
      similar to those intended to be conducted by our
  company.




·
            Since
      our directors beneficially own shares of our common stock which will be
      released from escrow only if a business combination is successfully
      completed, and may own warrants which will expire worthless if a business
      combination is not consummated, our board may have a conflict of interest
      in determining whether a particular target business is appropriate to
      effect a business combination. Additionally, no liquidation distributions
      will be paid with respect to any of the initial shares beneficially owned
      by our directors or with respect to the shares underlying any founder
      warrants owned by them at the time of such liquidation, which also might
      cause them to have a conflict of interest in determining whether a
      particular target business is appropriate. Furthermore, the purchaser of
      the founder warrants has contractually agreed that the warrants and the
      underlying securities will not be sold or transferred by it until after we
      have completed a business
combination.




·
            Our
      officers and directors may enter into consulting or employment agreements
      with the company as part of a business combination pursuant to which they
      may be entitled to compensation for their services to be rendered to the
      company after the consummation of a business combination. The personal and
      financial interests of our directors and officers may influence their
      motivation in identifying and selecting a target business, timely
      completing a business combination and securing the release of their
      stock.




·
            Our
      directors and officers may purchase shares of common stock in the open
      market. If they do, they would be entitled to vote such shares as they
      choose on a proposal to approve a business
  combination.




·
            If
      we determined to enter into a business combination with an entity
      affiliated with any of our officers, directors or initial stockholders,
      they may benefit personally and financially from such transaction. As a
      result, such personal and financial interests may influence their
      motivation in identifying and selecting a target
  business.




In
general, officers and directors of a corporation incorporated under the laws of
the State of Delaware are required to present business opportunities to a
corporation if:




·
            the
      corporation could financially undertake the
  opportunity;




·
            the
      opportunity is within the corporation’s line of business;
    and




·
            it
      would not be fair to the corporation and its stockholders for the
      opportunity not to be brought to the attention of the
      corporation.




Accordingly,
as a result of multiple business affiliations, our officers and directors may
have similar legal obligations relating to presenting business opportunities
meeting the above-listed criteria to multiple entities. In addition, conflicts
of interest may arise when our board evaluates a particular business opportunity
with respect to the above-listed criteria. We cannot make any assurances that
any of the above-mentioned conflicts will be resolved in our favor.




In order
to minimize potential conflicts of interest which may arise from multiple
corporate affiliations, each of our officers and directors has agreed, until the
earliest of a business combination, our liquidation or such time as he or she
ceases to be an officer or director, to present to our company for our
consideration, prior to presentation to any other entity, any business
opportunity which may reasonably be required to be presented to us under
Delaware law, subject to any pre-existing fiduciary obligations he or she might
have.




Mr.
Bar-Niv and Ms. Lev are each a General Partner of Ascend Technology Ventures,
and Dr. Gleitman is Managing Partner at Platinum Venture Capital, each of which
are venture capital firms located in Israel. Each of Ascend Technology Ventures
and Platinum Venture Capital have currently invested all of their funds that are
available for new investments. Consequently, we do not believe that there will
be any conflicts of interest regarding potential investment opportunities
between us, on the other hand, and either of Ascend Technology Ventures and
Platinum Venture Capital, on the other hand.




43




In
connection with the vote required for any business combination, our initial
stockholders have agreed to vote the shares of common stock then owned by them,
including any shares of common stock purchased in or following our initial
offering, in accordance with the vote of the public stockholders owning a
majority of the shares of our common stock sold in our initial offering. In
addition, they have agreed to waive their respective rights to participate in
any liquidation distribution but only with respect to their initial shares and
the shares of common stock underlying any founder warrants held by them at the
time of such liquidation.




To
further minimize potential conflicts of interest, we have agreed not to
consummate a business combination with an entity which is affiliated with any of
our initial stockholders unless we obtain an opinion from an independent
investment banking firm that the business combination is fair to our
stockholders from a financial point of view. Furthermore, in no event will any
of our existing officers, directors or stockholders, or any entity with which
they are affiliated, be paid any finder’s fee, consulting fee or other
compensation prior to, or for any services they render in order to effectuate,
the consummation of a business combination; provided, however, that we are
permitted to pay a finder’s fee or other compensation to Shrem, Fudim Group Ltd.
and/or to Shrem, Fudim Technologies Ltd. should they provide us services prior
to or in connection with a business combination. We currently do not anticipate
entering into a business combination with an entity affiliated with any of such
individuals or entities.




Section
16(a) Beneficial Ownership Reporting Compliance




Section
16(a) of the Exchange Act requires our officers, directors and persons who own
more than 10% of a registered class of our equity securities to file reports of
ownership and changes in ownership with the SEC. Officers, directors and 10%
stockholders are required by regulation to furnish us with copies of all Section
16(a) forms they file. Based solely on copies of such forms received, we believe
that, during the year ended December 31, 2008, all filing requirements
applicable to our officers, directors and greater than 10% beneficial owners
were complied with.




Item
      11.
            EXECUTIVE
      COMPENSATION




Officer
and Director Compensation




No
officer has received, or is entitled to receive, any cash compensation for
services rendered, other than reasonable out-of-pocket expenses. No compensation
of any kind, including finder’s and consulting fees, will be paid to any of our
initial stockholders, directors and officers, or any of their respective
affiliates, for services rendered prior to or in connection with a business
combination; provided, however, that we are permitted to pay a finder’s fee or
other compensation to Shrem, Fudim Group Ltd. and/or to Shrem, Fudim
Technologies Ltd. should they provide us services prior to or in connection with
a business combination. However, our initial stockholders, directors and
officers will receive reimbursement for any reasonable out-of-pocket expenses
incurred by them in connection with activities on our behalf such as
participating in the offering process, identifying a potential target business
and performing due diligence on a suitable business combination. There is no
limit on the amount of these reasonable out-of-pocket expenses and there will be
no review of the reasonableness of the expenses by anyone other than our board
of directors, which includes persons who may seek reimbursement, or a court of
competent jurisdiction if such reimbursement is challenged.




Since our
formation, we have not granted any stock options or stock appreciation rights or
any awards under long-term incentive plans.




Certain
of our directors, Yoram Buki, Nathan Sharony and Yacov Rozen, may be compensated
for service on our board of directors at a rate of $2,000 per month and $500 per
meeting attended, the receipt of such compensation will be contingent upon and
deferred until the consummation of a business combination, as approved by a
majority of the shares of our common stock voted by our public stockholders, at
which time all accrued compensation shall be paid, in cash, to Yoram Buki,
Nathan Sharony and Yacov Rozen.




We have
agreed to pay a monthly fee of $10,000 to LMS Nihul, an affiliate of M.O.T.A.
Holdings Ltd., FSGL Holdings Ltd and OLEV Holdings Ltd, three of our initial
stockholders, for general and administrative services including office space,
utilities and secretarial support. We believe, based on rents and fees for
similar services in Israel, that the fee charged by LMS Nihul is at least as
favorable as we could have obtained from an unaffiliated third
party.




Compensation
Committee Interlocks and Insider Participation




None.




44




Compensation
Committee Report




None of
our executive officers have received any compensation for services rendered
during the fiscal year ended December 31, 2008 and therefore our independent
directors have not reviewed and discussed a Compensation Discussion and Analysis
required by Item 402(b) of Regulation S-K with management for such fiscal
year.




This
report is provided by the board of directors:




Moshe
Bar-Niv


Liora
Lev


Yehoshua
(Shuki) Gleitman


Elisha
Yanay


Yoram
Buki


Nathan
Sharony


Yacov
Rozen




Item
      12.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS




The
following table sets forth information regarding the beneficial ownership of our
common stock as of March 17, 2009 by the following individuals or
groups:




·
            each
      person or entity who is known by us to own beneficially more than 5% of
      our outstanding stock;




·
            each
      of our officers and directors; and




·
            all
      of our officers and directors as a
group.




Beneficial
ownership is determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to the securities. Except as
otherwise indicated, and subject to applicable community property laws, we
believe that all persons named in the table have sole voting and investment
power with respect to all shares of common stock held by them.




Name
      and Address(1)
                
                Amount and
                    Nature of
                    Beneficial
                    Ownership
                
                
                Percent of
                    Shares
                    Outstanding5% StockholdersM.O.T.A.
      Holdings Ltd.
                
                
                1,461,042
                
                
                
                5.4
                %OLEV
      Holdings Ltd
                
                
                1,461,041
                
                
                
                5.4
                %FSGL
      Holdings Ltd
                
                
                1,461,042
                
                
                
                5.4
                %Fir
      Tree, Inc. and Fir Tree SPAC Holdings 1, LLC (2)
                
                
                1,435,300
                
                
                
                5.3
                %HBK
      Investments L.P., HBK Services LLC, HBK New York LLC, HBK Partners II
      L.P., HBK Management LLC, and HBK Master Fund L.P. (3)
                
                
                1,698,361
                
                
                
                6.3
                %QVT
      Financial LP, QVT Financial GP LLC, QVT Fund LP, and QVT Associates GP LLC
      (4)
                
                
                2,313,667
                
                
                
                8.6
                %Drawbridge
      DSO Securities LLC, Drawbridge Special Opportunities Fund LP, Drawbridge
      Special Opportunities GP LLC, Drawbridge Special Opportunities Advisors
      LLC, Fortress Principal Investment Holdings IV LLC, FIG LLC, Fortress
      Operating Entity I LP, FIG Corp. and Fortress Investment Group LLC
      (5)
                
                
                1,856,250
                
                
                
                6.9
                %Jonathan
      M. Glaser (6)
                
                
                1,767,240
                
                
                
                6.6
                %Andrew
      M. Weiss, Ph.D. (7)
                
                
                1,471,115
                
                
                
                5.5
                %Directors
      and Executive OfficersMoshe
      Bar-Niv (8)
                
                
                1,461,042
                
                
                
                5.4
                %Liora
      Lev (9)
                
                
                1,461,041
                
                
                
                5.4
                %Yehoshua
      Gleitman (10)
                
                
                1,461,042
                
                
                
                5.4
                %Ido
      Bahbut
                
                
                15,000
                
                
                
                *Elisha
      Yanay
                
                
                82,500
                
                
                
                *Yoram
      Buki
                
                
                0
                
                
                
                0Nathan
      Sharony
                
                
                0
                
                
                
                0Yacov
      Rozen
                
                
                0
                
                
                
                0All
      directors and executive officers as a group (6 persons)
                
                
                4,480,625
                
                
                
                16.6
                %


45




*
            Less
      than 1% of our outstanding shares of common
  stock.




(1)
            Unless
      otherwise indicated, the address for each stockholder listed in the
      following table is c/o Advanced Technology Acquisition Corp., 14 A
      Achimeir Street, Ramat GAN 52587
Israel.




(2)
            Based
      on information contained in a Schedule 13G/A filed by Fir Tree SPAC
      Holdings 1, LLC and Fir Tree, Inc. on February 10, 2009.  Fir
      Tree SPAC Holdings 1, LLC is the beneficial owner of and may direct the
      vote and dispose of 1,347,650 shares of common stock.  Fir Tree
      SPAC Holdings 2, LLC is the beneficial owner of and may direct the vote
      and dispose of 87,650 shares of common stock.  Fir Tree, Inc.
      has been granted investment discretion over the shares of common stock
      held by Fir Tree SPAC Holdings 1, LLC and Fir Tree SPAC Holdings 2,
      LLC.  The business address of Fir Tree SPAC Holdings 1, LLC and
      Fir Tree, Inc. is 505 Fifth Avenue, 23rd
      Floor, New York, New York 10017.




(3)
            Based
      on information contained in a Schedule 13G/A filed by HBK Investments,
      L.P., HBK Services LLC, HBK New York LLC, HBK Partners II L.P., HBK
      Management LLC, and HBK Master Fund L.P. on January 26, 2009. Each of HBK
      Investments L.P., HBK Services LLC, HBK New York LLC, HBK Partners II
      L.P., and HBK Management LLC has shared voting and dispositive power of
      2,196,349 shares of common stock, which includes 1,474,249 and 722,100
      shares of common stock over which HBK Master Fund L.P. and HBK Special
      Opportunity Fund I L.P., respectively, also share voting and dispositive
      power.  The address for each of the entities is 2101 Cedar
      Springs Road, Suite 700, Dallas, Texas 75201, except for HBK Maser Fund
      L.P., which is c/o HBK Services LLC at the above address, and except for
      HBK New York LLC, whose address is 350 Park Avenue, 20th
      Floor, New York, New York 10022.




(4)
            Based
      on information contained in a Schedule 13G/A filed by QVT Financial LP,
      QVT Financial GP LLC, QVT Fund LP, and QVT Associates GP LLC on January
      28, 2009. QVT Financial LP (“QVT Financial”) is the investment manager for
      QVT Fund LP (the “Fund”), which has beneficial ownership of 1,893,775
      shares of common stock, and for Quintessence Fund L.P. (“Quintessence”),
      which beneficially owns 207,789 shares of common stock. QVT Financial is
      also the investment manager for a separate discretionary account managed
      for a third party (the “Separate Account”), which holds 212,103 shares of
      common stock. QVT Financial has the power to direct the vote and
      disposition of the common stock held by the Fund, Quintessence and the
      Separate Account. Accordingly, QVT Financial may be deemed to be the
      beneficial owner of an aggregate amount of 2,313,667 shares of common
      stock, consisting of the shares owned by the Fund and Quintessence, and
      the shares held in the Separate Account. QVT Financial GP LLC, as General
      Partner of QVT Financial, may be deemed to beneficially own the same
      number of shares of common stock reported by QVT Financial. QVT Associates
      GP LLC, as General Partner of the Fund and Quintessence, may be deemed to
      beneficially own the aggregate number of shares of common stock owned by
      the Fund and Quintessence, and accordingly, QVT Associates GP LLC may be
      deemed to be the beneficial owner of an aggregate amount of 2,101,564
      shares of common stock. The address for each of the entities is 1177
      Avenue of the Americas, 9th
      Floor, New York, New York 10036, except for the Fund, whose address is
      Walkers SPV, Walkers House Mary Street, George Town, Grand Cayman,
      KY1-9002, Cayman Islands.




(5)
            Based
      on information contained in a Schedule 13G filed by Drawbridge DSO
      Securities LLC, Drawbridge Special Opportunities Fund LP, Drawbridge
      Special Opportunities GP LLC, Drawbridge Special Opportunities Advisors
      LLC, Fortress Principal Investment Holdings IV LLC, FIG LLC, Fortress
      Operating Entity I LP, FIG Corp., and Fortress Investment Group LLC on
      June 29, 2007. Drawbridge DSO Securities LLC beneficially owns 1,577,813
      shares of common stock. Drawbridge Special Opportunities Fund LP is deemed
      to beneficially own 1,577,813 shares solely as in its capacity as the sole
      managing member of Drawbridge DSO Securities LLC. Drawbridge Special
      Opportunities GP LLC is deemed to beneficially own 1,577,813 shares solely
      in its capacity as the general partner of Drawbridge Special Opportunities
      Fund LP. Drawbridge OSO Securities LLC beneficially owns 278,437 shares of
      common stock. Drawbridge Special Opportunities Advisors LLC is deemed to
      beneficially own 1,856,250 shares solely in its capacity as the investment
      advisor of each of Drawbridge Special Opportunities Fund LP and Drawbridge
      Special Opportunities Fund Ltd., the latter of which beneficially owns
      278,437 shares of common stock as the sole managing member of Drawbridge
      OSO Securities LLC. Fortress Principal Investment Holdings IV LLC is
      deemed to beneficially own 1,577,813 shares solely in its capacity as the
      sole managing member of Drawbridge Special Opportunities GP LLC. FIG LLC
      is deemed to beneficially own 1,856,250 shares solely in its capacity as
      the sole managing member of Drawbridge Special Opportunities Advisors LLC.
      Fortress Operating Entity I LP is deemed to beneficially own 1,856,250
      shares solely in its capacity as the sole managing member of each of FIG
      LLC and Fortress Principal Investment Holdings IV LLC. FIG Corp. is deemed
      to beneficially own 1,856,250 shares solely in its capacity as the general
      partner of Fortress Operating Entity I LP. Fortress Investment Group LLC
      is deemed to beneficially own 1,856,250 shares solely in its capacity as
      the holder of all the issued and outstanding shares of beneficial interest
      of FIG Corp. The address for each of the entities is c/o Fortress
      Investment Group LLC, 1345 Avenue of the Americas, 46th
      Floor, New York, New York 10105.




46




(6)
            Based
      on information contained in a Schedule 13G filed by Jonathan M. Glaser on
      February 17, 2009. Mr. Glaser is deemed to beneficially own 1,767,240
      shares of common stock.  PAM and JMG LLC are deemed to
      beneficially own 1,024,440 and 742,800 shares of common stock,
      respectively, as investment advisers whose clients have the right to
      receive or the power to direct the receipt of dividends from, or the
      proceeds from the sale of common stock; no client separately holds more
      than five percent of the common stock.  PAM is the investment
      adviser to an investment fund and PCM is a member of PAM.  Mr.
      Glaser, Mr. David and Mr. Richter are control persons of PCM and
      PAM.  JMG LLC is the investment adviser and general partner of
      an investment limited partnership and JMG Inc. is a member of JMG
      LLC.  Mr. Glaser is the control person of JMG Inc. and JMG
      LLC.  The address for Mr. Glaser is 11601 Wilshire Boulevard,
      Suite 2180, Los Angeles, CA 90025.




(7)
            Based
      on information contained in a Schedule 13G filed by Andrew M. Weiss, Ph.D.
      on April 21, 2008.  Dr. Weiss is deemed to beneficially own
      1,471,115 shares of common stock, of which 1,025,968 are beneficially
      owned by Weiss Asset Management, LLC, of which he is a managing member,
      and 445,147 are held by a private investment corporation which may be
      deemed to be controlled by Dr. Weiss, who is the managing member of Weiss
      Capital, LLC, the investment manager of such private investment
      corporation.   The address for Dr. Weiss is 29 Commonwealth
      Avenue, 10th
      Floor, Boston, Massachusetts 02116.




(8)
            Consists
      of the 1,461,042 shares held by M.O.T.A. Holdings Ltd., of which Mr.
      Bar-Niv is the controlling
stockholder.




(9)
            Consists
      of the 1,461,041 shares held by OLEV Holdings Ltd, of which Ms. Lev is the
      controlling stockholder.




(10)
            Consists
      of the 1,461,042 shares held by FSGL Holdings Ltd, of which Dr. Gleitman
      is the controlling stockholder.




(11)
            Effective
      June 16, 2008, Avigdor Kaplan resigned as a member of our board of
      directors.




All of
our securities outstanding prior to the effective date of our initial public
offering, including the private placement warrants, were placed in escrow with
Continental Stock Transfer & Trust Company, as escrow agent, and shall
remain in escrow until the consummation of a business combination.




During
the escrow period, the holders of the shares will not be able to sell or
transfer their shares of common stock (except to their spouses and children, or
trusts established for their benefit), but will retain all other rights as our
stockholders, including, without limitation, the right to vote their shares of
common stock (subject to their agreement to vote all of their shares of common
stock, including any shares of common stock purchased in or following our
initial offering, in accordance with the majority of the shares of common stock
voted by the public stockholders) and the right to receive cash dividends, if
declared. If dividends are declared and payable in shares of common stock, such
dividends will also be placed in escrow. If we are unable to effect a business
combination and liquidate, none of our initial stockholders, directors or
officers will receive any portion of the liquidation proceeds with respect to
common stock owned by them immediately before our initial offering.




We
consider Mr. Bar-Niv; Ms. Lev; Dr. Gleitman; Shrem, Fudim Technologies Ltd.; and
Shrem, Fudim Group Ltd. to be our promoters as such term is defined within the
rules promulgated by the SEC under the Securities Act.




Item
      13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE




Transactions
with Related Persons




On June
22, 2007, we issued an aggregate of 3,625,000 warrants at a price of $1.00 per
warrant, for an aggregate purchase price of $3,625,000 in a private placement to
the individuals set forth below:




Name
                  
                  Number of
                      Warrants
                  
                  Relationship to UsM.O.T.A.
      Holdings Ltd. (1)
                  
                  
                  708,334
                  
                  StockholderFSGL
      Holdings Ltd (2)
                  
                  
                  708,333
                  
                  StockholderOLEV
      Holdings Ltd (3)
                  
                  
                  708,333
                  
                  StockholderShrem,
      Fudim Technologies Ltd.
                  
                  
                  933,333
                  
                  StockholderShrem,
      Fudim Group Ltd.
                  
                  
                  466,667
                  
                  StockholderElisha
      Yanay
                  
                  
                  100,000
                  
                  Stockholder
      and Director







(1)
            An
      entity controlled by Mr. Bar-Niv, one of our directors and our Chairman of
      the Board. 125,000 and 41,667 warrants, respectively, were pledged to CRT
      Capital Group LLC and I-Bankers Securities, Inc. pursuant to a Pledge and
      Escrow Agreement dated June 22,
2007.




47




(2)
            An
      entity controlled by Dr. Gleitman, one of our directors and our Chief
      Technology Officer. 125,000 and 41,667 warrants, respectively, were
      pledged to CRT Capital Group LLC and I-Bankers Securities, Inc. pursuant
      to a Pledge and Escrow Agreement dated June 22,
  2007




(3)
            An
      entity controlled by Ms. Lev, one of our directors and our Chief Executive
      Officer. 125,000 and 41,666 warrants, respectively, were pledged to CRT
      Capital Group LLC and I-Bankers Securities, Inc. pursuant to a Pledge and
      Escrow Agreement dated June 22,
2007




These
warrants, which we refer to collectively as the founder warrants, will not be
sold or transferred by the purchasers of the founder warrants until the later of
June 18, 2008, and the completion of our initial business combination. The
$3,625,000 in proceeds from the sale of the founder warrants will be held in the
trust account. The founder warrants will expire worthless if we do not complete
a business combination. Prior to the closing of our initial offering, two of the
underwriters, CRT Capital Group LLC and I-Bankers Securities, Inc., loaned to
certain of the founders $500,000 to be used to purchase a portion of the founder
warrants. Such loan was secured by a pledge of 500,000 founder warrants. Such
founders will not be required to repay this loan unless a business combination
is completed. Such founders will not be required to pay interest on the loans,
unless they default on the loan, which would occur if the such founders fail to
make required payments or become insolvent. Under the terms of the note, within
five business days after the completion of the business combination, such
founders will transfer to CRT Capital Group LLC and I-Bankers Securities, Inc.
500,000 of the founder warrants. In addition, within five business days after
the expiration of the escrow period, such founders will repay the principal
amount of the loan to CRT Capital Group LLC and I-Bankers Securities, Inc. The
founders will fund the remainder of the purchase price ($3,125,000) by using
their own funds.




The
purchasers of the founder warrants have also indicated that any warrants
purchased by them will not be sold or transferred until the completion of a
business combination. These purchases are expected to align the interests of the
purchasers of the founder warrants more closely with those of the public
stockholders and warrantholders by placing more of our officers’ and directors’
capital at risk. Purchases of founder warrants also demonstrate confidence in
our ultimate ability to effect a business combination because the founder
warrants, which cannot be transferred until the later of June 18, 2008, and the
completion of our initial business combination, will expire worthless if we are
unable to consummate a business combination and are forced to liquidate. The
holders of the founder warrants and the common stock underlying such warrants
are entitled to registration rights with respect to such securities under an
agreement dated June 18, 2007. Unlike the other warrants, the founder warrants
cannot be sold or transferred unless such warrants or the shares for which such
warrants are exercisable are first registered on a registration
statement.




M.O.T.A.
Holdings Ltd., FSGL Holdings Ltd and OLEV Holdings Ltd have loaned us an
aggregate of $219,000 for the payment of a portion of the offering expenses and
have incurred an additional $120,930 of liabilities relating to our initial
offering. These non-interest bearing loans were initially payable on September
14, 2007, were deferred to October 2007 and were thereafter repaid. The last
payment on the loans was made on October 10, 2007.




We will
reimburse our initial stockholders, directors and officers for any reasonable
out-of-pocket expenses incurred by them in connection with activities on our
behalf such as identifying a potential target business and performing due
diligence on a suitable business combination. There is no limit on the amount of
these reasonable out-of-pocket expenses and there will be no review of the
reasonableness of the expenses by anyone other than our board of directors,
which includes persons who may seek reimbursement, or a court of competent
jurisdiction if such reimbursement is challenged.




Other
than the $10,000 per-month administrative fee, repayment of the management loans
and reimbursable out-of-pocket expenses payable to our officers and directors,
no compensation or fees of any kind, including finder’s fees, consulting fees or
other similar compensation, will be paid to any of our initial stockholders,
officers or directors who owned our common stock prior to our initial offering,
or to any of their respective affiliates, prior to or with respect to the
business combination.




Review,
Approval or Ratification of Transactions with Related Persons




All
ongoing and future transactions between us and any of our officers and directors
or their respective affiliates, including loans by our officers and directors,
will be on terms believed by us to be no less favorable to us than are available
from unaffiliated third parties. Such transactions or loans, including any
forgiveness of loans, will require prior approval by a majority of our
uninterested “independent” directors (to the extent we have any) or the members
of our board who do not have an interest in the transaction, in either case who
had access, at our expense, to our attorneys or independent legal counsel. We
will not enter into any such transaction unless our disinterested “independent”
directors (or, if there are no “independent” directors, our disinterested
directors) determine that the terms of such transaction are no less favorable to
us than those that would be available to us with respect to such a transaction
from unaffiliated third parties.




48




Item
      14.
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES




Audit
and Non-Audit Services




The firm
of Brightman Almagor & Co., a member firm of Deloitte Touche Tohmatsu
(“Deloitte”),
an independent registered public accounting firm acts as our principal
accountant. Deloitte manages and supervises the audit, and is exclusively
responsible for the opinion rendered in connection with its examination. We have
engaged Deloitte to assist us in the preparation of our audited financial
statements. The following is a summary of fees paid to Deloitte for services
rendered:





Service
      Category
                
                2008
                
                
                2007Audit
      Fees
                
                $
                25,000
                
                
                $
                15,000Audit-Related
      Fees
                
                
                5,000
                
                
                
                –Tax
      Fees
                
                
                11,805
                
                
                
                5,000All
      Other Fees
                
                
                –
                
                
                
                –Total
                
                $
                41,805
                
                
                $
                19,000




In the
above table, in accordance with the SEC’s definitions and rules, “audit fees”
are fees for professional services for the audit of a company’s financial
statements included in the Annual Report, for the review of a company’s
financial statements included in the quarterly reports on Form 10-Q, and for
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements; “audit-related fees” are fees
for assurance and related services that are reasonably related to the
performance of the audit or review of a company’s financial statements; and “tax
fees” are fees for tax compliance, tax advice and tax planning. Included in
Audit Fees are fees that were billed and unbilled for the 2007 and 2008 audits,
respectively.




Policy
on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Registered Public Accounting Firm




To help
ensure the independence of the independent registered public accounting firm,
the audit committee has adopted a policy for the pre-approval of all audit and
non-audit services to be performed for us by our independent registered public
accounting firm. Pursuant to this policy, all audit and non-audit services to be
performed by the independent registered public accounting firm must be approved
in advance by the audit committee.




49




PART
IV




Item
      15.
            EXHIBITS,
      FINANCIAL STATEMENT SCHEDULES




(a) The
following documents are filed as part of this Annual Report:




(1)
            Financial
      Statements.




Reference
is made to the Index to the financial statements of Advanced Technology
Acquisition Corp. under Item 8 of Part II hereof.




(2)
            Financial Statement
      Schedule.




All
schedules are omitted for the reason that the information is included in the
financial statements or the notes thereto or that they are not required or are
not applicable.




(3)
            Exhibits.




The list
of exhibits required by Item 601 of Regulation S-K and filed as part of this
report is set forth in the Exhibit Index.


50




SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.




ADVANCED
      TECHNOLOGY ACQUISITION CORP.By:
                        /s/ Liora LevLiora
      Lev




Date:
March 31, 2009




POWER
OF ATTORNEY




We, the
undersigned directors and/or officers of Advanced Technology Acquisition Corp.
(the “Company”), hereby severally constitute and appoint Shuki Gleitman, Liora
Lev and Moshe Bar-Niv, and each of them individually, with full powers of
substitution and resubstitution, our true and lawful attorneys, with full powers
to them and each of them to sign for us, in our names and in the capacities
indicated below, the Annual Report on Form 10-K to be filed with the Securities
and Exchange Commission, and any and all amendments to said Annual Report on
Form 10-K, and to file or cause to be filed the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as each
of them might or could do in person, and hereby ratifying and confirming all
that said attorneys, and each of them, or their substitute or substitutes, shall
do or cause to be done by virtue of this Power of Attorney.




Pursuant
to the requirements of the Securities and Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated:




Signature
                  
                  Title
                  
                  Date/s/ Moshe Bar-Niv
                  
                  Chairman
      of the Board of Directors
                  
                  March
      31, 2009Moshe
      Bar-Niv/s/ Liora Lev
                  
                  Chief
      Executive Officer and Director
                  
                  March
      31, 2009Liora
      Lev/s/ Yehoshua Gleitman
                  
                  Chief
      Technology Officer and Director
                  
                  March
      31, 2009Yehoshua
      Gleitman/s/ Ido Bahbut
                  
                  Chief
      Financial Officer, Treasurer and Secretary
                  
                  March
      31, 2009Ido
      Bahbut
                  
                  (principal
      financial and accounting officer)/s/
      Elisha Yanay
                  
                  Director
                  
                  March
      31, 2009Elisha
      Yanay/s/ Yoram Buki
                  
                  Director
                  
                  March
      31, 2009Yoram
      Buki/s/ Yacov Rozen
                  
                  Director
                  
                  March
      31, 2009Yacov
      Rozen




51




EXHIBIT
INDEX




Exhibit Number
                
                Description3.1
                
                Form
      of Amended and Restated Certificate of Incorporation (incorporated by
      reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K,
      filed on June 22, 2007).3.2
                
                Bylaws
      (incorporated by reference to Exhibit 3.2 of the Company’s Registration
      Statement on Form S-1 (Registration No. 333-137863), filed on October 6,
      2006).4.1
                
                Specimen
      of Unit Certificate (incorporated by reference to Exhibit 4.1 of the
      Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006).4.2
                
                Specimen
      of Common Stock Certificate (incorporated by reference to Exhibit 4.2 of
      the Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006).4.3
                
                Specimen
      of Warrant Certificate (incorporated by reference to Exhibit 4.3 of the
      Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006).4.4
                
                Specimen
      Founder Warrant Certificate (incorporated by reference to Exhibit 4.4 of
      the Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006).4.5
                
                Specimen
      Underwriter Unit Certificate (incorporated by reference to Exhibit 4.5 of
      the Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006).4.6
                
                Specimen
      Underwriter Warrant Certificate (incorporated by reference to Exhibit 4.6
      of the Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006).4.7
                
                Form
      of Unit Purchase Option to be granted to certain of the Underwriters
      (incorporated by reference to Exhibit 4.7 of the Company’s Registration
      Statement on Form S-1/A (Registration No. 333-137863), filed on June 14,
      2007.4.8
                
                Form
      of Warrant Agreement between Continental Stock Transfer & Trust
      Company and the Registrant (incorporated by reference to Exhibit 4.8 of
      the Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006).10.1
                
                Letter
      Agreement of M.O.T.A. Holdings Ltd., as an Initial Stockholder of the
      Company, dated September 29, 2006 (incorporated by reference to Exhibit
      10.1 of the Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006; Letter Agreement of M.O.T.A.
      Holdings Ltd., as an Initial Stockholder of the Company, dated February
      16, 2007 (incorporated by reference to Exhibit 10.1 of the Company’s
      Registration Statement on Form S-1/A (Registration No. 333-137863), filed
      on February 16, 2007.10.2
                
                Letter
      Agreement of FSGL Holdings Ltd, as an Initial Stockholder of the Company,
      dated September 29, 2006 (incorporated by reference to Exhibit 10.2 of the
      Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006); Letter Agreement of FSGL Holdings
      Ltd, as an Initial Stockholder of the Company, dated February 16, 2007
      (incorporated by reference to Exhibit 10.2 of the Company’s Registration
      Statement on Form S-1/A (Registration No. 333-137863), filed on February
      26, 2007).10.3
                
                Letter
      Agreement of OLEV Holdings Ltd, as an Initial Stockholder of the Company,
      dated September 29, 2006 (incorporated by reference to Exhibit 10.3 of the
      Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006); Letter Agreement of OLEV Holdings
      Ltd, as an Initial Stockholder of the Company, dated February 16, 2007
      (incorporated by reference to Exhibit 10.3 of the Company’s Registration
      Statement on Form S-1/A (Registration No. 333-137863), filed on February
      16, 2007).





52




Exhibit Number
            
            Description10.4(a)
            
            Letter
      Agreement of Josef Neuhaus Ltd, as an Initial Stockholder of the Company,
      dated September 29, 2006 (incorporated by reference to Exhibit 10.4 of the
      Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006).10.4(b)
            
            Letter
      Agreement of Ido Bahbut, as an Initial Stockholder of the Company, dated
      February 16, 2007 (incorporated by reference to Exhibit 10.4(b) of the
      Company’s Registration Statement on Form S-1/A (Registration No.
      333-137863), filed on February 16, 2007).10.5
            
            Letter
      Agreement of Shrem, Fudim, Kelner - Technologies Ltd., as an Initial
      Stockholder of the Company, dated September 29, 2006 (incorporated by
      reference to Exhibit 10.5 of the Company’s Registration Statement on Form
      S-1 (Registration No. 333-137863), filed on October 6,
    2006).10.6
            
            Letter
      Agreement of Shrem, Fudim, Kelner & Co. Ltd., as an Initial
      Stockholder of the Company, dated September 29, 2006 (incorporated by
      reference to Exhibit 10.6 of the Company’s Registration Statement on Form
      S-1 (Registration No. 333-137863), filed on October 6,
    2006).10.7
            
            Letter
      Agreement of Avigdor Kaplan, as an Initial Stockholder of the Company,
      dated September 29, 2006 (incorporated by reference to Exhibit 10.7 of the
      Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006).10.8
            
            Letter
      Agreement of Elisha Yanay, as an Initial Stockholder of the Company, dated
      September 29, 2006 (incorporated by reference to Exhibit 10.8 of the
      Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006).10.9(a)
            
            Letter
      Agreement of Josef Neuhaus, as an Officer of the Company, dated September
      29, 2006 (incorporated by reference to Exhibit 10.9 of the Company’s
      Registration Statement on Form S-1 (Registration No. 333-137863), filed on
      October 6, 2006).10.9(b)
            
            Letter
      Agreement of Ido Bahbut, as an Officer of the Company, dated February 16,
      2007 (incorporated by reference to Exhibit 10.9(b) of the Company’s
      Registration Statement on Form S-1/A (Registration No. 333-137863), filed
      on February 16, 2007).10.10
            
            Letter
      Agreement of Elisha Yanay, as a Director of the Company, dated September
      29, 2006 (incorporated by reference to Exhibit 10.10 of the Company’s
      Registration Statement on Form S-1 (Registration No. 333-137863), filed on
      October 6, 2006).10.11
            
            Letter
      Agreement of Avigdor Kaplan, as a Director of the Company, dated September
      29, 2006 (incorporated by reference to Exhibit 10.11 of the Company’s
      Registration Statement on Form S-1 (Registration No. 333-137863), filed on
      October 6, 2006).10.12
            
            Letter
      Agreement of Moshe Bar-Niv, as a Director and Officer of the Company,
      dated September 29, 2006 (incorporated by reference to Exhibit 10.12 of
      the Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006); Letter Agreement of Moshe Bar-Niv,
      as a Director and Officer of the Company, dated February 16, 2007
      (incorporated by reference to Exhibit 10.12 of the Company’s Registration
      Statement on Form S-1/A (Registration No. 333-137863), filed on February
      16, 2007).10.13
            
            Letter
      Agreement of Shuki Gleitman, as a Director and Officer of the Company,
      dated September 29, 2006 (incorporated by reference to Exhibit 10.13 of
      the Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006); Letter Agreement of Shuki
      Gleitman, as a Director and Officer of the Company, dated February 12,
      2007 (incorporated by reference to Exhibit 10.13 of the Company’s
      Registration Statement on Form S-1/A (Registration No. 333-137863), filed
      on February 16, 2007).




53




Exhibit Number
              
              Description10.14
              
              Letter
      Agreement of Liora Lev, as a Director and Officer of the Company, dated
      September 29, 2006 (incorporated by reference to Exhibit 10.14 of the
      Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006); Letter Agreement of Liora Lev, as
      a Director and Officer of the Company, dated February 16, 2007
      (incorporated by reference to Exhibit 10.14 of the Company’s Registration
      Statement on Form S-1/A (Registration No. 333-137863), filed on February
      16, 2007).10.15
              
              Form
      of Investment Management Trust Agreement between Continental Stock
      Transfer & Trust Company and the Registrant (incorporated by reference
      to Exhibit 10.15 of the Company’s Registration Statement on Form S-1
      (Registration No. 333-137863), filed on October 6,
  2006).10.16
              
              Form
      of Stock Escrow Agreement between the Registrant, Continental Stock
      Transfer & Trust Company and the Initial Stockholders (incorporated by
      reference to Exhibit 10.16 of the Company’s Registration Statement on Form
      S-1 (Registration No. 333-137863), filed on October 6,
    2006).10.17
              
              Form
      of Promissory Note (incorporated by reference to Exhibit 10.17 of the
      Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006).10.18
              
              Form
      of Registration Rights Agreement among the Registrant and the Initial
      Stockholders (incorporated by reference to Exhibit 10.18 of the Company’s
      Registration Statement on Form S-1 (Registration No. 333-137863), filed on
      October 6, 2006).10.19(a)
              
              Letter
      Agreement, dated September 29, 2006, between the Registrant and each of
      the Initial Stockholders (incorporated by reference to Exhibit 10.19 of
      the Company’s Registration Statement on Form S-1 (Registration No.
      333-137863), filed on October 6, 2006).10.19(b)
              
              Letter
      Agreement, dated February 16, 2007, between the Registrant and Ido Bahbut,
      in his capacity as an Initial Stockholder (incorporated by reference to
      Exhibit 10.19(b) of the Company’s Registration Statement on Form S-1/A
      (Registration No. 333-137863), filed on February 16,
  2007).10.20
              
              Form
      of Subscription Agreement, dated September 29, 2006, between the
      Registrant and each of the purchasers of the founder warrants
      (incorporated by reference to Exhibit 10.20 of the Company’s Registration
      Statement on Form S-1 (Registration No. 333-137863), filed on October 6,
      2006).10.21
              
              Letter
      Agreement, dated September 29, 2006, between the Registrant and LMS Nihul
      regarding administrative support (incorporated by reference to Exhibit
      10.21 of the Company’s Registration Statement on Form S-1 (Registration
      No. 333-137863), filed on October 6, 2006).10.22
              
              Form
      of Letter Agreement relating to forfeiture of shares of common stock,
      between the Registrant, the Underwriters and certain of the Initial
      Stockholders of the Company (incorporated by reference to Exhibit 10.22 of
      the Company’s Registration Statement on Form S-1/A (Registration No.
      333-137863), filed on March 21, 2007).10.23
              
              Form
      of Promissory Note among the Underwriters and certain of the Initial
      Stockholders of the Company (incorporated by reference to Exhibit 10.23 of
      the Company’s Registration Statement on Form S-1/A (Registration No.
      333-137863), filed on June 14, 2007.10.24
              
              Form
      of Pledge Agreement among the Underwriters and certain of the Initial
      Stockholders of the Company and the Escrow Agent (incorporated by
      reference to Exhibit 10.24 of the Company’s Registration Statement on Form
      S-1/A (Registration No. 333-137863), filed on June 14,
    2007).10.24
              
              Letter
      of Intent, dated as of December 19, 2008, between Advanced Technology
      Acquisition Corp. and Bioness Inc. (incorporated by reference to Exhibit
      10.1 of the Company’s Current Report of Form 8-K, filed December 22,
      2008).


54




Exhibit Number
              
              Description14.1
              
              Code
      of Conduct and Business (incorporated by reference to Exhibit 14.1 of the
      Company’s Annual Report on Form 10-K, filed on March 26,
      2008).31.1
              
              Certification
      of Principal Executive Officer pursuant to Section 302(a) of the
      Sarbanes-Oxley Act of 2002.31.2
              
              Certification
      of Principal Financial Officer pursuant to Section 302(a) of the
      Sarbanes-Oxley Act of 2002.32.1
              
              Certification
      of Principal Executive Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.32.2
              
              Certification
      of Principal Financial Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.99.1
              
              Audit
      Committee Charter (incorporated by reference to Exhibit 99.1 of the
      Company’s Annual Report on Form 10-K, filed on March 26,
      2008).


55


ADVANCED TECHNOLOGY ACQUISITION
CORP.
 (A
Development Stage Corporation)
 Financial
Statements as of December 31, 2008
 
 INDEX
TO FINANCIAL STATEMENTS
 
 Report
      of Independent Registered Public Accounting Firm
                              F-2Attestation
      Report of Independent Registered Public Accounting Firm
                              F-3Financial
      statementsBalance
      Sheets
                              F-5Statements
      of Operations
                              F-6Statement
      of Changes in Stockholders’ Equity
                              F-7Statement
      of Cash Flows
                              F-8Notes
      to Financial Statements
                              F-9–
      F-16
 
 F-1
  
  REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To
the Board of Directors and the shareholders of
 Advanced
Technology Acquisition Corp.
 
 We have
audited the accompanying consolidated balance sheets of Advanced Technology
Acquisition Corp. (a development stage corporation) (“the Company”) as of
December 31, 2008 and 2007, and the related statements of operations,
shareholders’ equity and cash flows for each of the two years in the period
ended December 31, 2008, the period August 24, 2006 (inception) to December 31,
2006 and the period August 24, 2006 (inception) to December 31,
2008.  These financial statements are the responsibility of the
Company’s Board of Directors and management. Our responsibility is to express an
opinion on these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, such consolidated financial statements present fairly, in all material
respects, the financial position of Advanced Technology Acquisition Corp. (a
development stage corporation) as of December 31, 2008 and 2007, and the results
of operations and cash flows for each of the two years in the period ended
December 31, 2008 the period August 24, 2006 (inception) to December 31, 2006
and the period August 24, 2006 (inception) to December 31, 2008, in conformity
with accounting principles generally accepted in United States of
America.
 
 We have
also audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the Company's internal control over financial
reporting as of December 31, 2008, based on criteria established in Internal
Control — Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), and our report dated March 31,
2009 expressed an adverse opinion on the effectiveness of the Company’s internal
control over financial reporting.
 
 /s/
Brightman Almagor Zohar & Co.
 Certified
Public Accountants
 A
Member Firm of Deloitte Touche Tohmatsu
 
 March
31, 2009
  
 F-2
   REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 
 To
Board of Directors and the shareholders of
 Advanced
Technology Acquisition Corp.
 
 We have
audited the internal control over financial reporting of Advanced Technology
Acquisition Corp. (a development stage corporation) (the "Company") as of
December 31, 2008, based on criteria established in Internal Control —
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). The Company's Board of Directors and management are
responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial
reporting, included in ITEM 9A. CONTROLS AND PROCEDURES - Management’s Annual
Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on the Company's internal control over financial reporting
based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all
material respects.  Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness
of internal control based on the assessed risk, and performing such other
procedures as we considered necessary in the circumstances.  We
believe that our audit provides a reasonable basis for our opinion.
 
 A
company's internal control over financial reporting is a process designed by, or
under the supervision of, the company's principal executive and principal
financial officers, or persons performing similar functions, and effected by the
company's board of directors, management, and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial
statements.
 
  
 F-3
 
   Because
of the inherent limitations of internal control over financial reporting,
including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may not be prevented or
detected on a timely basis.  Also, projections of any evaluation of
the effectiveness of the internal control over financial reporting to future
periods are subject to the risk that the controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
 
 A
material weakness is a deficiency, or a combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of the company’s annual or interim financial
statements will not be prevented or detected on a timely basis.  A
material weakness relating to lack of segregation of duties because of limited
staff members has been identified and included in management's
assessment.  This material weakness was considered in determining the
nature, timing, and extent of audit tests applied in our audit of the
consolidated financial statements as of and for the year ended December 31,
2008, of the Company and this report does not affect our report on such
financial statements.
 In our
opinion, because of the effect of the material weakness identified above on the
achievement of the objectives of the control criteria, the Company has not
maintained effective internal control over financial reporting as of December
31, 2008, based on the criteria established in Internal Control — Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission.
 
 We have
also audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the financial statements as of and for the year
ended December 31, 2008 of the Company and our report dated March 31, 2009
expressed an unqualified opinion on those financial statements.
 
 
 
 
 
 
 /s/
Brightman Almagor Zohar & Co.
 Certified
Public Accountants
 A
Member Firm of Deloitte Touche Tohmatsu
 
 Tel
Aviv, Israel
 March 31,
2009
  
 F-4
 
 ADVANCED
TECHNOLOGY ACQUISITION CORP.
 (A
Development Stage Corporation)
 
 Balance
Sheets
 
 December 31,
                    2 0 0 8
                
                
                December 31,
                    2 0 0 7ASSETSCurrent
      assetsCash
      and cash equivalents
                
                $
                32,301
                
                
                $
                41,869Bank
      deposit
                
                
                1,300,000
                
                
                
                775,000Prepaid
      expenses
                
                
                -
                
                
                
                162,150Investment
      held in escrow (Note 6)
                
                
                174,542,411
                
                
                
                -Long-term
      assetsInvestment
      held in escrow (Note 6)
                
                
                -
                
                
                
                171,554,122Total
      assets
                
                $
                175,874,712
                
                
                $
                172,533,141LIABILITIES
      AND STOCKHOLDERS’ EQUITYAccounts
      payable
                
                $
                316,119
                
                
                $
                70,011Total
      liabilities
                
                
                316,119
                
                
                
                70,011Commitments
      and Contingencies (Note 4)Redeemable
      common stock (note 5)Issued
      and outstanding 8,625,000 shares as of  December 31, 2008 and
      2007
                
                
                67,807,500
                
                
                
                67,807,500Stockholders’
      equity (notes 5 & 7)Preferred
      stock, $0.0001 par value
                  Authorized
      1,000,000 shares; none issuedCommon
      stock, $0.0001 par value
                  Authorized
      100,000,000 shares
                  Issued
      and outstanding 18,328,125 shares as of  December 31, 2008 and
      2007 exclusive of 8,625,000 shares outstanding classified as Redeemable
      common stock
                
                
                1,833
                
                
                
                1,833Warrants
                
                
                3,625,000
                
                
                
                3,625,000Additional
      paid-in capital
                
                
                98,172,475
                
                
                
                98,172,475Retained
      earnings during the development stage
                
                
                5,951,785
                
                
                
                2,856,322Total
      stockholders’ equity
                
                
                107,751,093
                
                
                
                104,655,630Total
      liabilities and stockholders’ equity
                
                $
                175,847,712
                
                
                $
                172,533,141
 
 The
accompanying notes are an integral part of these Financial
Statements.
  F-5
 
 ADVANCED
TECHNOLOGY ACQUISITION CORP.
 (A
Development Stage Corporation)
 
 Statements
of Operations
 
 Year ended
                    December 31,
                    2 0 0 8
                
                
                Year ended
                    December 31,
                    2 0 0 7
                
                
                For the period
                  August 24, 2006
                  (inception) to
                  December 31,
                    2 0 0 6
                
                
                For the period
                    August 24, 2006
                    (inception) to
                    December 31,
                    2 0 0 8Formation
      and operating costs
                
                $
                816,379
                
                
                $
                274,919
                
                
                $
                5,000
                
                
                $
                1,096,298Financial
      income
                
                
                3,911,842
                
                
                
                3,136,241
                
                
                
                —
                
                
                
                7,048,083Net
      income
                
                
                3,095,463
                
                
                
                2,861,322
                
                
                
                (5,000
                )
                
                
                5,951,785Weighted
      average shares outstanding (Note 2b)
                
                
                26,953,125
                
                
                
                20,665,509
                
                
                
                6,250,000Basic
      and diluted loss per share
                
                $
                0.11
                
                
                $
                0.14
                
                
                $
                0.00
 
 The
accompanying notes are an integral part of these Financial
Statements.
  F-6
  ADVANCED
TECHNOLOGY ACQUISITION CORP.
 (A
Development Stage Corporation)
 
 Statement
of Changes in Stockholders’ Equity
 
 Common stock
                
                
                Additional paid-in
                
                
                
                
                
                Retained earnings
                    (Accumulated
                    deficit) during the
                
                
                Stockholders’Shares
                
                
                Amount
                
                
                capital
                
                
                Warrants
                
                
                development stage
                
                
                equityCommon
      shares issued at $0.0001 per share
                
                
                4,687,500
                
                
                $
                469
                
                
                $
                18,281
                
                
                $
                -
                
                
                $
                -
                
                
                $
                18,750Net
      Loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (5,000
                )
                
                
                (5,000
                )Balance
      at December 31, 2006
                
                
                4,687,500
                
                
                
                469
                
                
                
                18,281
                
                
                
                -
                
                
                
                (5,000
                )
                
                
                13,750Common
      shares issued at $0.0001 per share (net of issuance expenses of
      $933,505)
                
                
                12,937,500
                
                
                
                1,294
                
                
                
                98,151,452
                
                
                
                -
                
                
                
                -
                
                
                
                98,152,746Issuance
      of warrants
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,625,000
                
                
                
                -
                
                
                
                3,625,000Reclassification
      of redeemable shares that are no longer redeemable to permanent
      equity
                
                
                703,125
                
                
                
                70
                
                
                
                2,742
                
                
                
                -
                
                
                
                -
                
                
                
                2,812Net
      income
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                2,861,322
                
                
                
                2,861,322Balance at December
      31, 2007(1)
                
                
                18,328,125
                
                
                
                1,833
                
                
                
                98,172,475
                
                
                
                3,625,000
                
                
                
                2,856,322
                
                
                
                104,655,630Net
      income
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,095,463
                
                
                
                3,095,463Balance at December
      31, 2008(1)
                
                
                18,328,125
                
                
                $
                1,833
                
                
                $
                98,172,475
                
                
                $
                3,625,000
                
                
                $
                5,951,785
                
                
                $
                107,751,093
 
 (1)
Exclusive of 8,625,000 shares outstanding classified as Redeemable common
stock
 
 The
accompanying notes are an integral part of these Financial
Statements.
 
 F-7
 
 ADVANCED
TECHNOLOGY ACQUISITION CORP.
 (A
Development Stage Corporation)
 
 Statement
of Cash Flows
 
 Year ended
                    December 31,
                    2 0 0 8
                
                
                Year ended
                    December 31,
                    2 0 0 7
                
                
                For the period
                  August 24,
                  2006
                  (inception) to
                  December 31,
                    2 0 0 6
                
                
                For the period
                    August 24,
                    2006
                    (inception) to
                    December 31,
                    2 0 0 8Cash
      flows from operating activitiesNet
      income (loss)
                
                $
                3,095,463
                
                
                $
                2,861,322
                
                
                $
                (5,000
                )
                
                $
                5,951,785Adjustments
      to reconcile net income to net cash provided by (used in) operating
      activities:Interest
      receivable from deposits in escrow
                
                
                (3,013,289
                )
                
                
                (453,806
                )
                
                
                -
                
                
                
                (3,467,095
                )Changes
      in operating assets and liabilities:Increase
      in deferred offering costs
                
                
                -
                
                
                
                -
                
                
                
                (233,013
                )
                
                
                (233,013
                )Decrease
      in Notes and accounts payables –  Stockholders
                
                
                -
                
                
                
                (74,842
                )
                
                
                
                
                
                
                (74,842
                )Decrease
      (Increase) in prepaid expenses
                
                
                162,150
                
                
                
                (162,150
                )
                
                
                -
                
                
                
                -Increase
      in accounts payable
                
                
                246,108
                
                
                
                70,011
                
                
                
                
                
                
                
                316,119Net
      cash provided by (used in) operating activities
                
                
                490,432
                
                
                
                2,240,535
                
                
                
                (238,013
                )
                
                
                2,492,954Cash
      flows used in investment activitiesInvestment
      in bank deposit and escrow
                
                
                (500,000
                )
                
                
                (171,875,315
                )
                
                
                —
                
                
                
                (172,375,315
                )Net
      cash used in investment activities
                
                
                (500,000
                )
                
                
                (171,875,315
                )
                
                
                —
                
                
                
                (172,375,315
                )Cash
      flows from financing activitiesRepayment
      of notes to payable to shareholders
                
                
                -
                
                
                
                (219,000
                )
                
                
                -
                
                
                
                (219,000
                )Proceeds
      from issuance of notes payable to stockholders
                
                
                -
                
                
                
                -
                
                
                
                219,000
                
                
                
                219,000Proceeds
      from sale of shares of common stock
                
                
                -
                
                
                
                -
                
                
                
                25,000
                
                
                
                25,000Proceeds
      from issuance of shares of common stock, net
                
                
                -
                
                
                
                166,264,662
                
                
                
                -
                
                
                
                166,264,662Proceeds
      from issuance of warrants
                
                
                -
                
                
                
                3,625,000
                
                
                
                -
                
                
                
                3,625,000Net
      cash provided by financing activities
                
                
                -
                
                
                
                169,670,662
                
                
                
                244,000
                
                
                
                169,914,662Net
      increase (decrease) in cash and cash equivalents
                
                
                (9,568
                )
                
                
                35,882
                
                
                
                5,987
                
                
                
                32,301Cash
      and cash equivalentsat the beginning of
      the period
                
                
                41,869
                
                
                
                5,987
                
                
                
                -
                
                
                
                -Cash
      and cash equivalentsat the end of the
      period
                
                $
                32,301
                
                
                $
                41,869
                
                
                $
                5,987
                
                
                $
                32,301Non-cash activitiesDeferred
      offering costs paid by shareholders
                
                $
                -
                
                
                $
                -
                
                
                $
                74,842
                
                
                $
                -
 
 The
accompanying notes are an integral part of these Financial
Statements.
  F-8
 
 ADVANCED
TECHNOLOGY ACQUISITION CORP.
 (A
Development Stage Corporation)
 Notes
to Financial Statements
 
 NOTE
      1   -
              ORGANIZATION
      AND BUSINESS OPERATIONS
 
 Advanced
Technology Acquisition Corp. (the “Company”) was incorporated in Delaware on
August 24, 2006 as a blank check company whose objective is to effect a merger,
capital stock exchange, asset acquisition, stock purchase or other similar
business combination with a technology or technology-related business that has
operations or facilities located in Israel, or that intends to establish
operations or facilities in Israel, such as research and development,
manufacturing or executive offices, following its initial business
combination.
 
 At
December 31, 2008, the Company had not yet commenced any operations. All
activities through December 31, 2008 relate to the Company’s formation and the
Public Offering (“Offering”) described below. The Company has selected December
31 as its fiscal year-end.
 
 On June
22, 2007 the Company completed the offering. Substantially all net proceeds of
this Offering are intended to be generally applied toward consummating a
business combination with a technology or technology related business that has
operations or facilities located in Israel, or that intends to establish
operations or facilities in Israel, such as research and development,
manufacturing or executive offices, following the Company’s initial business
combination (“Business Combination”). The Company’s management has complete
discretion in identifying and selecting the target business. There is no
assurance that the Company will be able to successfully effect a Business
Combination. Upon the closing of the Offering, 98.27% or $169,518,750 of the
proceeds from the Offering were deposited in trust account (“Trust Account”)
until the earlier of (i) the completion of a Business Combination and (ii)
liquidation of the Company. The placing of funds in the Trust Account may not
protect those funds from third party claims against the Company. Although the
Company will seek to have all vendors, prospective target businesses or other
entities it engages execute agreements with the Company waiving any right in or
to any monies held in the Trust Account, there is no guarantee that they will
execute such agreements. The remaining net proceeds (not held in the Trust
Account) may be used to pay for business, legal and accounting due diligence on
prospective acquisitions, and initial and continuing general and administrative
expenses (including formation expenses). The Company, after signing a definitive
agreement for the acquisition of a target business, is required to submit such
transaction for stockholder approval. The Company will proceed with the initial
business combination only if both a majority of the shares of common stock voted
by the public stockholders are voted in favor of the business combination and
public stockholders owning less than 40% of the shares sold in this offering
exercise their conversion rights described below. All of the Company’s
stockholders prior to the Offering, including all of the officers and directors
of the Company (“Initial Stockholders”), have agreed to vote their founding
shares of common stock in accordance with the vote of the majority in interest
of all other stockholders of the Company (“Public Stockholders”) with respect to
any Business Combination. After consummation of a Business Combination, these
voting safeguards will no longer be applicable.
 
 F-9
 
 ADVANCED
TECHNOLOGY ACQUISITION CORP.
 (A
Development Stage Corporation)
 Notes
to Financial Statements
 
 NOTE
      1   -
              ORGANIZATION
      AND BUSINESS OPERATIONS (Cont.)
 
 With
respect to a Business Combination which is approved and consummated, the Company
will offer each of its Public Stockholders the right to have such stockholder’s
shares of common stock converted into cash if the stockholder votes against the
business combination. The per share conversion price will equal the amount in
the Trust Account, calculated as of two business days prior to the consummation
of the proposed Business Combination, less any remaining tax liabilities
relating to interest income, divided by the number of shares of common stock
held by Public Stockholders at the consummation of the Offering. Public
Stockholders who convert their stock into their share of the trust account
retain their warrants. The Company will not complete any proposed business
combination which our Public Stockholders owning 40% or more of the shares sold
in this offering both vote against and exercise their conversion
rights.
 
 The
Company’s Certificate of Incorporation provides for mandatory liquidation of the
Company in the event that the Company does not consummate a Business Combination
within 18 months from the date of the consummation of the Offering, or 24 months
from the consummation of the Offering if a letter of intent, agreement in
principle or definitive agreement has been executed within 18 months after the
consummation of the Offering and the business combination relating thereto has
not yet been consummated within such 18-month period. In the event of
liquidation, it is likely that the per share value of the residual assets
remaining available for distribution (including Trust Fund assets) will be less
than the IPO price per share in the Offering (assuming no value is attributed to
the Warrants contained in the Units to be offered in the Offering discussed in
Note 3).
 
 F-10
  ADVANCED
TECHNOLOGY ACQUISITION CORP.
 (A
Development Stage Corporation)
 Notes
to Financial Statements
 
 NOTE
      2   -
              SIGNIFICANT
      ACCOUNTING POLICIES
 
 A.
                Deferred
      taxes
 
 Deferred
income taxes are provided for the differences between the bases of assets and
liabilities for financial reporting and income tax purposes. A valuation
allowance is established when necessary to reduce deferred tax assets to the
amount expected to be realized.
 
 B.
                Earning
      per share
 
 Basic and
diluted earning per share is computed by dividing net income by the
weighted-average number of shares of common stock outstanding during the period.
The 6,250,000 Shares issued to the Company’s initial stockholders were issued
for $0.004 per share, which is considerably less than the IPO per share price.
Under the provisions of FASB No. 128 and SAB Topic 4:D such shares have been
assumed to be retroactively outstanding for the period since inception.
26,953,125 options were not included in diluted earning per share because the
necessary conditions for their exercisability have not been met.
 
 C.
                Use
      of estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
expenses during the reporting period. Actual results could differ from those
estimates.
  F-11
 
 ADVANCED
TECHNOLOGY ACQUISITION CORP.
 (A
Development Stage Corporation)
 Notes
to Financial Statements
 
 NOTE
      2   -
              SIGNIFICANT
      ACCOUNTING POLICIES
 
 D.
                Recently
      issued accounting
pronouncements
 
 On
October 10, 2008, the FASB issued FSP FAS 157-3, which amends Statement 157 by
incorporating “an example to illustrate key considerations in determining the
fair value of a financial asset” in an inactive market. The FSP’s example
emphasizes the following principles from Statement 157:
 ·
              Objective
      of fair value — The objective of fair value measurement is to determine
      the price that would be received to sell an asset “in an orderly
      transaction that is not a forced liquidation or distressed sale” between
      market participants as of the measurement date. This objective does not
      change even when “there is little, if any, market activity for an asset”
      as of the measurement date.
 ·
              Distressed
      transactions — Paragraph 9(a) of the FSP states, “Even in times of market
      dislocation, it is not appropriate to conclude that all market activity
      represents forced liquidations or distressed
  sales.
 ·
              Management’s
      assumptions about nonperformance and liquidity risks — The use of
      management’s internal “assumptions about future cash flows and
      appropriately risk adjusted discount rates is acceptable” when there are
      no relevant observable market data. However, any assumptions or valuation
      techniques must take into account adjustments for nonperformance and
      liquidity risks that market participants would consider in valuing the
      asset.
 ·
              Third-party
      pricing quotes — Quotes and information obtained from brokers or pricing
      services “are not necessarily determinative if an active market does not
      exist for the financial asset” being measured. In addition, “an entity
      should place less reliance on quotes that do not reflect actual market
      transactions.”
 
 The
Company believes that the carrying amount of its investment in the trust is the
fair value of that investment as required by SFAS No. 157 and FSP SFAS
157-3.
 
 Management
does not believe that any other recently issued, but not yet effective,
accounting standards if currently adopted would have a material effect on the
accompanying financial statements.
 
 F-12
 
 ADVANCED
TECHNOLOGY ACQUISITION CORP.
 (A
Development Stage Corporation)
 Notes
to Financial Statements
 
 NOTE
      3   -
              PUBLIC
      OFFERING
 
 The
Offering called for the Company to offer for public sale 18,750,000 Units at a
proposed offering price of $8.00 per Unit (plus additional 2,812,500 units
solely to cover over-allotments).
 
 Each Unit
consisted of one share of the Company’s common stock and one Redeemable Common
Stock Purchase Warrants (“Warrants”). Each Warrant entitles the holder to
purchase from the Company one share of common stock at an exercise price of
$6.00 commencing the later of the completion of a Business Combination and one
year from the effective date of the Offering and expiring four years from the
effective date of the Offering. The Company may redeem the Warrants, at a price
of $.01 per Warrant upon 30 days’ notice after the Warrants become exercisable,
if, and only if, the last sales price of the Company’s common stock equals or
exceeds $11.50 per share for any 20 trading days within a 30 trading day period
ending three business days before the Company sends the notice of redemption.
The Company has agreed to pay to the underwriter in the Offering an underwriting
discount of 3.25% of the gross proceeds of the Offering and an additional
contingent fee of 3.75% of the gross proceeds of the Proposed Offering. Such
additional contingent fees are payable after the consummation of the initial
business combination. The Company issued additional 3,625,000 warrants to
certain of its initial stockholders (“founder warrants”) in the amount of
$3,625,000, which took place in a private placement simultaneously with the
consummation of this offering.
 
 NOTE
      4   -
              COMMITMENTS
      AND CONTINGENCIES
 
 The
Company presently occupies office space provided by certain of the Initial
Stockholders. Such stockholders have agreed that, until the Company consummates
a Business Combination, it will make such office space, as well as certain
office and secretarial services, available to the Company, as may be required by
the Company from time to time. The Company has agreed to pay such stockholders
$10,000 per month for such services commencing on the effective date of the
Offering.
 
 The
initial stockholders will be entitled to make up to two demands that the Company
register their shares pursuant to an agreement to be signed in connection with
the IPO. The holders of the majority of these shares can elect to exercise these
registration rights at any time after the date on which the lock-up period
expires. In addition, these stockholders have unlimited piggy-back registration
rights on registration statements filed subsequent to such date. The Company
will bear the expenses incurred in connection with the filing of any such
registration statements.
 
 The
Company has sold to the underwriter for $100, as additional compensation, an
option to purchase up to a total of 1,125,000 units at a price of $8.80 per
unit. The units issuable upon exercise of this option are identical to those
offered by the Company, except that the warrants underlying such units will
expire five years from the date of the offering and will become
exercisable on the later of completion of a business combination and 18 months
from the date of the offering.
 
 F-13
 
 ADVANCED
TECHNOLOGY ACQUISITION CORP.
 (A
Development Stage Corporation)
 Notes
to Financial Statements
 
 NOTE
      4   -
              COMMITMENTS
      AND CONTINGENCIES (Cont.)
 
 Effective June 16, 2008
the Company decided to compensate three newly appointed board members with
$2,000 per month and $500 per meeting. Such compensation is contingent and
payable uponthe consummation of an initial business combination, as
approved by a majority of the shares of common stock of the Company voted by the
Company’s public stockholders. As the business combination has not materialized
yet, the provision of $22,500 for the compensation of
the new board members has not been recorded in the financial statements as of
December 31, 2008.
 
 NOTE
      5   -
              REDEEMABLE
      COMMON STOCK
 
 The
balance as at December 31, 2008 represents the amount of shares that may be
converted by the shareholders. The amount equals 40% of the proceeds held in the
trust.
 
 Following
the change in structure of the Offering the Company was granted a right to
cancel up to an aggregate of 1,562,500 shares of common stock held by existing
stockholders in the event that the collective ownership of such persons or
entities exceeds 20.0% following the completion of the offering and the exercise
of the over-allotment option by the underwriters. In accordance with the
agreement with the underwriters, this right to cancel shares will be only in an
amount sufficient to cause the existing stockholders to maintain control over
20.0% of the Company’s outstanding shares after giving effect to the offering
and the exercise of the underwriters’ over-allotment option. Upon the
consummation of the Offering, 859,375 of the 1,562,500 were
cancelled.
 
 NOTE
      6   -
              INVESTMENT
      HELD IN ESCROW
 
 The
Company accounts for its investments in accordance with SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" (“SFAS 115”).
The investment was managed by Lehman Brothers.
  The
investment in escrow consists of short maturity tax exempted municipal bonds.
This investment is classified as available for sale which is recorded at fair
value, with any unrealized appreciation or depreciation in value recorded in
Other Comprehensive Income ("OCI"). Interest received during the period is
recognized in earnings. The carrying amount of the investment as of the transfer
to Wachovia Securities (as described below) approximated its initial cost plus
interest received, thus no amounts recorded in OCI.Following the collapse of
Lehman Brothers the Company transferred the trust amount to Wachovia Securities
and purchased the same type of investment as described above. The Company
incurred no losses in that transfer.
  During
March 2009, the company moved its investment held in escrow from the short
maturity tax exempted municipal bonds it holds into US Treasury bills.
 
 F-14
  ADVANCED
TECHNOLOGY ACQUISITION CORP.
 (A
Development Stage Corporation)
 Notes
to Financial Statements
 
 NOTE
      7   -
              PREFERRED
      STOCK
 
 The
Company is authorized to issue 1,000,000 shares of blank check preferred stock
with such designations, voting and other rights and preferences as may be
determined from time to time by the Board of Directors.
 
 NOTE
      8   -
              DEFINITE
      AGREEMENT WITH BIONESS INC.
 
 In
December 22, 2008, the Company had entered into a letter of intent (the “LOI”)
to complete a business combination by means of a merger ( the “Merger”) with
Bioness, Inc., a Delaware corporation (“Bioness”) having significant business
operations in Israel.  Pursuant to the Company’s Amended and Restated
Certificate of Incorporation, the execution of the LOI affords the Company a
six-month extension for completion of a business combination, until June 22,
2009.
  The LOI
provides that, within four business days following the date of its execution:
(1) certain principal stockholders of the Company (the “Founders”) must enter
into an agreement to cancel an aggregate of 3,625,000 warrants (the “Founder
Warrants”) purchased by the Founders in connection with the Company’s initial
public offering (the "IPO") and (2) the underwriters of the Company’s IPO must
enter into an agreement to cancel the option to purchase up to an aggregate of
1,125,000 units (consisting of the Company Common Stock and warrants to purchase
the Company Common Stock) (the “Unit Purchase Option”) that was granted to such
underwriters in connection with such IPO.  The LOI also provides that,
immediately prior the execution of a definitive agreement, the Founders will
deliver to the Company for cancellation for no consideration an aggregate of
1,000,000 shares of Company Common Stock.
  The LOI
provides that, following execution of a definitive agreement, Bioness will
commence a tender offer for the purchase of the Company’s outstanding warrants
for four cents per warrant.  The LOI further provides that, as a
condition to the tender offer, 100% of the outstanding warrants will be tendered
and not withdrawn.  It is a condition to the commencement of the
tender offer that, not later than one business day prior to the announcement by
Bioness of the tender offer, all Founder Warrants and Unit Purchase Option will
be canceled with the consent of the holders thereof.  All warrants
purchased in the tender offer will be terminated immediately following their
purchase.  Bioness’ obligation to consummate the Merger is conditioned
upon satisfaction of the foregoing conditions to the tender
offer.  All costs and expenses related to the tender offer will be
paid by Bioness.
 
 Subject
to certain exceptions, the LOI provides that each of the Company stockholder
that (a) purchased shares of the Company Common Stock in the Company’s IPO or
subsequently purchased shares of the Company Common Stock on the American Stock
Exchange, (b) voted in favor of the Merger, and (c) holds any shares of the
Company Common Stock following the closing of the Merger will be granted a
non-transferable put option to sell such shares to the Company at a price of
$8.20 per share.  Such put option will be exercisable during the
30-day period commencing on the second anniversary of the closing of the
Merger.
 
 F-15
 
 ADVANCED
TECHNOLOGY ACQUISITION CORP.
 (A
Development Stage Corporation)
 Notes
to Financial Statements
 
 NOTE
      8   -
              DEFINITE
      AGREEMENT WITH BIONESS INC. (Cont.)
 
 To secure
payment to the holders of the put option, all available funds of the Company
(minus all transaction costs and expenses), on the date of the closing of the
Merger minus a working capital reserve, will be set aside in trust (the “Option
Trust”).
 
 The
consummation of the business combination is subject to, among other things,
negotiation and execution of a definitive agreement, reasonable satisfaction of
due diligence inquires and required stockholder approval.  There can
be no assurances that a business combination will be consummated.
 
 Bioness
Inc. is a neuromodulation company marketing non-invasive medical devices and
developing minimally-invasive implantable products intended to treat the tens of
millions of individuals suffering from disabling conditions caused by various
neurological events and conditions (such as stroke and multiple sclerosis),
chronic pain and urological syndromes. Bioness’ non-invasive technologies are
used for central nervous system disorders and may provide such patients with
increased levels of physical independence, productivity and symptom management.
Bioness' investigational lines of minimally-invasive implantable devices target
the peripheral nervous system. The devices are in various stages of research and
design, including clinical trials, and are intended to be smaller, less
invasive, less expensive, more site-specific and safer than current implantable
devices.
 
 F-16