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# U.S. SECURITIES AND
EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

# FORM 10-K

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

For The Fiscal Year
EndedJuly 31, 2007

Commission file number:
000-51980

# ISRAEL GROWTH PARTNERS
ACQUISITION CORP.(Exact Name of
Registrant as Specified in its Charter)

|                                |                       
|------------------------------- | ----------------------
|
|
|
|
|Delaware                        | 20-3233358            
|(State or other jurisdiction of | (I.R.S. Employer      
|incorporation or organization)  | Identification Number)

Yahalom Tower
3a Jabotinsky St., Ramat Gan 52520
Israel
(Address of Principal Executive Offices and Zip Code)

972-9-9602049
(Registrant's Telephone Number, Including Area Code)

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

NONE

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

Series
A Units, each consisting of two shares of common stock, par value $.0001 per share, ten
Class Z warrants

Series B Units, each consisting of two share of Class B Common stock, par value $.0001 per share,
two Class W warrants

# Common Stock, par
value $.0001 per share

# Class B Common Stock,
par value $.0001 per share

# Class W Warrants

# Class Z Warrants

Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.

Yes o
No x



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Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 of the
Act.

# Yes o
No x

Indicate by checkmark 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 o

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, or a non-accelerated filer.
See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o
Accelerated filer o
Non-accelerated filer x

Indicate by check mark whether the
registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.

# Yes  x No o

The aggregate market value of the
voting and non-voting common equity held by non-affiliates computed by reference to the
price at which the common equity was last sold, or the average bid and asked price of such
common equity, as of the last business day of the registrants most recently
completed second fiscal quarter was approximately $46,040,772 (common stock and Class B
common stock).

Indicate the number of shares
outstanding of each of the issuers classes of common stock, as of the latest
practicable date.

|Class                                             | Outstanding at October 4, 2007
|------------------------------------------------- | ------------------------------
|
|
|
|
|Common Stock, par value $0.0001 per share         | 1,065,100                     
|Class B Common Stock, par value $0.0001 per share | 10,236,000                    

# DOCUMENTS INCORPORATED
BY REFERENCE

List hereunder the following
documents if incorporated by reference and the Part of the Form 10K (e.g. Part I, Part II,
etc.) into which the document is incorporated: (1) Any annual report to security
holders; (2) Any proxy or information statement; and (3) Any prospectus filed
pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents
should be clearly described for identification purposes (e.g., annual report to security
holders for fiscal year ended December 24, 1980).

None

2

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Forward Looking Statements

The
statements discussed in this report include forward looking statements that involve risks
and uncertainties. You can identify these statements by forward-looking words such as
may, will, expect, anticipate,
believe, estimate, plans, and continue or
similar words. You should read statements that contain these words carefully because they
discuss our future expectations, contain projections of our future results of operations
or of our financial condition or state other forward-looking information.

We
believe it is important to communicate our expectations to our investors. However, there
may be events in the future that we are not able to accurately predict or over which we
have no control. The cautionary language in this annual report provide examples of risks,
uncertainties and events that may cause our actual results to differ materially from the
expectations we describe in our forward-looking statements. You should be aware that the
occurrence or non-occurrence of events described in this annual report or detailed from
time to time in our filings with the Securities and Exchange Commission could have a
material adverse effect on our business, operating results and financial condition,
including our ability to successfully consummate a business combination, and the other
risks detailed from time to time in our filings with the Securities and Exchange
Commission.

# PART I

|Item 1. |  | Business
|------- |  | --------

Introduction

We
are a Delaware blank check company incorporated on August 1, 2005, to serve as a vehicle
for the acquisition of an operating business which has operations or facilities located in
Israel, or which is a company operating outside of Israel which management believes would
benefit from establishing operations or facilities in Israel. Our efforts in identifying a
prospective target business will not be limited to a particular industry.

Our
offices are located at Yahalom Tower, 3a Jabotinsky, Ramat Gan 52520, Israel and our
telephone number is 972-9-9602049. We do not currently have a website and consequently do
not make available materials we file with or furnish to the Securities and Exchange
Commission. We will provide electronic or paper copies of such materials free of charge
upon request.

Effecting a business combination

General

A
business combination may involve the acquisition of, or merger with, a company which does
not need substantial additional capital but which 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 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 which may be financially
unstable or in its early stages of development or growth.

3

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We
have not identified a target business or target industry

To
date, we have not selected any target business or target industry on which to concentrate
our search for a business combination. Subject to the limitations that a target business
have an existing revenue stream from, or operations or research and development facilities
located in, Israel, or be a company operating outside of Israel which management believes
would benefit from establishing operations or facilities in Israel, and a fair market
value of at least 80% of our net assets at the time of the acquisition, as described below
in more detail, we will have virtually unrestricted flexibility in identifying and
selecting a prospective acquisition candidate.

Sources
of target businesses

We
anticipate that target business candidates will 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. Our initial
securityholders, including our officers and directors, and their affiliates may also 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. In no event, however, will any of
our initial securityholders, including 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.

Selection
of a target business and structuring of a business combination

Subject
to the requirement that our initial business combination must be with a target business
which has operations or facilities located in Israel or which is a company operating
outside of Israel which management believes would benefit from establishing operations or
facilities in Israel and has a fair market value that is equal to at least 80% of our net
assets at the time of such acquisition, our management will have virtually unrestricted
flexibility in identifying and selecting a prospective target business. In evaluating a
prospective target business, our management will consider, among other factors, the
following:

| |  | financial
condition and results of operation;
| | - | ---------------------------------------------

| |  | growth
potential;
| | - | -----------------

| |  | experience
and skill of management and availability of additional personnel;
| | - | ----------------------------------------------------------------------------

| |  | capital
requirements;
| | - | ---------------------

| |  | competitive
position;
| | - | ---------------------

| |  | barriers
to entry;
| | - | ------------------

| |  | stage
of development of the products, processes or services;
| | - | ------------------------------------------------------------

4

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| |  | 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 industry; 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 will be based, to the extent relevant, on the above factors as well as other
considerations deemed relevant by our management in effecting a business combination consistent with our
business objective. In evaluating a prospective target business, we will conduct an extensive due
diligence review which will encompass, among other things, meetings with incumbent management and
inspection of facilities, as well as review of financial and other information which 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, where deemed appropriate by our management. 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 both companies stockholders. We cannot
assure you, however, that the Internal Revenue Service, appropriate state tax authorities
or Israeli tax authorities will agree with our tax treatment of the business combination.

The
time and costs required to select and evaluate a target business and to structure and
complete the business combination 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.

5

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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 at the time of such acquisition, although we may acquire a target
business whose fair market value significantly exceeds 80% of our net assets. To this end,
we may seek to raise additional funds through the sale of our securities or through loan
arrangements if such funds are required to consummate such a business combination. While
we have not engaged, retained or entered into any agreements with any third party
regarding any such potential financing transactions, we have had non-binding discussions
with a certain third party which our management may retain should they determine it to be
necessary. If we were to seek such additional funds, any such arrangement would only be
consummated simultaneously with our consummation of a business combination. 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, we will obtain an
opinion from an unaffiliated, independent investment banking firm that is a member of the
National Association of Securities Dealers, Inc. with respect to the satisfaction of such
criteria. Since any opinion, if obtained, would merely state that the fair market value of
the target business 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 has sufficient fair market value.

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 we will have the ability to complete only a single business combination.
Accordingly, the prospects for our success may be entirely dependent upon the future
performance of such 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 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, and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | result
in our dependency upon the development or market acceptance of a single or limited number
of products, processes or services.
| | - | ------------------------------------------------------------------------------------------------------------------------------------

Additionally,
in the event our business combination involves the simultaneous acquisition of several
related businesses and such businesses are owned by different sellers, we will need for
each of such sellers to agree that our purchase of its business is contingent on the
simultaneous closings of the other acquisitions, which may make it more difficult for us,
and delay our ability, to complete the business combination. With multiple acquisitions,
we could also face additional risks, including additional burdens and costs with respect
to possible multiple negotiations and due diligence investigations (if there are multiple
sellers) and the additional risks associated with the subsequent assimilation of the
operations and services or products of the acquired companies in a single operating
business.

6

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Limited
ability to evaluate the target business management

Although
we intend to closely scrutinize the management of a prospective target business when
evaluating the desirability of effecting a business combination, we cannot assure you that
our assessment of the target business management will prove to be correct. In
addition, we cannot assure you that the future management will have the necessary skills,
qualifications or abilities to manage a public company intending to embark on a program of
business development. Furthermore, the future role of our officers and directors, if any,
in the target business cannot presently be stated with any certainty. Although Messrs.
Matty Karp, Carmel Vernia and Dror Gad may remain with us in senior management or advisory
positions following a business combination, it is possible that some of them will not
devote their full efforts to our affairs subsequent to a business combination. Moreover,
they would only be able to remain with the company after the consummation of a business
combination if they are able to negotiate employment or consulting agreements in
connection with the business combination. Such negotiations would take place
simultaneously with the negotiation of the business combination and could provide for such
individuals to receive compensation in the form of cash payments and/or our securities for
services they would render to our company after the consummation of the business
combination. While the personal and financial interests of such individuals may cause them
to have a conflict of interest in determining whether a potential business combination is
more appropriate for us and influence their motivation in identifying and selecting a
target business, the ability of such individuals to remain with our company after the
consummation of a business combination will not be the determining factor in our decision
as to whether or not we will proceed with any potential business combination.
Additionally, we cannot assure you that our officers and directors will have significant
experience or knowledge relating to the operations of the particular target business.

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

Opportunity
for Class B stockholder approval of business combination

Prior
to the completion of a business combination, we will submit the transaction to our Class B
stockholders for approval, even if the nature of the acquisition would not ordinarily
require stockholder approval under applicable state law. In connection with seeking Class
B stockholder approval of a business combination, we will furnish our Class B stockholders
with proxy solicitation materials prepared in accordance with the Securities Exchange Act
of 1934, which, among other matters, will include a description of the operations of the
target business and audited historical financial statements of the business. These
materials will also be mailed to the holders of our common stock although their vote will
not be solicited.

7

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In
connection with the vote required for any business combination, all of our officers and
directors who own Class B shares may vote their Class B shares in any manner
they determine, in their sole discretion. We will not proceed with a business combination
if the holders of a majority of the Class B common shares cast at the meeting to approve
the business combination fail to vote in favor of such business combination or if
stockholders owning 20% or more of the outstanding shares of Class B common stock both
exercise their conversion rights and vote against the business combination.

Conversion
rights

At
the time we seek Class B stockholder approval of any business combination, we will offer
each Class B stockholder the right to have his, her or its shares of Class B common stock
converted to cash if he, she or it votes against the business combination and the business
combination is approved and completed. The holders of our common stock will not be
entitled to seek conversion of their shares. The actual per-share conversion price will be
equal to the amount in the trust fund inclusive of any interest (calculated as of two
business days prior to the proposed consummation of the business combination), divided by
the number of Class B shares sold in our initial public offering. Including interest
earned on the trust fund, the per-share conversion price was $5.25 per share as of
September 25, 2007. An eligible Class B stockholder may request conversion at any time
after the mailing to our Class B stockholders of the proxy statement and 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 Class B 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. The
funds to be distributed to Class B stockholders entitled to convert their Class B shares
who elect conversion will be distributed promptly after completion of a business
combination. Any Class B stockholder who converts his, her or its stock into his, her or
its share of the trust fund still has the right to exercise the Class W warrants that he,
she or it received as part of the Series B units. We will not complete any business
combination if Class B stockholders, owning 20% or more of the Class B shares outstanding,
both vote against the business combination and exercise their conversion rights.

8

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Distribution
of trust fund to Class B stockholders if no business combination

Pursuant
to the terms of the trust agreement by and between us and American Stock Transfer &
Trust Company and applicable provisions of the Delaware General Corporation Law, we will
promptly dissolve, distribute all proceeds held in the trust fund to our Class B common
stockholders and liquidate our remaining assets if we do not effect a business combination
within 18 months following the consummation of our initial public offering on July 18,
2006 (or within 24 months from the consummation of our initial public offering if a letter
of intent or definitive agreement has been executed within 18 months following
consummation of the initial public offering and the business combination contemplated by
such letter of intent or definitive agreement has not yet been consummated within such 18
month period). The proceeds held in our trust fund may not be distributed except upon
receipt of stockholder approval and, unless and until such approval is obtained from our
stockholders, the proceeds held in our trust fund will not be released. Consequently,
holders of a majority of our outstanding stock must approve our dissolution in order for
the Class B common stockholders to receive the proceeds held in the trust fund and such
proceeds will not be available for any other corporate purpose. These procedures, or a
vote to reject any plan of dissolution by our stockholders, may result in substantial
delays or prohibit distribution of the trust fund to our Class B common stockholders and
our liquidation to our common stockholders of any remaining net assets.

If
we do not complete a business combination within the prescribed periods, our charter
provides that we seek stockholder approval to dissolve and, upon obtaining such approval,
distribute to all of our Class B stockholders, in proportion to their respective equity
interest in the Class B common stock, an aggregate sum equal to the amount in the trust
fund, inclusive of any interest, and all then outstanding shares of Class B common stock
will be automatically cancelled. There will be no distribution from the trust fund with
respect to our common stock or our Class W and Class Z warrants. Our charter further
provides that certain provisions that apply prior to a business combination, including
those provisions relating to seeking stockholder approval to dissolve and then distribute
the trust fund if no business combination occurs within the prescribed time periods,
cannot be amended. Our counsel has advised us that these restrictions on charter
amendments may not be enforceable under Delaware law. Nevertheless, we view these business
combination procedures in our charter and this prospectus as obligations to investors and
we will not propose any amendments to these procedures to our stockholders.

The
distribution per Class B share, including interest earned on the trust fund, was $5.25 per
share as of September 25, 2007. The proceeds deposited in the trust fund could, however,
become subject to the claims of our creditors which could be prior to the claims of our
Class B stockholders. If we are unable to complete a business combination and are forced
to dissolve and distribute the proceeds held in trust to our Class B stockholders, each of
our executive officers have agreed that they will be personally liable to ensure that the
proceeds in the trust fund are not reduced by the claims of vendors or other entities that
are owed money by us for services rendered or contracted for or products sold to us, or by
any target business, and that have not executed an agreement waiving any right, title,
interest or claim of any kind in or to any monies held in the trust; provided, however,
that such liability shall not extend to claims of target businesses brought under Israeli
law or in Israeli courts. We have questioned these individuals and reviewed their
financial information and believe that each of these individuals has a substantial net
worth. Moreover, because our offices are located in Israel, it is likely that the vendors
and other entities with which we do business will be located in Israel and prospective
target businesses will likely have operations or facilities in Israel. We therefore expect
that most claims that could be brought against us would be brought under Israeli law
and/or in Israeli courts and will be outside the indemnification obligations of our
executive officers. As a result, we believe that these individuals will be able to satisfy
their indemnification obligations. However, we cannot assure you this will be the case.
Accordingly, the proceeds held in trust could be subject to claims which could take
priority over the claims of the holders of our Class B common stock. We cannot assure you
that the per-share distribution from the trust fund will not be less than $5.25 due to
claims of creditors.

9

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Additionally,
if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed
against us which is not dismissed, the proceeds held in the trust fund could 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. To the extent
any bankruptcy claims deplete the trust fund, we cannot assure you we will be able to
return to our Class B stockholders at least $5.25 per share.

If
we enter into either a letter of intent, an agreement in principle or a definitive
agreement to complete a business combination prior to the expiration of 18 months
following completion of the initial public offering on July 18, 2006, but are unable to
complete the business combination within the 18-month period, then we will have an
additional six months in which to complete the business combination contemplated by the
letter of intent, agreement in principle or definitive agreement. If we are unable to do
so by the expiration of the 24-month period from the completion of this offering, we will,
upon obtaining stockholder approval for our plan of dissolution, notify the trustee of the
trust fund to commence liquidating the investments constituting the trust fund and will
turn over the proceeds to our transfer agent for distribution to our Class B stockholders.
Our instruction to the trustee would be given promptly after obtaining stockholder
approval for our plan of dissolution.

A
Class B stockholder shall be entitled to receive funds from the trust fund only in the
event (i) we do not complete a business combination within the applicable time periods and
we obtain stockholder approval for our plan of dissolution or (ii) if the Class B
stockholder elected to convert his, her or its shares into cash upon our completion of a
business combination that the Class B stockholder voted against and such business
combination is actually completed by us. In no other circumstances shall a Class B
stockholder have any right or interest of any kind to or in the trust fund. Holders of our
common stock will not be entitled to receive any of the proceeds held in the trust fund.

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Plan
of Dissolution and Liquidation if no business combination

Pursuant
to our certificate of incorporation, if we do not complete a business combination within
18 months following the consummation of our initial public offering on July 18, 2006 (or
within 24 months following the consummation of the offering if the extension criteria have
been satisfied) our purpose and powers will be limited to dissolving, liquidating and
winding up. We view this obligation to dissolve and liquidate as an obligation to our
stockholders and neither we nor our board of directors will take any action to amend or
waive any provision of our certificate of incorporation to allow us to survive for a
longer period of time if it does not appear we will be able to consummate a business
combination within the foregoing time periods.

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. However, it is our intention to distribute the proceeds of the trust fund to
our Class B stockholders promptly after obtaining stockholder approval for our plan of
dissolution andmake liquidating distributions to our common stockholders as soon
as reasonably possible thereafter and, therefore, we do not intend to comply with those
procedures. Because we will not be complying with Section 280, Section 281(b) of the
Delaware General Corporation Law requires 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 and service providers (such as accountants, lawyers, investment bankers, etc.)
and 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. Nevertheless, there are significant limitations on our obligation to obtain
such waivers. Furthermore, such agreements may or may not be enforceable. As such, our
common stockholders and Class B stockholders could potentially be liable for any claims to
the extent of distributions received by them in a dissolution and any liability of our
common stockholders and Class B stockholders may extend beyond the third anniversary of
such dissolution.

Additionally,
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 in our
dissolution.

11

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We
currently believe that, upon expiration of the prescribed time periods, the following
would occur:

| |  | our
board of directors will, consistent with its obligations described in our amended and
restated certificate of incorporation to dissolve, on or prior to the passing of such
deadline, convene and adopt a specific plan of dissolution, 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 as well as the boards
recommendation of such plan;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | upon
such deadline, we would file our preliminary proxy statement with the Securities and
        Exchange Commission;
| | - | ----------------------------------------------------------------------------------------------------------------------

| |  | if the
Securities and Exchange Commission does not review the preliminary proxy statement, then,
10 days following the filing of such preliminary proxy statement, we will mail the
definitive proxy statement to our stockholders, and approximately 30 days following the
mailing of such definitive proxy statement, 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 Securities and Exchange Commission does review the preliminary proxy statement, we
currently estimate that we will receive their comments approximately 30 days after the
filing of such proxy statement. We would then mail the definitive proxy statement 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.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We
expect that all costs associated with the implementation and completion of our plan of
dissolution (which we currently anticipate will not exceed $50,000 to $75,000) will be
funded by any remaining net assets outside of the trust fund, although we cannot assure
you that there will be sufficient funds for such purpose. If such funds are insufficient,
we anticipate either our initial stockholders will advance us the funds necessary to
complete such dissolution and liquidation or we will be dissolved by court order.

In
the event we seek stockholder approval for a plan of dissolution and do not obtain such
approval, we will nonetheless continue to pursue stockholder approval for our dissolution.
Pursuant to the terms of our certificate of incorporation, our powers and purpose
following the expiration of the prescribed 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
fund 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 common stock must
approve our dissolution in order for us to distribute the proceeds of the trust fund to
our Class B common stockholders, and to distribute our remaining net assets to our common
stockholders.

12

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These
procedures, or a vote to reject any plan of dissolution by our stockholders, may result in
substantial delays or prohibit our liquidation and the distribution to our Class B common
stockholders of the proceeds of the trust fund.

In
the event we obtain stockholder approval for a plan of dissolution, after the proceeds of
the trust fund have been distributed to our Class B stockholders, we will distribute any
remaining net assets to our holders of common stock. It is likely, however, that our
remaining net assets will be minimal following the expenditures incurred in connection
with the attempt to complete a business combination and, accordingly, such holders are
likely to lose all or substantially all of their investment. Accordingly, the holders of
our common stock will receive distributions on liquidation only in the event that the
amount of proceeds not held in trust exceeds the expenses we incur.

# Competition

In
identifying, evaluating and selecting a target business, we may encounter intense
competition from other entities having a business objective similar to ours. There are
approximately 83 blank check companies in the United States seeking to carry out a
business plan which is similar to ours which have more than $8.4 billion in trust. Of
these companies, 26 have announced that they have entered into a definitive agreement but
have not yet consummated their acquisitions and 52 companies are currently actively
searching to acquire a target business, the remaining 5 have failed to complete business
combinations and have either dissolved or announced their intention to dissolve and return
the trust proceeds to their stockholders. Fortissimo Acquisition Corp., Pinpoint Advance
Corp., and Advanced Technology Acquisition Corp. are blank check companies which
consummated their public offerings in October 2006, April 2007 and June 2007,
respectively, with approximately $26 million, $25 million and $170 million, respectively,
placed in trust, are also targeting companies with operations or facilities located in
Israel or operations outside of Israel which their managements believe would benefit from
establishing operations or facilities in Israel.

In addition, there are approximately
51 public offerings of blank check companies currently in registration, with approximately
$7.8 billion which would be placed in trust, from which we may encounter competition.
There are likely to be more blank check companies filing registration statements for
initial public offerings following the date of this report and prior to the completion of
a business combination. Additionally, we will be subject to competition from other
companies looking to expand their operations through the acquisition of a target business.
Many of these entities 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. While
we believe there are numerous potential target businesses that we could acquire with the
net proceeds of this offering, 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:

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| |  | our
obligation to seek Class B stockholder approval of a business combination may delay the
        completion of a transaction;
| | - | --------------------------------------------------------------------------------------------------------------------------------

| |  | our
obligation to convert into cash shares of Class B common stock held by our Class B
 stockholders if such holders both vote against the business combination and also seek
conversion of their shares may reduce the resources available to us for a business
combination; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | our
outstanding warrants and option, and the future dilution they potentially represent, may
not be viewed favorably by certain target businesses.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------

Any of these factors may place us at
a competitive disadvantage in successfully negotiating 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, there will be, in all likelihood, intense
competition from competitors of the target business. In particular, certain industries
which experience rapid growth frequently attract an increasingly larger number of
competitors, including competitors with increasingly greater financial, marketing,
technical and other resources than the initial competitors in the industry. The degree of
competition characterizing the industry of any prospective target business cannot
presently be ascertained. We cannot assure you that, subsequent to a business combination,
we will have the resources to compete effectively, especially to the extent that the
target business is in a high-growth industry.

# Facilities

We
maintain our executive offices at Yahalom Tower (28th Floor), 3a Zabotinski St., Ramat
Gan 52520, Israel. The cost for this space is included in the $7,500 per-month fee
that Danash Investment and Management Ltd. charges us for general and administrative
services pursuant to a letter agreement between us and Danash Investment and Management
Ltd., an affiliate of Mr. Dror Gad, our Chief Financial Officer, Executive Vice President
and Director. We believe, based on rents and fees for similar services in the Tel-Aviv,
Israel metropolitan area, that the fee charged by Danash Investment and Management Ltd. 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.

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# Employees

We have three executive officers, all
of whom are also members of our board of directors. These individuals are not obligated to
contribute any specific number of hours to our matters and intend to devote only as much
time as they deem necessary to our affairs. The amount of time they will devote in any
time period will vary based on whether a target business has been selected for a business
combination and the stage of the business combination process that the company is in.
Accordingly, once management locates a suitable target business to acquire, they will
spend more time investigating such target business and negotiating and processing the
business combination (and consequently more time to our affairs) than they would prior to
locating a suitable target business. We do not intend to have any full time employees
prior to the consummation of a business combination.

# Available Information

We
file or submit to the SEC annual, quarterly and current periodic reports, proxy statements
and other information meeting the informational requirements of the Exchange Act. While we
do not have a website with available filings we will provide at no additional charge,
copies of these reports, proxy, information statements and other information requests upon
request to our address at Yahalom Tower, 3a Jabotinsky, Ramat Gan 52520, Israel. You may
also inspect and copy these reports, proxy statements and other information, and related
exhibits and schedules, at the Public Reference Room of the SEC at 100F Street, NE,
Washington, D.C. 20549. You may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a
website that contains reports, proxy, information statements and other information filed
electronically by us with the SEC which are available on the SECs website at
http://www.sec.org.

|Item 1A. |  | Risk Factors
|-------- |  | ------------

An
investment in our securities involves a high degree of risk. You should consider carefully
all of the material risks described below, together with the other information contained
in this prospectus, before making a decision to invest in our units.

Risks associated with
our business

We are a development
stage company with no operating history and very limited resources.

We are a recently incorporated
development stage company with no operating results to date. Since we do not have an
operating history, you will have no basis upon which to evaluate our ability to achieve
our business objective, which is to acquire an operating business which has operations or
facilities located in Israel, or which is a company operating outside of Israel which
management believes would benefit from establishing operations or facilities in Israel. We
have entered into non-binding discussions with several prospective acquisition candidates.
We have no present revenue and will not generate any revenue until, at the earliest, after
the consummation of a business combination.

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If we are unable to
complete a business combination, holders of our common stock will be unable to convert
their securities and participate in the distribution of the trust fund.

The
trust fund will be reserved for holders of our Class B common stock acquired as part of
the Series B units sold in our initial public offering consummated on July 18, 2006.
Consequently, if we are unable to complete a business combination within 18 months
following completion of the offering, or within 24 months following completion of the
public offering if the extension criteria described below have been satisfied, the holders
of our common stock will not be entitled to participate in the distribution of the trust
fund that will be effected following stockholder approval of our plan of dissolution.
Furthermore, there will be no distribution from the trust fund with respect to our
outstanding Class W warrants and Class Z warrants.

Shares of common stock will not
be entitled to vote on a proposed business combination.

Holders
of our common stock will not be entitled to vote on a proposed business combination with a
target business. Only the holders of Class B common stock will have an opportunity to
approve a business combination. Consequently, holders of common stock and warrants will be
entirely dependent upon the judgment of the holders of Class B common stock in determining
whether or not a proposed business combination is approved.

Holders of our common
stock are likely to lose all or substantially all of their investment if we do not
complete a business combination.

If
we are unable to complete a business combination, we will be dissolved, the trust fund
will be distributed to the Class B stockholders and our remaining net assets will be
distributed to the holders of our common stock. It is likely, however, that our remaining
net assets will be minimal following the expenditures incurred in connection with the
attempt to complete a business combination and, accordingly, the holders of our common
stock are likely to lose all or substantially all of their investment.

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

Since
the net proceeds of our initial public offering are intended to be used to complete a
business combination with a target business that has not been identified, we may be 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, we are exempt from rules
promulgated by the SEC to protect investors of blank check companies such as Rule 419.
Accordingly, investors will not be afforded the benefits or protections of those rules.
Because we are not subject to Rule 419, we will have a longer period of time to complete a
business combination in certain circumstances.

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Because there are
numerous companies with a business plan similar to ours seeking to effectuate a business
combination, it may be more difficult for us to complete a business combination.

Based
upon publicly available information, we have identified 117 blank check companies which
have gone public in the United States since August 2003, of which 34 have completed a
business combination, 26 of which have announced that they have entered into a definitive
agreement for a business combination but have not consummated such business combination
and 5 of which have failed to complete business combinations and have either dissolved or
announced their intention to dissolve and return the trust proceeds to their stockholders.
The remaining 52 blank check companies have more than $5.8 billion in trust and are
seeking to complete business combinations. Fortissimo Acquisition Corp., Pinpoint Advance
Corp., and Advanced Technology Acquisition Corp., are blank check companies which
consummated their public offerings in October 2006, April 2007 and June 2007,
respectively, with approximately $26 million, $25 million and $170 million, respectively,
placed in trust, are also targeting companies with operations or facilities located in
Israel or operations outside of Israel which their managements believe would benefit from
establishing operations or facilities in Israel.

Furthermore,
we have identified approximately 51 additional offerings for blank check companies in the
United States that are still in the registration process but have not completed initial
public offerings, and there are likely to be more blank check companies filing
registration statements for initial public offerings prior to our completion of a business
combination. While some of the blank check companies must complete their respective
business combinations in specific industries, a number of them may consummate their
business combinations in any industry they choose. Therefore, we may be subject to
competition from these and other companies seeking to consummate a business combination.
We cannot assure you that we will be able to successfully compete for an attractive
business combination. Additionally, because of this competition, we cannot assure you that
we will be able to effectuate a business combination within the required time period.

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If third parties bring
claims against us, the proceeds held in trust could be reduced and the per-share distribution
 received by Class B stockholders from the trust fund following stockholder approval
of the plan of dissolution  could be less than $5.25 per share.

Our
placing of funds in trust may not protect those funds from third party claims against us.
Although we will seek to have all vendors, prospective target businesses or other entities
we engage, execute agreements with us waiving any right, title, interest or claim of any
kind in or to any monies held in the trust fund for the benefit of the holders of our
Class B common stock, there is no guarantee that they will execute such agreements or that
even if they execute such agreements that they would be prevented from bringing claims
against the trust fund. Nor is there any 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 will not seek recourse against the trust
fund for any reason. If we are unable to complete a business combination and are forced to
distribute the proceeds held in trust to the holders of our Class B common stock, our
executive officers Matty Karp, Carmel Vernia and Dror Gad, have agreed that they will be
personally liable to ensure that the proceeds in the trust fund are not reduced by the
claims, if any, of vendors or other entities that are owed money by us for services
rendered or contracted for or products sold to us, or by any target business, and that
have not executed an agreement waiving any right, title, interest or claim of any kind in
or to any monies held in the trust; provided, however, that such liability shall not
extend to claims of target businesses brought under Israeli law or in Israeli courts. We
have questioned these individuals and reviewed their financial information and believe
that each of these individuals has a substantial net worth. As a result, and because of
the significant limitations on their indemnification obligations described above, we
believe that these individuals will be able to satisfy their indemnification obligations.
However, we cannot assure you this will be the case. Accordingly, the proceeds held in
trust could be subject to claims which could take priority over the claims of the holders
of our Class B common stock and we cannot assure you that the per-share distribution from
the trust fund will not be less than $5.25 due to claims of creditors.

Additionally,
if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed
against us which is not dismissed, the proceeds held in the trust fund could 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. To the extent
any bankruptcy claims deplete the trust fund, we cannot assure you we will be able to
return to our Class B stockholders at least $5.25 per share.

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

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. However, it is our intention to distribute the
proceeds of the trust fund to our Class B common stockholders promptly after receiving
stockholder approval for our plan of dissolution andmake liquidating distributions
to our common stockholders as soon as reasonably possible after dissolution and,
therefore, we do not intend to comply with those procedures. As such, our common
stockholders and Class B common stockholders could potentially be liable for any
claims to the extent of distributions received by them in a dissolution and any liability
of our common stockholders and Class B stockholders may extend beyond the third
anniversary of such dissolution. Accordingly, we cannot assure you that third parties will
not seek to recover from our common stockholders and Class B stockholders amounts owed to
them by us.

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Additionally,
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 in our
dissolution.

We will dissolve and liquidate
if we do not consummate a business combination.

Pursuant
to, among other documents, our amended and restated certificate of incorporation, if we do
not complete a business combination within 18 months following the consummation of our
initial public offering on July 18, 2006, or within 24 months following the consummation
of our offering if the extension criteria described below have been satisfied, our purpose
and powers will be limited to dissolving, distributing the trust fund to our Class B
common stockholders, liquidating and winding up our affairs. We view this obligation to
dissolve and liquidate as an obligation to our stockholders and neither we nor our board
of directors will take any action to amend or waive any provision of our certificate of
incorporation to allow us to survive for a longer period of time if it does not appear we
will be able to consummate a business combination within the foregoing time periods. Upon
dissolution, we will distribute the proceeds of the trust fund, including interest
thereon, to our Class B common stockholders in proportion to their respective equity
interests, at which point all outstanding shares of Class B common stock will be
cancelled. Our remaining assets, if any, will then be distributed to our common
stockholders in proportion to their respective equity interests. Our directors and
officers have agreed to vote in favor of any plan of dissolution which we will present to
our stockholders for vote. We will pay the costs of our dissolution and liquidation, which
we currently estimate to be approximately $50,000 to $75,000, from our remaining assets
outside of the trust fund. In addition, our directors and officers have agreed that they
will be personally liable to ensure that the proceeds in the trust fund are not reduced by
the claims, if any, of vendors or other entities that are owed money by us for services
rendered or contracted for or products sold to us, or by any target business, and that
have not executed an agreement waiving any right, title, interest or claim of any kind in
or to any monies held in the trust; provided, however, that such liability shall not
extend to claims of target businesses brought under Israeli law or in Israeli courts.

If
we enter into either a letter of intent, an agreement in principle or a definitive
agreement to complete a business combination prior to the expiration of 18 months
following the consummation of our initial public offering, but are unable to complete the
business combination within the 18-month period, then we will have an additional six
months in which to complete the business combination contemplated by the letter of intent,
agreement in principle or definitive agreement. If we are unable to consummate a
transaction within 24 months following the consummation of our initial public offering our
purpose and powers will be limited to dissolving, distributing the trust fund to our Class
B common stockholders, liquidating and winding up our affairs. Upon notice from us, the
trustee of the trust fund will liquidate the investments constituting the trust fund and
will turn over the proceeds to our transfer agent for distribution to our Class B common
stockholders as part of our plan of dissolution and distribution. Concurrently, we shall
pay, or reserve for payment, from funds not held in trust, our liabilities and
obligations, although we cannot assure you that there will be sufficient funds for such
purpose.

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If we do not consummate a
business combination and dissolve, payments from the trust fund to our Class B common
stockholders and liquidation of our remaining assets may be delayed.

If
we do not consummate a business combination within the prescribed time periods, we will
dissolve and liquidate. We currently believe that any plan of dissolution subsequent to
the expiration of the 18-and 24-month deadlines 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, on or prior to the passing of such
deadline, convene and adopt a specific plan of dissolution, 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 as well as the boards
recommendation of such plan;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | upon
such deadline, we would file our preliminary proxy statement with the Securities and
        Exchange Commission;
| | - | ----------------------------------------------------------------------------------------------------------------------

| |  | if
the Securities and Exchange Commission does not review the preliminary proxy statement,
then, 10 days following the filing of such preliminary proxy statement, we will mail the
definitive proxy statement to our stockholders, and approximately 30 days following the
mailing of such definitive proxy statement, 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
Securities and Exchange Commission does review the preliminary proxy statement, we
currently estimate that we will receive their comments approximately 30 days after the
filing of such proxy statement. We would then mail the definitive proxy statement 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.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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In
the event we seek stockholder approval for a plan of dissolution 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, distributing the proceeds of the trust fund to the Class B stockholders,
liquidating and winding up our affairs. The funds held in our trust account may not be
distributed except following stockholder approval of our dissolution and, unless and until
such approval is obtained from our stockholders, the funds held in the trust fund will not
be released. Consequently, holders of a majority of our outstanding stock must approve our
dissolution in order for our Class B common stockholders to receive the funds held in the
trust fund 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 distribution of the trust fund to
our Class B common stockholders and liquidation of our remaining assets to our common
stockholders.

Since we have not yet
selected a particular industry or any target business with which to complete a business
combination, we are unable to currently ascertain the merits or risks of the industry
in, or business, which we may ultimately operate.

We
may consummate a business combination with a company in any industry we choose and are not
limited to any particular industry or type of business. Accordingly, there is no current
basis for you to evaluate the possible merits or risks of the particular industry in which
we may ultimately operate or the target business which we may ultimately acquire. To the
extent we complete a business combination with a financially unstable company or an entity
in its development stage, we may be affected by numerous risks inherent in the business
operations of those entities. If we complete a business combination with an entity in an
industry characterized by a high level of risk, we may be affected by the currently
unascertainable risks of that industry. Although our management will endeavor to evaluate
the risks inherent in a particular industry or target business, we cannot assure you that
we will properly ascertain or assess all of the significant risk factors.

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

Our
certificate of incorporation authorizes the issuance of up to 40,000,000 shares of common
stock, par value $.0001 per share, 12,000,000 shares of Class B common stock, par value
$.0001 per share, and 5,000 shares of preferred stock, par value $.0001 per share.
Following our initial public offering and the representatives partial exercise of
the over-allotment option, there are currently 6,967,900 and 1,304,000 authorized but
unissued shares of our common stock and Class B common stock, respectively, available for
issuance (after appropriate reservation for the issuance of shares upon conversion of the
Class B common stock and upon full exercise of our outstanding Class W warrants and Class
Z warrants and the purchase option granted to HCFP/Brenner Securities, the representative
of the underwriters) and all of the 5,000 shares of preferred stock available for
issuance.  Although we have no commitments as of the date of this
report to issue our securities, we will, in all likelihood, issue a substantial number of
additional shares of our common stock or preferred stock, or a combination of common and
preferred stock, to the shareholders of a potential target or in connection with a related
simultaneous financing to complete a business combination. The issuance of additional
shares of our common stock or any number of shares of our preferred stock:

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| |  | may
significantly reduce the equity interest of investors in this offering;
| | - | ---------------------------------------------------------------------------

| |  | may
subordinate the rights of holders of common stock if preferred stock is issued with
rights senior to those afforded to our common stockholders;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------

| |  | will likely
cause a change in control if a substantial number of our shares of common 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 some
or all         of our present officers and directors; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | may
adversely affect prevailing market prices for our common stock.
| | - | -------------------------------------------------------------------

Similarly, if we issue debt securities, it could result in:

| |  | default
and foreclosure on our assets if our operating revenues after a business combination were
insufficient to pay our debt obligations;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------

| |  | acceleration
of our obligations to repay the indebtedness even if we have made all principal and
interest payments when due if the debt security contains covenants that require the
maintenanceof certain financial ratios or reserves and any such covenant is breached
without a waiver or         renegotiation of that covenant;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | our
immediate payment of all principal and accrued interest, if any, if the debt security is
        payable on demand; and
| | - | ---------------------------------------------------------------------------------------------------------------------------

| |  | our
inability to obtain additional financing, if necessary, if the debt security contains
covenants restricting our ability to obtain additional financing while such security is outstanding.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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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 and whom we would have only a limited ability to
evaluate.

Our
ability to successfully effect a business combination will be totally dependent upon the
efforts of our key personnel. The future role of our key personnel in the target business,
however, cannot presently be ascertained. Although Messrs. Matty Karp, Carmel Vernia and
Dror Gad, our executive officers, may remain with us in senior management or advisory
positions following a business combination, we may employ other personnel following the
business combination. Moreover, management will only be able to remain with the company
after the consummation of a business combination if members of management are able to
negotiate employment or consulting agreements in connection with the business combination.
Such negotiations would take place simultaneously with the negotiation of the business
combination and could provide for such individuals to receive compensation in the form of
cash payments and/or securities for services they would render to the company after the
consummation of the business combination. While the personal and financial interests of
such individuals may cause them to have a conflict of interest in determining whether a
potential business combination is appropriate for us and influence their motivation in
identifying and selecting a target business, the ability of such individuals to remain
with the company after the consummation of a business combination will not be the
determining factor in our decision as to whether or not we will proceed with any potential
business combination. While we intend to closely scrutinize any additional individuals we
engage after a business combination, we cannot assure you that our assessment of these
individuals will prove to be correct. 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.

Because our officers and
directors will allocate their time to other businesses, it could interfere with our
ability to consummate a business combination.

Our
officers and directors are not required to 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. All of our executive officers are engaged in
several other business endeavors and are not obligated to contribute any specific number
of hours to our affairs. If our executive officers other business affairs require
them to devote more substantial amounts of time to such affairs, it could limit their
ability to devote time to our affairs and could interfere with our ability to consummate a
business combination.

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One of our advisors once
was, and our officers and directors may in the future become, affiliated with entities
engaged in business activities similar to those intended to be conducted by us and
accordingly, may have conflicts of interest in determining which entity a particular
business opportunity should be presented to.

Lior
Samuelson, one of our advisors, had previous contractual and fiduciary obligations to
present business opportunities to Mercator Partners Acquisition Corp., a blank check
company similar to us which sought to acquire an operating business. Mr. Samuelsons
obligations terminated in October, 2006 when he resigned from his positions as Executive
Vice President and director of Meractor Partners following the consummation of its
business combination. However, any of 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 us. Our officers and
directors may become aware of business opportunities which may be appropriate for
presentation to us as well as the other entities to which they have fiduciary obligations.
Accordingly, Mr. Samuelson has had, and our officers and directors may have in the future,
conflicts of interest in determining to which entity a particular business opportunity
should be presented. We cannot assure you that these conflicts will be resolved in our
favor.

All of our officers and
directors own securities of ours which will not participate in the distribution of the
trust fund or distributions upon our liquidation. This may cause them to have a conflict
of interest in determining whether a particular target business is appropriate for a
business combination.

The
100 shares of common stock, 2,475,000 Class W warrants and 2,475,000 Class Z warrants
owned by our directors and officers 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. 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. Additionally,
such individuals may purchase shares in the open market. If they purchase Class B common
stock in the open market, they would be entitled to vote as they choose on a proposal to
approve a business combination and exercise conversion rights in connection therewith.
These individuals may not have the same interests as other Class B common stockholders.

Initially 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 a business with a fair market value of at least
80% of our net assets at the time of such acquisition. Consequently, initially we will
have the ability to complete only a single business combination. By consummating a
business combination with only a single entity, our lack of diversification 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. Further, we would 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. Accordingly, the prospects
for our success may be:

24

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| |  | solely
dependent upon the performance of a single business, or
| | - | --------------------------------------------------------------

| |  | dependent
upon the development or market acceptance of a single or limited number of products,
processes or services.
| | - | ---------------------------------------------------------------------------------------------------------------------

Alternatively,
if our business combination entails the simultaneous acquisitions of several operating
businesses and with different sellers, each such seller will need to agree that the
purchase of its business is contingent upon simultaneous closings of the other
acquisitions, which may make it more difficult for us, and delay our ability, to complete
the business combination. If we were to consummate a business combination with several
operating businesses, we could also face additional risks, including burdens and costs
with respect to possible multiple negotiations and due diligence investigations (if there
are multiple sellers) and the additional risks associated with the subsequent assimilation
of the operations and services or products of the acquired companies into a single
operating business. If we are unable to adequately address these risks, we may not be able
to improve productivity, efficiencies, profitability and operating margins after the
merger.

Because of our limited
resources and structure, we may not be able to consummate an attractive business
combination.

We
expect to encounter intense competition from other entities with business objectives
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. While we believe that there are
numerous potential target businesses that we could acquire with the net proceeds of this
offering, 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. Further, the
obligation we have to seek Class B stockholder approval of a business combination may
delay the consummation of a transaction, and our obligation to convert into cash the
shares of Class B common stock in certain instances may reduce the resources available for
a business combination. Additionally, our outstanding Class W warrants and Class Z
warrants, and the future dilution they potentially represent, may not be viewed favorably
by certain target businesses. Any of these factors may place us at a competitive
disadvantage in successfully negotiating a business combination. The fact that only 34 of
the 117 blank check companies that have gone public in the United States since August 2003
have completed a business combination and an additional 26 of such companies have entered
into either a definitive agreement or a letter of intent for a business combination may
indicate that there are only a limited number of attractive target businesses available to
entities such as our company or that many privately held target businesses are not
inclined to enter into a business combination with a blank check company. If we are unable
to consummate a business combination with a target business within the prescribed time
period, we will be forced to liquidate and, in such case, the holders of our Series A
units or shares of our common stock will lose their entire investment.

25

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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
the transaction or abandon a particular business combination.

Although
we believe that the net proceeds of our initial public offering will be sufficient to
allow us to consummate a business combination, in as much as we have not yet identified
any prospective target business, we cannot ascertain the capital requirements for any
particular transaction. If the net proceeds of this offering prove to be insufficient,
either because of the size of the business combination or the depletion of the available
net proceeds in search of a target business, or because we become obligated to convert
into cash a significant number of shares of Class B common stock from dissenting
stockholders, we will be required to seek additional financing. We cannot assure you 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 restructure the transaction 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 prevent or severely limit 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 a business combination.

The loss of the services
of any of our executive officers would make it more difficult to find a suitable company
for a business combination which makes it more likely that we will be required to distribute the proceeds of our trust fund to
our Class B stockholders.

Our
ability to successfully effect a business combination will be largely dependent upon the
efforts of our executive officers. We have not entered into an employment agreement with
any of our executive officers, nor have we obtained any key man life insurance
on any of their lives. The loss of any or all of their services could have a material
adverse effect on our ability to successfully achieve our business objectives, including
seeking a suitable target business to effect a business combination.

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Our outstanding warrants
and options 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 public offering, as part of the Series A units and Series B
units, we issued warrants to purchase 15,561,000 shares of common stock. We have also
issued to our initial security holders, including our officers and directors and/or
certain of their affiliates, warrants to purchase 4,950,000 shares of common stock at an
exercise price of $5.00 per share. We also issued an option to purchase 25,000 Series A
units and/or 230,000 Series B units to the representative of the underwriters which, if
exercised, will result in the issuance of an additional 510,000 shares of common stock and
710,000 warrants. 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 and option 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 and
option may make it more difficult to effectuate a business combination or increase the
cost of the target business. Additionally, the sale, or even the possibility of sale, of
the shares underlying the warrants and option 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 and option are exercised, you may experience dilution to your
holdings.

If our existing
securityholders 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.

Our
initial securityholders are entitled to demand that we register the resale of their 100
shares of our common stock and their 2,475,000 Class W warrants and 2,475,000 Class Z
warrants as well as the 4,950,000 shares of common stock underlying their Class W warrants
and Class Z warrants at any time after we consummate a business combination. Thus, if our
existing securityholders exercise their registration rights with respect to these
securities, there could be up to an additional 100 shares of common stock and 4,950,000
warrants (or an additional 4,950,000 shares of common stock issuable upon exercise of such
warrants) eligible for trading in the public market. The presence of this additional
number of shares of common stock and warrants 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 effectuate a business combination
or increase the cost of the target business, as the stockholders of the target business
may be discouraged from entering into a business combination with us or 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.

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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 representatives
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 meet these conditions and to maintain a current
prospectus relating to the common stock issuable upon exercise of the warrants until the
expiration of the warrants. However, we cannot assure you that we will be able to do so,
and 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 representatives 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 warrants issued to our initial securityholders may be exercisable for
unregistered shares of common stock.

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.

If
we are deemed to be an investment company under the Investment Company Act of 1940, we may
be subject to certain restrictions that may make it difficult for us to complete a
business combination, including:

| |  | restrictions
on the nature of our investments; and
| | - | --------------------------------------------------

| |  | restrictions
on our issuance of securities.
| | - | -------------------------------------------

In
addition, we may have imposed upon us burdensome requirements, including:

| |  | registration
as an investment company;
| | - | --------------------------------------

| |  | adoption
of a specific form of corporate structure; and
| | - | -------------------------------------------------------

| |  | reporting,
record keeping, voting, proxy and disclosure requirements and other rules and
regulations.
| | - | -----------------------------------------------------------------------------------------------------

We believe that our anticipated
activities will not subject us to the Investment Company Act of 1940 as the net proceeds
of our initial public offering that are being held in trust may only be invested by the
trust agent in government securities within the meaning of Section 2(a)(16) of
the Investment Company Act of 1940 having a maturity of 180 days or less, or in money
market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment
Company Act of 1940. By restricting the investment of the trust fund to these instruments,
we intend to meet the requirements for the exemption provided in Rule 3a-1 promulgated
under the Investment Company Act of 1940. Notwithstanding our belief that we are not
required to comply with the requirements of such act, in the event that our stockholders
do not approve a plan of dissolution and the proceeds remain in the trust fund for an
indeterminable amount of time, we may be considered to be an investment company and thus
required to comply with such act. If we were deemed to be subject to the act, compliance
with these additional regulatory burdens would require additional expense that we have not
allotted for.

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Our directors will not be
considered independent under the policies of the North American Securities
Administrators Association, Inc.

Under
the policies of the North American Securities Administrators Association, Inc., an
international organization devoted to investor protection, because each of our directors
is also an executive of ours, owns securities of ours and may receive reimbursement for
out-of-pocket expenses incurred by him in connection with activities on our behalf such as
identifying potential target businesses and performing due diligence on suitable business
combinations, state securities administrators will take the position that such individuals
are not independent. Accordingly, they will take the position that we do not
have the benefit of independent directors examining the propriety of expenses incurred on
our behalf and subject to reimbursement. Additionally, there is no limit on the amount of
out-of-pocket expenses that could be incurred by them or our other initial securityholders
that they may be affiliated with and there will be no review of the reasonableness of the
expenses by anyone other than our board of directors, which would include persons who may
seek reimbursement, or a court of competent jurisdiction if such reimbursement is
challenged. Although we believe that all actions taken by our directors on our behalf will
be in our best interests, whether or not they are deemed to be independent, we
cannot assure you that this will actually be the case. If actions are taken, or expenses
are incurred that are actually not in our best interests, it could have a material adverse
effect on our business and operations and a material adverse effect on the price of the
stock held by our public stockholders.

Our securities are quoted
on the OTC Bulletin Board, which may limit the liquidity and price of our securities more
than if our securities were quoted or listed on the Nasdaq Stock Market or a national
exchange.

Our
securities are quoted on the OTC Bulletin Board, an NASD-sponsored and operated
inter-dealer automated quotation system for equity securities not included in the Nasdaq
Stock Market. Quotation of our securities on the OTC Bulletin Board will limit the
liquidity and price of our securities more than if our securities were quoted or listed on
the Nasdaq Stock Market or a national exchange.

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Our obligations
under laws, regulations and standards relating to corporate governance and public
disclosure, including the Sarbanes-Oxley Act of 2002 and related regulations, may
increase our cost of completing a business combination.

As
a public company, we will be obligated to comply with laws, regulations and standards
relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act
of 2002 and related regulations implemented by the Securities and Exchange Commission and
the National Association of Securities Dealers. These laws and regulations may impose
obligations that will increase the legal and financial costs required to consummate a
business combination and increase the time required to complete a transaction.

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:

Significant shifts in the
political, economic and military conditions in Israel could reduce our profitability and
revenues and make an investment in our company less attractive.

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. Major hostilities involving Israel or the interruption or curtailment of trade
between Israel and its present trading partners could have a material adverse effect on
the target business and its operating results and financial condition. Furthermore,
several countries restrict business with Israeli companies. Any of these factors could
reduce our profitability and revenues and make an investment in our company less
attractive following a business combination.

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

The
Israeli Government currently provides tax and capital investment incentives to 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 assure you that such benefits and
programs would continue to be available following a business combination, or if available,
to what extent. Termination or further reduction of such benefits and programs could
increase the costs involved in operating the combined company following a business
combination or make a specific business combination less attractive.

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Deterioration of
relations between the United States and Israel could cause potential target businesses or
their goods or services to become less attractive.

Israel
and the United States have historically had a positive relationship. A significant amount
of Israels economic development has been financed principally by military and
economic aid from the United States and many Israeli companies have been financed by
United States venture capital and investment concerns. If the relationship between the
United States and Israel deteriorates, potential target businesses or their goods or
services could become less attractive and our operations following a business combination
could decline.

Because some of our
directors and officers reside outside of United States and, after the consummation of a
business combination substantially all of our assets may be located outside of the
United States, it may be difficult for investors to enforce their legal rights against
such individuals.

Some
of our directors and officers reside outside of the United States and, after the
consummation of a business combination, substantially all of our assets may 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, to effect service of process upon our
directors or officers or to enforce judgments of United States courts predicated upon
civil liabilities and criminal penalties of our directors and officers under Federal
securities laws.

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

Executive
officers or key employees of a target business may also reside in Israel and be required
to perform similar annual military reserve duty. Our operations could be disrupted by the
absence for a significant period of one or more of these officers or key employees due to
military service. Any such disruption could affect our ability to operate our business
efficiently or manage growth, which could result in declining revenues or lost profits.

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, a target
business revenue 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, our
dollar-measured results of operations following a business combination could be weaker.

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Any Israeli government
grants we receive for research and development expenditures may be reduced or eliminated
due to government budget cuts, and these grants limit or prohibit our ability to
manufacture products and transfer know-how outside of Israel and require us to satisfy
specified conditions.

Following
a business combination, the target business we acquire may be receiving, or may receive in
the future, 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
our 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. Additionally, the Israeli
government has reduced the benefits available under this program in recent years and has
indicated that it may reduce or eliminate these benefits in the future. When know-how or
products are developed using Chief Scientist grants, the terms of these grants prohibit
the transfer of the know-how out of Israel and would limit our ability 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, will generally be subject to additional
financial obligations. If we fail to comply with the conditions imposed by the Office of
the Chief Scientist, including the payment of royalties with respect to grants received,
we 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 enter into in the future
that provide for such a transfer. If we acquire a target business in Israel, any
non-Israeli who becomes a holder of 5%or more of our outstanding common stock will
be required to notify the Office of the Chief Scientist and to undertake to observe the
law governing the grant programs of the Office of the Chief Scientist.

If we fail to satisfy the
conditions specified by any Approved Enterprise program, we may be required
to pay increased taxes and would likely be denied the tax benefits to which we are
currently entitled in the future.

Following
a business combination, the Investment Center of the Ministry of Industry, Trade and
Labor, a part of the Israeli Government, may grant, or have already granted,
Approved Enterprise status to some investment programs at our manufacturing
facilities. Approved Enterprises are companies incorporated in Israel that
qualify, based on certain criteria, for special treatment in respect of governmental
benefits and grants designed to promote foreign and domestic investment. When we generate
net income from Approved Enterprise programs approved as such on or before December 31,
2004, the portion of our income derived from these programs would be exempt from tax for a
period of two to ten years and is subject to reduced tax for an additional period
thereafter. The benefits available to an Approved Enterprise program depend upon the
ability of the entity to adhere to the investment program filed with the Investment Center
of the Israeli Ministry of Industry, Trade and Labor, and to the fulfillment of periodic
reporting obligations. Additionally, tax benefits can be granted to certain
Benefited Enterprises beginning in 2004, provided that the facilities meet the
criteria for tax benefits under the Israeli Encouragement of Capital Investments Law. If
we fail to comply with the conditions, in whole or in part, and, therefore do not qualify
as an Approved Enterprise or a Benefited Enterprise, we may be
required to pay additional taxes for the period in which we benefited from the tax
exemption or reduced tax rates and would likely he denied these benefits in the future.

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The ability of any
Israeli subsidiary to pay dividends is subject to Israeli law and the amount of cash
dividends payable may be subject to devaluation in the Israeli currency.

After
the completion of any business combination, if such business combination involves us
maintaining an Israeli subsidiary, the ability of such Israeli subsidiary to pay dividends
to us will be governed by Israeli law, which provides that cash dividends maybe paid by an
Israeli corporation only out of retained earnings as determined for statutory purposes in
Israeli currency. In the event of a devaluation of the Israeli currency against the
dollar, the amount in dollars available for payment of cash dividends out of prior
years earnings will decrease accordingly. Cash dividends paid by an Israeli
corporation to a corporation treated as a resident of the United States for the purposes
of the Convention for the Avoidance of Double Taxation between Israel and the United
States, will be subject to taxation by both Israel and the United States. The U.S.
resident would, however, be permitted to claim a credit for such Israeli taxes against the
U.S. income tax imposed with respect to such dividend, subject to the limitations
applicable to foreign tax credits. Such dividends out of income derived in respect of a
period for which an Israeli company is entitled to the reduced tax rate applicable to an
Approved Enterprise or to a Benefited Enterprise are generally subject to
withholding of Israeli income tax at source at a rate of 15% or less. Any Israeli
subsidiary would generally be subject to additional Israeli taxes in respect of such
dividends, generally equal to the tax benefits previously granted in respect of the
underlying income by virtue of any Approved Enterprise status.

Because service and
enforcement of legal process against our executive officers and directors is uncertain,
investors may not be able to obtain or collect upon a judgment against such
individuals and we may not be able to enforce our indemnity rights against our executive
officers.

Service
of process upon individuals or firms which are not resident in the United States may be
difficult to obtain within the United States. Each of our directors and officers reside
outside the United States. Furthermore, 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. We have appointed
Corporation Service Company as our agent to receive service of process in any action
against us in the United States. None of our officers or directors has consented to
service of process in the United States or to the jurisdiction of any United States Court.

If
we are unable to complete a business combination and are forced to distribute the proceeds
held in trust to the holders of our Class B common stock, our executive officers have
agreed that they will be personally liable to ensure that the proceeds in the trust fund
are not reduced by the claims, if any, of vendors or other entities that are owed money by
us for services rendered or contracted for or products sold to us, or by any target
business, and that have not executed an agreement waiving any right, title, interest or
claim of any kind in or to any monies held in the trust; provided, however, that such
liability shall not extend to claims of target businesses brought under Israeli law or in
Israeli courts. Accordingly, if a judgment is obtained against the trust fund, we may not
be able to enforce our indemnity rights against our executive officers.

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We
have been informed by our legal counsel in Israel, Yigal Arnon & Co., that, in such
counsels opinion, 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. However, subject to certain time limitations, an Israeli court may declare a
foreign civil judgment enforceable if it finds that (1) the judgment was rendered by a
court which was, according to the laws of the jurisdiction of the court, competent to
render the judgment, (2) the judgment is no longer appealable, (3) the obligation imposed
by the judgment is enforceable according to the rules relating to the enforceability of
judgments in Israel and the substance of the judgment is not contrary to public policy,
and (4) the judgment is executory in the state in which it was given. A foreign judgment
will not be declared enforceable if it was given in a state whose laws do not provide for
the enforcement of judgments of Israeli courts (subject to exceptional cases) or if its
enforcement is likely to prejudice the sovereignty or security of the State of Israel. An
Israeli court also will not declare a foreign judgment enforceable if it is proved to the
Israeli court that (i) the judgment was obtained by fraud, (ii) there was no due process,
(iii) the judgment was rendered by a court not competent to render it according to the
laws of private international law in Israel, (iv) the judgment is at variance with another
judgment that was given in the same matter between the same parties and which is still
valid, or (v) at the time the action was brought in the foreign court a suit in the same
matter and between the same parties was pending before a court or tribunal in Israel.

A
specific permit of the Controller of Foreign Currency of the Bank of Israel is required
before transferring out of Israel the proceeds of a foreign judgment enforced in Israel.
Under existing law, a foreign judgment payable in foreign currency may be paid in Israel
currency at the rate of exchange on the date of payment, but the judgment debtor may also
make payment in foreign currency if the Israeli exchange control regulations then in
effect permit such foreign currency payment. Pending collection, the amount of the
judgment of an Israeli court stated in Israeli currency will ordinarily be linked to the
Israeli consumer price index. Judgment creditors must bear the risk that they will be
unable to convert their award into foreign currency that can be transferred out of Israel.
All judgment creditors must bear the risk of unfavorable exchange rates.

|Item 1B. |  | Unresolved Staff Comments.
|-------- |  | --------------------------

Not applicable.

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|Item 2. |  | Properties.
|------- |  | -----------

We
maintain our executive offices at Yahalom Tower (28th Floor), 3a Zabotinski St., Ramat
Gan 52520, Israel. The cost for this space is included in the $7,500 per-month fee
Danash Investment and Management Ltd. charges us for general and administrative services
pursuant to a letter agreement between us and Danash Investment and Management Ltd., an
affiliate of Mr. Dror Gad, our Chief Financial Officer, Executive Vice President and
Director. We believe, based on rents and fees for similar services in the Tel-Aviv, Israel
metropolitan area, that the fee charged by Danash Investment and Management Ltd. 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.

|Item 3. |  | Legal Proceedings.
|------- |  | ------------------

We
are not party to any litigation, and we are not aware of any threatened litigation that
would have a material adverse effect on us or our business.

|Item 4. |  | Submission
of Matters to a Vote of Security Holders.
|------- |  | ----------------------------------------------------

No
matters were submitted to a vote of securityholders during the fourth quarter of the
fiscal period ended July 31, 2007.

# PART II

|Item 5. |  | Market For Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases ofEquity Securities.
|------- |  | ------------------------------------------------------------------------------------------------------------

Our
Series A Units and Series B Units have traded on the OTC Bulletin Board under the symbols
IGPAU.OB and IGPBU.OB, respectively, since July 13, 2006, the date
of the initial public offering of our securities. On October 4, 2006, the common stock,
Class B common stock, Class W warrants and Class Z warrants included in the Series A Units
and Series B Units commenced separate trading under the symbols IGPAA,
IGPAB, IGPAW and IGPAZ.

The
closing high and low sales prices of our Series A Units and Series B Units, as
reported by the OTC Bulletin Board, for the periods indicated as follows:

|Period Ending | Common Stock | Class B CommonStock | Class WWarrants | Class ZWarrants | Series A Units | Series B Units
|------------- | ------------ | ------------------- | --------------- | --------------- | -------------- | --------------
|
|
|
|
|2007          |              |                     |                 |                 |                |               
|July 31       |              |                     | $               | N/A             |                |               
|April 30      |              |                     |                 | 1.85            |                |               
|January 31    |              |                     |                 | 2.00            |                |               
|2006          |              |                    
|October 31    |              |                     |                 | N/A             |                |               

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The trading of our securities,
especially our Class W and Class Z warrants, is limited, and therefore there may not be
deemed to be an established public trading market under guidelines set forth by the
Securities and Exchange Commission. As of September 19, 2007, there were 2 stockholders of
record of our common stock, 1 stockholder of record of our Class B common stock, 8 holders
of record of Class W warrants, 8 holders of record of our Class Z warrants, 1 holder of
record for our Series A Units and 1 holder of record of our Series B Units. Such numbers
do not include beneficial owners holding shares, units or warrants through nominee names.

Dividends

We
have not paid any dividends on our units or 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 tables should be read
in conjunction with our financial statements and the notes thereto appearing elsewhere in
this Annual Report on Form 10-K. The selected financial data has been derived from our
financials statements, which have been audited by Ziv Haft, a BDO Member firm, an
independent registered public accounting firm, as indicated in their reports included
elsewhere herein.

|                                                          | Year Ended07/31/2007 | Period from inception (August 1, 2005) to07/31/2006 | Period from inception (August 1, 2005) to07/31/2007
|--------------------------------------------------------- | -------------------- | --------------------------------------------------- | ---------------------------------------------------
|
|
|
|
|Statement of Operations Data:                             |                      |                                                     |                                                    
|Revenue                                                   |                      |                                                     | $                                                  
|Operating loss                                            |                      |                                                     |                                                    
|Interest income                                           |                      |                                                     |                                                    
|Net income (loss)                                         |                      |                                                     |                                                    
|Accretion of Trust Fund relating to Class B               |                      |                                                    
|common stock subject to possible conversion               |                      |                                                     |                                                    
|Net loss attributed to other Class B stockholders         |                      |                                                    
|and common stockholders                                   |                      |                                                     |                                                    
|                                                          |                      |                                                     |                                                    
|Earnings per share data:                                  |                      |                                                    
|Weighted average Class B common shares outstanding        |                      |                                                    
|subject to possible conversion                            |                      |                                                     |                                                    
|Net income per Class B common share, basic and diluted:   |                      |                                                    
|subject to possible conversion                            |                      |                                                     | $                                                  
|Weighted average basic and diluted shares outstanding     |                      |                                                     |                                                    
|Net income (loss) per share, basic and diluted:           |                      |                                                     | $                                                  
|                                                          |                      |                                                     |                                                    
|Other Financials Data:                                    |                      |                                                    
|Net cash used in operating activities                     |                      |                                                     | $                                                  
|Cash used in investing activities                         |                      |                                                     |                                                    
|Net proceeds from public offering allocable to            |                      |                                                    
|stockholders' equity                                      |                      |                                                     |                                                    
|Portion of net proceeds from public offering allocable to |                      |                                                    
|Common Stock subject to possible conversion               |                      |                                                     |                                                    
|Cash flows from financing activities                      |                      |                                                     | $                                                  

|                                            | July 31, 2007 | July 31, 2006
|------------------------------------------- | ------------- | -------------
|
|
|
|
|Cash and cash equivalents                   |               |              
|Investment held in Trust Fund               |               |              
|Total assets                                |               |              
|Common stock subject to possible conversion |               |              
|Total stockholders' equity                  |               |              

36

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Management's Discussion and Analysis of Financial Condition and Results of operations.

The following discussion should be
read in conjunction with our financial statements and footnotes thereto contained in this
report.

# General

We were formed on August 1, 2005 to
serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other
similar business combination with a currently unidentified operating business which has
operations or facilities located in Israel, or which is a company operating outside of
Israel which our management believes would benefit from establishing operations or
facilities in Israel.

On July 18, 2006, we completed our
initial public offering of 500,000 Series A Units and 4,600,000 Series B Units. On July
26, 2006, we consummated the closing of an additional 32,500 Series A Units and 518,000
Series B Units which were subject to the over-allotment option. Each Series A Unit
consists of two shares of common stock, $.0001 par value per share, ten Class Z warrants,
each to purchase one share of our Common Stock at a price of $5.00 per share. Each Series
B Unit consists of two shares of Class B Common Stock, $.0001 par value per share, two
Class W Warrants, each to purchase one share of our Common Stock at a price of $5.00 per
share. Our net proceeds from the initial public offering, including the exercise of the
over allotment option, totaled $52,895,728 which was net of $3,292,476 in underwriting and
other expenses.

For a description of the proceeds
generated in our initial public offering and a discussion of the use of such proceeds, we
refer you to Notes 1 and 2 of the financial statements included in Part II, Item 8 of this
Form 10-K.

# Results of Operations

Net income for the year ended July
31, 2007 of $1,479,275 consisted of interest income on the Trust Fund investment of
$1,817,789 and interest on cash and cash equivalents of $62,497, offset by professional
fees of $128,981, Delaware franchise taxes of $65,795 and other operating expenses of
$206,235, which consist of $90,000 for a monthly administrative services agreement with an
affiliate, $74,904 for insurance, $33,594 for travel, and $7,737 for other expenses.

Net loss for the period from
inception (August 1, 2005) to July 31, 2006 of $84,852 consisted of interest income on the
Trust Fund investment of $29,277 and interest on cash and cash equivalents of $1,337,
offset by professional fees of $30,603, Delaware franchise taxes of $78,042 and other
operating expenses of $6,821, consisting of $5,081 for a monthly administrative services
agreement with an affiliate, and $1,740 for other expenses.

37

---

---

Net income for the period from
inception (August 1, 2005) to July 31, 2007 of $1,394,423 consisted of interest income on
the Trust Fund investment of $1,848,404 and interest on cash and cash equivalents of
$62,496, offset by professional fees of $159,584, Delaware franchise taxes of $143,837 and
other operating expenses of $213,056, consisting of $95,081 for a monthly administrative
services agreement with an affiliate, $74,904 for insurance, $33,594 for travel, and
$9,477 for other expenses.

# Liquidity and Capital
Resources

We consummated our initial public
offering of 500,000 Series A units and 4,600,000 Series B units on July 18, 2006. On July
26, 2006, we consummated the closing of an additional 32,500 Series A Units and 518,000
Series B Units that were subject to the over-allotment option. Proceeds from our initial
public offering were approximately $52.9 million, net of underwriting and other expenses
of approximately $3.3 million, of which $51.7 million was deposited into the Trust Fund. The
remaining proceeds are available to be used by us to provide for business, legal and
accounting due diligence on prospective acquisitions and continuing general and
administrative expenses. We will use substantially all of the net proceeds of this
offering to acquire a target business, including identifying and evaluating prospective
acquisition candidates, selecting the target business, and structuring, negotiating and
consummating the business combination. To the extent that our capital stock is used in
whole or in part as consideration to effect a business combination, the proceeds held in
the Trust Fund as well as any other net proceeds not expended will be used to finance the
operations of the target business.

We believe we will have sufficient
available funds outside of the Trust Fund to operate through July 11, 2008, assuming that
a business combination is not consummated during that time. At July 31, 2007, our cash
balance was $1,123,856. We do not believe we will need to raise additional funds in order
to meet the expenditures required for operating our business. However, we may need to
raise additional funds through a private offering of debt or equity securities if such
funds are required to consummate a business combination that is presented to us. We would
only consummate such a financing simultaneously with the consummation of a business
combination.

# Off-Balance Sheet
Arrangements

As of July 31, 2007, we did not have
any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

# Contractual Obligations
and Commitments

Contractual Obligations

|                                     | Payment due by period
|------------------------------------ | ---------------------
|
|
|
|
|Administrative services agreement(1) |                      
|                                     |                      
|Total                                |                      
|                                     |                      

38

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Commencing on July 11, 2006, the
effective date of the Offering, we were obligated to pay an affiliate of our chief
financial officer, $7,500 per month for office, secretarial and administrative services.
Included in other general and administrative expenses in the Statements of Operations are
amount of $90,000, $5,081 and $95,081 for such services for the year ended July 31, 2007,
the period from inception (August 1, 2005) thru July 31, 2006 and the period from
inception (August 1, 2005) thru July 31, 2007, respectively.

# Critical Accounting
Policies

Our significant accounting policies
are described in Note 3 to our audited financial statements included elsewhere in this
report. We believe the following critical accounting polices involved the most significant
judgments and estimates used in the preparation of our financial statements.

Cash and Cash
Equivalents  We consider all highly liquid investments with original
maturities of three months or less to be cash equivalents.

Investments
 Investments held in the Trust Fund consist of municipal money market securities
with maturities of up to 30 days. Such securities generate current income which is exempt
from US Federal income tax and therefore no provision for income taxes is required for the
period ended July 31, 2007.

|Item 7A. |  | Quantitative
and Qualitative Disclosures About Market Risk.
|-------- |  | -----------------------------------------------------------

Market
risk is the exposure to loss resulting from changes in interest rates, foreign currency
exchange rates, commodity prices and equity prices. We do not believe we are exposed to
significant market risk.

|Item 8. |  | Financial Statements and Supplementary Data.
|------- |  | --------------------------------------------

Reference
is made to pages F-1 through F-12 comprising a portion of this annual report on
Form 10-K.

|Item 9. |  | Changes
in and Disagreements with Accountants on Accounting and Financial Disclosure.
|------- |  | -------------------------------------------------------------------------------------

None.

39

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|Item 9A. |  | Controls and Procedures.
|-------- |  | ------------------------

Our
management carried out an evaluation, with the participation of Mr. Carmel Vernia, our
chief executive officer and Mr. Dror Gad, our chief financial officer, of the
effectiveness of our disclosure controls and procedures as of July 31, 2007. Based
upon that evaluation, Messrs. Vernia and Gad concluded that our disclosure controls and
procedures were effective to ensure that information required to be disclosed by us in
reports that we file or submit under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time periods specified in the rules and
forms of the Securities and Exchange Commission.

There
has not been any change in our internal control over financial reporting in connection
with the evaluation required by Rule 13a-15(d) under the Exchange Act that occurred
during the period ended July 31, 2007 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

|Item 9B. |  | Other Information.
|-------- |  | ------------------

Not applicable.

# PART III

|Item 10. | Directors and Executive Officers of the Registrant.
|-------- | ---------------------------------------------------

Our
current directors, executive officers and special advisors are as follows:

|Name           | Age | Position                                                      
|-------------- | --- | --------------------------------------------------------------
|
|
|
|
|Matty Karp     | 58  | Chairman                                                      
|Carmel Vernia  | 55  | Chief Executive Officer and Director                          
|Dror Gad       | 41  | Executive Vice President, Chief Financial Officer and Director
|Lior Samuelson | 59  | Senior Advisor                                                
|George Hervey  | 61  | Senior Advisor                                                

Matty
Karphas been our Chairman since our inception. In 1997, Mr. Karp co-founded Concord
Ventures, an Israeli venture capital fund focused on Israeli early-stage technology
companies, and has served as its Managing Partner since its formation. From 1994 to June
1999, Mr. Karp served as Chief Executive Officer of Kardan Technologies, Ltd., a
technology investment company, and continued to serve as a Director until October 2001.
From 1994 to 1997, Mr. Karp served as the President of Nitzanim Venture Fund, an Israeli
venture capital fund focused on early-stage high technology companies. From 1987 to 1994,
Mr. Karp served as Corporate Vice President for Business Development, Marketing and
Sales, General Manager of the Airborne Systems Division and Head of the Systems and
Products Group at Elbit Computers Ltd., an Israeli high-tech company with a worldwide
presence in the defense and healthcare sectors. Mr. Karp has served on the board of
directors of Galileo Technology Ltd. (1994 to 2001), which was acquired by Marvel
Technology Group, Ltd., a Nasdaq listed company; Accord Networks Ltd. (1994 to 2001),
which was acquired by Polycom Inc., a Nasdaq listed company; and Saifun Semiconductors
(2000 to present), a Nasdaq listed company. Mr. Karp has also served on the board of
directors of El Al Israel Airlines from 2000 to 2003. He also served as a jet fighter
pilot in the Israeli Airforce. Mr. Karp received a B.S., cum laude, in Electrical
Engineering from the Technion - Israel Institute of Technology and is a graduate of the
Harvard Business School Advanced Management Program.

40

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Carmel
Verniahas been our Chief Executive Officer and a Director since our inception. Since
January 2005, Mr. Vernia has been managing his private investment portfolio. From June
2003 to January 2005, Mr. Vernia served as the Chairman of the board of directors and
Chief Executive Officer of Tower Semiconductor Ltd., a silicon foundry based in Israel.
From 2000 to May 2002, Mr. Vernia served as the Chief Scientist in the Government of
Israel's Ministry of Industry and Trade. Following his service as Chief Scientist from
June 2002 until May 2003, Mr. Vernia did not hold any positions, as he was subject to a
mandatory one year cooling period under Israeli law during which he was not allowed to
work for or receive any benefit from any organization that benefited in any way from his
decisions while in his government position. From 1984 until April 2000, Mr. Vernia was
employed by Comverse Technology Inc., a Nasdaq listed company that is one of the world's
leading suppliers of voicemail systems and other value added services to wireless and
wireline telecom operators, including as its Chief Operating Officer from 1994 to April
2000, as well as Chief Executive Officer of Verint Systems (from its inception in 1999
until April 2000), an independent subsidiary of Comverse Technology and a world leader in
digital voice and video recording for communications and business intelligence, which
later became an independent Nasdaq listed company. Mr. Vernia served on the board of
directors of Comverse Technology from August 1997 until April 2000. Mr. Vernia also
serves on the Executive Council of Tel Aviv University. Mr. Vernia received an M.S. in
Electrical and Computer Engineering from the University of California, Davis, and a B.S.
in Electrical Engineering from the Technion - Israel Institute of Technology.

Dror
Gadhas been our Executive Vice President, Chief Financial Officer and
Director since our inception. In January 2003, Mr. Gad founded Danash Management and
Investments, an advisory business focused on the Israeli technology sector and has served
as its Chairman since its formation. Mr. Gad currently serves on the board of directors of
REIT 1 Ltd., a real-estate investment company listed on the Tel Aviv Stock Exchange. From
2000 until December 2002, Mr. Gad was the Chief Executive Officer of TechnoPlus Ventures
Ltd., an Israeli venture capital investment company, listed on the Tel Aviv Stock
Exchange. From 1997 to 1999, Mr. Gad served as a Vice President of the Property and
Building Corporation, a Tel Aviv Stock Exchange listed company and subsidiary of the IDB
Group, where he formed and headed the Project Finance Division. From 1995 to 1997, Mr. Gad
served as an assistant to the Chief Executive Officer of IDB Holdings Corporation Ltd., a
Tel Aviv Stock Exchange listed company. From 1984 to 1993, Mr. Gad served as a pilot in
the Israeli Airforce, where he held various positions. Mr. Gad retired with the rank of
Major (res.) and is an active F-16 pilot. From 1993 to 1995, Mr. Gad attended Tel Aviv
University, from which he received a B.A., summa cum laude, in Economics and
Management. Mr. Gad also received an Executive MBA. from the Kellogg-Recanati
International program, a joint program of Northwestern University and Tel Aviv University.

41

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Lior
Samuelsonhas been a Senior Advisor to us since August 2005. Mr. Samuelson
served as Executive Vice President and Director of Mercator Partners Acquisition Corp., an
OTC Bulletin Board listed blank check company, from the companys formation in
January, 2005 until the companys consummation of a business combination in October,
2006. In 1999, Mr. Samuelson co-founded Mercator Capital L.L.C., a merchant and
investment bank focused on communications, media and technology and has been a partner of
it and its affiliates since formation. From 1997 until 1999, Mr. Samuelson was President
and Chief Executive Officer of PricewaterhouseCoopers Securities. From 1994 to 1996, Mr.
Samuelson served as Chief Executive Officer of Barents Group, a merchant bank and advisory
firm specializing in assisting companies in emerging markets. In 1985, Mr. Samuelson
joined PEG Group, a company that specialized in developing simulation software and
services, which was sold to KPMG in 1986. Mr. Samuelson became a partner of KPMG in 1986,
and served as a partner of KPMG until 1994. From 1980 until 1985, Mr. Samuelson served in
a senior management position with Booz, Allen & Hamilton, a management consulting
firm. Since August 2001, Mr. Samuelson has served as a Director of Deltathree, Inc., a
Nasdaq listed internet telephony company, and, from April 2001 until June 2005, as a
Director of Civcom, a privately held telecommunication equipment company. Mr. Samuelson
received a B.S. and an M.S. from Virginia Tech.

George
Herveyhas been a Senior Advisor to us since August 2005. Mr. Hervey joined
Marvell Technology Group Ltd., or Marvell, a Nasdaq listed global semiconductor provider
of high-performance analog, mixed-signal, digital signal processing and embedded
microprocessor integrated circuits, in 2000. Until his retirement from Marvell in May
2007, Mr. Hervey served as its Vice President of Finance and Chief Financial Officer, and
in a similar capacity for Marvell Semiconductor, Inc. From 1997 to 2000, Mr. Hervey served
as Senior Vice President, Chief Financial Officer and Secretary for Galileo Technology
Ltd., formerly a Nasdaq listed company, which Marvell acquired in January 2001. From 1992
to 1997, Mr. Hervey was Senior Vice President and Chief Financial Officer of S3
Incorporated, a designer and manufacturer of graphics and video accelerators for personal
computers and related peripheral products. Mr. Hervey received a B.S. in Business
Administration from the University of Rhode Island.

Our
board of directors is divided into three classes with only one class of directors being
elected in each year and each class serving a three-year term. The term of office of the
first class of directors, consisting of Dror Gad, will expire at our first annual meeting
of stockholders. The term of office of the second class of directors, consisting of
Carmel Vernia, will expire at the second annual meeting. The term of office of the third
class of directors, consisting of Matty Karp, will expire at the third annual meeting.

These
individuals will play a key role in identifying and evaluating prospective acquisition
candidates, selecting the target business, and structuring, negotiating and consummating
its acquisition. While our senior advisors will not have any decision-making or voting
authority with respect to potential target businesses or business combinations, they will
provide us with their thoughts and advice with respect to such target businesses and
business combinations. Other than Mr. Samuelson, none of these individuals has been or
currently is a principal of, or affiliated with, a blank check company. However, we
believe that the skills and expertise of these individuals, their collective access to
acquisition opportunities and ideas, their contacts, and their transactional expertise
should enable them to successfully identify and effect an acquisition.

42

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---

We
do not have an audit committee of our board of directors nor do we have an audit
committee financial expert, because we do not believe the nature of our business is such
that an audit committee or audit committee financial expert would be useful or necessary.
Furthermore, our equity securities are not listed on an exchange or automated quotation
system that requires its listed companies to appoint an audit committee.

We
have not adopted a Code of Ethics that applies to our principal executive officer or
principal financial officer, or persons performing similar functions, primarily because
we do not and will not have any operations until such time as we enter into a business
combination. We intend to adopt a Code of Ethics at or prior to such time as we enter
into a business combination.

Conflicts of Interest and Other Information

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

| |  | None
of our officers and directors are required to commit their 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 us as well as         the other entities with which they are affiliated.
They may have conflicts of interest in        determining to which entity a particular
business opportunity should be presented. For a complete         description of our
management's other affiliations, see the previous section entitled " -         Directors
and Executive Officers."
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 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 us.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Our
directors own warrants that are subject to lock-up agreements restricting their sale
until a         business combination is successfully completed. Accordingly, our board
may have a conflict of         interest in determining whether a particular target
business is appropriate to effect a business         combination. Additionally, such
individuals may purchase units in the open market. If such         individuals purchase
Series B units in the open market or Class B common stock in the open         market,
they would be entitled to vote as they choose on a proposal to approve a business
        combination and exercise conversion rights in connection therewith. These
individuals may not         have the same interests as other Class B common stockholders.
For example, because our directors         purchased warrants prior to the public
offering, they may have a greater incentive than an         investor who holds our Class
B common stock to vote in favor of a business combination. This         greater incentive
stems from the fact that our directors would stand to lose their initial
        investment if a business combination were not effected during the designated time
period, while         an investor who owns only our Class B common stock would be
entitled to recover his, her or its         entire investments in the event no business
combination was effected.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

43

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| |  | Our
directors and officers may enter into consulting or employment agreements with us as part
of         a business combination pursuant to which they may be entitled to compensation
for their services         following the 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.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 assure you that any of the above mentioned conflicts
will be resolved in our favor. If any of these conflicts are not resolved in our favor,
it may diminish our ability to complete a favorable business combination.

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 earlier of a
business combination or our dissolution and distribution of the trust fund to the Class B
stockholders, or such time as he ceases to be an officer or director, to present to our
company for our consideration, prior to presentation to any other entity, any suitable
business opportunity which may reasonably be required to be presented to us subject to
any pre-existing fiduciary or contractual obligations he might have.

44

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Until
October, 2006, Mr. Samuelson, one of our senior advisors, was Executive Vice President
and a director of Mercator Partners, Mr. Hackman, a warrantholder of ours, was President
and a director of Mercator Partners, and Mr. Ballarini, a warrantholder of ours, was
Chief Financial Officer, Treasurer and a director of Mercator Partners. Messrs.
Samuelson, Hackman and Ballarini had each signed a letter agreement with Mercator
Partners stating that, subject to any pre-existing fiduciary obligations, he would
present to Mercator Partners for its consideration, prior to presentation to any other
person or entity, any suitable opportunity to acquire an operating business, until the
earlier of the consummation by Mercator Partners of a business combination, the
liquidation of Mercator Partners' trust fund, or the time at which he ceases to serve as
an officer and director of Mercator Partners. In October, 2006, based on publicly
available information, Mercator Partners consummated a business combination, releasing
Messrs. Samuelson, Hackman and Ballarini from their pre-existing fiduciary and
contractual obligations at Meractor Partners (though as of the date of this report Mr.
Hackman has remained a board member and Mr. Ballarini serves as the interim-CFO of the
acquired business). Accordingly, as of October, 2006, Messrs. Samuelson, Hackman and
Ballarini are no longer under a fiduciary and contractual obligation to present
appropriate business opportunities to Mercator Partners prior to presenting those
opportunities to us.

Mr.
Vernia, our Chief Executive Officer and a member of our board of directors, was the Chief
Operating Officer of Comverse Technology, Inc., a Nasdaq listed company, from 1994 until
April 2000, and a member of Comverse's board of directors from August 1997 until April
2000. According to Comverse's SEC filings, in May 2006 Comverse received a subpoena from
the United States Attorney's Office for the Eastern District of New York in connection
with the issuance, timing and pricing of stock option grants between 1995 and the
present, and representatives of a special committee of Comverse's board of directors are
cooperating with the SEC. According to a Current Report on Form 8-K filed by Comverse
with the SEC on May 4, 2006, eight purported class action or derivative lawsuits have
been filed against Comverse and certain of its current and former officers and directors
relating to the option grants. One of the suits referenced in that Form 8-K names Mr.
Vernia as a defendant. According to its SEC filings, Comverse's Remuneration and Stock
Option Committee was responsible for approving compensation arrangements for senior
management and administering the Company's stock option plans during the period that Mr.
Vernia served as a director of Comverse. Mr. Vernia has advised us that he was never a
member of Comverse's Remuneration and Stock Option Committee.

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 existing
securityholders 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.

45

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|Item 11. | Executive
Compensation
|-------- | ----------------------

No
executive officer, nor director has received any cash or deferred compensation, nor
received any stock for services rendered during the period covered by this report, nor
have we provided any form of retirement or pension benefits to them. During the period
covered by this report we have not employed any personnel. Commencing on the effective
date of this prospectus through the acquisition of a target business, we will pay Danash
Investment and Management Ltd., an affiliate of Mr. Gad, a fee of $7,500 per month for
providing us with office space and certain office and administrative services. However,
this arrangement is solely for our benefit and is not intended to provide Mr. Gad
compensation in lieu of a salary. No other initial security holder of ours is an officer,
director or principal shareholder of Danash Investment and Management Ltd. Other than
this $7,500 per-month fee, no compensation of any kind, including finder's and consulting
fees, will be paid to any of our initial security holders, officers, directors, or any of
their respective affiliates, prior to, or for any services they render in order to
effectuate, the consummation of a business combination. However, they will be reimbursed
for any out-of-pocket expenses incurred in connection with activities on our behalf such
as identifying potential target businesses and performing due diligence on suitable
business combinations. There is no limit on the amount of these 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. Because of the foregoing, we
will generally not have the benefit of independent directors examining the propriety of
expenses incurred on our behalf and subject to reimbursement.

|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 and Class B common stock as of September 19, 2007, based on information known to
us, with respect to the beneficial ownership of shares of our common stock or Class B
common stock, by:

| |  | each
person known by us to be the beneficial owner of more than 5% of our outstanding shares
of         common stock;
| | - | ---------------------------------------------------------------------------------------------------------------------

| |  | each
of our officers, directors and senior advisors; and
| | - | --------------------------------------------------------

| |  | all
our officers and directors as a group.
| | - | ------------------------------------------

Unless
otherwise indicated, we believe that all persons named in the table have sole voting and
investment power with respect to all shares of common stock beneficially owned by them.

46

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|                                                                                      | Common Stock | Class B Common Stock
|------------------------------------------------------------------------------------- | ------------ | --------------------
|
|
|
|
|D.B. Zwirn & Co., L.P. (2)                                                            |              |                     
|745 Fifth Avenue, 18thfloor
New York, NY 10151                                        |              |                     
|                                                                                      |              |                     
|Andrew M. Weiss (3)                                                                   |              |                     
|29 Commonwealth Avenue                                                                |              |                     
|Boston Mass. 02116                                                                    |              |                     
|                                                                                      |              |                     
|Pequot Capital Management, Inc. (4)
500 Nyala Farm Road
Westport, CT 06880            |              |                     
|                                                                                      |              |                     
|QVT Financial LP (5)                                                                  |              |                     
|1177 Avenue of the Americas                                                           |              |                     
|New York, NY 10036                                                                    |              |                     
|                                                                                      |              |                     
|Jonathan M. Glaser (6)
11601 Wilshire Boulevard
Suite 2180
Los Angeles, CA 90025      |              |                     
|                                                                                      |              |                     
|Daniel Albert David (6)                                                               |              |                     
|100 Drakes Landing                                                                    |              |                     
|Suite 207                                                                             |              |                     
|Greenbrae, CA 94904                                                                   |              |                     
|                                                                                      |              |                     
|Roger Richter (6)
One Sansome Street
San Francisco, CA 94104                          |              |                     
|                                                                                      |              |                     
|Pacific Assets Management LLC (6)                                                     |              |                     
|100 Drakes Landing                                                                    |              |                     
|Suite 207                                                                             |              |                     
|Greenbrae, CA 94904                                                                   |              |                     
|                                                                                      |              |                     
|Pacific Capital Management, Inc. (6)
100 Drakes Landing
Suite 207
Greenbrae, CA 94904 |              |                     
|                                                                                      |              |                     
|JMG Triton Offshore Fund, Ltd. (6)                                                    |              |                     
|Nemours Chambers                                                                      |              |                     
|PO Box 3170                                                                           |              |                     
|Road Town, Tortola BVI                                                                |              |                     
|                                                                                      |              |                     
|Dror Gad                                                                              |              |                     
|                                                                                      |              |                     
|Matty Karp                                                                            |              |                     
|                                                                                      |              |                     
|Carmel Vernia                                                                         |              |                     
|                                                                                      |              |                     
|Lior Samuelson (11)                                                                   |              |                     
|                                                                                      |              |                     
|George Hervey                                                                         |              |                     
|                                                                                      |              |                     
|All executive officers and directors as                                               |              |                     
|a group (3 persons)                                                                   |              |                     

---

|* | Less
than 1%.
|- | -------------

|(1) | Unless
otherwise noted, the business address of each of the following is Yahalom
               Tower (28th Floor), 3a Jabotinski St., Ramat Gan 52520, Israel.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Based
on information contained in a Schedule 13-G filed by D.B. Zwirn & Co.,
               L.P., DBZ GP, LLC, Zwirn Holdings, LLC, Daniel B. Zwirn, D.B. Zwirn
Special                Opportunities Fund, L.P. and D.B. Zwirn Special Opportunities
Fund, L.P. on                September 27, 2006, D.B. Zwirn & Co., L.P., DBZ GP, LLC,
Zwirn Holdings,                LLC, and Daniel B. Zwirn may each be deemed the beneficial
owner of (i) 304,000                shares of our Class B Common Stock owned by D.B.
Zwirn Special Opportunities                Fund, L.P. and (ii) 496,000 shares of our
Class B Common Stock owned by D.B.                Zwirn Special Opportunities Fund, Ltd.
(each entity referred to in (i) through                (ii) is herein referred to as a
Fund and, collectively, as the                Funds).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D.B.
 Zwirn & Co., L.P. is the manager of each of the Funds, and consequently has
                    voting control and investment discretion over the shares held by each
of the                     Funds. Daniel B. Zwirn is the managing member of and thereby
controls Zwirn                     Holdings, LLC, which in turn is the managing member of
and thereby controls DBZ                     GP, LLC, which in turn is the general
partner of and thereby controls D.B. Zwirn                     & Co., L.P.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

47

---

---

|(3) | Based on information contained in a
Schedule 13-G filed on January 19, 2007, by Weiss Asset Management, LLC, Weiss Capital
LLC, and Andrew M. Weiss, PH.D Andrew M. Weiss may be deemed the beneficial owner of
1,084,800 shares of our Class B Common Stock. These shares include shares beneficially
owned by a private investment partnership of which Weiss Asset Management LLC is the sole
general partner and which may be deemed to be controlled by Mr. Weiss, who is the Managing
Member of Weiss Asset Management, and also includes shares held by a private investment
corporation which may be deemed to be controlled by Mr. Weiss, who is the managing member
of Weiss Capital LLC, the Investment Manager of such private investment corporation.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Based on information
contained in a Schedule 13-G filed on February 14, 2007.
|--- | -----------------------------------------------------------------------------

|(5) | Based on information contained in a
Schedule 13-G filed on May 23, 2007, QVT Fund LP (the Fund) beneficially owns
617,370 shares of our Class B Common Stock. QVT Financial LP (QVT
Financial) is the investment manager for the Fund. QVT Financial is also the
investment manager for a separate discretionary account managed for Deutsche Bank AG (the
Separate Account), which holds 4,930 shares of our Class B Common Stock. QVT
Financial has the power to direct the vote and disposition of the shares of our Class B
Common Stock held by each of the Fund and the Separate Account. Accordingly, QVT Financial
may be deemed to be the beneficial owner of an aggregate amount of 622,300 the shares of
our Class B Common Stock, consisting of the shares owned by the Fund 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, may be deemed to beneficially own the same number of shares of Common
Stock reported by the Fund.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Based on information contained in a
Schedule 13-G filed on June 4, 2007, the following entities each beneficially own 583,500
shares of our Class B Common Stock: Pacific Assets Management, LLC PAM);
Pacific Capital Management, Inc (PCM); and JMG Triton Offshore Fund, Ltd. (the
JMG Fund). PAM is an investment adviser whose
clients have the right to receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, the stock. PAM is the investment adviser to the JMG Fund
and PCM is a member of PAM. Jonathan M. Glaser, Daniel Albert David and Roger Richter are
control persons of PCM and PAM.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | JMG Capital Management, LLC
(JMG LLC) and JMG Capital Management, Inc. (JMG Inc) beneficially
own 200,000 shares of our Class B Common Stock. Mr. Glaser is the control person of JMG,
LLC and JMG Inc. In aggregate, Mr. Glaser beneficially owns 783,500 shares of our Class B
Common Stock.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Does
not include 1,159,714 shares of common stock issuable upon exercise of
               Class W warrants and Class Z warrants which are not exercisable and will
not be                exercisable within the next 60 days.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Does
not include 1,317,858 shares of common stock issuable upon exercise of
               Class W warrants and Class Z warrants which are not exercisable and will
not be                exercisable within the next 60 days.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Does
not include 1,581,428 shares of common stock issuable upon exercise of
               Class W warrants and Class Z warrants which are not exercisable and will
not be                exercisable within the next 60 days.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Does
not include 247,500 shares of common stock issuable upon exercise of Class
               W warrants and Class Z warrants which are not exercisable and will not be
               exercisable within the next 60 days.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | The
business address of Mr. Samuelson is c/o Mercator Capital L.L.C., One
               Fountain Square, 11911 Freedom Drive, Suite 1080, Reston, Virginia 20190.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(12) | Does
not include 148,500 shares of common stock issuable upon exercise of Class
               W warrants and Class Z warrants which are not exercisable and will not be
               exercisable within the next 60 days.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(13) | Does
not include 4,059,000 shares of common stock issuable upon exercise of
               Class W warrants and Class Z warrants which are not exercisable and will
not be                exercisable within the next 60 days.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

48

---

---

|Item 13. | Certain
Relationships and Related Transactions.
|-------- | -----------------------------------------------

Prior
to the date of our initial public offering consummated on July 18, 2006, we issued 100
shares of common stock for $500 in cash, or a purchase price of $5.00 per share. We also
issued 2,475,000 Class W warrants and 2,475,000 Class Z warrants for $247,500 in cash, at
a purchase price of $0.05 per warrant. These securities were issued to the individuals set
forth below, as follows:

|Name               | Number of
Shares of
Common Stock | Number of
Class W
Warrants | Number of
Class Z
Warrants | Relations hip to Us
|------------------ | -------------------------------- | -------------------------- | -------------------------- | -------------------
|
|
|
|
|Matty Karp         |                                  |                            |                            | 0                  
|Carmel Vernia      |                                  |                            |                            | 0                  
|Dror Gad           |                                  |                            |                            | 100                
|David Silberg      |                                  |                            |                            | 0                  
|George Hervey      |                                  |                            |                            | 0                  
|Lior Samuelson     |                                  |                            |                            | 0                  
|Rhodric C. Hackman |                                  |                            |                            | 0                  
|David Ballarini    |                                  |                            |                            | 0                  

In
February 2006, Mr. Silberg resigned from all of his positions with us and sold 40,179
Class W warrants and 40,179 Class Z warrants to Matty Karp, 48,214 Class W warrants and
48,214 Class Z warrants to Carmel Vernia, and 35,357 Class W warrants and 35,357 Class Z
warrants to Dror Gad, at a purchase price of $.05 per warrant.

Each
of the current holders of our securities has agreed, pursuant to a letter agreement
between us and HCFP/Brenner Securities, not to sell any of the foregoing securities until
the completion of a business combination. In addition, Dror Gad, the sole holder of our
common stock outstanding prior to our initial public offering, has agreed to waive his
right to participate in any liquidation distribution with respect to shares of common
stock acquired by him prior to our initial public offering.

49

---

---

Danash
Investment and Management Ltd., an affiliate of Mr. Gad has agreed that, commencing on
the effective date of our initial public offering through the acquisition of a target
business, it will make available to us office space and certain office and administrative
services, as we may require from time to time. We have agreed to pay Danash Investment
and Management Ltd. $7,500 per month for these services. Dror Gad is the sole shareholder
of Danash Investment and Management Ltd. Consequently, Mr. Gad will benefit from this
transaction to the extent of his interest in Danash Investment and Management Ltd.
However, this arrangement is solely for our benefit and is not intended to provide Mr.
Gad compensation in lieu of a salary. We believe, based on rents and fees for similar
services in the Tel-Aviv, Israel metropolitan area, that the fees charged by Danash
Investment and Management Ltd. is at least as favorable as we could have obtained from an
unaffiliated person. However, as our directors may not be deemed "independent," we did
not have the benefit of disinterested directors approving this transaction.

We
will reimburse our initial securityholders, including our officers and directors, for any
reasonable out-of-pocket business expenses incurred by them in connection with certain
activities on our behalf such as identifying and investigating possible target businesses
and business combinations. There is no limit on the amount of accountable out-of-pocket
expenses reimbursable by us, which will be reviewed only by our board or a court of
competent jurisdiction if such reimbursement is challenged.

Other
than the $7,500 per-month administrative fee payable to Danash Investment and Management
Ltd. and reimbursable out-of-pocket expenses payable to our officers and directors, no
compensation or fees of any kind, including finders and consulting fees, will be paid to
any of our initial securityholders, officers or directors, or to any of their affiliates
prior to, or for any services they render in order to effectuate, the consummation of the
business combination.

Any
ongoing or future transactions between us and any of our officers and directors or their
respective affiliates, including loans by our officers and directors, will require prior
approval in each instance by a majority of our disinterested "independent" directors (to
the extent we have any) or the members of our board who do not have an interest in the
transaction. These directors will, if they determine necessary or appropriate, have
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.

|Item14. | Principal
Accounting Fees and Services.
|------- | ---------------------------------------

# Audit and Non-Audit Fees

The
following table sets forth the fees billed for the periods indicated for professional
services rendered by ZIV HAFT ABDO member firm for the year 2007 and BDO Seidman, LLP for
the years 2006 and 2007, our independent registered public accounting firms.

| |                    | Fiscal Year Ended
July 31, 2007 | Fiscal Year Ended
July 31, 2006
| | ------------------ | ------------------------------- | -------------------------------
|
|
|
|
| | Audit Fees         |                                 |                                
| | Audit-Related Fees |                                 |                                
| | Tax Fees           |                                 |                                
| | All Other Fees     |                                 |                                
| |                    |                                 |                                
| | Total              |                                 |                                
| |                    |                                 |                                

|(1) | Audit fees for the fiscal year ended July 31, 2007 related to the audit of
          our financial statements and for the fiscal year ended July 31, 2007,
          estimated to be $18,000 (including $5,000 to BDO Seidman LLP), and the quarterly
          reviews of financial statements included in our quarterly reports on Form 10-Q
          for the quarterly periods ended October 31, 2006, January 31,
          2007 and April 30, 2007 aggregating $15,000.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Audit
fees related to professional services rendered in connection with our initial public
offering (financial statements included in our Registration Statement on Form S-1 and our
Current Report on Form 8-K filed with the SEC on July 18, 2006), aggregating $54,000
(including expenses of $9,000) and, for the audit of our financial statements for the
period from August 1, 2005 (date of inception) to July 31, 2006, estimated to be $14,000.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Audit-related fees for the fiscal year ended July 31, 2007 include
          professional services related to consultation on due diligence with respect to a
          proposed acquisition.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Audit-related
fees for the fiscal year ended July 31, 2006 include professional services related
to consultation on accounting matters during the registration process for our initial
public offering.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

50

---

---

# Pre-Approval Policies
and Procedures

We currently do not have an audit
committee. However, our board of directors has approved the services described above.

# PART IV

|Item 15. | Exhibits
and Financial Statement Schedules
|-------- | ------------------------------------------

# (a) Financial Statements.

Our
financial statements as set forth in the Index to Financial Statements attached hereto
commencing on page F-1 are hereby incorporated by reference.

# (b) Exhibits.

The
following exhibits, which are numbered in accordance with Item 601 of Regulation S-K,
are filed herewith or, as noted, incorporated by reference herein:

|Exhibit No. | Description
|----------- | -----------

|3.1 |  | Second
Amended and Restated Certificate of Incorporation (3)
|--- |  | ------------------------------------------------------------

|3.2 |  | By-laws
(1)
|--- |  | -----------

|4.1 |  | Specimen
Series A Unit Certificate (2)
|--- |  | --------------------------------------

|4.2 |  | Specimen
Series B Unit Certificate (2)
|--- |  | --------------------------------------

|4.3 |  | Specimen
Common Stock Certificate (1)
|--- |  | -------------------------------------

|4.4 |  | Specimen
Class B Common Stock Certificate (1)
|--- |  | ---------------------------------------------

|4.5 |  | Specimen
Class W Warrant Certificate (4)
|--- |  | ----------------------------------------

|4.6 |  | Specimen
Class Z Warrant Certificate (4)
|--- |  | ----------------------------------------

|4.7 |  | Unit
Purchase Option granted to HCFP/Brenner Securities LLC (4)
|--- |  | ---------------------------------------------------------------

|4.8 |  | Warrant
Agreement between American Stock Transfer & Trust Company and the Registrant (4)
|--- |  | ----------------------------------------------------------------------------------------

51

---

---

|10.1 |  | Letter
Agreement among the Registrant, HCFP/Brenner Securities LLC and Matty Karp (3)
|---- |  | -------------------------------------------------------------------------------------

|10.2 |  | Letter
Agreement among the Registrant, HCFP/Brenner Securities LLC and Carmel Vernia (3)
|---- |  | ----------------------------------------------------------------------------------------

|10.3 |  | Letter
Agreement among the Registrant, HCFP/Brenner Securities LLC and Dror Gad (3)
|---- |  | -----------------------------------------------------------------------------------

|10.4 |  | Letter
Agreement among the Registrant, HCFP/Brenner Securities LLC and Lior Samuelson (1)
|---- |  | -----------------------------------------------------------------------------------------

|10.5 |  | Letter
Agreement among the Registrant, HCFP/Brenner Securities LLC and Rhodric C. Hackman
                (1)
|---- |  | -------------------------------------------------------------------------------------------------------------

|10.6 |  | Letter
Agreement among the Registrant, HCFP/Brenner Securities LLC and Rhodric C. Hackman
                (1)
|---- |  | -------------------------------------------------------------------------------------------------------------

|10.7 |  | Investment
Management Trust Agreement between American Stock Transfer & Trust Company and
                the Registrant (3)
|---- |  | ----------------------------------------------------------------------------------------------------------------------------

|31.1 |  | Section
302 CEO Certification (Carmel Vernia)
|---- |  | ---------------------------------------------

|31.2 |  | Section
302 CFO Certification (Dror Gad)
|---- |  | ----------------------------------------

|32.1 |  | Section
906 CEO Certification (Carmel Vernia)
|---- |  | ---------------------------------------------

|32.2 |  | Section
906 CFO Certification (Dror Gad)
|---- |  | ----------------------------------------

---

|(1) | Previously
filed as an Exhibit to the Registrants Form S-1 Registration
               statement and incorporated herein by reference.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

|(2) | Previously
filed as an Exhibit to the Registrants Amendment No. 2 to Form                S-1
Registration statement and incorporated herein by reference.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Previously
filed as an Exhibit to the Registrants Amendment No. 7 to Form                S-1
Registration statement and incorporated herein by reference.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Previously
filed as an Exhibit to the Registrants Amendment No. 9 to Form                S-1
Registration statement and incorporated herein by reference.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

52

---

---

# Israel Growth Partners
Acquisition Corp. 
(a corporation in the
development stage)

# INDEX

|                                                            |           
|----------------------------------------------------------- | ----------
|
|
|
|
|Report of Independent Registered Public Accounting Firm     | F-2 - F-3 
|                                                           
|Financial Statements:                                      
|                                                           
|Balance Sheets as of July 31, 2007 and                     
|July 31, 2006                                               | F-4       
|                                                           
|Statements of Operations, for the year ended July 31, 2007,
|for the period from inception (August 1, 2005)  to         
|July 31, 2006, and for the period from inception           
|(August 1, 2005) to July 31, 2007                           | F-5       
|                                                           
|Statement of Stockholders' Equity for the period           
|from inception (August 1, 2005) to July 31, 2006           
|and year ended July 31, 2007                                | F-6       
|                                                           
|Statements of Cash Flows, for year ended July 31, 2007,    
|for the period from inception (August 1, 2005) to          
|July 31, 2006 and for the period from inception            
|(August 1, 2005) to July 31, 2007                           | F-7       
|                                                           
|Notes to Financial Statements                               | F-8 - F-14

F - 1

---

---

# Report of independent
Registered Public Accounting Firm

Board of Directors and
Stockholders 
Israel Growth Partners Acquisition
Corp.

We have audited the accompanying
balance sheets of Israel Growth Partners Acquisition Corp. a corporation in the
development stage (The Company) as of July 31, 2007 and 2006 and the related
statements of operations, stockholders equity, and cash flows for the period from
inception (August 1, 2005) to July 31, 2007. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audit. We did not audit the balance
sheet as of July 31, 2006, statements of operations, changes in stockholders deficit
and cash flows for the period from August 1, 2005 (inception) to July 31, 2006. Those
financial statements were audited by other auditors whose reports have been furnished to
us, and our opinion, insofar as it relates to the amounts included for such period, is
based solely on the reports of the other auditors.

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 the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Companys internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provide a reasonable basis for
our opinion.

In our opinion, based on our audit
and the report of other auditor, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of July 31,
2007 and 2006, and the results of its operations and its cash flows for the period from
inception (August 1, 2005) to July 31, 2007, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern. As
discussed in Note A to the financial statements, the Company is required to consummate a
business combination within 18 months of the Companys initial public offering (by
January 18, 2008) or 24 months of the Companys initial public offering (by
July 18, 2008) if certain extension criteria are met. The possibility of such
business combination not being consummated raises substantial doubt about the
Companys ability to continue as a going concern, and the financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

| | Ziv Haft
Certified Public Accountants (Isr.)
A BDO member firm
| | --------------------------------------------------------------

Tel-Aviv, Israel
October 3, 2007

F - 2

---

---

# Report of Independent
Registered Public Accounting Firm

Board of Directors and
Stockholders 
Israel Growth Partners Acquisition
Corp.

We have audited the accompanying
balance sheet of Israel Growth Partners Acquisition Corp. (a corporation in the
development stage) as of July 31, 2006, and the related statements of operations,
stockholders equity and cash flows for the period from inception (August 1, 2005) to
July 31, 2006. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial statements
based on our audit.

We conducted our audit in accordance
with the standards of 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. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Companys internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial
statements referred to above present fairly, in all material respects, the financial
position of Israel Growth Partners Acquisition Corp. as of July 31, 2006, and its results
of operations and its cash flows for the period from inception (August 1, 2005) to July
31, 2006, in conformity with accounting principles generally accepted in the United States
of America.

|/s/ BDO Seidman, LLP
BDO Seidman, LLPNew York, New York
October 24, 2006 |  | 
|-------------------------------------------------------------------------------------- |  | 

F - 3

---

---

Israel Growth Partners Acquisition Corp.
(a corporation in the development stage)
Balance Sheets

|                                                                 | As of
July 31, 2007 | As of
July 31, 2006
|---------------------------------------------------------------- | ------------------- | -------------------
|
|
|
|
|ASSETS                                                           |                     |                    
|                                                                 |                     |                    
|Current Assets:                                                  |                     |                    
|Cash and cash equivalents                                        |                     |                    
|Investments held in Trust                                        |                     |                    
|including interest receivable of $151,773, and $29,277 (Note 1)  |                     |                    
|Interest receivable                                              |                     |                    
|Prepaid expenses                                                 |                     |                    
|                                                                 |                     |                    
|Total assets                                                     |                     |                    
|                                                                 |                     |                    
|                                                                 |                     |                    
|LIABILITIES AND STOCKHOLDERS' EQUITY                             |                     |                    
|                                                                 |                     |                    
|Current Liabilities:                                             |                     |                    
|Accrued registration costs                                       |                     |                    
|Accrued expenses                                                 |                     |                    
|                                                                 |                     |                    
|Total current liabilities                                        |                     |                    
|                                                                 |                     |                    
|                                                                 |                     |                    
|Common stock, Class B subject to possible conversion,            |                     |                    
|(2,046,176 shares at conversion value) (Note 1)                  |                     |                    
|                                                                 |                     |                    
|                                                                 |                     |                    
|Commitments (Note 5)                                             |                     |                    
|                                                                 |                     |                    
|Stockholders' Equity (Notes 2, 6 and 7)                          |                     |                    
|40,000,000 shares authorized, 1,065,100 shares                   |                     |                    
|issued and outstanding                                           |                     |                    
|Common stock, Class B, par value $.0001 per share,               |                     |                    
|12,000,000 shares authorized, 8,189,824 shares issued            |                     |                    
|and outstanding (excluding 2,046,176 shares subject to           |                     |                    
|possible conversion)                                             |                     |                    
|Additional paid-in-capital                                       |                     |                    
|Retained earnings (deficit) accumulated in the development stage |                     |                    
|                                                                 |                     |                    
|                                                                 |                     |                    
|Total stockholders' equity                                       |                     |                    
|                                                                 |                     |                    
|                                                                 |                     |                    
|Total liabilities and stockholders' equity                       |                     |                    
|                                                                 |                     |                    

See Notes to the Financial Statements

F - 4

---

---

Israel Growth Partners Acquisition Corp.
(a corporation in the development stage)
Statements of Operations

|                                                                                           | Year Ended
July 31, 2007 | Period from inception
(August 1, 2005) to
July 31, 2006 | Period from inception
(August 1, 2005) to
July 31, 2007
|------------------------------------------------------------------------------------------ | ------------------------ | ------------------------------------------------------- | -------------------------------------------------------
|
|
|
|
|Revenue                                                                                    |                          |                                                         | $                                                      
|                                                                                           |                          |                                                        
|Operating expenses:                                                                        |                          |                                                        
|Professional fees                                                                          |                          |                                                         |                                                        
|Delaware franchise tax (Note 4)                                                            |                          |                                                         |                                                        
|Other general and administrative expenses (Note 5)                                         |                          |                                                         |                                                        
|                                                                                           |                          |                                                         |                                                        
|Loss from operations                                                                       |                          |                                                         |                                                        
|                                                                                           |                          |                                                        
|Interest Income                                                                            |                          |                                                         |                                                        
|                                                                                           |                          |                                                         |                                                        
|Income (loss) before provision for income taxes                                            |                          |                                                         |                                                        
|                                                                                           |                          |                                                        
|Provision for income taxes (Note 4)                                                        |                          |                                                         |                                                        
|                                                                                           |                          |                                                         |                                                        
|Net income (loss) for the period                                                           |                          |                                                         | $                                                      
|                                                                                           |                          |                                                         |                                                        
|                                                                                           |                          |                                                        
|Accretion of Trust Fund relating to Class B
   common stock subject to possible conversion |                          |                                                         |                                                        
|                                                                                           |                          |                                                         |                                                        
|                                                                                           |                          |                                                        
|Net income (loss) attributable to other Class B stockholders                               |                          |                                                        
|and common stockholders                                                                    |                          |                                                         | $                                                      
|                                                                                           |                          |                                                         |                                                        
|                                                                                           |                          |                                                        
|Weighted average Class B common shares outstanding
   subject to possible conversion       |                          |                                                         |                                                        
|                                                                                           |                          |                                                         |                                                        
|                                                                                           |                          |                                                        
|Net income per Class B common share subject to possible                                    |                          |                                                        
|conversion,basic and diluted                                                               |                          |                                                         | $                                                      
|                                                                                           |                          |                                                         |                                                        
|                                                                                           |                          |                                                        
|Weighted average number of shares outstanding,basic and diluted                            |                          |                                                         |                                                        
|                                                                                           |                          |                                                         |                                                        
|                                                                                           |                          |                                                        
|Net income (loss) per share,basic and diluted                                              |                          |                                                         | $                                                      
|                                                                                           |                          |                                                         |                                                        

See Notes to the Financial Statements

F - 5

---

---

Israel Growth Partners Acquisition Corp.
(a corporation in the development stage)
Statement of Stockholders' Equity

|                                                                          | Common Stock | Common Stock, Class B | Additional
Paid -In
Capital | Deficit
accumulated in
the development
stage | Total
|------------------------------------------------------------------------- | ------------ | --------------------- | --------------------------- | -------------------------------------------- | -----
|
|
|
|
|Balance,August 1, 2005 (inception)                                        |              |                       |                             | -                                            |      
|                                                                          |              |                      
|Issuance of Common Stock to initial                                       |              |                      
|stockholder                                                               |              |                       |                             | 100                                          |      
|                                                                          |              |                      
|Issuance of 4,950,000 Warrants
    at $0.05 Per Warrant                   |              |                       |                             | -                                            |      
|                                                                          |              |                      
|Sale of 532,500 Series A Units, 5,118,000                                 |              |                      
|Series B Units through public offering                                    |              |                      
|net of underwriters' discount and offering                                |              |                      
|expenses and net of proceeds of 10,333,190                                |              |                      
|allocable to 2,046,176 shares of common                                   |              |                      
|stock, Class B subject to possible conversion                             |              |                       |                             | 1,065,000                                    |      
|                                                                          |              |                      
|Proceeds from sale of underwriters'
    purchase option                   |              |                       |                             | -                                            |      
|                                                                          |              |                      
|Accretion relating to Class B common stock                                |              |                      
|subject to possible conversion                                            |              |                       |                             |                                              |      
|                                                                          |              |                      
|Net loss for the period                                                   |              |                       |                             | -                                            |      
|                                                                          |              |                       |                             |                                              |      
|Balance,July 31, 2006                                                     |              |                       |                             | 1,065,100                                    |      
|                                                                          |              |                      
|Accretion relating to Class B common stock
subject to possible conversion |              |                       |                             |                                              |      
|                                                                          |              |                      
|Net income for the period                                                 |              |                       |                             |                                              |      
|                                                                          |              |                       |                             |                                              |      
|Balance, July 31,2007                                                     |              |                       |                             | 1,065,100                                    |      
|                                                                          |              |                       |                             |                                              |      

See Notes to the Financial Statements

F - 6

---

---

Israel Growth Partners Acquisition Corp.
(a corporation in the development stage)
Statements of Cash Flows

|                                                                                        | For the year ended
July 31, 2007 | Period from inception
(August 1, 2005) to
July 31, 2006 | Period from inception
(August 1, 2005) to
July 31, 2007
|--------------------------------------------------------------------------------------- | -------------------------------- | ------------------------------------------------------- | -------------------------------------------------------
|
|
|
|
|CASH FLOWS FROM OPERATING ACTIVITIES                                                    |                                  |                                                         |                                                        
|Net income (loss) for the period                                                        |                                  |                                                         | $                                                      
|Adjustments to reconcile net income (loss) to net cash used in operating activities:    |                                  |                                                        
|Gain on maturity of Securities held in Trust Fund                                       |                                  |                                                         |                                                        
|Changes in operating assets and liabilities:                                            |                                  |                                                        
|Increase in interest receivable in trust                                                |                                  |                                                         |                                                        
|Increase in accounts receivable - interest                                              |                                  |                                                         |                                                        
|Increase in prepaid expenses                                                            |                                  |                                                         |                                                        
|Increase in accrued expenses                                                            |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                        
|Net cash used in operating activities                                                   |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                        
|CASH FLOWS FROM INVESTING ACTIVITIES                                                    |                                  |                                                        
|Purchase of Securities held in trust                                                    |                                  |                                                         |                                                        
|Maturity of Securities held in trust                                                    |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                        
|Net cash used in investing activities                                                   |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                        
|CASH FLOWS FROM FINANCING ACTIVITIES                                                    |                                  |                                                        
|Proceeds from issuance of common stock to initial stockholder                           |                                  |                                                         |                                                        
|Proceeds from issuance of warrants                                                      |                                  |                                                         |                                                        
|Proceeds from sale of underwriters' purchase option                                     |                                  |                                                         |                                                        
|Deferred registration costs                                                             |                                  |                                                         |                                                        
|Portion of net proceeds from sale of Series B units                                     |                                  |                                                        
|through public offering allocable to shares of                                          |                                  |                                                        
|common stock, Class B subject to possible                                               |                                  |                                                        
|conversion                                                                              |                                  |                                                         |                                                        
|Net proceeds from sale of Series A and B units through public                           |                                  |                                                        
|offering allocable to stockholders' equity                                              |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                        
|Net cash (used in) provided by financing activities                                     |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                        
|Net increase in cash and cash equivalents                                               |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                        
|Cash and cash equivalents                                                               |                                  |                                                        
|Beginning of period                                                                     |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                        
|End of period                                                                           |                                  |                                                         | $                                                      
|                                                                                        |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                        
|Supplemental disclosure of cash flow activities:                                        |                                  |                                                        
|                                                                                        |                                  |                                                        
|Cash paid for income taxes                                                              |                                  |                                                         | $                                                      
|                                                                                        |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                        
|Cash paid for interest                                                                  |                                  |                                                         | $                                                      
|                                                                                        |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                        
|Supplemental disclosure of non-cash financing activities:                               |                                  |                                                        
|Accrued registration costs                                                              |                                  |                                                         | $                                                      
|                                                                                        |                                  |                                                         |                                                        
|                                                                                        |                                  |                                                        
|Fair value of underwriter purchase option included in offering costs                    |                                  |                                                         | $                                                      
|                                                                                        |                                  |                                                         |                                                        
|Accretion of Trust Fund relating to Class B common stock subject to possible conversion |                                  |                                                         | $                                                      
|                                                                                        |                                  |                                                         |                                                        

See Notes to the Financial Statements

F - 7

---

---

NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS

Israel Growth Partners Acquisition
Corp. (the "Company") was incorporated in Delaware on August 1, 2005 to serve as a
vehicle to effect a merger, capital stock exchange, asset acquisition or other similar
business combination with a currently unidentified operating business which has
operations or facilities located in Israel, or which is a company operating outside of
Israel which the Company's management believes would benefit from establishing operations
or facilities in Israel (a "Target Business"). All activity from inception (August 1,
2005) through July 31, 2007 related to the Company's formation and capital raising
activities. The Company has selected July 31 as its year end.

The Company is considered to be a
development stage company and as such the financial statements presented herein are
presented in accordance with Statement of Financial Accounting Standards ("SFAS") No. 7
"Accounting and Reporting by Development Stage Enterprises".

The registration statement for the
Company's initial public Offering ("Offering") was declared effective on July 11, 2006.
The Company consummated the Offering of 500,000 series A Units (Note 2) and 4,600,000
Series B Units (Note 2) on July 18, 2006. On July 26, 2006, the Company consummated the
closing of an additional 32,500 Series A Units and 518,000 Series B Units which were
subject to an over-allotment option granted to the underwriters. The Offering generated
total net proceeds of approximately $52.9 million of which $51.7 million was placed in
trust.  The Company's management has broad authority with respect to the application of
the proceeds of the Offering although substantially all of the proceeds of the Offering
are intended to be applied generally toward consummating a merger, capital stock
exchange, asset acquisition or other similar transaction with a Target Business (a
"Business Combination"). An amount of $53,540,204 including accrued interest of $151,773
is being held in an interest-bearing trust account ("Trust Fund") to be returned to the
holders of Class B common stock if a Business Combination is not contracted in 18 months,
or consummated in 24 months, subsequent to the Offering (the "Target Business Acquisition
Period"). In the event there is no Business Combination, the Company will dissolve and
any remaining net assets, after the distribution of the Trust Fund to Class B
stockholders, will be distributed to the holders of common stock sold in the Offering.

Both the common stock and the Class
B common stock have one vote per share. However, the Class B stockholders may, and the
common stockholders may not, vote in connection with a Business Combination. Further,
should a Business Combination not be consummated during the Target Business Acquisition
Period, in the event it receives stockholder approval for its plan of dissolution, the
Company's Trust Fund would be distributed pro-rata to all of the Class B common
stockholders and their Class B common shares would be cancelled and returned to the
status of authorized but unissued shares.

Common stockholders will not receive
any of the proceeds from the Trust Fund should a Business Combination not be consummated.

The Company, after signing a
definitive agreement for a Business Combination, is obliged to submit such transaction
for approval by a majority of the Class B common stockholders of the Company. Class B
stockholders that vote against such proposed Business Combination are, under certain
conditions, entitled to convert their shares into a pro-rata distribution from the Trust
Fund (the "Conversion Right").  The actual per-share conversion price will be equal to
the amount in the Trust Fund (inclusive of any interest thereon) as of two business days
prior to the proposed Business Combination, divided by the number of Class B shares sold
in the Offering, or approximately $5.23 per share based on the value of the Trust Fund as
of July 31, 2007.  As a result of the Conversion Right, $10,702,687 (including accretion
of $375,349) relating to 2,046,176 shares of Class B Common Stock subject to possible
conversion, has been classified in temporary equity as Common Stock, Class B subject to
possible conversion on the accompanying balance sheet as of July 31, 2007.  In the event
that holders of a majority of the outstanding shares of Class B common stock vote for the
approval of the Business Combination and the holders owning 20% or more of the
outstanding Class B common stock do no exercise their Conversion Rights, the Business
Combination may then be consummated.  Upon completion of such Business Combination and
the payment of any Conversion Rights (and related cancellation of Class B common stock),
the remaining shares of Class B common stock would be converted to common stock.

F - 8

---

---

NOTE 2 - OFFERING

In the Offering, effective July 11,
2006, the Company sold to the public an aggregate of 532,500 Series A Units (the "Series
A Units" or a "Series A Unit") and 5,118,000 Series B Units (the "Series B Units" or a
"Series B Unit") at a price of $8.50 and $10.10 per unit, respectively. Proceeds from the
Offering, totaled approximately $52.9 million, which was net of approximately $3.3
million in underwriting expenses and other registration costs incurred through July 26,
2006. Each Series A Unit consists of two shares of the Company's common stock, and ten
Class Z Warrants (each a "Class Z Warrant"). Each Series B Unit consists of two shares of
the Company's Class B common stock, and two Class W Warrants (each a "Class W Warrant").

Each Class W Warrant included in the
units sold in the Offering entitles the holder to purchase from the Company one share of
common stock at an exercise price of $5.00, subject to adjustment in certain
circumstances, commencing on the later of (a) July 11, 2007 and (b) the completion of a
Business Combination. The Class W Warrants will expire on July 10, 2011 or earlier upon
redemption. Each Class Z Warrant included in the units sold in the Offering entitles the
holder to purchase from the Company one share of common stock at an exercise price of
$5.00, subject to adjustment in certain circumstances, commencing on the later of (a)
July 11, 2007 and (b) the completion of a Business Combination. The Class Z Warrants will
expire on July 10, 2013 or earlier upon redemption. The Company may redeem the
outstanding Class W Warrants and/or Class Z Warrants with the prior consent of
HCFP/Brenner Securities LLC ("HCFP"), the representative of the underwriters of the
Offering, in whole or in part, at a price of $.05 per warrant at any time after the
warrants become exercisable, upon a minimum of 30 days' prior written notice of
redemption, and if, and only if, the last sale price of the Company's common stock equals
or exceeds $7.50 per share and $8.75 per share, for a Class W Warrant and a Class Z
Warrant, respectively, for any 20 trading days within any 30 trading day period ending
three business days before the Company sent the notice of redemption.

The Company has also sold to certain
of the underwriters for an aggregate of $100, an option (the "Underwriter's Purchase
Option" or "UPO") to purchase up to a total of 25,000 additional Series A Units and/or
230,000 additional Series B Units (see Note 7).

NOTE 3 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS - Included
in cash and cash equivalents are deposits with financial institutions as well as
short-term money market instruments with maturities of three months or less when
purchased.

CONCENTRATION OF CREDIT RISK -
Financial instruments that potentially subject the Company to a significant concentration
of credit risk consist primarily of cash and cash equivalents. The Company maintains
deposits in federally insured financial institutions in excess of federally insured
limits. However, management believes the Company is not exposed to significant credit
risk due to the financial position of the depository institutions in which those deposits
are held.

INVESTMENTS - Investments held in
the Trust Fund consist of municipal money fund securities with maturities of up to 30
days.  Such securities generate current income which is exempt from federal income tax
and therefore no provision for income taxes is required for the period ended July 31,
2007.

INCOME TAXES - Deferred income tax
assets and liabilities are computed for differences between the financial statement and
tax bases of assets and liabilities that will result in future taxable or deductible
amounts and are based in enacted tax laws and rates applicable to the periods in which
the differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred income tax assets to the amount expected to
be realized.

NET LOSS PER SHARE - Net loss per
share is computed based on the weighted average number of shares of common stock and
Class B common stock outstanding.

F - 9

---

---

Basic earnings (loss) per share is
computed by dividing income (loss) available to common stockholders by the weighted
average common shares outstanding for the period. Basic net income per Class B share
subject to possible conversion is calculated by dividing the accretion relating to the
Class B common stock during the period by the 2,046,176 weighted average shares subject to
conversion. Diluted earnings per share reflect the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted into
common stock or resulted in the issuance of common stock that then shared in the earnings
of the entity. Since the effect of outstanding warrants to purchase common stock and the
UPO is antidilutive, they have been excluded from the Companys computation of
diluted net income per share. Therefore, basic and diluted loss per share were the same
for the period from inception (August 1, 2005) to July 31, 2007.

FAIR VALUE OF FINANCIAL INSTRUMENTS
- The fair values of the Company's assets and liabilities that qualify as financial
instruments under SFAS No. 107 approximate their carrying amounts presented in the
accompanying balance sheets at July 31, 2007.

The company accounts for derivative
instruments in accordance with SFAS No.133 "Accounting for Derivative instruments and
Hedging Activities," As amended, ("SFAS 133") which establishes accounting and reporting
standards for derivative instruments and hedging activities, including certain derivative
instruments imbedded in other financial instruments or contracts and requires recognition
of all derivatives on the balance sheet at fair value.  Accounting for the changes in the
fair value of the derivative instruments depends on whether the derivatives qualify as
hedge relationships and the types of the relationships designated are based on the
exposures hedged. Changes in the fair value of the derivative instruments which are not
designated as hedges are recognized in earnings as other income (loss).

USE OF ESTIMATES - The preparation
of financial statements in accordance with accounting principles generally accepted in
the United States requires management to make estimates and assumptions that affect
certain reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ from those
estimates.

NEW ACCOUNTING PRONOUNCEMENTS 
In July 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income
Taxes, an Interpretation of FASB Statement No. 109. FIN 48 clarifies the accounting
for uncertainty in income taxes recognized in a companys financial statements and
prescribes a recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in an income
tax return. FIN 48 also provides guidance in derecognition, classification, interest and
penalties, accounting in interim periods, disclosures and transition. FIN 48 is effective
for fiscal years beginning after December 15, 2006. Adoption of FIN48 is not expected to
have a material impact on the Companys financial statements.

The Company 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.

NOTE 4 - TAXES

Income Taxes

Significant components of the
Company's future tax assets are as follows:

|                                              | 
|--------------------------------------------- | 
|
|
|
|
|Tax effect of the operating loss carryforward | 
|Other deferred tax assets                     | 
|Less valuation allowance                      | 
|                                              | 
|                                              | 
|Totals                                        | 
|                                              | 

F - 10

---

---

Management has recorded a full
valuation allowance against its deferred tax assets because it believes it is not more
likely than not that sufficient taxable income will be realized during the carry-forward
period to utilize the deferred tax asset. Realization of the future tax benefits is
dependent upon many factors, including the Companys ability to generate taxable
income within the loss carry-forward period, which runs through 2027.

Other

Included in operating expenses for
are $65,795, $78,042 and $143,837 for Delaware franchise tax for the year ended July 31,
2007, the period from inception (August 1, 2005) through July 31, 2006 and the period from
inception (August 1, 2005) through July 31, 2007, respectively.

# NOTE 5 - COMMITMENTS

Administrative Services

Commencing on July 11, 2006, the
effective date of the Offering, the Company is obligated to pay an affiliate of the
Companys chief financial officer, $7,500 per month for office, secretarial and
administrative services. Included in other general and administrative expenses in the
accompanying Statements of Operations are amount of $90,000, $5,081 and $95,081 for such
services for the year ended July 31, 2007, the period from inception (August 1, 2005)
through July 31, 2006 and the period from inception (August 1, 2005) through July 31,
2007, respectively.

Financial Advisory
Services

HCFP has been engaged by the Company
to act as the Companys non-exclusive investment banker in connection with a proposed
Business Combination. For assisting the Company in structuring and negotiating the terms
of a Business Combination, the Company will pay HCFP a cash transaction fee of $1,500,000
upon consummation of a Business Combination.

Solicitation Services

The Company has engaged HCFP, on a
non-exclusive basis, to act as its agent for the solicitation of the exercise of the
Companys Class W Warrants and Class Z Warrants. In consideration for solicitation
services, the Company will pay HCFP a commission equal to 5% of the exercise price for
each Class W Warrant and Class Z Warrant exercised after July 10, 2007 if the exercise is
solicited by HCFP. No solicitation services have been provided to date.

# NOTE 6 - CAPITAL
STOCK

Preferred Stock

The Company is authorized to issue up
to 5,000 shares of Preferred Stock with such designations, voting, and other rights and
preferences as may be determined from time to time by the Board of Directors.

Common Stock and Class B
Common Stock

The Company is authorized to issue
40,000,000 shares of common stock and 12,000,000 shares of Class B common stock. As of
July 31, 2007, there are 1,065,100 shares of the Companys common stock issued and
outstanding and 10,236,000 shares of the Companys Class B stock issued and
outstanding, including 2,046,176 Class B common shares subject to possible conversion.

As of July 31, 2007, there are
6,967,900 and 1,304,000 authorized but unissued shares of the Companys common stock
and the Companys Class B common stock, respectively, available for future issuance,
after appropriate reserves for the issuance of common stock in connection with the Class W
Warrants and Class Z Warrants, the Underwriters Purchase Option and the officers and
directors Class W Warrants and Class Z Warrants.

F - 11

---

---

The Company currently has no
commitments to issue any shares of common stock other than as described herein; however,
the Company will, in all likelihood, issue a substantial number of additional shares in
connection with a Business Combination. To the extent that additional shares of common
stock are issued, dilution to the interests of the Companys stockholders who
participated in the Offering will occur.

# NOTE 7  WARRANTS
AND OPTION TO PURCHASE COMMON STOCK

Warrants

In August 2005, the Company sold and
issued Class W Warrants to purchase 2,475,000 shares of the Companys common stock,
and Class Z Warrants to purchase 2,475,000 shares of the Companys common stock to
its initial securityholders, for an aggregate purchase price of $247,500, or $0.05 per
warrant.

The Class W and Class Z Warrants
outstanding prior to the offering are also subject to a registration rights agreement. On
January 31, 2006, the Company and the initial securityholders entered into a registration
rights agreement and a letter agreement which revised the terms of the Companys
obligations under the warrant and registration rights agreement to clarify that the
Company will only deliver unregistered common shares on the exercise of the warrants.

The Class W Warrants and Class Z
Warrants outstanding prior to the Offering may be exercised with cash on or prior to their
respective expiration dates. Although the Companys initial securityholders may make
a written demand that the Company file a registration statement, the Company is only
required to use its best efforts to cause the registration statement to be declared
effective and, once effective, only to use its best efforts to maintain its effectiveness.
Accordingly, the Companys obligation is merely to use its best efforts in connection
with the registration rights agreement and upon exercise of the warrants, the Company can
satisfy its obligation by delivering unregistered shares of common stock.

Prior to entering into to the
registration rights agreement and the letter agreement on January 31, 2006, the Company
accounted for the Class W and Class Z Warrants issued to the initial securityholders as
liabilities in accordance with the guidance of EITF 00-19, Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Companys Own
Stock. Accordingly, the Company recorded the fair value of the warrants of $247,500 as
a non-current liability on its balance sheet from the date of issuance through January 31,
2006. As a result of entering into the registration rights agreement, the warrants no
longer are accounted for as liabilities and are classified in stockholders equity.
For the period from inception (August 1, 2005) to July 31, 2007, no income (loss) was
recorded related to recording the derivative to market value as their was no change in the
fair value of such securities. The Company determined the fair value of the Class W and
Class Z Warrants issued in August 2005 based on the aggregate purchase price paid to the
Company of $247,500, or $0.05 per Warrant.

On January 31, 2006, the date of
reclassification of the Warrants from liability to equity, the Company estimated that the
fair value of the Class W and Class Z Warrants was still $0.05 per Warrant. The
determination to value the Warrants at $0.05 was based on the cash purchase price paid in
August 2005 by the holders, the fact that the Warrants were not publicly traded, the
inherent price of $0.05 per Warrant contained in the Series A and Series B Units which
were sold in the Offering, and an evaluation of the differences in the rights and
privileges of the Warrants sold and issued in August 2005 versus the Warrants which were
sold in the Offering.

Each Class W Warrant issued in the
Offering and to the initial securityholders is exercisable with cash for one share of
common stock. Except as set forth below, the Class W Warrants entitle the holder to
purchase shares at $5.00 per share, subject to adjustment in the event of stock dividends
and splits, reclassifications, combinations and similar events for a period commencing on
the later of: (a) completion of the Business Combination and (b) July 10, 2007 and ending
July 10, 2011. As of July 31, 2007 there were 12,711,000 Class W Warrants outstanding.

F - 12

---

---

Each Class Z Warrant issued in the
Offering and to the initial securityholders is exercisable with cash for one share of
common stock. Except as set forth below, the Class Z warrants entitle the holder to
purchase shares at $5.00 per share, subject to adjustment in the event of stock dividends
and splits, reclassifications, combinations and similar events for a period commencing on
the later of: (a) completion of the Business Combination and (b) July 10, 2007 and ending
July 10, 2013. As of July 31, 2007 there were 7,800,000 Class Z Warrants outstanding.

The Class W Warrants and Class Z
Warrants outstanding prior to the Offering, all of which are held by the Companys
initial securityholders or their affiliates, shall not be redeemable by the Company as
long as such warrants continue to be held by such securityholders or their affiliates.
Except as set forth in the preceding sentence, the Company may redeem the Class W Warrants
and/or Class Z Warrants with the prior consent of HCFP, in whole or in part, at a price of
$.05 per warrant at any time after the warrants become exercisable, upon a minimum of 30
days prior written notice of redemption, and if, and only if, the last sale price of
the Companys common stock equals or exceeds $7.50 per share and $8.75 per share, for
a Class W Warrant and Class Z Warrant, respectively, for any 20 trading days within a 30
trading day period ending three business days before the Company sent the notice of
redemption (the Measurement Period). In addition, the Company may not redeem
the Class W Warrants and/or the Class Z Warrants unless the shares of common stock
underlying such warrants are covered by an effective registration statement from the
beginning of the measurement period through the date fixed for redemption.

The Class W and Class  Z
Warrants issued in the Offering will not be exercisable unless a registration statement
covering the securities underlying the warrants is effective or an exemption from
registration is available. Accordingly if the warrants are not able to be exercised such
warrants may expire worthless. The Company has no obligation to net cash settle the
exercise of the warrants.

The holders of Class W Warrants and
Class Z Warrants do not have the rights or privileges of holders of the Companys
common stock or any voting rights until such holders exercise their respective warrants
and receive shares of the Companys common stock. As the proceeds from the exercise
of the Class W Warrants and Class Z Warrants will not be received until after the
completion of a Business Combination, the expected proceeds from exercise will not have
any effect on the Companys financial condition or results of operations prior to a
Business Combination.

F - 13

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Underwriter Purchase
Option

In connection with the Offering, the
Company has issued to certain of the underwriters the UPO for $100 to purchase up to
25,000 Series A Units at an exercise price of $14.025 per unit and/or up to 230,000 Series
B Units at an exercise price of $16.665 per unit. The Series A Units and Series B Units
underlying the UPO will be exercisable in whole or in part, solely at HCFPs
discretion, commencing on the later of (a) completion of a Business Combination and
(b) July 10, 2007 and ending July 10, 2011. The fair value of the UPO, inclusive of
the receipt of the $100 cash payment, has been accounted as an expense of the Offering
resulting in a charge directly to stockholders equity with a corresponding credit to
additional paid-in-capital. The Company computed the fair value of the 25,000 Series A
Units and 230,000 Series B Units underlying the UPO was approximately $641,000 using a
Black-Scholes option-pricing model. The fair value of the UPO granted was estimated as of
the date of grant using the following assumptions: (1) expected volatility of 38.419%, (2)
risk-free interest rate of 5.10% and (3) contractual life of 5 years. The UPO may be
exercised for cash or on a cashless basis, at the holders option, such
that the holder may use the appreciated value of the UPO (the difference between the
exercise prices of the UPO and the underlying warrants and the market price of the units
and underlying securities) to exercise the UPO without the payment of any cash. Each of
the Series A Units and Series B Units included in the UPO are identical to the Series A
Units and Series B Units sold in the Offering, except that the exercise price of the
Class W Warrants underlying the Series B Units and the Class Z Warrants underlying
the Series A Units will be $5.50 per share and the Class Z Warrants underlying the Series
A Units shall only be exercisable until the fifth anniversary of the Offering.

During
the registration process for the offering, the Company amended the form of UPO to clarify
that the Company has no obligation to net cash settle the exercise of the UPO or the
warrants underlying the UPO. The holder of the UPO will not be entitled to exercise the
UPO or the warrants underlying the UPO unless a registration statement covering the
securities underlying the UPO is effective or an exemption from registration is available.
If the holder is unable to exercise the UPO or underlying warrants, the UPO or warrants,
as applicable, will expire worthless.

F - 14

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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.

|Date: October 9, 2007 |  | ISRAEL GROWTH PARTNERS ACQUISITION CORP.By: /s/ Carmel Vernia
Carmel VerniaChief Executive Officer
(Principal Executive Officer)
|--------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------

Pursuant
to the requirements of the Securities Act of 1934, this report has been signed by the
following persons in the capacities and on the dates indicated.

|Name | Position | Date
|---- | -------- | ----

|/s/ Carmel Vernia
Carmel Vernia | Chief Executive Officer and Director
(Principal Executive Officer) | October 9, 2007
|--------------------------------------------- | ------------------------------------------------------------------ | ---------------

|/s/ Matty Karp
Matty Karp | Chairman | October 9, 2007
|--------------------------------------- | -------- | ---------------

|/s/ Dror Gad
Dror Gad | Chief Financial Officer, Executive Vice
President and Director                 
(Principal Financial and Accounting    
Officer) | October 9, 2007
|----------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | ---------------

53

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