---

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

# FORM 10-Q

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

For The Quarterly
Period Ended 
October 31, 2006

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)

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 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

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 December 11, 2006
|------------------------------------------------- | --------------------------------
|
|
|
|
|Common Stock, par value $0.0001 per share         |                                 
|Class B Common Stock, par value $0.0001 per share |                                 

2

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# PART I 
FINANCIAL INFORMATION

|Item 1. | Financial
Statements
|------- | --------------------

# INDEX

|                                                                   | 
|------------------------------------------------------------------ | 
|
|
|
|
|Condensed Financial Statements:                                    | 
|                                                                   | 
|Condensed Balance Sheets as of October 31, 2006 (Unaudited)        | 
|and July 31, 2006 (Audited)                                        | 
|                                                                   | 
|Condensed Statements of Operations, for the three months ended     | 
|October 31, 2006 and 2005, and for the period from inception       | 
|(August 1, 2005) to October 31, 2006 (Unaudited)                   | 
|                                                                   | 
|Condensed Statement of Stockholders' Equity for the                | 
|period from inception (August 1, 2005) to July 31, 2006            | 
|and the three months ended October 31, 2006 (Unaudited)            | 
|                                                                   | 
|Condensed Statements of Cash Flows, for the three months           | 
|ended October 31, 2006 and 2005, and for the period from inception | 
|(August 1, 2005) to October 31, 2006 (Unaudited)                   | 
|                                                                   | 
|Notes to Unaudited Condensed Financial Statements                  | 

F - 1

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---

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

|                                                                                                                                                | As of
October 31, 2006
(Unaudited) | As of
July 31, 2006
(Audited)
|----------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------- | -----------------------------
|
|
|
|
|ASSETS                                                                                                                                          |                                    |                              
|                                                                                                                                                |                                    |                              
|Current Assets:                                                                                                                                 |                                    |                              
|Cash and cash equivalents                                                                                                                       |                                    |                              
|Investments held in Trust                                                                                                                       |                                    |                              
|including interest receivable of $148,221 (Note 1)                                                                                              |                                    |                              
|Prepaid expenses                                                                                                                                |                                    |                              
|                                                                                                                                                |                                    |                              
|Total assets                                                                                                                                    |                                    |                              
|                                                                                                                                                |                                    |                              
|                                                                                                                                                |                                    |                              
|LIABILITIES AND STOCKHOLDER'S 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 4)                                                                                                                            |                                    |                              
|                                                                                                                                                |                                    |                              
|Stockholders' Equity (Notes 2, 5 and 6)                                                                                                         |                                    |                              
|Preferred stock, par value $.0001 per share,                                                                                                    |                                    |                              
|5,000 shares authorized, 0 shares issued                                                                                                        |                                    |                              
|Common stock, par value $.0001 per share,                                                                                                       |                                    |                              
|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 Unaudited
Condensed Financial Statements

F - 2

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---

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

|                                                                                           | For the three months
ended
October 31, 2006 | For the three months
ended
October 31, 2005 | Period from inception
(August 1, 2005) to
October 31, 2006
|------------------------------------------------------------------------------------------ | ------------------------------------------- | ------------------------------------------- | ----------------------------------------------------------
|
|
|
|
|Revenue                                                                                    |                                             |                                             | $                                                         
|                                                                                           |                                             |                                            
|Operating expenses:                                                                        |                                             |                                            
|Professional fees                                                                          |                                             |                                             |                                                           
|Delaware franchise tax (Note 3)                                                            |                                             |                                             |                                                           
|Other general and administrative expenses (Note 4)                                         |                                             |                                             |                                                           
|                                                                                           |                                             |                                             |                                                           
|Loss from operations                                                                       |                                             |                                             |                                                           
|                                                                                           |                                             |                                            
|Interest Income                                                                            |                                             |                                             |                                                           
|                                                                                           |                                             |                                             |                                                           
|Income (loss) before provision for income taxes                                            |                                             |                                             |                                                           
|                                                                                           |                                             |                                            
|Provision for income taxes (Note 3)                                                        |                                             |                                             |                                                           
|                                                                                           |                                             |                                             |                                                           
|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 Unaudited
Condensed Financial Statements

F - 3

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---

# Israel Growth Partners
Acquisition Corp. 
(a corporation in the
development stage) 
Condensed Statement of Stockholders Equity for the period 
from inception (August 1, 2005) to July 31, 2006 and for the three months ended October 31, 2006

|                                                                                          | 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 (unaudited) |              |                       |                             |                                              |      
|                                                                                          |              |                      
|Net income for the period (unaudited)                                                     |              |                       |                             |                                              |      
|                                                                                          |              |                       |                             |                                              |      
|Balance,October 31, 2006 (unaudited)                                                      |              |                       |                             | 1,065,100                                    |      
|                                                                                          |              |                       |                             |                                              |      

See Notes to Unaudited
Condensed Financial Statements

F - 4

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---

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

|                                                                                     | For the three months
ended October 31, 2006 | For the three months
ended October 31, 2005 | Period from inception
(August 1, 2005) to
October 31, 2006
|------------------------------------------------------------------------------------ | ------------------------------------------- | ------------------------------------------- | ----------------------------------------------------------
|
|
|
|
|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 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 (decrease) 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                 |                                             |                                             | $                                                         
|                                                                                     |                                             |                                             |                                                           

See Notes to Unaudited
Condensed Financial Statements

F - 5

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|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 October 31, 2006 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 $52,160,236 including accrued interest of
$148,221 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.

F - 6

---

---

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 $5.10 per share based on the value of the
Trust Fund as of October 31, 2006. As a result of the Conversion Right, $10,426,831
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 October 31, 2006. 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 that holders owning 20% or more of the
outstanding Class B common stock do not 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.

|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.

F - 7

---

---

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 6).

|NOTE 3 |  | SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|------ | - | ------------------------------------------

INTERIM FINANCIAL STATEMENTS
 The accompanying unaudited condensed financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
(SEC) and should be read in conjunction with the Companys audited
financial statements and footnotes thereto for the period from inception (August 1, 2005)
to July 31, 2006 included in the Companys Form 10-K filed on October 30, 2006.
Certain information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the United States
of America have been omitted pursuant to such rules and regulations. However, the Company
believes that the disclosures are adequate to make the information presented not
misleading. The financial statements reflect all adjustments (consisting primarily of
normal recurring adjustments) that are, in the opinion of management necessary for a fair
presentation of the Companys financial position and results of operations. The
operating results for the three months ended October 31, 2006 are not necessarily
indicative of the results to be expected for any other interim period of any future year.

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 HELD IN TRUST
 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 October 31, 2006.

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.

F - 8

---

---

Franchise taxes incurred in the State
of Delaware are included in general and administrative expenses.

NET INCOME PER SHARE 
Net income per share is computed based on the weighted average number of shares of common
stock and Class B common stock outstanding.

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 share is calculated
by dividing net income attributable to (1) common and Class B stockholders and (2) Class B
common stockholders subject to possible conversion by their weighted average number of
common shares outstanding during the period. Diluted earnings per share reflects 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 are antidilutive, as their exercise prices are
greater than the average market price of common stock during the period, they have been
excluded from the Companys computation of net income per share. Therefore, basic and
diluted income per share were the same for the three months ended October 31,
2006 and 2005, and for the period from inception (August 1, 2005)
through October 31, 2006.

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 condensed balance sheets at July 31, 2006 and October 31,
2006.

USE OF ESTIMATES  The
preparation of financial statements in accordance with accounting principles generally
accepted in the United States of America 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
 The Company does not believe that any recently issued, but not yet effective,
accounting standards if currently adopted would have a material effect on the accompanying
condensed financial statements.

|NOTE 4 |  | 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. An amount of $22,500 is included in general and administrative
expenses on the accompanying condensed statements of operations for the three months ended
October 31, 2006, and $27,580 for the period from Inception (August 1, 2005) to October
31, 2006.

F - 9

---

---

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 were provided during the three months ended
October 31, 2006.

|NOTE 5 |  | 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
October 31, 2006, 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 October 31, 2006, 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.

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.

F - 10

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|NOTE 6 |  | 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.

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 October 31, 2006 there were 12,711,000 Class W Warrants outstanding.

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 October 31, 2006 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.

F - 11

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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.

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.

F - 12

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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.

|Item 2. | 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 the Companys management believes would benefit from establishing
operations or facilities in Israel (a Target Business). On July 18, 2006, we
completed our initial public offering (IPO) of 500,000 Series A Units
(Series A Units) and 4,600,000 Series B Units (Series B Units). 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 the over-allotment option. Each Series A
Unit consists of two shares of common stock, $.0001 par value per share (Common
Stock) and ten Class Z warrants (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 and 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 $3,322,322 in underwriting and other
expenses.

For a description of the proceeds
generated in our IPO 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 our Form 10-K filed on
October 30, 2006.

# Results of Operations

Net income for the three months ended
October 31, 2006 of $346,908 consisted of interest income on the Trust Fund investment of
$437,821, and interest on cash and cash equivalents of $19,103, offset by professional
fees of $34,817, $19,614 for Delaware franchise tax, and other operating expenses of
$55,585, consisting of $22,500 for office space and other administrative expenses, $14,904
for officer liability insurance, and $15,614 for travel, and $2,567 for other operating
expenses.

Net loss for the three months ended
October 31, 2005 of $30,834 consisted of professional fees $16,600, $13,832 for Delaware
franchise tax, and other operating expenses of $402.

3

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Net income for the period from August
1, 2005 (inception) to October 31, 2006 of $262,056 consisted of interest income on the
Trust Fund investment of $468,436, and interest on cash and cash equivalents of $19,102,
offset by professional fees of $65,420, $97,656 for Delaware franchise tax, and other
operating expenses of $62,406, consisting of $27,581 for office space and other
administrative expenses, $14,904 for officer liability insurance, $15,614 for travel, and
other operating expenses of $4,307.

# Liquidity and Capital
Resources

Proceeds from our initial public
offering were approximately $52.9 million, net of underwriting and other expenses of
approximately $3.3 million, of which $51,691,800 was placed in a trust account and the
remaining proceeds became available to be used to provide for business, legal and
accounting due diligence on prospective transactions and continuing general and
administrative expenses. We expect to 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 account, as well as any other net proceeds not expended, will be used to finance
the operations of the target. At October 31, 2006, we had cash outside of the trust
account of $1,241,154, investments held in the trust account of $52,160,236, prepaid
expenses and other assets of $69,803 and total current liabilities of $65,309.

We believe that the funds available
to us outside of the trust account will be sufficient to allow us to operate until July
11, 2008, assuming that a business combination is not consummated during that time. Of the
funds held outside of the trust account totaling $1,241,154 as of October 31, 2006, we
anticipate using these funds to cover legal and accounting fees, other expenses attendant
to the due diligence investigations, structuring, and negotiating of a business
combination, and administrative expenses incurred prior to completing a business
combination. 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 fund raising simultaneously with the consummation of a business combination.

# Contractual Obligations
and Commitments

Commencing on July 11, 2006, the
effective date of the offering, the Company is obligated to pay an affiliate of the
Companys chief executive officer, $7,500 per month for office, secretarial and
administrative services. An amount of $22,500 and $27,581 is included in general and
administrative expenses on the accompanying condensed statements of operations for the
three months ended October 31, 2006, and for the period from August 1, 2005 (inception)
to October 31, 2006, respectively.

|Item 3. | 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.

4

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|Item 4. | Control
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 October 31, 2006. 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 October 31, 2006 that has materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting.

# PART II  OTHER
INFORMATION

|Item 6. | Exhibits
|------- | --------

Exhibits

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

|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)
|---- |  | ----------------------------------------

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# SIGNATURES

Pursuant
to the requirements 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: December 12, 2006 |  | ISRAEL GROWTH PARTNERS ACQUISITION CORP.By:  /s/ Carmel Vernia
Carmel VerniaChief Executive Officer
|----------------------- |  | -----------------------------------------------------------------------------------------------------------------

| |  | By:  /s/ Dror Gad
Dror GadChief Financial Officer
| |  | ---------------------------------------------------------------

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