**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**FORM
      10-KSB** ****





**x**
            **Annual
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934**




**For
      the fiscal year ended: December 31, 2006**




**o**
            **Transition
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934**




**For
      the transition period from ______________to ______________**




**Commission
      File Number 000-51259**




**FORTISSIMO
      ACQUISITION CORP.**


(Name
      of
      Small Business Issuer in Its Charter)





**Delaware**
              (State
                of Incorporation)
            **02-0762508**
              (Small
                Business Issuer
              I.R.S.
                Employer I.D. Number)**14
                Hamelacha Street, Park Afek,**
              **Rosh
                Haayin, Israel**
              (Address
                of principal executive offices)
            **48091**
              (zip
                code)





**972-3-915-7400**


(Issuer’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:**


Units
      consisting of one share of Common Stock, par value $.0001 per share, and two
      Warrants


Common
      Stock, $.0001 par value per share


Warrants
      to purchase shares of Common Stock







Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. o




Check
      whether the Issuer (1) has filed all reports required to be filed by Section
      13
      or 15(d) of the Exchange Act during the past 12 months (or for such shorter
      period that the registrant was required to file such reports), and (2) has
      been
      subject to such filing requirement for the past 90
      days.      Yes x No o




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of the registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. o




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




Issuer’s
      revenues for the fiscal year ended December 31, 2006 were $0.




As
      of
      March 28, 2007, the aggregate market value of the common stock held by
      non-affiliates of the Registrant was approximately $25,486,700.




As
      of
      March 28, 2007, there were 5,868,334 shares of Common Stock, $.0001 par value
      per share, outstanding.




Transitional
      Small Business Disclosure Format (check one): Yes o No x









**PART
      I**




**ITEM
      1. DESCRIPTION OF BUSINESS**





Fortissimo
      Acquisition Corp was incorporated on December 27, 2005 as a blank check company
      whose objective is to acquire an operating business that has manufacturing
      operations or research and development facilities located in Israel, or that
      is
      a company operating outside Israel which management believes would benefit
      from
      establishing operations or facilities in Israel.





On
      October 17, 2006, we consummated our initial public offering of 4,000,000 Units,
      with each unit consisting of one share of our common stock and two warrants,
      each to purchase one share of our common stock at an exercise price of $5.00
      per
      share. On October 25, 2006, we consummated the closing of an additional 535,000
      units that were subject to the over-allotment option. The units were sold at
      an
      offering price of $6.00 per unit, generating total gross proceeds of $27,210,000
      (not including $2,000,004 from the sale of units to one of the initial
      stockholders of the Company, the “Insider Units”). EarlyBirdCapital, Inc.
      (“EarlyBirdCapital”) acted as the underwriter. After deducting the underwriting
      discounts and commissions and the offering expenses, the total net proceeds
      to
      us from the offering were approximately $26,663,686, of which a total of
      $26,257,650 was deposited into the trust account (or approximately $5.79 per
      share sold in the offering, including the over-allotment option) and the
      remaining proceeds are available to be used to provide for business, legal
      and
      accounting due diligence on prospective business combinations and continuing
      general and administrative expenses. Through December 31, 2006, we have used
      $92,973 of the net proceeds that were not deposited into the trust fund to
      pay
      general and administrative expenses. The net proceeds deposited into the trust
      fund remain on deposit in the trust fund earning interest. As of December 31,
      2006, there was $26,537,334 held in the trust fund.




We
      are
      not presently engaged in, and we will not engage in, any substantive commercial
      business until we consummate a business combination. We intend to utilize our
      cash, including the funds held in the trust fund, capital stock, debt or a
      combination of the foregoing in effecting a business combination. 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, we may seek to consummate a
      business combination with a company that may be financially unstable or in
      its
      early stages of development or growth.




**Opportunities
      in Israel**




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




·
            Israel’s
                Central Bureau of Statistics reported that Israel’s Gross Domestic Product
                grew by 5.2% in 2005, ranking it as one of the fastest growing economies
                in the western world;




·
            Israel’s
                Central Bank reported that foreign investments in Israel have risen
                consecutively in the last 3 years, reaching a record $9.7 billion
                in 2005,
                a 67% rise from 2004;




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




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




2




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




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




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




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




·
            In
                2005, the Israeli Government continued its policy of accelerated
                privatization and has pledged to maintain this policy in
                2006.




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




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




·
            **Several
                institutions of higher education**:
                There are several universities in Israel that specialize in engineering,
                physics, computer science and other technology-related fields.




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




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




**Effecting
      a business combination**




***General***




We
      are
      not presently engaged in, and we will not engage in, any substantive commercial
      business for an indefinite period of time following our public offering. We
      intend to utilize cash derived from the proceeds of our public offering, the
      proceeds from the sale of the Insider Units simultaneously with the closing
      of
      our public offering, and issuances of our capital stock, debt or a combination
      of cash, capital stock and debt, in effecting a business combination. Although
      substantially all of the net proceeds of our public offering are intended to
      be
      generally applied toward effecting a business combination as described in this
      report, the proceeds are not otherwise being designated for any more specific
      purposes. A business combination may involve the acquisition of, or merger
      with,
      an emerging growth company, by which we mean a company with one or more products
      being marketed and some revenues, but which would benefit from additional
      capital. In the alternative, a business combination may involve 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. While we may seek to effect
      business combinations with more than one target business, we will probably
      have
      the ability, as a result of our limited resources, to effect only a single
      business combination.




3




***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. Target businesses may be brought to our attention by such
      unaffiliated sources as a result of being solicited by us through calls or
      mailings. These sources may also introduce us to target businesses in which
      they
      think we may be interested on an unsolicited basis since many of these sources
      will have read our public offering prospectus and know what types of business
      we
      are targeting. Our initial stockholder, 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. While we do not presently anticipate engaging the services
      of professional firms that specialize in business acquisitions on any formal
      basis, we may engage these firms in the future, in which event we may pay a
      finder’s fee or other compensation to be determined in an arm’s length
      negotiation based on the terms of the transaction. In no event, however, will
      our initial stockholder, 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. We have not established any other specific attributes or
      criteria (financial or otherwise) for prospective target businesses. In
      addition, prospective target businesses may be privately-held or publicly-traded
      on a securities exchange.




In
      evaluating a prospective target business, our management will consider, among
      other factors, the following:




·
            financial
                condition and results of operations;




·
            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;




·
            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.




4




With
      respect to a target business’ financial condition, current profitability and net
      current assets (i.e. current assets less current liabilities) are only two
      of
      many factors our management may look at when evaluating such prospective target
      business. Indeed, a prospective target business may have had losses for a
      substantial number of periods, but still may become profitable in the long-run
      and therefore worthy of consideration. Similarly, a company whose current
      liabilities exceed current assets may have a viable and valuable business,
      and
      simply needs an infusion of cash to realize its potential, and therefore worthy
      of our consideration.




The
      above
      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, although we have no current intention
      to engage such third parties. We will also seek to have all prospective target
      businesses execute agreements with us waiving any right, title, interest or
      claim of any kind in or to any monies held in the trust. If any prospective
      target business refuses to execute such agreement, it is unlikely we would
      continue negotiations with such target business. However, we would weigh the
      risks of potential liability and amount of exposure to the trust fund against
      the attractiveness of the particular business opportunity in making any such
      decision.




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.




***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. In order to consummate such an acquisition, we may issue a
      significant amount of our debt or equity securities to the sellers of such
      businesses and/or seek to raise additional funds through a private offering
      of debt or equity securities. Since we have no specific business combination
      under consideration, we have not entered into any such fund raising arrangement
      and have no current intention of doing so. 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 - which is likely to occur only in those situations in which the target
      business is outside the scope of the expertise of our executive officers or
      in
      those situations in which the proposed business combination was with an entity
      which is affiliated with any of our initial stockholders - we will obtain an
      opinion from an unaffiliated, independent investment banking firm which 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 fair market value meets the 80% of net assets threshold, it is not
      anticipated that copies of such opinion would be distributed to our
      stockholders, although copies will be provided to stockholders who request
      it.
      We will not be required to obtain an opinion from an investment banking firm
      as
      to the fair market value if our board of directors independently determines
      that
      the target business complies with the 80% threshold.




***Lack
      of business diversification***




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




5




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




***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. Furthermore, the future role of our officers and directors, if any,
      in
      the target business cannot presently be stated with any certainty. While it
      is
      possible that some of our officers and directors will remain associated in
      senior management or advisory positions with us following a business
      combination, it is unlikely that any of them will 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 him
      to
      receive compensation in the form of cash payments and/or our securities for
      services he would render to the company after the consummation of the business
      combination. While the personal and financial interests of our key personnel
      may
      influence his motivation in identifying and selecting a target business, their
      ability 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. 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 the additional
      managers will have the requisite skills, knowledge or experience necessary
      to
      enhance the incumbent management.




***Opportunity
      for stockholder approval of business combination***




Prior
      to
      the completion of a business combination, we will submit the transaction to
      our
      stockholders for approval, even if the nature of the acquisition is such as
      would not ordinarily require stockholder approval under applicable state law.
      We
      view this requirement as an obligation to our stockholders and will not take
      any
      action to amend or waive this provision in our Amended and Restated Certificate
      of Incorporation. In connection with any such transaction, we will also submit
      to our stockholders for approval a proposal to amend our Amended and Restated
      Certificate of Incorporation to provide for our corporate life to continue
      perpetually following the consummation of such business combination. Any vote
      to
      extend our corporate life to continue perpetually in connection with a business
      combination will be effective only if the business combination is approved.
      We
      will only consummate a business combination if stockholders vote both in favor
      of such business combination and our amendment to extend our corporate
      life.




In
      connection with seeking stockholder approval of a business combination, we
      will
      furnish our stockholders with proxy solicitation materials prepared in
      accordance with the Securities Exchange Act of 1934, which, among other matters,
      will include a description of the operations of the target business and audited
      historical financial statements of the business. We will publicly announce
      the
      record date for determining the stockholders entitled to vote at the meeting
      to
      approve our business combination at least two business days prior to such record
      date.




In
      connection with the vote required for any business combination, our initial
      stockholders have agreed to vote their respective initial shares in accordance
      with the majority of the shares of common stock voted by the public
      stockholders. This voting arrangement shall not apply to shares included in
      units purchased in our initial public offering or purchased following such
      offering in the open market by any of our initial stockholders, officers and
      directors. Accordingly, they may vote these shares on a proposed business
      combination any way they choose. Pursuant to the provisions of our Amended
      and
      Restated Certificate of Incorporation, which cannot by their terms be amended
      prior to the consummation of a business combination, we will proceed with the
      business combination only if a majority of the shares of common stock voted
      by
      the public stockholders are voted in favor of the business combination and
      public stockholders owning less than 20% of the shares sold in our initial
      public offering both exercise their conversion rights and vote against the
      business combination.




6




***Conversion
      rights***




At
      the
      time we seek stockholder approval of any business combination, we will offer
      each public stockholder the right to have such stockholder’s shares of common
      stock converted to cash if the stockholder votes against the business
      combination and the business combination is approved and completed. We view
      this
      requirement as an obligation to our stockholders and will not take any action
      to
      amend or waive this provision in our certificate of incorporation. Our initial
      stockholders will not have such conversion rights with respect to any shares
      of
      common stock owned by them, directly or indirectly, whether included in their
      initial shares, included in their Insider Units or purchased by them in our
      initial public offering or in the aftermarket. The actual per-share conversion
      price will be equal to the amount in the trust account, inclusive of any
      interest (calculated as of two business days prior to the consummation of the
      proposed business combination), divided by the number of shares sold in our
      initial public offering. Without taking into any account interest earned on
      the
      trust account, the initial per-share conversion price would be $5.79, or $0.21
      less than the per-unit offering price of $6.00. An eligible stockholder may
      request conversion at any time after the mailing to our 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 stockholder votes against the business combination and the
      business combination is approved and completed. Any request for conversion,
      once
      made, may be withdrawn at any time up to the date of the meeting. It is
      anticipated that the funds to be distributed to stockholders entitled to convert
      their shares who elect conversion will be distributed promptly after completion
      of a business combination. Public stockholders who convert their stock into
      their share of the trust account still have the right to exercise any warrants
      they still hold.




Pursuant
      to the provisions of our Amended and Restated Certificate of Incorporation,
      which cannot by their terms be amended prior to the consummation of a business
      combination, we will not complete any business combination if public
      stockholders, owning 20% or more of the shares sold in our initial public
      offering, both exercise their conversion rights and vote against the business
      combination.




Stockholders
      who do not sell, or who receive less than an aggregate of $0.21 of net sales
      proceeds for, the warrants included in the units, or persons who purchase common
      stock in the aftermarket at a price in excess of
      $5.79
      per share, may have a disincentive to exercise their conversion rights because
      the amount they would receive upon conversion could be less than their original
      or adjusted purchase price.




***Liquidation
      if no business combination***




Our
      Amended and Restated Certificate of Incorporation provides that we will continue
      in existence only until October 11, 2008. This provision may not be amended
      except in connection with the consummation of a business combination. If we
      have
      not completed a business combination by such date, our corporate existence
      will
      cease except for the purposes of winding up our affairs liquidating, pursuant
      to
      Section 278 of the Delaware General Corporation Law. This has the same effect
      as
      if our board of directors and stockholders had formally voted to approve our
      dissolution pursuant to Section 275 of the Delaware General Corporation Law.
      Accordingly, limiting our corporate existence to a specified date as permitted
      by Section 102(b)(5) of the Delaware General Corporation Law removes the
      necessity to comply with the formal procedures set forth in Section 275 (which
      would have required our board of directors and stockholders to formally vote
      to
      approve our dissolution and liquidation and to have filed a certificate of
      dissolution with the Delaware Secretary of State). We view this provision
      terminating our corporate life by October 11, 2008 as an obligation to our
      stockholders and will not take any action to amend or waive this provision
      to
      allow us to survive for a longer period of time except in connection with the
      consummation of a business combination.




7




If
      we are
      unable to complete a business combination by October 11, 2008, we will
      distribute to all of our public stockholders, in proportion to their respective
      equity interests, an aggregate sum equal to the amount in the trust account,
      inclusive of any interest, plus any remaining net assets (subject to our
      obligations under Delaware law to provide for claims of creditors as described
      below). We anticipate notifying the trustee of the trust account to begin
      liquidating such assets promptly after such date and anticipate it will take
      no
      more than 10 business days to effectuate such distribution.




Our
      initial stockholders have waived their rights to participate in any liquidation
      distribution with respect to their initial shares and their shares included
      within the Insider Units. There will be no distribution with respect to our
      warrants which will expire worthless. We expect that all costs associated with
      the implementation and completion of our plan of dissolution and distribution
      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, one of our initial stockholders, Fortissimo Capital
      Fund GP, L.P. (“FCF”), has agreed to advance us the funds necessary to complete
      such dissolution (currently anticipated to be no more than approximately
      $15,000) and has agreed not to seek repayment for such expenses.




If
      we
      were to expend all of the net proceeds of our initial public offering, other
      than the proceeds deposited in the trust account, and without taking into
      account interest, if any, earned on the trust account, the initial per-share
      liquidation price would be $5.79, or $0.21 less than the per-unit offering
      price
      of $6.00. The proceeds deposited in the trust account could, however, become
      subject to the claims of our creditors (which could include vendors and service
      providers we have engaged to assist us in any way in connection with our search
      for a target business and that are owed money by us, as well as target
      businesses themselves) which could be prior to the claims of our public
      stockholders. Our directors have agreed pursuant to agreements with us and
      EarlyBirdCapital, that, if we liquidate prior to the consummation of a business
      combination, they will be jointly and severally liable to pay debts and
      obligations to target businesses or vendors or other entities that are owed
      money by us for services rendered or products sold to us in excess of the net
      proceeds of our initial public offering not held in the trust account. We cannot
      assure you, however, that they would be able to satisfy those obligations.
      Furthermore, if the directors are unable to satisfy their indemnification
      obligations, and if FCF is unable to satisfy its obligation to indemnify the
      directors for such liability this would reduce the amount held in the trust
      fund. Accordingly, we cannot assure you that the actual per-share liquidation
      price will not be less than $5.79, plus interest, due to claims of
      creditors.




Our
      public stockholders will be entitled to receive funds from the trust account
      only in the event of our liquidation or if the stockholders seek to convert
      their respective shares into cash upon a business combination which the
      stockholder voted against and which is completed by us. In no other
      circumstances will a stockholder have any right or interest of any kind to
      or in
      the trust account.




Under
      the
      Delaware General Corporation Law, stockholders may be held liable for claims
      by
      third parties against a corporation to the extent of distributions received
      by
      them in a dissolution. 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, as stated above,
      it is our intention to make liquidating distributions to our stockholders as
      soon as reasonably possible after October 11, 2008 and, therefore, we do not
      intend to comply with those procedures. As such, our stockholders could
      potentially be liable for any claims to the extent of distributions received
      by
      them and any liability of our stockholders may extend well beyond the third
      anniversary of such date. Because we will not be complying with Section 280,
      Section 281(b) of the Delaware General Corporation Law requires us to adopt
      a
      plan 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.
      Accordingly, we would be required to provide for any claims of creditors known
      to us at that time or those that we believe could be potentially brought against
      us within the subsequent 10 years prior to our distributing the funds in the
      trust account to our public stockholders. However, because we are a blank check
      company, rather than an operating company, and our operations will be limited
      to
      searching for prospective target businesses to acquire, the only likely claims
      to arise would be from our vendors (such as accountants, lawyers, investment
      bankers, etc.) or potential target businesses. As described above, pursuant
      to
      the obligation contained in our underwriting agreement, we will seek to have
      all
      vendors and 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 account. As a result of this obligation, the claims that could be made
      against us are significantly limited and the likelihood that any claim that
      would result in any liability extending to the trust is remote.




8




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 account 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
      account, we cannot assure you we will be able to return to our public
      stockholders at least $5.79 per share. 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. Furthermore, b ecause
      we
      intend to distribute the proceeds held in the trust account to our public
      stockholders promptly after October 11, 2008, this may be viewed or interpreted
      as giving preference to our public stockholders over any potential creditors
      with respect to access to or distributions from our assets. Furthermore, our
      board may be viewed as having breached their fiduciary duties to our creditors
      and/or may have acted in bad faith, and thereby exposing itself and our company
      to claims of punitive damages, by paying public stockholders from the trust
      account prior to addressing the claims of creditors. We cannot assure you that
      claims will not be brought against us for these reasons.




**Competition**




In
        identifying, evaluating and selecting a target business, we may encounter
        intense competition from other entities having a business objective similar
        to
        ours. Since August 2003, based upon publicly available information,
        approximately 92 blank check companies have completed initial public
        offerings in the United States. Of these companies, only 23 companies have
        consummated a business combination, while 21 other companies have announced
        that
        they have entered into a definitive agreement for a business combination,
        but
        have not yet consummated such business combination. Additionally, five of
        these
        companies have recently announced that they will dissolve and distribute
        their
        assets to stockholders. Accordingly,
        there are approximately 43 blank check companies in the United States with
        more than $4.1 billion in trust that are seeking to carry out a business
        plan
        similar to our business plan. Furthermore, there are a number of additional
        offerings for blank check companies 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 after the date of this report and prior to our completion of a
        business combination. Additionally, we may be subject to competition from
        entities other than blank check companies having a business objective similar
        to
        ours, including venture capital firms, leverage buyout firms and operating
        businesses 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. Our ability to compete
        in
        acquiring certain sizable target businesses will be limited by our available
        financial resources.
        This inherent competitive limitation gives others an advantage in pursuing
        the
        acquisition of a target business. Further, the following may not be viewed
        favorably by certain target businesses:




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




·
            our
                obligation to convert into cash shares of common stock held by our
                public
                stockholders to such holders that both vote against the business
                combination and exercise their conversion rights may reduce the resources
                available to us for a business combination;
                and




·
            our
                outstanding warrants and options, and the future dilution they potentially
                represent.




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
      with
      significant growth potential on favorable terms.




9




If
      we
      succeed in effecting a business combination, there will be, in all likelihood,
      intense competition from competitors of the target business. We cannot assure
      you that, subsequent to a business combination, we will have the resources
      or
      ability to compete effectively.





**Israeli
        Government Programs**




Israeli
      companies are generally subject to income tax on their taxable income at the
      rate of 31% for the year 2006, 29% for 2007, 27% for 2008, 26% for 2009 and
      25%
      for year 2010 and thereafter.




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




**The
      Israeli Companies Law**




Under
      the
      Israeli Companies Law - 1999, referred to as the Companies Law, Israeli
      companies are subject to certain restrictions with respect to changes in control
      of the company:




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




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




10




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




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




**Employees**




We
      have
      five executive officers, all of whom are members of our board of directors.
      These individuals are not obligated to devote any specific number of hours
      to
      our matters and intend to devote only as much time as they deem necessary to
      our
      affairs. The amount of time they will devote in any time period will vary based
      on whether a target business has been selected for the business combination
      and
      the stage of the business combination process 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 spend more time to our affairs) than
      they
      would prior to locating a suitable target business. We presently expect each
      of
      our officers to devote an average of approximately ten hours per week to our
      business. We do not intend to have any full time employees prior to the
      consummation of a business combination.




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




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




Each
      of
      our directors and officers reside outside the United States. As described above,
      each of our officers or directors has consented to service of process in the
      State of New York and to the jurisdiction of the courts of the State
      of
      New York or of the United States of America for the Southern District of New
      York. However, since most of our and such persons’ assets are outside the United
      States, it may not be possible for investors to enforce against them judgments
      of United States courts predicated upon civil liability provisions of the United
      States federal or state securities laws, and the enforceability in Israel
      of a judgment obtained in the United States against us or our officers and
      directors may be difficult. Moreover, there is substantial doubt as to the
      enforceability in Israel against us or any of our directors and officers who
      are
      not residents of the United States, in original actions in Israel of civil
      liabilities predicated solely on the Securities Act of 1933, as amended, or
      the
      Securities Exchange Act of 1934. This is due to the fact that Israeli courts
      may
      refuse to hear a claim based on a violation of U.S. securities laws because
      Israel is not the most appropriate forum to bring such a claim, and even if
      it
      would hear the claim it may determine that Israeli law and not U.S. law is
      applicable to the claim. If U.S. law is found to be applicable, the content
      of
      applicable U.S. law must be proved as a fact which can be time-consuming and
      costly.




11




**Periodic
      Reporting and Audited Financial Statements**




We
      have
      registered our units, common stock and warrants under the Securities Exchange
      Act of 1934, as amended, and have reporting obligations, including the
      requirement that we file annual, quarterly and current reports with the SEC.
      In
      accordance with the requirements of the Securities Exchange Act of 1934, our
      annual reports will contain financial statements audited and reported on by
      our
      independent registered public accountants.




We
      will
      not acquire a target business if audited financial statements based on United
      States generally accepted accounting principles cannot be obtained for the
      target business. Additionally, our management will provide stockholders with
      audited financial statements, prepared in accordance with United States
      generally accepted accounting principles, of the prospective target business
      as
      part of the proxy solicitation materials sent to stockholders to assist them
      in
      assessing the target business. We cannot assure you that any particular target
      business identified by us as a potential acquisition candidate will have
      financial statements prepared in accordance with United States generally
      accepted accounting principles or that the potential target business will be
      able to prepare its financial statements in accordance with United States
      generally accepted accounting principles. The financial statements of a
      potential target business will be required to be audited in accordance with
      United States generally accepted accounting standards. To the extent that this
      requirement cannot be met, we will not be able to acquire the proposed target
      business. While this may limit the pool of potential acquisition candidates,
      given the broad range of companies we may consummate a business combination
      with, we do not believe that the narrowing of the pool will be
      material.




**Risks
      associated with our business**




In
      addition to other information included in this report, the following factors
      should be considered in evaluating our business and future
      prospects.




***We
      are a development stage company with no operating history and, accordingly,
      you
      will not have any basis on which to evaluate our ability to achieve our business
      objective.***




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 that has operations or facilities located in
      Israel, or that is a company operating outside of Israel which management
      believes would benefit from establishing operations or facilities in Israel.
      We
      will not generate any revenues until, at the earliest, after the consummation
      of
      a business combination.




***If
      we are forced to liquidate before a business combination and distribute the
      trust account, our public stockholders will receive less than $6.00 per share
      and our warrants will expire worthless.***




If
      we are
      unable to complete a business combination by October 11, 2008 and are forced
      to
      liquidate our assets, the per-share liquidation distribution is likely to be
      less than $6.00 because of the expenses of our initial public offering, our
      general and administrative expenses and the anticipated costs of seeking a
      business combination. Furthermore, there will be no distribution with respect
      to
      our outstanding warrants which will expire worthless if we liquidate before
      the
      completion of a business combination.




***If
      the proceeds held outside the trust are insufficient to allow us to operate
      through October 11, 2008, we may be unable to complete a business
      combination.***




We
      believe that the funds available to us outside the trust account will be
      sufficient to allow us to operate through October 11, 2008, assuming that a
      business combination is not consummated during that time. However, we cannot
      assure you that our estimates will be accurate. We could use a portion of the
      funds not being placed in trust to pay fees to consultants to assist us with
      our
      search for a target business. We could also use a portion of the funds not
      being
      placed in the trust as a down payment or to fund a “no-shop” provision (a
      provision in letters of intent designed to keep target businesses from
“shopping” around for transactions with other companies on terms more favorable
      to such target businesses) with respect to a particular proposed business
      combination, although we do not have any current intention to do so. If we
      entered into a letter of intent where we paid for the right to receive
      exclusivity from a target business and were subsequently required to forfeit
      such funds (whether as a result of our breach or otherwise), we might not have
      sufficient funds to continue searching for, or conduct due diligence with
      respect to, a target business.




12




***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 operations or facilities
      located in Israel, or that is a company operating outside of Israel which
      management believes would benefit from establishing operations or facilities
      in
      Israel 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, our units will be immediately
      tradable and we have a longer period of time to complete a business
      combination.




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




Our
      Amended and Restated Certificate of Incorporation provides that we will continue
      in existence only until October 11, 2008. If we have not completed a business
      combination by such date and amended this provision in connection therewith,
      pursuant to the Delaware General Corporation Law, our corporate existence will
      cease except for the purposes of winding up our affairs and liquidating. 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 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 make liquidating distributions to our
      stockholders as soon as reasonably possible after dissolution and, therefore,
      we
      do not intend to comply with those procedures. Because we will not be complying
      with those procedures, we are required, pursuant to Section 281 of the Delaware
      General Corporation Law, to adopt a plan 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. Accordingly, we would be required to provide
      for
      any creditors known to us at that time or those that we believe could be
      potentially brought against us within the subsequent 10 years prior to
      distributing the funds held in the trust to stockholders. We cannot assure
      you
      that we will properly assess all claims that may be potentially brought against
      us. As such, our stockholders could potentially be liable for any claims to
      the
      extent of distributions received by them and any liability of our stockholders
      may extend well beyond the third anniversary of such date. Accordingly, we
      cannot assure you that third parties will not seek to recover from our
      stockholders amounts owed to them by us.




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




If
      we are
      forced to file a bankruptcy case or an involuntary bankruptcy case is filed
      against us which is not dismissed, any distributions received by stockholders
      could be viewed under applicable debtor/creditor and/or bankruptcy laws as
      either a “preferential transfer” or a “fraudulent conveyance.” As a result, a
      bankruptcy court could seek to recover all amounts received by our stockholders.
      Furthermore, because we intend to distribute the proceeds held in the trust
      account to our public stockholders promptly after October 11, 2008, this
      may be viewed or interpreted as giving preference to our public stockholders
      over any potential creditors with respect to access to or distributions from
      our
      assets. Furthermore, our board of directors may be viewed as having breached
      their fiduciary duties to our creditors and/or may have acted in bad faith,
      and
      thereby exposing itself and our company to claims of punitive damages, by paying
      public stockholders from the trust account prior to addressing the claims of
      creditors. We cannot assure you that claims will not be brought against us
      for
      these reasons.




13




***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 do
      so.***




Since
        August 2003, based upon publicly available information, approximately 92
        similarly structured blank check companies have completed initial public
        offerings in the United States. Of these companies, only 23 companies have
        consummated a business combination, while 21 other companies have announced
        that
        they have entered into a definitive agreement for a business combination,
        but
        have not yet consummated such business combination. Accordingly, there are
        approximately 43 blank check companies in the United States with more than
        $4.1 billion in trust that are seeking to carry out a business plan similar
        to
        our business plan. Furthermore, there are approximately 47 additional offerings
        for blank check companies in the United States with more than approximately
        $4.2
        billion that would be placed in trust 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 after the date of this report and prior to our completion of a
        business combination. While some of those companies must complete a business
        combination in specific industries, a number of them may consummate a business
        combination in any industry they choose. Therefore, we may be subject to competition
        from these and other companies seeking to consummate a business plan similar
        to
        ours. Because of this competition, we cannot assure you that we will be able
        to
        effectuate a business combination within the required time
        periods.




***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 entities other than blank check companies
        having a business objective similar to ours, including venture capital funds,
        leveraged buyout funds and operating businesses competing for acquisitions.
        Many
        of these entities are well established and have extensive experience in
        identifying and effecting business combinations directly or through affiliates.
        Many of these competitors possess greater technical, human and other resources
        than we do and our financial resources will be relatively limited when
        contrasted with those of many of these competitors. Our ability to compete
        in
        acquiring certain sizable target businesses will be limited by our available
        financial resources. This inherent competitive limitation gives others an
        advantage in pursuing the acquisition of certain target businesses. Furthermore,
        the obligation we have to seek stockholder approval of a business combination
        may delay the consummation of a transaction. Additionally, our outstanding
        warrants, and the future dilution they potentially represent, may not be
        viewed
        favorably by certain target businesses. Any of these obligations may place
        us at
        a competitive disadvantage in successfully negotiating a business combination.
        Because only 43 of the 92 blank check companies that have gone public in
        the United States since August 2003 have either consummated a business
        combination or entered into a definitive agreement for a business combination,
        it may indicate that there are fewer attractive target businesses available
        to
        such entities like our company or that many privately held target businesses
        are
        not inclined to enter into these types of transactions with publicly held
        blank
        check companies like ours. If we are unable to consummate a business combination
        with a target business by October 11, 2008, we will be forced to
        liquidate.




***If
      third parties bring claims against us, the proceeds held in trust could be
      reduced and the per-share liquidation price received by stockholders is likely
      to be less than $5.79 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 account for the benefit of our public stockholders, there is no guarantee
      that they will execute such agreements or that such agreements, even if
      executed, would be enforceable under operation of law. 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 account for
      any
      reason. If we liquidate before the completion of a business combination and
      distribute the proceeds held in trust to our public stockholders, our directors
      have agreed that they will be jointly and severally liable to ensure that the
      proceeds in the trust account are not reduced by the claims of target businesses
      or vendors or other entities that are owed money by us for services rendered
      or
      contracted for or products sold to us. Because we will seek to have all vendors
      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 moneys held
      in,
      the trust fund, we believe the likelihood of the directors having any such
      obligations is minimal. Notwithstanding the foregoing, we have questioned these
      individuals and reviewed their financial information and believe they will
      be
      able to satisfy any indemnification obligations that may arise. Furthermore,
      FCF
      has entered into indemnification agreements with each of the directors, whereby
      FCF agrees to indemnify each director for any such liability and we are aware
      that FCF has the ability to satisfy such an indemnification obligation. Based
      on
      the foregoing, we believe that the directors have funds sufficient to satisfy
      their obligations. However, we cannot assure you that they will be able to
      satisfy those obligations. Furthermore, each of our directors resides outside
      of
      the United States and, as a result, we may not be able to enforce these
      indemnification rights. Finally, if the directors are unable to satisfy their
      indemnification obligations and if FCF is unable to satisfy its obligation
      to
      indemnify the directors for such liability, this would reduce the amount held
      in
      trust. Accordingly, the proceeds held in trust could be subject to claims which,
      if valid, would take priority over the claims of our public stockholders. We
      cannot assure you that the per-share distribution from the trust fund will
      not
      be less than $5.79, plus interest, due to claims of such creditors.




14




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 account
      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 account,
      we
      cannot assure you we will be able to return to our public stockholders at least
      $5.79 per share.




***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 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
      whether by net cash settlement or otherwise. 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 may have no value,
      the
      market for the warrants may be limited and the warrants may expire
      worthless.




***The
      warrants included in the Insider Units may be exercisable at times when the
      Warrants held by an investor may not be exercisable.***




An
      effective registration statement may not be in place when an investor desires
      to
      exercise his Warrants, thus precluding such investor from being able to exercise
      his, her or its warrants. Even if the registration statement relating to the
      common stock issuable upon exercise of the warrants is not effective, the
      warrants underlying the Insider Units issued to FCF may be exercisable for
      unregistered shares of common stock. Accordingly, FCF may receive shares of
      common stock upon exercise of such warrants and such warrants will not expire
      worthless when public warrant holders would be unable to receive anything and
      their warrants would expire worthless.




15




***An
      investor will only be able to exercise a warrant if the issuance of common
      stock
      upon such exercise has been registered or qualified or is deemed exempt under
      the securities laws of the state of residence of the holder of the warrants.***




No
      warrants will be exercisable and we will not be obligated to issue shares of
      common stock unless the common stock issuable upon such exercise 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. Because the exemptions from
      qualification in certain states for resales of warrants and for issuances of
      common stock by the issuer upon exercise of a warrant may be different, a
      warrant may be held by a holder in a state where an exemption is not available
      for issuance of common stock upon an exercise and the holder will be precluded
      from exercise of the warrant. At the time that the warrants become exercisable
      (following our completion of a business combination), we expect to either become
      listed on a national securities exchange, which would provide an exemption
      from
      registration in every state, or we would register the warrants in every state
      (or seek another exemption from registration in such states). Accordingly,
      we
      believe holders in every state will be able to exercise their warrants as long
      as our prospectus relating to the common stock issuable upon exercise of the
      warrants is current. However, we cannot assure you of this fact. As a result,
      the warrants may be deprived of any value, the market for the warrants may
      be
      limited and the holders of warrants may not be able to exercise their warrants
      if the common stock issuable upon such exercise is not qualified or exempt
      from
      qualification in the jurisdictions in which the holders of the warrants
      reside.




***Investments
      in emerging growth companies involve greater risk than investments in more
      established companies.***




A
      business combination may involve the acquisition of, or merger with, an emerging
      growth company, by which we mean a company with one or more products being
      marketed and some revenues, but which would benefit from additional capital.
      In
      the alternative, a business combination may involve 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.




In
      the
      event we choose to do a business combination with an emerging growth company,
      we
      will be subject to the risks associated with such companies. Investing in
      emerging growth companies generally involves greater risk than is customarily
      associated with more established companies. Specifically, while investing in
      an
      emerging growth company offers the opportunity for significant capital gains,
      such investments also involve a degree of risk that can result in substantial
      losses. There can be no assurance that the returns of investing in a start-up
      or
      emerging growth company will, in the future, yield returns commensurate with
      its
      associated risks.




***Resources
      could be wasted in researching acquisitions that are not consummated. In such
      a
      situation, less capital would be available to us, which may make it more
      difficult to complete a business combination.***




It
      is
      anticipated that the investigation of each specific target business and the
      negotiation, drafting and execution of relevant agreements, disclosure documents
      and other instruments will require substantial management time and attention
      and
      substantial costs for accountants, attorneys and others. If a decision is made
      not to complete a specific business combination, the costs incurred up to that
      point for the proposed transaction would not be recoverable by us. Furthermore,
      even if an agreement is reached relating to a specific target business, we
      may
      fail to consummate the transaction for any number of reasons including those
      beyond our control, including, for instance, if 20% or more of our stockholders
      vote against a proposed business combination. Any such event will result in
      a
      loss to us of the related costs incurred which could materially adversely affect
      subsequent attempts to locate and acquire a target business.




***We
      may issue shares of our capital stock 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
      Amended and Restated Certificate of Incorporation authorizes the issuance of
      up
      to 21,000,000 shares of common stock, par value $.0001 per share, and 1,000,000
      shares of preferred stock, par value $.0001 per share. There are 4,194,998
      authorized but unissued shares of our common stock available for issuance (after
      appropriate reservation for the issuance of shares upon full exercise of our
      outstanding warrants and the purchase option granted to EarlyBirdCapital) and
      all of the 1,000,000 shares of preferred stock available for issuance. Although
      we currently have no commitments 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 complete
      a business combination. The issuance of additional shares of our common stock
      or
      any number of shares of our preferred stock:




·
            may
                significantly reduce the equity interest of
                investors;




16




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




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




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




***We
      may issue debt securities to complete a business combination, which may result
      in restrictions on our business operations.***




It
      is
      possible that we may issue debt securities in order to complete a business
      combination. 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 maintenance of 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.




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




Our
      ability to 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. Each of our
      officers is a full-time employee of Fortissimo Capital Fund and intends to
      remain employed at Fortissimo Capital Fund following any acquisition effected
      by
      us. FCF is the general partner of an $80 million private equity fund, which
      commenced operations in April 2004, whose investors include many of the leading
      financial institutions in Israel (banks, insurance companies and pension funds).
      There is no intention to place any of our officers permanently as an executive
      officer of the acquired company (although if the board of directors of the
      combined company determines that this is in the best interest of the company,
      this could occur). Accordingly, although it is possible that one or more of
      Messrs. Cohen, Barashi, Blatt, Hacohen and Lesnick, our executive officers
      and
      directors, will remain associated with the target business in senior management
      or advisory positions following a business combination, it is likely that the
      management of the target business at the time of the business combination will
      remain in place. Moreover, our key personnel will be able to remain with the
      company after the consummation of a business combination only 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 the company after the consummation of the business
      combination. As a result, while the personal and financial interests of such
      individuals may 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 main 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 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 which may adversely affect our operations.




17




***Our
      officers, directors and special advisors will allocate their time to other
      businesses thereby causing conflicts of interest in their determination as
      to
      how much time to devote to our affairs. This could have a negative impact on
      our
      ability to consummate a business combination.***




Our
      officers, directors and special advisors 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 have a negative impact on our ability
      to
      consummate a business combination.




***Our
      officers, directors and their affiliates are, and 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.***




None
      of
      our officers, directors or their affiliates has been, or currently is,
      associated with a “blank check company.” However, each of our officers and
      directors is currently affiliated with FCF, one of our initial stockholders.
      FCF
      is the general partner of three partnerships that invest in growth equity
      opportunities in Israeli-related technology companies. While it is possible
      that
      FCF and its partnerships could be examining the same type of target businesses
      that we intend to target, FCF and each of our officers and directors have agreed
      that they will present all suitable business opportunities to us prior to
      presenting them to another entity. Accordingly, we believe all potential
      conflicts of interest between us and FCF would be resolved in our favor,
      although we cannot assure you that this will be the case. Furthermore, our
      officers, directors and their affiliates may in the future become affiliated
      with additional entities, including other “blank check” companies or private
      equity firms that are engaged in business activities similar to those intended
      to be conducted by us. Accordingly, they may have 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. As a result, a potential target business may be presented to another
      entity prior to its presentation to us, potentially depriving us of an
      attractive business combination.




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




We
      currently have no plans to combine with an entity affiliated with one or more
      of
      our initial stockholders and our management is not aware of any potential
      business combination opportunity with any such affiliated entities. Our officers
      and directors, and Fortissimo Capital Fund, one of our initial stockholders,
      are
      currently affiliated only with the following companies: Telrad Networks Ltd.
      (“Telrad”), Nur Macroprinters Ltd., RadView Software Ltd; Crow Technologies 1977
      Ltd., and Soda-Club Enterprises N.V.. Furthermore, Yair Seroussi, one of our
      special advisors, is affiliated with DSP Group, Inc., Israel Corp., Aspen Real
      Estate, Frutarom Industries and Eyal Microwave; and Michael Chill, our other
      special advisor, is affiliated with Paramount BioCapital, Inc., Ulticom Inc.
      and
      BluePhoenix Solutions Ltd. Neither we nor any of our initial stockholders
      currently intends to make any of these affiliated companies a target acquisition
      candidate for us.




If,
      however, it is later determined that this is in the best interest of our
      stockholders, we may propose to acquire one or more of the companies affiliated
      with Fortissimo Capital Fund in a “business combination.” In particular, there
      is nothing in our Amended and Restated Certificate of Incorporation or any
      contractual arrangements to which we are a party which would prohibit us from
      doing so. If we were to determine to acquire an affiliated company, we would
      do
      so only after at least 12 months have elapsed following the closing of our
      initial public offering.




18




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




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




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




***All
      of our officers and directors are beneficial owners of shares of our common
      stock which will not participate in liquidation distributions and therefore
      they
      may have a conflict of interest in determining whether a particular target
      business is appropriate for a business combination.***




All
      of
      our officers and directors are beneficial owners of our common stock through
      their partnership interest in FCF, one of our initial stockholders. FCF also
      invested $2,000,004 to acquire the Insider Units. FCF has waived its right
      to
      receive distributions with respect to its initial shares and the shares included
      within the Insider Units upon our liquidation if we are unable to consummate
      a
      business combination. The shares acquired prior to our initial public offering
      and the shares included in the Insider Units, as well as any warrants included
      in the Insider Units 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 timely. 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.




***The
      requirement that we complete a business combination by October 11, 2008 may
      give
      potential target businesses leverage over us in negotiating a business
      combination.***




We
      will
      dissolve and promptly distribute only to our public stockholders the amount
      in
      our trust fund (subject to our obligations under Delaware law for claims of
      creditors) plus any remaining net assets if we do not effect a business
      combination by October 11, 2008. Any potential target business with which we
      enter into negotiations concerning a business combination will be aware of
      this
      requirement. Consequently, such target businesses may obtain leverage over
      us in
      negotiating a business combination, knowing that if we do not complete a
      business combination with that particular target business, we may be unable
      to
      complete a business combination with any target business. This risk will
      increase as we get closer to October 11, 2008.




***The
      requirement that we complete a business combination by October 11, 2008 may
      motivate our directors to approve a business combination during that time period
      so that they may get their out-of-pocket expenses
      reimbursed.***




Each
      of
      our executive officers 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. The funds for such reimbursement will be provided from the money
      not held in trust. In the event that we do not effect a business combination
      by
      October 11, 2008, then any expenses incurred by such individuals in excess
      of
      the money being held outside of the trust will not be repaid as we will
      liquidate at such time. On the other hand, if we complete a business combination
      within such time period, those expenses will be repaid by the target business.
      Consequently, our executive officers, who are also our directors, may have
      an
      incentive to complete a business combination other than just what is in the
      best
      interest of our stockholders.




19




***The
      criteria used by our officers and directors in evaluating target companies
      could
      be different from those of public stockholders in ways that do not benefit
      such
      public stockholders due to a number of factors including risk preference and
      diversification.***




Each
      of
      our officers and directors is currently affiliated with FCF, one of our initial
      stockholders. FCF is the general partner of three partnerships that invest
      in
      growth equity opportunities in Israeli-related technology companies. FCF’s
      current investment portfolio has, and will most likely in the future have,
      investments in different companies. On the other hand, it is likely that we
      will
      only acquire one company. Because FCF’s total return on investment will only be
      in part due to its return on its investment in us, it may be willing to take
      on
      more or less risk than
      our
      public stockholders, depending on the volatility of the other companies in
      which
      it has invested. In addition, when evaluating potential target companies, FCF
      may consider how the potential target can or cannot help to diversify the risk
      of its then investment portfolio. Such consideration, if given by our officers
      and directors, would not be for the benefit of our public
      stockholders.




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




If
      at any
      time we have net tangible assets of $5,000,000 or less and our common stock
      has
      a market price per share of less than $5.00, transactions in our common stock
      may be subject to the “penny stock” rules promulgated under the Securities
      Exchange Act of 1934. Under these rules, broker-dealers who recommend such
      securities to persons other than institutional accredited investors
      must:




·
            make
                a special written suitability determination for the
                purchaser;




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




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




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




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




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




Substantially
      all of the net proceeds from our initial public offering, together with all
      of
      the proceeds from the sale of the Insider Units, provided us with only
      approximately $26,000,000 which we may use to complete a business combination.
      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, it is probable that we will have the ability to
      complete a business combination with only a single operating business.
      Accordingly, the prospects for our success may be:




·
            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.




In
      this
      case, we will not be able to diversify our operations or benefit from the
      possible spreading of risks or offsetting of losses, unlike other entities
      which
      may have the resources to complete several business combinations in different
      industries or different areas of a single industry.




20




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




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




***We
      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
      our
      initial public 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 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 have a material
      adverse effect on 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.




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




Our
      initial stockholders collectively own 22.7% of our issued and outstanding shares
      of common stock. Our board of directors is divided into three classes, each
      of
      which will generally serve for a term of three years with only one class of
      directors being elected in each year. It is unlikely that there will be an
      annual meeting of stockholders to elect new directors prior to the consummation
      of a business combination, in which case all of the current directors will
      continue in office at least until the consummation of the business combination.
      If there is an annual meeting, as a consequence of our “staggered” board of
      directors, only a minority of the board of directors will be considered for
      election and our initial stockholders, because of their ownership position,
      will
      have considerable influence regarding the outcome. Accordingly, our initial
      stockholders will continue to exert control at least until the consummation
      of a
      business combination. In addition, our initial stockholders and their affiliates
      and relatives are not prohibited from purchasing units or shares in the public
      market. If they do, we cannot assure you that our initial stockholders will
      not
      have considerable influence upon the vote in connection with a business
      combination.




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




In
      connection with our initial public offering, as part of the units, we issued
      warrants to purchase 8,000,000 shares of common stock as part of the units
      offering and warrants to purchase 666,668 shares of common stock included in
      the
      Insider Units. In addition, EarlyBirdCapital exercised an over allotment option
      to purchase 535,000 units ,
      which,
      resulted in the issuance of an additional 1,070,000 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.




21




***If
      our initial stockholders exercise their registration rights, and/or if
      EarlyBirdCapital elects to exercise its purchase option, 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 stockholders are entitled to demand that we register the resale of
      their
      shares of common stock at any time after the date on which their shares are
      released from escrow. If our initial stockholders exercise their registration
      rights with respect to all of their shares of common stock, then there will
      be
      an additional 1,000,000 shares of common stock eligible for trading in the
      public market. In addition, we sold to EarlyBirdCapital an option to purchase
      up
      to a total of 400,000 units identical to those units offered in our initial
      public offering. If this purchase option is exercised, and all of the underlying
      warrants are also exercised, there will be an additional 1,200,000 shares of
      our
      common stock eligible for trading in the public market. The presence of these
      additional shares of common stock eligible for trading in the public market
      may
      have an adverse effect on the market price of our common stock. In addition,
      the
      existence of these rights may make it more difficult to effectuate a business
      combination or increase the cost of acquiring the target business, as the
      stockholders of the target business may be discouraged from entering into a
      business combination with us or will request a higher price for their securities
      as a result of these registration rights and the potential future effect their
      exercise may have on the trading market for our common stock.




***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
      on
      The Nasdaq Stock Market. Quotation of our securities on the OTC Bulletin Board
      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.




***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.***




A
      company
      that, among other things, is or holds itself out as being engaged primarily,
      or
      proposes to engage primarily, in the business of investing, reinvesting, owning,
      trading or holding certain types of securities would be deemed an investment
      company under the Investment Company Act of 1940. Since we will invest the
      proceeds held in the trust fund, it is possible that we could be deemed an
      investment company. Notwithstanding the foregoing, we do not believe that our
      anticipated principal activities will subject us to the Investment Company
      Act
      of 1940. To this end, the proceeds held in trust may be invested by the trust
      agent only in United States “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. By restricting the investment of the proceeds 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.




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




·
            restrictions
                on the nature of our investments;
                and




22




·
            restrictions
                on the 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, compliance policies and procedures
                and
                disclosure requirements and other rules and
                regulations.




If
      we
      were deemed to be subject to the Investment Company Act of 1940, compliance
      with
      these additional regulatory burdens would require additional expense for which
      we have not allotted.




***Our
      directors may not be considered “independent” under the policies of the North
      American Securities Administrators Association, Inc. If such an event were
      to
      occur, it is possible that state securities administrators may restrict the
      ability of investors in certain states to invest in our common
      stock.***




Although
      each of our directors beneficially owns shares of our common stock, no salary
      or
      other compensation will be paid to our directors for services rendered by them
      on our behalf prior to or in connection with a business combination.
      Accordingly, we believe our non-executive directors would be considered
“independent” as that term is commonly used. Such exchanges define “independent”
as a person, other than an officer or employee of the company or any parent
      or
      subsidiary, having no relationship which would interfere with the exercise
      of
      independent judgment in carrying out the responsibilities of a director. Equity
      ownership of non-executive directors is not relevant to the definition of
      independence. However, under the policies of the North American Securities
      Administrators Association, Inc., an international organization devoted to
      investor protection, because each of our directors beneficially owns shares
      of
      our securities and may receive reimbursement for out-of-pocket expenses incurred
      by them in connection with activities on our behalf such as identifying
      potential target businesses and performing due diligence on suitable business
      combinations, state securities administrators could take the position that
      all
      of such individuals are not “independent.” If this were the case, they would
      take the position that we would not have the benefit of any 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
      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 the price of our securities.




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




In
      accordance with requirements of United States federal securities laws, in order
      to seek stockholder approval of a business combination, a proposed target
      business will be required to have certain financial statements which are
      prepared in accordance with, or which can be reconciled to, United States
      generally accepted accounting principles and audited in accordance with United
      States generally accepted auditing standards. To the extent that a prospective
      target business does not have financial statements which have been prepared
      with, or which can be reconciled to, United States generally accepted accounting
      standards, and audited in accordance with United States generally accepted
      auditing standards, we will not be able to acquire such target business. These
      financial statement requirements may limit the pool of potential target
      businesses which we may acquire.




23




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




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




**Risks
      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:*




***Because
      our directors and officers reside outside of the United States, it may be
      difficult for investors to enforce their legal rights against such
      individuals.***




Each
      of
      our directors and officers resides outside of the United States, and although
      our directors have agreed that they will be jointly and severally liable to
      ensure that the proceeds in the trust account are not reduced by the claims
      of
      target businesses or vendors or other entities that are owed money by us for
      services rendered or contracted for or products sold to us if we were to
      liquidate before the completion of a business combination and distribute the
      proceeds held in trust to our public stockholders, we cannot assure you that
      they will be able to satisfy those obligations. 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.




***After
      the consummation of a business combination, it is likely that substantially
      all
      of our assets will be located outside of the United States, and therefore may
      be
      difficult for investors to enforce their legal rights against
      us.***




After
      the
      consummation of a business combination, it is likely that substantially all
      of
      our assets will be located outside of the United States. It may not be possible
      for investors in the United States to effect service of process upon us, or
      to
      enforce their legal rights against us. It is also possible that some of our
      assets may be in jurisdictions that do not have treaties providing for the
      reciprocal recognition and enforcement of judgments of courts with the United
      States, and therefore even if investors were able to get a judgment against
      us
      in a U.S. court, they may not be able to get such a judgment
      enforced.




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




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




24




***If
      relations between the United States and Israel deteriorate, it 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,
      it could adversely affect our operations or cause potential target businesses
      or
      their goods or services to become less attractive.




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




Generally,
      all nonexempt male adult citizens and permanent residents of Israel, including
      some of our officers and directors, are obligated to perform military reserve
      duty annually, and are subject to being called to active duty at any time under
      emergency circumstances. Executive officers or key employees of a target
      business may also reside in Israel and be required to perform similar annual
      military reserve duty. 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 adversely affect our operations
      and
      profitability.




***Because
      a substantial portion of many Israeli companies’ revenues is generated in
      dollars and euros, while a significant portion of their expenses is incurred
      in
      Israeli currency, 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, it would therefore have an
      adverse effect on our dollar-measured results of operations following a business
      combination.




***Exchange
      controls may restrict our ability to utilize our cash
      flow.***




If
      we
      acquire a company in Israel, we may be subject to existing or future rules
      and
      regulations on currency conversion. In 1998, the Israeli currency control
      regulations were liberalized significantly, and there are currently no currency
      controls in place (although there still are reporting requirements for foreign
      currency transactions). However, legislation remains in effect pursuant to
      which
      such currency controls could be imposed in Israel by administrative action
      at
      any time. We cannot assure you that such controls will not be reinstated, and
      if
      reinstated, would not have an adverse effect on our operations.




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




The
      Israeli government currently provides tax and capital investment incentives
      to
      qualified domestic companies. 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. If such benefits and programs were terminated or
      further reduced, it could have an adverse effect on our results of operations
      following a business combination or make a specific business combination less
      attractive.




25




***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 limit or 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.




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




Under
      the
      Israeli Companies Law, a merger is generally required to be approved by the
      shareholders and board of directors of each of the merging companies (however,
      shareholder approval isn’t required if the company that will not survive is
      controlled by the surviving company and the law provides some exceptions to
      the
      shareholder approval requirement in the surviving company). Shares held by
      a
      party to the merger and certain of its affiliates are not counted toward the
      required approval. If the share capital of the company that will not be the
      surviving company is divided into different classes of shares, the approval
      of
      each class is also required. A merger may not be approved if the surviving
      company will not be able to satisfy its obligations. At the request of a
      creditor, a court may block a merger on this ground. In addition, a merger
      can
      be completed only after all approvals have been submitted to the Israeli
      Registrar of Companies, provided that 30 days have elapsed since shareholder
      approval was received and 50 days have passed from the time that a proposal
      for
      approval of the merger was filed with the Registrar.




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




The
      Israeli Companies Law also provides specific rules and procedures for the
      acquisition of shares held by minority shareholders, if the majority shareholder
      shall hold more than 90% of the outstanding shares.




26




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




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




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




**Risks
      Relating to Enforcement of Legal Process**




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




We
      have
      appointed Corporation Service Company as our agent to receive service of process
      in any action against us in the United States. Each of our directors and
      officers reside outside the United States. Each of our officers or directors
      has
      consented to service of process in the State of New York and to the jurisdiction
      of the courts of the State of New York or of the United States of America for
      the Southern District of New York. However, since most of our and such persons’
assets are outside the United States, any judgment obtained in the United States
      against us or such persons may not be collectible within the United
      States.




Furthermore,
      there is substantial doubt as to the enforceability of civil liabilities under
      the Securities Act or the Exchange Act in original actions instituted in Israel,
      and the enforceability of a judgment obtained in the United States against
      us or
      our officers and directors may be difficult.




Our
      directors have agreed, pursuant to agreements with us and EarlyBirdCapital,
      that, if we liquidate prior to the consummation of a business combination,
      they
      will be jointly and severally liable to pay debts and obligations to target
      businesses or vendors or other entities that are owed money by us for services
      rendered or contracted for, or for products sold to us, in excess of the net
      proceeds of our initial public offering not held in the trust account. We cannot
      assure you, however, that they would be able to satisfy those
      obligations.




27





**ITEM
      2. DESCRIPTION OF PROPERTY**




We
      maintain our executive offices at 14 Hamelacha Street, Park Afek, Rosh Ha’ayin
      48091, Israel. The cost for this space is included in the $7,500 per-month
      fee
      FCM charges us for general and administrative services. FCM provides management
      services to and is affiliated with FCF. This arrangement is solely for our
      benefit and is not intended to provide FCF or our officers or directors
      compensation in lieu of salary. We believe, based on rents and fees for similar
      services in Israel, that the fee charged by FCM 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**




None.




**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**




None.




**PART
      II**




**ITEM
      5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS**




**Market
      Information**




Our
        units, common stock and warrants are traded on the Over-the-Counter Bulletin
        Board under the symbols FSMOU, FSMO and FSMOW, respectively. The following
        table
        sets forth the range of high and low closing bid prices for the units, common
        stock and warrants for the periods indicated since the units commenced public
        trading on October 12, 2006 and since the common stock and warrants commenced
        public trading on November 21, 2006. The over-the-counter market quotations
        reflect inter-dealer prices, without retail mark-up, mark-down or commission
        and
        may not necessarily reflect actual transactions.







Units
            
            Common
                Stock
            
            WarrantsHigh
            
            Low
            
            High
            
            Low
            
            High
            
            Low2006:Fourth
                Quarter*
            
            $
            6.23
            
            $
            5.84
            
            $
            5.40
            
            $
            5.25
            
            $
            0.41
            
            $
            0.30





*From
      October 12, 2006





**Holders**




As
      of
      March 27, 2007, there were 70 holders of record of our units, 63 holders of
      record of our common stock and 78 holders of record of our warrants.




**Dividends**




We
      have
      not paid any cash dividends on our common stock to date and do not intend to
      pay
      cash dividends prior to the completion of a business combination. The payment
      of
      cash 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.




28





**Securities
      Authorized for Issuance Under Equity Compensation Plans.**




None




**Recent
      Sales of Unregistered Securities**




In
      December 2005, we issued an aggregate of 1,000,000 shares of our common stock
      at
      a purchase price of $0.025 per share, for an aggregate of $25,000 in cash.
      These
      shares were issued as follows: 950,000 to FCF and 50,000 shares to Michael
      Chill, one of our Special Advisors. In January 2006, FCF transferred 50,000
      of
      its shares to Yair Seroussi, one of our Special Advisors. Such shares were
      issued in connection with our organization pursuant to the exemption from
      registration contained in Section 4(2) of the Securities Act.




The
      ownership of our common stock prior to the completion of our initial public
      offering is as set forth in the following table:




**Name**
            
            **Number of Shares**
            
            **Relationship
                to Us**Fortissimo
                Capital Fund GP, L.P.(1)
            
            
            900,000
            
            
            Initial
                StockholderYair
                Seroussi
            
            
            50,000
            
            
            Special
                AdvisorMichael
                Chill
            
            
            50,000
            
            
            Special
                Advisor







(1)
            Each
                of our officers and directors is a partner of FCF and as such indirectly
                are beneficial holders of our common stock held by FCF. Such officers
                and
                directors disclaim beneficial ownership of the shares held by FCF,
                except
                to the extent of their pecuniary interest therein. FCF holds its
                shares on
                behalf of Fortissimo, the three parallel partnerships in which it
                serves
                as the General Partner.




Use
        of
        Proceeds from Registered Securities.





On
      October 17, 2006, we consummated our initial public offering of 4,000,000 Units,
      with each unit consisting of one share of our common stock and two warrants,
      each to purchase one share of our common stock at an exercise price of $5.00
      per
      share. On October 25, 2006, we consummated the closing of an additional 535,000
      units that were subject to the over-allotment option. The units were sold at
      an
      offering price of $6.00 per unit, generating total gross proceeds of $27,210,000
      (not including $2,000,004 from the sale of the Insider Units). EarlyBirdCapital,
      Inc. acted as the underwriter. The securities sold in our initial public
      offering were registered under the Securities Act of 1933 on a registration
      statement on Form S-1 (No. 333-131417). The Securities and Exchange Commission
      declared the registration statement effective on October 11, 2006.





We
      paid
      approximately $1,742,350 in underwriting discounts and commissions (not
      including $352,350 which was deferred by the Underwriter until completion of
      a
      Business Combination), and approximately $481,718 was paid for costs and
      expenses related to our initial public offering.





After
      deducting the underwriting discounts and commissions and the offering expenses,
      the total net proceeds to us from our initial public offering were approximately
      $26,633,686, of which a total of $26,257,650 was deposited into the trust
      account (or approximately $5.79 per share sold in the offering, including the
      over-allotment option) and the remaining proceeds are available to be used
      to
      provide for business, legal and accounting due diligence on prospective business
      combinations and continuing general and administrative expenses. The net
      proceeds deposited into the trust fund remain on deposit in the trust fund
      and
      have earned $279,684 in interest through December 31, 2006.





**Repurchases
      of Equity Securities** .




None.




29





**ITEM
      6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**




We
      were
      incorporated on December 27, 2005 as a blank check company whose objective
      is to
      acquire an operating business that has manufacturing operations or research
      and
      development facilities located in Israel, or that is a company operating outside
      Israel which management believes would benefit from establishing operations
      or
      facilities in Israel. We intend to utilize cash derived from the proceeds of
      our
      recently completed public offering, our capital stock, debt or a combination
      of
      cash, capital stock and debt, in effecting a business combination.




We
      consummated our initial public offering on October 17, 2006. All activity from
      December 27, 2005 through October 17, 2006 related to our formation and our
      initial public offering. Since October 17, 2006, we have been searching for
      prospective target businesses to acquire.




Net
      income of $89,329 for the fiscal year ended December 31, 2006 consisted of
      net
      financial income of $223,775 offset by $89,973 of general and administrative
      expenses and a tax provision of $44,473.




$26,257,650
      of the net proceeds of our initial public offering ($26,537,334 including
      interest) are in trust, with the remaining net proceeds of $728,386 to pay
      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 our initial public offering not held in trust to identify
      and evaluate prospective acquisition candidates, select the target business,
      and
      structure, negotiate and consummate the business combination. We intend to
      utilize our cash, including the funds held in the trust fund, capital stock,
      debt or a combination of the foregoing to effect a business combination. To
      the
      extent that our capital stock or debt securities are 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 available cash will be used to finance the operations
      of the target business. At December 31, 2006, we had cash outside of the trust
      fund of $692,100 and total liabilities of $193,177 (not including $352,350
      deferred underwriting fees), and working capital, excluding amounts held in
      trust, of $560,031. We believe that we have sufficient available funds outside
      of the trust fund to operate through October 11, 2008, assuming that a business
      combination is not consummated during that time. 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.




Commencing
      on October 11, 2006 and ending upon the acquisition of a target business, we
      began incurring a fee from Fortissimo Capital Management Ltd (“FCM”), an
      affiliate of FCF, of $7,500 per month for providing us with office space and
      certain general and administrative services. In addition, in December 2005
      and
      in January 2006, FCF advanced an aggregate of $115,000 to us for payment on
      our
      behalf of offering expenses. These loans were repaid following our initial
      public offering from the proceeds of the offering.




In
      connection with our initial public offering, we issued an option, for $100,
      to
      EarlyBirdCapital to purchase 400,000 units at an exercise price of $7.50 per
      unit, with each unit consisting of one share of common stock and two warrants.
      The warrants underlying such units are exercisable at $6.25 per share. We
      accounted for the fair value of the Underwriter’s option, inclusive of the
      receipt of the $100 cash payment, as an expense of the public offering resulting
      in a charge directly to stockholders’ equity. The Company estimates that the
      fair value of the Underwriter’s Option is approximately $1,485,882 ($3.71 per
      Unit) using a Black-Scholes option-pricing model. The fair value of the
      Underwriter’s Option is estimated as of the date of grant using the following
      assumptions: (1) expected volatility of 77.9%, (2) risk-free interest rate
      of 4.77% and (3) expected life of 5 years. The expected volatility in the
      preceding sentence was calculated as an average of the volatilities of
      publicly-traded companies in the United States, with a market capitalization
      between $20 million and $200 million, which are Israeli or Israeli-related.
      In
      calculating volatility for the representative companies, we used daily
      historical volatilities for the period of time equal to the term of the option
      (5 years). The Underwriter’s Option 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 option (the difference between the exercise prices of the option
      and the underlying Warrants and the market price of the Units and underlying
      securities) to exercise the option without the payment of any cash. The Warrants
      underlying such Units will be exercisable at $5.00 per share. The Company will
      have no obligation to net cash settle the exercise of the Underwriter’s Option
      or the Warrants underlying the Underwriter’s Option. The holder of the
      Underwriter’s Option will not be entitled to exercise the Underwriter’s Option
      or the Warrants underlying the Underwriter’s Option unless a registration
      statement covering the securities underlying the Underwriter’s Option is
      effective or an exemption from registration is available. If the holder is
      unable to exercise the Underwriter’s Option or underlying Warrants, the
      Underwriter’s Option or Warrants, as applicable, will expire
      worthless.




30




In
        2005,
        the Company had only one expense, relating to the formation of the Company
        in
        the amount of $3,000.




**ITEM
      7. FINANCIAL STATEMENTS**





This
      information appears following Item 14 of this Report and is incorporated herein
      by reference.




**ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE.**




None.




**ITEM
      8A. CONTROL AND PROCEDURES**




Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed in company reports filed or
      submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is
      recorded, processed, summarized and reported, within the time periods specified
      in the Securities and Exchange Commission’s rules and forms. Disclosure controls
      and procedures include, without limitation, controls and procedures designed
      to
      ensure that information required to be disclosed in company reports filed or
      submitted under the Exchange Act is accumulated and communicated to management,
      including our chief executive officer and treasurer, as appropriate to allow
      timely decisions regarding required disclosure.





As
      required by Rules 13a-15 and 15d-15 under the Exchange Act, our chief
      executive officer and chief financial officer carried out an evaluation of
      the
      effectiveness of the design and operation of our disclosure controls and
      procedures as of December 31, 2006. Based upon their evaluation, they concluded
      that our disclosure controls and procedures were effective.





Our
      internal control over financial reporting is a process designed by, or under
      the
      supervision of, our chief executive officer and chief financial officer and
      effected by our board of directors, management and other personnel, to provide
      reasonable assurance regarding the reliability of our financial reporting and
      the preparation of our financial statements for external purposes in accordance
      with generally accepted accounting principles. Internal control over financial
      reporting includes policies and procedures that pertain to the maintenance
      of
      records that in reasonable detail accurately and fairly reflect the transactions
      and dispositions of our assets; provide reasonable assurance that transactions
      are recorded as necessary to permit preparation of our financial statements
      in
      accordance with generally accepted accounting principles, and that our receipts
      and expenditures are being made only in accordance with the authorization of
      our
      board of directors and management; and provide reasonable assurance regarding
      prevention or timely detection of unauthorized acquisition, use or disposition
      of our assets that could have a material effect on our financial
      statements.




During
      the most recently completed fiscal quarter, there has been no change in our
      internal control over financial reporting that has materially affected, or
      is
      reasonably likely to materially affect, our internal control over financial
      reporting.




**ITEM
      8B. OTHER INFORMATION**





None.




31




**PART
      III**





**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
      WITH
      SECTION 16(a) OF THE EXCHANGE ACT.**





**Directors
      and Executive Officers**




Our
      current directors and executive officers are as follows:




**Name**
            ****
            **Age**
            ****
            **Position**Yuval
                Cohen
            
            44
            
            Chairman
                of the Board and Chief Executive OfficerEli
                Blatt
            
            44
            
            Chief
                Financial Officer, Secretary and DirectorMarc
                Lesnick
            
            40
            
            Vice
                President, Assistant Secretary and DirectorShmoulik
                Barashi
            
            44
            
            Vice
                President and DirectorYochai
                Hacohen
            
            41
            
            Vice
                President and Director




*Yuval
      Cohen* **** has
      served as our Chairman of the Board and Chief Executive Officer since our
      formation. Mr. Cohen is the Founding and Managing Partner of FCF, which was
      established in January 2003. From February 2002 through January 2003,
      Mr. Cohen worked on the formation of Fortissimo and served on the boards of
      directors of several technology companies in Israel. From September 1997 through
      February 2002, Mr. Cohen was a General Partner at Jerusalem Venture
      Partners (JVP), an international venture capital firm with over $650 million
      under management. As a General Partner of JVP, Mr. Cohen co-led fundraising
      efforts, and was involved in all investment decisions and the management of
      various JVP portfolio companies. Mr. Cohen led the investment and served on
      the board of several JVP portfolio companies, including the following: Precise
      Software Solutions, Inc. (Nasdaq: PRSE, later sold to Veritas - Nasdaq:VRTS),
      T.sqware, Inc. (sold to Globespan, Inc., Nasdaq: GSPN), PowerDsine Ltd. (Nasdaq:
      PDSN), Sheer Networks (sold to Cisco-Nasdaq: CSCO), Sphera Corporation and
      Celltick Technologies. From June 1996 through August 1997, Mr. Cohen was
      the Vice President of Marketing at VDOnet Corporation, a provider of software
      solutions for video over the Internet. From May 1995 through June 1996,
      Mr. Cohen served as the Vice President of Business Development at DSP
      Group, Inc. (Nasdaq: DSPG), a provider of DSP software and hardware solutions
      for communications and computer markets. From December 1991 through May 1995,
      Mr. Cohen served as the Manager of Business Development at Intel Capital at
      Intel Corporation (Nasdaq: INTC). Mr. Cohen is the Chairman of the board of
      directors of Telrad Networks Ltd. (“Telrad”), a telecommunication equipment
      provider, and NUR Macroprinters Ltd. (“NUR”; Nasdaq: NURM.PK), a developer,
      manufacturer and marketer of wide-format inkjet printers, presses and related
      ink products, both of which are portfolio companies of Fortissimo.
      Mr. Cohen also serves on the board of directors of Hadasit Bio-Holdings
      Ltd., a holding company of medical and biotech startup companies controlled
      by
      Hadassah Hospital in Israel and publicly traded on the Tel Aviv Stock Exchange.
      Mr. Cohen received an MBA from the Harvard Business School and a B.Sc. in
      Industrial Engineering from Tel Aviv University.




*Eli
      Blatt* **** has
      served as our chief financial officer and secretary and a member of our board
      of
      directors since our formation. Mr. Blatt joined FCF as a partner in January
      2005. Prior to joining FCF, from March 1999 through December 2004,
      Mr. Blatt was the Chief Financial Officer and Vice President operations of
      Noosh, Inc., a supplier of cross-enterprise e-business software solutions.
      At
      Noosh, Mr. Blatt was responsible for the general management of Noosh’s
      Finance and Operations activities including the company’s M&A strategy and
      initiatives. From September 1997 through February 1999, Mr. Blatt was the
      Director of Operations at CheckPoint Software Technologies Inc., an Internet
      security company, where he was responsible for OEM operations, product licensing
      and customer service. From February 1995 through August 1997, Mr. Blatt
      served as the Operations Controller at Madge Networks (sold to Lucent). From
      September 1993 through January 1995, Mr. Blatt held Finance and Operations
      positions at Intel Corporation. Mr. Blatt serves on the boards of directors
      of Telrad, NUR and RadView Software Ltd. (“RadView”; OTC BB:RDVWF), a provider
      of application testing software and services. Mr. Blatt received an MBA
      degree from Indiana University and a B.Sc. degree in Industrial Engineering
      from
      Tel Aviv University. Mr. Blatt also served as a fighter pilot in the
      Israeli air force.




32




*Marc
      Lesnick* **** has
      served as a Vice President and a member of our board since our formation, and
      as
      our Assistant Secretary since January 30, 2006. Mr. Lesnick joined FCF as a
      partner in May 2003. From October 2001 through May 2003, Mr. Lesnick served
      as an independent consultant to high tech companies and institutional investors.
      From September 1997 through June 1999, Mr. Lesnick served as the Managing
      Director at Jerusalem Global, a boutique investment bank that specialized in
      raising capital for Israeli based technology startup companies. Mr. Lesnick
      managed a team of 10 professionals and was instrumental in raising in excess
      of
      $250 million for 35 companies, several of which later went public or were
      acquired. Mr. Lesnick was also part of the founding team of Yazam.com,
      a spin off of Jerusalem Global where he served as the Executive Vice President
      from June 1999 through September 2001. Prior to moving to Israel and joining
      Jerusalem Global, Mr. Lesnick served as a senior corporate attorney at the
      New York offices of Weil, Gotshal & Manges from September 1992 through
      September 1997. Mr. Lesnick serves on the board of directors of Telrad.
      Mr. Lesnick received a JD from the University of Pennsylvania and a BA from
      Yeshiva University.




*Shmoulik
      Barashi* **** has
      served as a Vice President and a member of our board since our formation.
      Mr. Barashi joined FCF as a partner in May 2005. From January 2001 through
      May 2005, Mr. Barashi served as a senior partner in BDO Ziv Haft, one of
      the five largest accounting firms in Israel. Ziv Haft is the Israeli
      representative office of the international accounting firm of BDO. At BDO,
      Mr. Barashi specialized in corporate finance, IPO’s, deal structuring,
      business consultancy, auditing and tax. From March 1993 through December 2000,
      Mr. Barashi managed his own accounting firm, which he later merged into BDO
      Ziv Haft. Mr. Barashi serves on the board of directors of NUR.
      Mr. Barashi received an MBA from Hebrew University (specialty - finance)
      and an LLM from Bar Ilan University. Mr. Barashi is a certified public
      accountant in Israel.




*Yochai
      Hacohen* **** has
      served as a Vice President and a member of our board since our formation.
      Mr. Hacohen joined FCF as a partner in May 2004. From May 2003 through May
      2004, Mr. Hacohen was the General Manager of a U.S. division of Magal
      Security Systems Ltd. (Nasdaq: MAGS), a provider of hardware and software
      solutions for the security market. Mr. Hacohen opened the U.S. office on
      behalf of Magal. From October 1998 through September 2002, Mr. Hacohen
      served as the Director of European sales and Marketing at Nice Systems Ltd.
      (Nasdaq: NICE) Video division, a provider of digital video and audio recording
      solutions. From August 1995 through October 1998, Mr. Hacohen served as a
      project manger at Dover Medical, a medical technology company. Mr. Hacohen
      serves on the board of directors of RadView. Mr. Hacohen has been serving as
      the
      acting chief executive officer of RadView since June 2006. Mr. Hacohen
      received an MBA in marketing and a B.Sc. in Biotechnology from Tel Aviv
      University. Mr. Hacohen also served in an elite intelligence unit in the
      Israeli defense forces.




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 Mr. Hacohen, will
      expire at our first annual meeting of stockholders. The term of office of the
      second class of directors, consisting of Messrs. Barashi and Lesnick, will
      expire at the second annual meeting. The term of office of the third class
      of
      directors, consisting of Messrs. Blatt and Cohen, will expire at the third
      annual meeting.




***Special
      Advisors***




We
      also
      may consult from time-to-time with certain individuals who have demonstrated
      experience in the financial and technology-related sectors, who we call our
      special advisors. Our special advisors have no formal rights or duties as such,
      are not considered consultants or members of our management and therefore owe
      no
      fiduciary duties to us or our stockholders. We consider all special advisors
      to
      have equal stature and we expect them to act as an informal advisory panel
      for
      us. We expect to look to our special advisors primarily for assistance with
      locating and evaluating prospective target businesses.




We
      have
      initially identified the following individuals as our special
      advisors:




*Yair
      Seroussi* **** is
      currently the Managing Director of Amdeal Holdings Ltd., an entity acting as
      the
      advisory director of Morgan Stanley in charge of its activities in Israel,
      a
      position he has held since 1993. Mr. Seroussi serves as a director of the
      following companies: DSP Group, Inc., a fabless semiconductor company traded
      on
      Nasdaq; Israel Corp., an Israeli holding company traded on the The Tel Aviv
      Stock Exchange; Aspen Real Estate, a real estate company traded on the The
      Tel
      Aviv Stock Exchange; and Frutarom Industries, a multinational flavor and
      fragrance company traded on the London and Tel Aviv stock exchange. Since 2002,
      Mr. Seroussi also has served as Chairman of Eyal Microwave, a
      privately-held designer and manufacturer of microwave applications.
      Mr. Seroussi is also Chairman of the Investment Committee of Mivtachim
      Pension & Provident fund (Israel’s largest pension fund) and serves on the
      Board of Governors of the Hebrew University. During the 1980’s and up until
      1992, Mr. Seroussi served in senior positions in the Israeli Ministry of
      Finance. During the 1980’s, he served as a member of Israel’s Office of the
      Chief Scientist and the Investment Center of the Ministry of Industry, Trade
      and
      Labor. Mr. Seroussi received a BA in Economics and Political Science from
      Hebrew University.




33




*Michael
      Chill* **** is
      currently the Head of Direct Investments at Paramount BioCapital, Inc. and
      has
      been in that position since July 2005. Mr. Chill’s focus has been on
      emerging growth companies within the high tech sector. From July 2003 to April
      2005, Mr. Chill served as a Portfolio Analyst for Vertical Ventures (now
      Iroquois Capital), a New York based investment firm specializing in structured
      direct investments in public companies. From May 2001 to July 2003,
      Mr. Chill acted as an independent consultant for high tech companies,
      venture capital firms and hedge funds. From February 2000 to April 2001,
      Mr. Chill served as the Chief Executive Officer and Managing Director of
      the Investment Banking Group of Jerusalem Global, an investment banking and
      venture capital firm. From March 1998 to February 2000, Mr. Chill was a
      Managing Director of the Technology Investment Banking Group of Gruntal &
Company. From 1995 to 1998, Mr. Chill was a Vice President of Investment
      Banking for Hampshire Securities, a company subsequently acquired by Gruntal
      & Company. Mr. Chill serves on the board of directors of Ulticom Inc.,
      a Nasdaq National Market listed provider of service enabling signaling software
      for fixed, mobile, and Internet communications, and BluePhoenix Solutions Ltd.,
      a Nasdaq National Market listed developer and marketer of IT products and
      solutions. Mr. Chill received a B.S. in Accounting from Yeshiva University
      and an M.B.A. in Finance and Management from Columbia Business
      School.




We
      may
      identify, from time to time, additional individuals to serve as special advisors
      if those individuals possess a level of experience within the sectors that
      we
      believe may be beneficial to us. We will not compensate individuals for service
      as special advisors, other than providing reimbursement 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.





**Section
      16(a) Beneficial Ownership Reporting Compliance**




Section
        16(a) of the Securities Exchange Act of 1934 requires our officers, directors
        and persons who own more than ten percent of a registered class of our equity
        securities to file reports of ownership and changes in ownership with the
        Securities and Exchange Commission. Officers, directors and ten percent
        stockholders are required by regulation to furnish us with copies of all
        Section
        16(a) forms they file. Based solely on copies of such forms received or written
        representations from certain reporting persons that no Form 5s were required
        for
        those persons, we believe that, during the fiscal year ended December 31,
        2006,
        all filing requirements applicable to our officers, directors and greater
        than
        ten percent beneficial owners were complied with.




The
        Company adopted a code of ethics that applies to our directors, officers
        and
        employees as well as those of our subsidiaries. The Company will provide
        a copy
        of its code of ethics to any person without charge upon request. Requests
        for
        copies of our code of ethics should be sent in writing to Fortissimo Acquisition
        Corp., 14 Hamelacha Street, Park Afek, Rosh Haayin Israel 48091, Attention:
        Corporate Secretary.




**ITEM
      10. EXECUTIVE COMPENSATION**




No
      executive officer has received any cash compensation for services rendered.
      Commencing on October 11. 2006 through the acquisition of a target business,
      we
      began paying FCM a fee of $7,500 per month for providing us with office space
      and certain office and secretarial services. However, this arrangement is solely
      for our benefit and is not intended to provide our officers compensation in
      lieu
      of a salary. Other than this $7,500 per-month administrative fee, no
      compensation of any kind, including finders, consulting or other similar fees,
      will be paid to any of our initial stockholders, our officers and 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, such
      individuals 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 our
      directors may not be deemed “independent,” we will generally not have the
      benefit of independent directors examining the propriety of expenses incurred
      on
      our behalf and subject to reimbursement.




34





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




**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**




The
      following table sets forth information regarding the beneficial ownership of
      our
      common stock as of March 27, 2007 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 and directors; 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.




**Shares
                  Beneficially Owned**Fortissimo
                  Capital Fund GP, L.P.(1)
              
              
              1,233,334
              
              
              21.0
              %Yuval
                  Cohen(1)
              
              
              1,233,334
              
              
              21.0
              %Eli
                  Blatt(1)
              
              
              1,233,334
              
              
              21.0
              %Marc
                  Lesnick(1)
              
              
              1,233,334
              
              
              21.0
              %Shmoulik
                  Barashi(1)
              
              
              1,233,334
              
              
              21.0
              %Yochai
                  Hacohen(1)
              
              
              1,233,334
              
              
              21.0
              %Michael
                  Chill
              
              
              50,000
              
              
              0.9
              %Yair
                  Seroussi
              
              
              50,000
              
              
              0.9
              %Hummingbird
                  Management LLC(2)
              
              
              460,000
              
              
              7.8
              %Sapling.
                  LLC(3)
              
              
              525,000
              
              
              8.9
              %Weiss
                  Asset Management LLC(4)
              
              
              592,500
              
              
              10.1
              %All
                  directors and executive officers as a group (5 individuals)(1)
              
              
              1,233,334
              
              
              21.0
              %




(1)
            Fortissimo
                Capital Fund GP, L.P. (“FCF”) is the General Partner of: (i) Fortissimo
                Capital Fund L.P.; (ii) Fortissimo Capital Fund (Israel) L.P. and
                (iii) Fortissimo Capital Fund (Israel - DP), L.P., three parallel
                partnerships that invest in Israeli-related technology growth companies.
                The general partner of FCF is Fortissimo Capital (GP) Management
                Ltd., a
                Cayman Island corporation (“FFC-GP”). The sole shareholder and director of
                FFC-GP is Yuval Cohen. FCF holds shares as nominee on behalf of each
                of
                these three partnerships. The pro rata allocation of the shares of
                our
                common stock owned by these three partnerships is 3.57%, 89.97% and
                6.46%,
                respectively. FCF has agreed not to transfer these shares (other
                than to
                the three parallel partnerships), and if transferred to them, the
                three
                parallel partnerships have agreed not to transfer the shares to anyone
                else until the earliest of (a) three years following the date of
                our
                initial public offering and (b) the consummation of a liquidation,
                merger,
                stock exchange or other similar transaction which results in all
                of our
                stockholders having the right to exchange their shares of common
                stock for
                cash, securities or other property subsequent to our consummating
                a
                business combination with a target business. Each of our officers
                and
                directors is a partner of FCF, and may therefore be deemed to be
                beneficial holders of the shares held by FCF. Such officers and directors
                disclaim beneficial ownership of the shares held by FCF, except to
                the
                extent of their pecuniary interest therein. The business address
                of FCF
                and each of the individuals listed in this table is c/o Fortissimo
                Acquisition Corp. is 14 Hamelacha Street, Park Afek, Rosh Ha’ayin 48091,
                Israel.




35




(2)
            Based
                on the Schedule 13D filed by Hummingbird Management, LLC (“Hummingbird”)
                with the Securities and Exchange Commission (the “SEC”) on October 26,
                2006. Hummingbird acts as investment manager to Hummingbird Value
                Fund,
                L.P. and to the Hummingbird Microcap Value Fund L.P. and has the
                sole
                investment discretion and voting authority with respect to the investments
                owned of record by each of those entities. The managing member of
                Hummingbird is Paul Sonkin. The principal business address of Hummingbird
                is 460 Park Avenue New York, New York 10022.




(3)
            Based
                on the amended Schedule 13G filed by Sapling, LLC and related entities
                with the SEC on February 14, 2007. The securities reported represent
                shares owned by Sapling, LLC and Fir Tree Recovery Master Fund, L.P.
                Fir
                Tree Value Master Fund, L.P., a Cayman Islands exempted limited
                partnership is the sole member of Sapling, and Fir Tree, Inc., a
                New York
                corporation, is the investment manager of both Sapling and Fir Tree
                Recovery. The business address of these entities is 535 Fifth Avenue,
                31st
                Floor, New York, New York 10017.




(4)
            Based
                on the amended Schedule 13G filed by Weiss Capital, LLC and related
                entities with the SEC on February 9, 2007. The securities reported
                represent shares owned by Weiss Capital LLC, Weiss Asset Management,
                LLC
                and Andrew Weiss, the managing member of both entities. The business
                address of each entity is 29 Commonwealth Avenue, Boston, Massachusetts
                02116.




All
      of
      the shares of Common Stock owned by our initial stockholders were placed in
      escrow with American Stock Transfer & Trust Company, as escrow agent, until
      the earliest of:




·
            three
                years following the date of our initial public offering;
                and




·
            the
                consummation of a liquidation, merger, stock exchange or other similar
                transaction which results in all of our stockholders having the right
                to
                exchange their shares of common stock for cash, securities or other
                property subsequent to our consummating a business combination with
                a
                target business.




During
      the escrow period, FCF will not be able to sell or transfer the securities
      it
      beneficially owns (other than to the three parallel partnerships), and if
      transferred to them, the three parallel partnerships have agreed not to sell
      or
      transfer the shares to anyone else. In addition, during the escrow period,
      the
      individual holders of the initial shares will not be able to sell or
      transfer their securities except to their spouses and children or trusts
      established for their benefit, but will retain all other rights as our
      stockholders, including, without limitation, the right to vote their shares
      of
      common stock and the right to receive cash dividends, if declared. If dividends
      are declared and payable in shares of common stock, such dividends will also
      be
      placed in escrow. If we are unable to effect a business combination and
      liquidate, none of our existing stockholders will receive any portion of the
      liquidation proceeds with respect to their initial shares.





**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**




In
      December 2005, we issued an aggregate of 1,000,000 shares of our common stock
      at
      a purchase price of $0.025 per share, for an aggregate of $25,000 in cash.
      These
      shares were issued as follows: 950,000 to FCF and 50,000 shares to Michael
      Chill, one of our Special Advisors. In January 2006, FCF transferred 50,000
      of
      its shares to Yair Seroussi, one of our Special Advisors.




36




The
      ownership of our common stock prior to the completion of our initial public
      offering is as set forth in the following table:




**Name**
            ****
            **Number of Shares**
            ****
            **Relationship
                to Us**Fortissimo
                Capital Fund GP, L.P.(1)
            
            900,000
            
            Initial
                StockholderYair
                Seroussi
            
            50,000
            
            Special
                AdvisorMichael
                Chill
            
            50,000
            
            Special
                Advisor





(1)
            Each
                of our officers and directors is a partner of FCF and as such indirectly
                are beneficial holders of our common stock held by FCF. Such officers
                and
                directors disclaim beneficial ownership of the shares held by FCF,
                except
                to the extent of their pecuniary interest therein. FCF holds its
                shares on
                behalf of Fortissimo, the three parallel partnerships in which it
                serves
                as the General Partner.




The
      holders of the majority of these shares will be entitled to make up to two
      demands that we register these shares pursuant to a registration rights
      agreement entered into between the company and these parties. The holders of
      the
      majority of these shares can elect to exercise these registration rights at
      any
      time after the date on which these shares of common stock are released from
      escrow. In addition, these stockholders have certain “piggy-back” registration
      rights on registration statements filed subsequent to the date on which these
      shares of common stock are released from escrow. We will bear the expenses
      incurred in connection with the filing of any such registration
      statements.




From
      October 11, 2006 through the acquisition of a target business, FCM makes
      available to us a small amount of office space and certain office and
      secretarial services, as we may require from time to time. We have agreed to
      pay
      FCM $7,500 per month for these services. FCM is controlled by Yuval Cohen,
      our
      Chairman and Chief Executive Officer. FCM provides management services to and
      is
      affiliated with FCF. This arrangement is solely for our benefit and is not
      intended to provide FCF or Mr. Cohen compensation in lieu of salary. We
      believe, based on rents and fees for similar services in Israel, that the fee
      charged by FCM 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.




FCF
      advanced to us $115,000 to cover expenses related to our initial public
      offering. These loans were repaid from the proceeds of our initial public
      offering.




FCF
      purchased 333,334 units at $6.00 per unit (for an aggregate purchase price
      of $2,000,004) from us, simultaneously with the consummation of our public
      offering. All of the proceeds we received from the sale of the Insider Units
      were placed in the trust fund. The Insider Units are identical to the units
      offered to the public. However, FCF has waived the right to receive
      distributions upon our liquidation prior to a business combination with respect
      to the securities underlying these units. FCF has also contractually agreed
      that
      the units and underlying securities will not be sold or transferred by it until
      after we have completed a business combination.




We
      will
      reimburse 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 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 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 existing
      stockholders, officers or directors who owned our common stock prior to our
      initial public offering, or to any of their respective affiliates for services
      rendered to us prior to or with respect to the business combination (regardless
      of the type of transaction that it is).




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




37




**ITEM
      13. EXHIBITS, LIST AND REPORTS ON FORM 8-K**




(a)
      The
      following Exhibits are filed as part of this report.





Exhibit
              No.
            
            Description3.1
            
            Form
                of Second Amended and Restated Certificate of Incorporation.
                (1)3.2
            
            By-laws.
                (1)4.1
            
            Specimen
                Unit Certificate. (1)4.2
            
            Specimen
                Common Stock Certificate. (1)4.3
            
            Specimen
                Warrant Certificate. (1)4.4
            
            Form
                of Unit Purchase Option granted to EarlyBirdCapital, Inc.
                (1)4.5
            
            Form
                of Warrant Agreement between American Stock Transfer & Trust Company
                and the Registrant. (1)




10.1
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Fortissimo
                Capital Fund GP, LP. (1)10.2
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Fortissimo
                Capital Fund L.P., Fortissimo Capital Fund (Israel), L.P. and Fortissimo
                Capital Fund (Israel-DP), L.P. (1)10.3
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Yair Seroussi.
                (1)10.4
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Michael
                Chill.
                (1)10.5
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Yuval
                Cohen.
                (1)10.6
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Eli Blatt.
                (1)10.7
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Marc Lesnick.
                (1)10.8
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Shmoulik
                Barashi (1)10.9
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Yochai
                Hacohen
                (1)




38




10.10
            
            Form
                of Investment Management Trust Agreement between American Stock Transfer
                & Trust Company and the Registrant.(1) (2)10.11
            
            Form
                of Stock Escrow Agreement between the Registrant, American Stock
                Transfer
                & Trust Company and the Initial Stockholders. (1)10.12
            
            Form
                of Promissory Note issued to Fortissimo Capital Fund, GP, L.P. letter
                Agreement between A.F. Services Ltd. and Registrant regarding
                administrative support. (1)10.13
            
            Form
                of Registration Rights Agreement among the Registrant and the Initial
                Stockholders(1)10.14
            
            Letter
                Agreement, between the Registrant and each of the Initial Stockholders.
                (1)10.15(a)
            
            Subscription
                Agreement between the Registrant and Fortissimo Capital Fund GP,
                LP.
                (1)10.15(b)
            
            Amendment
                No. 1 to Subscription Agreement. (1)10.16
            
            Form
                of Letter Agreement between the Registrant and Fortissimo Capital
                Management Company Ltd. regarding administrative support.
                (1)10.17
            
            Letter
                Agreement among the Registrant and Fortissimo Capital Fund GP, L.P.
                (1)10.18
            
            Form
                of Indemnification Agreement, among Fortissimo Capital Fund GP, L.P.
                and
                each of the Registrant’s officers and Directors. (1)31.1
            
            Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.31.2
            
            Certification
                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.32
            
            Certification
                of Chief Executive Officer and Chief Financial Officer pursuant to
                Section
                906 of the Sarbanes-Oxley Act of
                2002.





(1)
            Incorporated
                by reference to the Registrant’s Registration Statement on Form S-1 (SEC
                File No. 333-131417).(2)
            An
                amendment to this agreement appears in the Registrant’s 8-K filed with the
                SEC on March 26, 2007, which is incorporated by reference.





**ITEM
      14. PRINCIPAL ACCOUNTING FEES AND SERVICES.**




Goldstein
      Golub Kessler LLP (“GGK”) acts as our principal accountant.  GGK has a
      continuing relationship with RSM McGladrey, Inc. (“RSM”), from which it leases
      auditing staff who are full time, permanent employees of RSM and through which
      its partners provided non-audit services. GGK has no full time employees and,
      therefore, none of the audit services performed were provided by permanent
      full-time employees of GGK. GGK manages and supervises the audit and audit
      staff, and is exclusively responsible for the opinion rendered in connection
      with its examination.  The following is a summary of fees paid or to be
      paid to GGK and RSM for services rendered.




39




**Audit
      Fees**




During
      the fiscal year ended December 31, 2006, we paid our principal accountant
      $50,500 for the services they performed in connection with our initial public
      offering, including the financial statements included in the Current Report
      on
      Form 8-K filed with the Securities and Exchange Commission on October 18, 2006,
      and $18,950 for current audit fees.





**Audit-Related
      Fees**




During
      2006, our principal accountants did not render assurance and related services
      reasonably related to the performance of the audit or review of financial
      statements.




**Tax
      Fees**




During
      2006, our principal accountants did not render services to us for tax
      compliance, tax advice and tax planning.




**All
      Other Fees**




During
      2006, there were no fees billed for products and services provided by the
      principal accountants other than those set forth above.




**Audit
      Committee Approval**




We
      currently do not have an audit committee.




40




**FORTISSIMO
      ACQUISITION CORP.**


**(A
      DEVELOPMENT STAGE CORPORATION)**





**FINANCIAL
      STATEMENTS**




**AS
      OF DECEMBER 31, 2006**





**INDEX**





**Page****Report
                of Independent Registered Public Accounting Firm**
            
            **F-2****Balance
                Sheets**
            
            **F-3****Statements
                of Operations**
            
            **F-4****Statements
                of Stockholders' Equity**
            
            **F-5****Statements
                of Cash Flows**
            
            **F-6****Notes
                to Financial Statements**
            
            **F-7-F-13**


F-1




**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





**To
      the Stockholders of**





**FORTISSIMO
      ACQUISITION CORP.**


**(A
      DEVELOPMENT STAGE CORPORATION)**







We
      have
      audited the accompanying balance sheets of Fortissimo Acquisition Corp. (a
      development stage corporation) (the “Company”) as of December 31, 2006 and 2005,
      and the related statements of operations, stockholders’ equity and cash flows
      for the year ended December 31, 2006, the period from December 27, 2005
      (inception) to December 31, 2005, and the cumulative period from December 27,
      2005 (inception) to December 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 audits.




We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.




In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of the Company as of December 31,
      2006, and 2005, and the results of its operations and its cash flows for the
      year ended December 31, 2006, the period from December 27, 2005 (inception)
      to
      December 31, 2005, and the cumulative period from December 27, 2005 (inception)
      to December 31, 2006, in conformity with United States generally accepted
      accounting principles.






/s/
                Goldstein Golub Kessler LLP**GOLDSTEIN
                GOLUB KESSLER LLP**New
                York, New York
              March
                15, 2007


F-2


**FORTISSIMO
      ACQUISITION CORP.**


**(A
      DEVELOPMENT STAGE CORPORATION)**


**BALANCE
      SHEET**




**December
                31,****2006**
            
            **2005**ASSETSCURRENT
                ASSETS:Cash
            
            $
            692,100
            
            $
            67,500Cash
                held in Trust (Note 3)
            
            
            26,537,334
            
            
            -Prepaid
                expenses
            
            
            19,243
            
            
            -Deferred
                tax asset
            
            
            41,865
            
            
            -Total
                current assets
            
            $
            27,290,542
            
            $
            67,500Deferred
                offering costs (Note 4)
            
            
            -
            
            
            27,000Total
                assets
            
            $
            27,290,542
            
            $
            94,500LIABILITIES
                AND STOCKHOLDERS' EQUITYCURRENT
                LIABILITIES:Accrued
                expenses
            
            $
            50,930
            
            $
            17,500Deferred
                trust interest income
            
            
            55,909
            
            
            -Deferred
                underwriting fee (Note 1)
            
            
            352,350
            
            
            -Loan
                from related party (Note 5)
            
            
            -
            
            
            55,000Income
                tax payable (Note 6)
            
            
            86,338
            
            
            -Total
                current liabilities
            
            $
            545,527
            
            $
            72,500Common
                stock , subject to possible conversion,
              906,547
                shares at conversion value
            
            
            5,248,907
            
            
            -STOCKHOLDERS'
                EQUITYPreferred
                stock - $.0001 par value; 1,000,000 authorized as of December 31,
                2006 and
                2005; none issued or outstanding (Note 7)
            
            
            -
            
            
            -Common
                stock - $.0001 par value; 21,000,000 authorized as of December 31,
                2006
                and 2005; 5,868,334 and 1,000,000 issued and outstanding as of December
                31, 2006 and 2005, respectively(2006
                - including 906,547 subject to possible conversion) (Note
                1)
            
            
            587
            
            
            100Additional
                paid-in capital
            
            
            21,409,192
            
            
            24,900Retained
                earnings (deficit) accumulated during the development
                stage
            
            
            86,329
            
            
            (3,000
            )Total
                stockholders' equity
            
            
            21,496,108
            
            
            22,000Total
                liabilities and stockholders' equity
            
            $
            27,290,542
            
            $
            94,500





See
      notes
      to financial statements.




F-3




**FORTISSIMO
      ACQUISITION CORP.**


**(A
      DEVELOPMENT STAGE ENERPRISE)**


**STATEMENT
      OF OPERATIONS**








**For
                the year ended December 31, 2006**
            
            **For
                the period from December 27, 2005 (inception) to December 31,
                2005**
            
            **For
                the period from December 27, 2005 (inception) to December 31,
                2006**State
                franchise tax
            
            $
            25,750
            
            $
            -
            
            $
            25,750Admin
                and office support
            
            
            20,026
            
            
            -
            
            
            20,026Professional
                fees
            
            
            23,039
            
            
            -
            
            
            23,039Insurance
            
            
            9,986
            
            
            -
            
            
            9,986Travel
            
            
            5,133
            
            
            -
            
            
            5,133Formation
                expenses
            
            
            -
            
            
            3,000
            
            
            3,000Other
                expenses
            
            
            5,771
            
            
            -
            
            
            5,771Total
                costs and expenses
            
            
            89,973
            
            
            3,000
            
            
            92,973Interest
                income
            
            
            223,775
            
            
            -
            
            
            223,775Income
                (loss) before provision for income taxes
            
            
            133,802
            
            
            (3,000
            )
            
            130,802Provision
                for income taxes
            
            
            44,473
            
            
            -
            
            
            44,473Net
                income (loss) for the period
            
            $
            89,329
            
            $
            (3,000
            )
            $
            86,329Weighted
                average number of shares outstanding, basic and diluted****
            
            
            2,059,849
            
            
            1,000,000
            
            
            2,048,361Net
                income (loss) per share
            
            $
            0.04
            
            $
            (0.00
            )
            $
            0.04




See
      notes
      to financial statements.




F-4




**FORTISSIMO
      ACQUISITION CORP.**


**(A
      DEVELOPMENT STAGE CORPORATION)**


**STATEMENT
      OF STOCKHOLDERS’ EQUITY**





**Deficit****Accumulated****Additional**
            
            **during
                the****Common
                Stock**
            
            **paid
                in**
            
            **development****Shares**
            
            **Amount**
            
            **capital**
            
            **stage**
            
            **Total**Issuance
                of Common Stock to initial stockholders on December 30, 2005 at $.025
                per
                share
            
            
            1,000,000
            
            $
            100
            
            $
            24,900
            
            $
            -
            
            $
            25,000Net
                loss for the period
            
            
            -
            
            
            -
            
            
            -
            
            
            (3,000
            )
            
            (3,000
            )Balance
                as at December 31, 2005
            
            
            1,000,000
            
            $
            100
            
            $
            24,900
            
            
            (3,000
            )
            $
            22,000Sale
                of 4,535,000 Units (net of $2,576,418 offering expenses, including
                the
                issuance of 906,547 shares subject to possible conversion)
            
            
            4,535,000
            
            
            454
            
            
            24,633,128
            
            
            -
            
            
            24,633,582Gross
                proceeds from issuance of Unit Purchase Option
            
            
            -
            
            
            -
            
            
            100
            
            
            -
            
            
            100Gross
                proceeds from Issuance of Insider Units
            
            
            333,334
            
            
            33
            
            
            1,999,971
            
            
            -
            
            
            2,000,004Proceeds
                subject to possible conversion
            
            
            -
            
            
            -
            
            
            (5,248,907
            )
            
            -
            
            
            (5,248,907
            )Net
                income for the year
            
            
            -
            
            
            -
            
            
            -
            
            
            89,329
            
            
            89,329Balance
                as at December 31, 2006
            
            
            5,868,334
            
            $
            587
            
            $
            21,409,192
            
            $
            86,329
            
            $
            21,496,108




See
      notes
      to financial statements.




F-5




**FORTISSIMO
      ACQUISITION CORP.**


**(A
      DEVELOPMENT STAGE CORPORATION)**


**STATEMENT
      OF CASH FLOWS**





**For
                the year ended December 31,**
            
            **For
                the period from December 27, 2005 (inception) to December
                31,**
            
            **For
                the period from December 27, 2005 (inception) to December
                31,****2006**
            
            **2005**
            
            **2006**Cash
                flows from operating activities:Net
                income (loss)
            
            $
            89,329
            
            $
            (3,000
            )
            $
            86,329Adjustments
                to reconcile net income to net cash used in operating
                activities:Interest
                earned on securities held in trust
            
            
            (279,684
            )
            
            -
            
            
            (279,684
            )Changes
                in operating assets/liabilities:Increase
                in prepaid expenses
            
            
            (19,243
            )
            
            -
            
            
            (19,243
            )Increase
                in accrued expenses
            
            
            47,930
            
            
            3,000
            
            
            50,930Increase
                in deferred tax asset
            
            
            (41,865
            )
            
            -
            
            
            (41,865
            )Increase
                in deferred trust interest income
            
            
            55,909
            
            
            -
            
            
            55,909Increase
                in income tax payable
            
            
            86,338
            
            
            -
            
            
            86,338Net
                cash used in operating activities
            
            
            (61,286
            )
            
            -
            
            
            (61,286
            )Cash
                flows from investing activities:Cash
                held in trust fund
            
            
            (26,257,650
            )
            
            -
            
            
            (26,257,650
            )Net
                cash used in investing activities
            
            
            (26,257,650
            )
            
            -
            
            
            (26,257,650
            )Cash
                flows from financing activities:Payment
                of notes payable - stockholders
            
            
            (115,000
            )
            
            -
            
            
            (115,000
            )Proceeds
                from sale of Units to public
            
            
            27,210,000
            
            
            -
            
            
            27,210,000Proceeds
                from issuance of shares to Initial Stockholders
            
            
            -
            
            
            25,000
            
            
            25,000Proceeds
                from notes payable - stockholders
            
            
            60,000
            
            
            55,000
            
            
            115,000Proceeds
                from sale of Unit Purchase Option
            
            
            100
            
            
            
            
            
            100Proceeds
                from sale of Insider Units
            
            
            2,000,004
            
            
            
            
            
            2,000,004Payment
                of offering expenses
            
            
            (2,211,568
            )
            
            (12,500
            )
            
            (2,224,068
            )Net
                cash provided by financing activities
            
            
            26,943,536
            
            
            67,500
            
            
            27,011,036Increase
                in cash
            
            
            624,600
            
            
            67,500
            
            
            692,100Cash
                at beginning of period
            
            
            67,500
            
            
            -
            
            
            -Cash
                at the end of the period
            
            $
            692,100
            
            $
            67,500
            
            $
            692,100Supplemental
                disclosure of non-cash financing activity :Accrual
                of offering costs
              Deferred
                Underwriting Fee
            
            $
              $
            -
              352,350
            
            $
              $
            14,500
              -
            
            $
              $
            -
              352,350





See
      notes
      to financial statements.




F-6




**FORTISSIMO
      ACQUISITION CORP.**


**(A
      DEVELOPMENT STAGE CORPORATION)**


**NOTES
      TO FINANCIAL STATEMENTS**





**NOTE
                1 —****GENERAL**




The
      Company was incorporated on December 27, 2005 as a blank check company whose
      objective is to acquire an operating business that has manufacturing operations
      or research and development facilities located in Israel, or that is a company
      operating outside Israel which management believes would benefit from
      establishing operations or facilities in Israel.





The
      Company’s ability to commence operations was contingent upon obtaining adequate
      financial resources through a proposed public offering (“Offering”) which was
      consummated on October 17, 2006. On October 17, 2006, we consummated our initial
      public offering of 4,000,000 Units, with each unit consisting of one share
      of
      our common stock and two warrants, each to purchase one share of our common
      stock at an exercise price of $5.00 per share. On October 25, 2006, we
      consummated the closing of an additional 535,000 units that were subject to
      the
      over-allotment option. The units were sold at an offering price of $6.00 per
      unit, generating total gross proceeds of $27,210,000 (not including $2,000,004
      from the sale of Units to one of our initial stockholders as more fully
      described below).





The
      Company’s management had broad discretion with respect to the specific
      application of the net proceeds of the Offering, although substantially all
      of
      the net proceeds of the Offering are intended to be generally applied toward
      consummating a business combination with an operating business that has
      manufacturing operations or research and development facilities located in
      Israel (“Business Combination”). Furthermore, there is no assurance that the
      Company will be able to successfully effect a Business Combination. An aggregate
      of $26,257,650 (including the over-allotment option), before any interest
      earned, has been deposited in an interest-bearing trust account (“Trust
      Account”) until the earlier of (i) the consummation of a Business Combination or
      (ii) liquidation of the Company. Under the agreement governing the Trust
      Account, funds will only be invested in United States 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. The placing of funds in the Trust Account
      may not protect those funds from third party claims against the Company.
      Although the Company will seek to have all vendors, prospective target
      businesses or other entities it engages, execute agreements with the Company
      waiving any right, title, interest or claim of any kind in or to any monies
      held
      in the Trust Account, there is no guarantee that they will execute such
      agreements. The Company’s directors have agreed that they will be jointly and
      severally liable under certain circumstances to ensure that the proceeds in
      the
      Trust Account are not reduced by the claims of target businesses or vendors
      or
      other entities that are owed money by the Company for services rendered or
      contracted for or products sold to the Company. However, there can be no
      assurance that the directors will be able to satisfy those obligations. The
      remaining net proceeds (not held in the Trust Account) of approximately $545,000
      may be used to pay for business, legal and accounting due diligence on
      prospective acquisitions and continuing general and administrative expenses.





Fortissimo
      Capital Fund GP, L.P., (“FCF”), one of the Company's initial
      stockholders, has purchased an aggregate of 333,334 units (the “Insider
      Units”) at $6.00 per unit (for an aggregate purchase price of $2,000,004)
      from the Company. This purchase took place on a private placement basis
      simultaneously with the consummation of the Offering. All of the proceeds
      received from the sale of the Insider Units were placed in the Trust Account.
      The Insider Units are identical to the units sold in the Offering to the public;
      however, FCF has waived the right to receive distributions upon a liquidation
      of
      the Company prior to a Business Combination with respect to the securities
      underlying the Insider Units. The Insider Units were registered for resale
      along
      with the Units in the Offering, but FCF has agreed that the Insider Units and
      underlying securities will not be sold or transferred by it until after the
      completion of a Business Combination.




F-7




**FORTISSIMO
      ACQUISITION CORP.**


**(A
      DEVELOPMENT STAGE CORPORATION)**


**NOTES
      TO FINANCIAL STATEMENTS**





**NOTE
      1 —**  **GENERAL**  -
      Cont.





The
      Company, after signing a definitive agreement for the acquisition of a target
      business, will submit such transaction for stockholder approval. Pursuant to
      the
      provisions of the Company's Amended and Restated Certificate of Incorporation,
      which cannot by its terms be amended prior to the consummation of a Business
      Combination, in the event that stockholders owning 20% or more of the shares
      sold in the Offering vote against the Business Combination and exercise their
      conversion rights described below, the Business Combination will not be
      consummated. All of the Company’s stockholders prior to the Offering, including
      all of the officers and directors of the Company (“Initial Stockholders”), have
      agreed to vote their 1,000,000 founding shares of common stock in accordance
      with the vote of the majority in interest of all other stockholders of the
      Company (“Public Stockholders”) with respect to any Business Combination. After
      consummation of a Business Combination, these voting safeguards will no longer
      be applicable.





With
      respect to a Business Combination which is approved and consummated, any Public
      Stockholder who voted against the Business Combination may demand that the
      Company convert his or her shares. The per share conversion price will equal
      the
      amount in the Trust Account, calculated as of two business days prior to the
      consummation of the proposed Business Combination divided by the number of
      shares of common stock held by Public Stockholders at the consummation of the
      Offering. Accordingly, Public Stockholders holding 19.99% of the aggregate
      number of shares owned by all Public Stockholders may seek conversion of their
      shares in the event of a Business Combination. Such Public Stockholders are
      entitled to receive their per share interest in the Trust Account computed
      without regard to the shares held by the Initial Stockholders.





The
      Company’s Amended and Restated Certificate of Incorporation provides that the
      Company will continue in existence only until 24 months from the effective
      date
      of the Offering (until October 11, 2008). If the Company has not completed
      a
      Business Combination by such date, its corporate existence will cease and it
      will dissolve and liquidate for the purposes of winding up its affairs. In
      the
      event of liquidation, it is likely that the per share value of the residual
      assets remaining available for distribution (including Trust Account assets)
      will be less than the initial public offering price per share in the Offering
      due to costs related to the Offering and since no value would be attributed
      to
      the Warrants contained in the Units sold.





Management
      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 unaudited financial statements.




**NOTE
                2 —****SIGNIFICANT
                ACCOUNTING POLICIES**




The
      Company’s financial statements have been prepared in accordance with accounting
      principles generally accepted in the United States.




a.  Use
      of
      estimates:




The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the amounts reported in the financial statements and accompanying notes.
      Actual results could differ from those estimates.




b.  Net
      Income (Loss) per common stock:




Net
      income (loss) per share is computed based on the weighted average number of
      shares of common stock outstanding.




F-8


**FORTISSIMO
      ACQUISITION CORP.**


**(A
      DEVELOPMENT STAGE CORPORATION)**


**NOTES
      TO FINANCIAL STATEMENTS**




**NOTE
      2 — SIGNIFICANT ACCOUNTING POLICIES** -
      Cont.




c.
                Concentrations
                    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
      may
      maintain 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.




d.
              Fair
                  Value of Financial Instruments:




The
      fair
      values of the Company’s assets and liabilities that qualify as financial
      instruments under SFAS No. 107 "Disclosures about Fair Value of Financial
      Instrument," approximate their carrying amounts presented in the balance sheet
      at December 31, 2006 and 2005.




e.
              Deferred
                  Interest:




Deferred
      interest consists of 19.99% of the interest earned on the investment held in
      trust, as it represents interest attributable to the common stock subject to
      possible conversion (See Note 1).




f.
              Recently
                  issued accounting
                  pronouncements:




In
      July
      2006, the Financial Accounting Standards Board (“FASB”) issued FASB
      Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an
      interpretation of FASB Statement No. 109” (“FIN 48”), which provides criteria
      for the recognition, measurement, presentation and disclosure of uncertain
      tax
      positions. A tax benefit from an uncertain position may be recognized only
      if it
      is “more likely than not” that the position is sustainable based on its
      technical merits. The provisions of FIN 48 are effective for fiscal years
      beginning after December 15, 2006. We do not expect FIN 48 will have a material
      effect on our financial condition or results of operations.




Management
      does not believe that any other recently issued, but not yet effective,
      accounting standards if currently adopted would have a material effect on the
      accompanying financial statements.




**NOTE
      3:-**  **INVESTMENTS
      HELD IN TRUST**





Investments
      held in trust at December 31, 2006 consist of a zero coupon United States
      Treasury Bill with a face value of $26,563,000 purchased at a discount of
      1.152%, due January 11, 2007 and carried on the Company’s financial statements
      at $26,537,334, which includes interest of $279,684 and trust cash of
      $632.




**NOTE
      4:**   **DEFERRED
      OFFERING COSTS**





Deferred
      offering costs consist primarily of legal, accounting, underwriting and other
      fees and expenses incurred through the balance sheet date that were related
      to
      the Offering and were charged to equity upon the receipt of the capital raised.




F-9


**FORTISSIMO
      ACQUISITION CORP.**


**(A
      DEVELOPMENT STAGE CORPORATION)**


**NOTES
      TO FINANCIAL STATEMENTS**




**NOTE
      5:**  **LOANS FROM RELATED PARTY**





The
      Company issued an aggregate of $115,000 unsecured, non-interest bearing,
      promissory notes to the Initial Stockholders, of which $55,000 was issued in
      December 2005, and the remainder was issued in January 2006. The notes were
      non-interest bearing and payable on the consummation of the Offering.
      Accordingly, such notes were repaid in October 2006 out of the proceeds of
      the
      Offering. Due to the short term nature of the notes, the fair value of the
      notes
      approximates their carrying amount.




**NOTE
      6:**  **INCOME TAXES**




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




As
      of
      December 31, 2005, the Company recorded a deferred income tax asset, principally
      for the tax effect of net operating loss carryforwards, aggregating
      approximately $1,000. In recognition of the uncertainty regarding the ultimate
      amount of income tax benefits to be derived, the Company has recorded a full
      valuation allowance.





The
      components of the provision for income taxes are as follows:





**Year
                ended December 31, 2006**
            
            **Year
                ended December 31, 2005**Current:Federal
                taxes
            
            $
            86,338
            
            $
            -Deferred:Federal
                taxes
            
            
            (41,865
            )
            
            -Total
                provision for income taxes
            
            $
            44,473
            
            $
            -





The
      tax
      effect of temporary differences that give rise to the deferred tax asset is
      as
      follows:




**December
                31, 2006**
            
            **December
                31, 2005**Interest
                income deferred for reporting purposes
            
            $
            19,009
            
            $
            -Expenses
                deferred for income tax purposes
            
            
            22,856
            
            
            -Total
                deferred tax asset
            
            $
            41,865
            
            $
            -


F-10


**FORTISSIMO
      ACQUISITION CORP.**


**(A
      DEVELOPMENT STAGE CORPORATION)**


**NOTES
      TO FINANCIAL STATEMENTS**




**NOTE
      6:** **INCOME
      TAXES -** (Cont.)





The
      total
      provision for income taxes differs from that amount which would be computed
      by
      applying the U.S. Federal income tax rate to income before provision for income
      taxes as follow:





**Year
                ended December 31, 2006**
            
            **Year
                ended December 31, 2005**Statutory
                federal income tax rate
            
            
            34.0
            %
            
            (34.0
            %)Increase
                (decrease) in valuation allowance
            
            
            (0.8
            %)
            
            34.0
            %Effective
                income tax rate
            
            
            33.2
            %
            
            -




**NOTE
          7:** **COMMITMENTS**





The
      Company presently occupies office space provided by an affiliate of an Initial
      Stockholder. Such affiliate has agreed that, until the acquisition of a target
      business by the Company, it will make such office space, as well as certain
      office and secretarial services, available to the Company, as may be required
      by
      the Company from time to time. The Company has agreed to pay such affiliate
      $7,500 per month for such services commencing on October 11, 2006 and ending
      upon the consummation of a Business Combination. The statement of operations
      for
      the year ended December 31, 2006 includes $19,839 relating to this
      agreement.





The
      Initial Stockholders have waived their right to receive distributions with
      respect to their founding shares and shares included within the Insider Units
      upon the Company’s liquidation.





The
      Initial Stockholders and holders of the Insider Units (or underlying securities)
      are entitled to registration rights with respect to their founding shares and
      Insider Units (or underlying securities). The holders of the majority of
      founding shares are entitled to demand that the Company register these shares
      at
      any time commencing three months prior to October 11, 2009. The holders of
      a
      majority of the Insider Units (or underlying securities) are entitled to demand
      that the Company register such securities at any time after the Company
      consummates a Business Combination. In addition, the Initial Stockholders and
      holders of the Insider Units (or underlying securities) have certain
“piggy-back” registration rights on registration statements filed subsequent to
      a Business Combination. The Underwriter's Option is subject to similar
      registration rights.




**NOTE
          8:-** **STOCKHOLDERS’
          EQUITY**





a.
            The
                Offering:





The
      Company sold 4,535,000 units ("Units") in the Offering, which included 535,000
      Units that were sold upon the exercise of the underwriters’ over-allotment
      option. Each Unit consists of one share of the Company’s common stock, $.0001
      par value, and two Redeemable Common Stock Purchase Warrants ("Warrants").
      Each
      Warrant entitles the holder to purchase from the Company one share of common
      stock at an exercise price of $5.00 commencing on the later of the completion
      of
      a Business Combination with a target business or October 11, 2007 and expiring
      on October 10, 2010. The Warrants will be redeemable at a price of
      $.01




F-11


**FORTISSIMO
      ACQUISITION CORP.**


**(A
      DEVELOPMENT STAGE CORPORATION)**


**NOTES
      TO FINANCIAL STATEMENTS**




**NOTE
          8:-** **STOCKHOLDERS’
          EQUITY -** (Cont.)





b.
            The
                Offering:




per
      Warrant upon 30 days notice after the Warrants become exercisable, only in
      the
      event that the last sale price of the common stock is at least $8.50 per share
      for any 20 trading days within a 30 trading day period ending on the third
      day
      prior to the date on which notice of redemption is given. In connection with
      this Offering, the Company issued an option, for $100, to the representative
      of
      the underwriters to purchase 400,000 Units at an exercise price of $7.50 per
      Unit (see Common Stock Commitments below).




The
      Company accounted for the fair value of the option, inclusive of the receipt
      of
      the $100 cash payment, as an expense of the Offering resulting in a charge
      directly to stockholders’ equity. The Company estimated that the fair value of
      this option was approximately $1,485,882 ($3.71 per Unit) using a Black-Scholes
      option-pricing model. The option 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 option (the difference between the exercise prices of the option
      and the underlying Warrants and the market price of the Units and underlying
      securities) to exercise the option without the payment of any cash. The warrants
      underlying such Units are exercisable at $5.00 per share, but otherwise have
      the
      same terms and conditions as the Warrants. Separate trading of the Common Stock
      and Warrants underlying the Company’s Units commenced in October 2006.





c.
            Preferred
                Stock :





The
      Company is authorized to issue up to 1,000,000 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.





Prior
      to
      the consummation of a Business Combination, the Company may not issue Preferred
      Stock which participates in the proceeds of the Trust Account, or which votes
      as
      a class with the Common Stock on a Business Combination.





d.
            Common
                Stock Commitments:





The
      Company has 10,936,668 shares of common stock commitments in the form of
      Warrants and the underwriters’ option, which are currently not exercisable.





e.
            Common
                Stock Subject to Conversion





Public
      Stockholders holding 19.99% of the aggregate number of shares owned by all
      Public Stockholders may seek conversion of their shares in the event of a
      Business Combination. Such Public Stockholders are entitled to receive their
      per
      share interest in the Trust Account computed without regard to the shares held
      by Initial Stockholders. Accordingly, a portion of the net proceeds from the
      Offering (19.99% of the amount held in the Trust Account) has been classified
      as
      common stock subject to possible conversion in the accompanying balance sheets
      and 19.99% of the related interest earned has been recorded as deferred
      interest.




F-12


**FORTISSIMO
      ACQUISITION CORP.**


**(A
      DEVELOPMENT STAGE CORPORATION)**


**NOTES
      TO FINANCIAL STATEMENTS**




**NOTE
          9:-** **EARNINGS
          PER SHARE**





Basic
      earnings per share is computed by dividing net income (loss) by the
      weighted-average number of shares of common stock outstanding during the period.
      Diluted earnings per share reflect the additional dilution for all potentially
      dilutive securities such as stock warrants and options. The effect of the
      9,736,668 outstanding warrants, issued in connection with the initial public
      offering described in Note 1 has not been considered in the diluted net earnings
      per share since the warrants are contingently exercisable. The effect of
      the 400,000 units included in the underwriters purchase option, as described
      in
      Note 1, along with the warrants underlying such units, has not been considered
      in the diluted earnings per share calculation since the market price of the
      unit
      was less than the exercise price during the period.




F-13





**SIGNATURES**





Pursuant
        to the requirements of the 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 on the 29th day of March 2007.




**FORTISSIMO
                ACQUISITION CORP.**By:
            /s/*Yuval
                Cohen*Yuval
                CohenChairman
                of the Board and Chief Executive Officer
              (Principal
                Executive Officer)




In
      accordance with the Securities Exchange Act of 1934, this report has been signed
      below by the following persons on behalf of the registrant and in the capacities
      and on the dates indicated.


Name
                  
                  Title
                  
                  Date/s*/
                      Yuval Cohen*
                  
                  Chairman
                      of the Board and Chief
                  
                  March
                      29, 2007Yuval
                      Cohen
                  
                  Executive
                      Officer (Principal Executive Officer)/s/*Eli
                      Blatt*
                  
                  Chief
                      Financial Officer, Secretary and
                  
                  March
                      29, 2007Eli
                      Blatt
                  
                  Director
                      (Principal Accounting and Financial Officer)/s/*Marc
                      Lesnick*
                  
                  Vice
                      President, Assistant Secretary
                  
                  March
                      29, 2007Marc
                      Lesnick
                  
                  and
                      Director/s/*Shmoulik
                      Barashi*
                  
                  Vice
                      President and Director
                  
                  March
                      29, 2007Shmoulik
                      Barashi/s/*Yochai
                      Hacohen*
                  
                  Vice
                      President and Director
                  
                  March
                      29, 2007Yochai
                      Hacohen


41