- Annual Report (10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

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

For the fiscal year ended December 31, 2008

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

For the transition period from _________ to _____________

Commission file number: 001-33544

ADVANCED TECHNOLOGY ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

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

14 A Achimeir Street

Ramat Gan, Israel 52587

(Address of principal executive offices, including ZIP Code)

011-972-3-751-3707

(Registrant’s telephone number, including area code)

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

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

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

None

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

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

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

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

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

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

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

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

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

DOCUMENTS INCORPORATED BY REFERENCE

None.

ADVANCED TECHNOLOGY ACQUISITION CORP.

TABLE OF CONTENTS

		Page

	PART I

Item 1.	BUSINESS	2

Item 1A.	RISK FACTORS	14

Item 1B.	UNRESOLVED STAFF COMMENTS	32

Item 2.	PROPERTIES	32

Item 3.	LEGAL PROCEEDINGS	32

Item 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	32

	PART II

Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	33

Item 6.	SELECTED FINANCIAL DATA	34

Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	34

Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	37

Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	38

Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE	38

Item 9A.	CONTROLS AND PROCEDURES	38

Item 9B.	OTHER INFORMATION	39

	PART III

Item 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	40

Item 11.	EXECUTIVE COMPENSATION	44

Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	45

Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	47

Item 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	49

Item 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	50

PART I

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

Forward-Looking Statements

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

Item 1.

BUSINESS

General

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

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

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

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

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

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

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

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

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

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

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

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

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

Focus on Israel

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Effecting a Business Combination

General

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

We have not consummated a business combination

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

Sources of target businesses

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

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

Selection of a target business and structuring of a business combination

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

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

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

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

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

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

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

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

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

earnings and operating margins;

nature of the customers and contracts;

stability and continuity in customer relationships;

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

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

regulatory environment of the relevant industry sector; and

costs associated with effecting the business combination

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

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

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

Fair market value of target business

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

Probable lack of business diversification

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

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

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

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

Limited ability to evaluate the target business’ management

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

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

Opportunity for stockholder approval of business combination

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

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

Conversion rights

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

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

Liquidation if no business combination

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Competition

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

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

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

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

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

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

Israeli Government Programs

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

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

The Companies Law

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

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

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

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

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

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

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

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

Facilities

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

Legal Proceedings

We are not a party to any pending legal proceedings.

Employees

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

Item 1A.

RISK FACTORS

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

Risks Associated with Our Business

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

make a special written suitability determination for the purchaser;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

restrictions on the nature of our investments;

restrictions on the issuance of securities; and

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

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

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

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

reduced liquidity with respect to our securities;

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

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

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

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

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

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

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

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

Risks Associated with the Industry

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

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

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

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

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

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

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

generally have less predictable operating results;

may from time to time be parties to litigation;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Risks Related to Operations in Israel

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Risks Relating to Enforcement of Legal Process

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

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

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

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

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

Item 1B.

UNRESOLVED STAFF COMMENTS

Not applicable.

Item 2.

PROPERTIES

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

Item 3.

LEGAL PROCEEDINGS

We are currently not a party to any legal proceedings.

Item 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II

Item 5.

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

Price Range of Securities

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

	Units				Common Stock				Warrants
	High		Low		High		Low		High		Low
2008:

Fourth Quarter	$	7.62	$	6.30	$	7.60	$	7.06	$	0.11	$	0.0001

Third Quarter		7.94		7.62		7.85		7.30		0.30		0.06

Second Quarter		7.79		7.50		7.61		7.38		0.30		0.21

First Quarter		8.15		6.98		7.92		7.32		0.70		0.2001

2007:
Fourth Quarter		8.18		7.81		7.51		7.30		0.72		0.50

Third Quarter		8.15		7.81		7.50		7.25		0.79		0.52

Holders of Record

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

Sales of Unregistered Securities

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

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

Use of Proceeds of Initial Public Offering

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

Dividend Policy

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

Item 6.

SELECTED FINANCIAL DATA

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

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

* We were formed on August 24, 2006

Item 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

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

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

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

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

Critical Accounting Policies

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

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

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

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

Results of Operations for the Year Ended December 31, 2008

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

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

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

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

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

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

Results of Operations for the Year Ended December 31, 2007

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

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

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

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

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

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

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

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

Liquidity and Capital Resources

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

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

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

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

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

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

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

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

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

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

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

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

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

Contractual Obligations

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

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Item 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

1. Report of Independent Registered Public Accounting Firm.

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

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

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

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

6. Notes to Consolidated Financial Statements.

Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE

Not applicable.

Item 9A.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

Management’s Annual Report on Internal Control over Financial Reporting

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

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

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

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

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

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

Management has considered the effectiveness the Company’s internal controls and procedures over financial reporting and has noted a material weakness in internal controls over financial reporting due to the lack of segregation of duties caused by the Company’s limited employees.

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

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

Changes in Internal Controls Over Financial Reporting

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

Item 9B.

OTHER INFORMATION

Not applicable.

PART III

Item 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our current directors and executive officers are as follows:

Name	Age	Position

Moshe Bar-Niv	60	Chairman of the Board of Directors

Liora Lev	55	Chief Executive Officer and Director

Yehoshua (Shuki) Gleitman	59	Chief Technology Officer and Director

Elisha Yanay	64	Director

Yoram Buki	55	Director

Nathan Sharony	74	Director

Yacov Rozen	56	Director

Ido Bahbut	34	Chief Financial Officer, Secretary and Treasurer

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

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

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

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

Yoram Buki has served as our director since June 2008. From January 2003 through December 2007, Mr. Buki served as a Partner of Kost Forer & Gabbay, C.P.A. (Ernst & Young). From January 1995 to March 2003, Mr. Buki served as a Partner of Luboshitz, Kasierer & Co., C.P.A. (Arthur Andersen). Mr. Buki currently serves on the board of directors and on the audit committee of Dikla Insurance Company Ltd. Mr. Buki studied accounting at Hamichlala Lminhal from 1976 through 1981, though he did not receive any degree. Mr. Buki has been a member of the liaison committee with the Supervisor of Banks of Israel and with the Bankers Association of Israel since 2004.

Yacov Rozen has served as our director since June 2008. From July 2008 through the present, Mr. Rozen served as Chief Executive Officer of Menora Mivtahim Pension LTD, where he also serves on the board of directors. From April 2006 through December 2008, Mr. Rozen served as Chief Financial Officer of Bank Hapoalim B.M., where he was also a member of the board of management from 2006-2007, and where he was the head of client asset management from September 2002 through April 2006. Mr. Buki currently serves on the boards of directors of Menora Mivtahim Finance LTD, PostalGuard LTD and Vir-Tec Software LTD. Mr. Rozen has previously served on the board of directors of a number of other companies. Mr. Rozen studied economics at Tel Aviv University from 1975 through 1979, where he received his Bachelor’s degree.

Nathan Sharony has served as our director since June 2008. From January 1994 through January 1997, Mr. Sharony has served as the President and Chief Executive Officer of State of Israel Bonds. From September 1992 through January 1994, Mr. Sharony served as the Director General in the Ministry of Industry and Trade of the government of Israel. During 1991 and 1992, Mr. Sharony was a private consultant in the field of simulation applications. From September 1989 through September 1991, Mr. Sharony was the head of the Economic Mission for the Israeli Government in North America. From January 1986 through September 1989, Mr. Sharony served as the President and Chief Executive Officer of Electro Optical Industries Ltd. From January 1979 through January 1982, Mr. Sharony served as Vice President of Logistics, Tadiran Electronics Industry Ltd. Mr. Sharony previously served on the board of directors of a number of other companies. Mr. Sharony was a student in the Field Artillery Battery Officers Course in Fort Sill, Oklahoma from August 1958 through June 1959. Mr. Sharony also studied military history at the Staff and Command College, though he did not receive a degree.

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

Composition of the Board

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

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

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

Director Independence

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

Board Committees

Audit Committee

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

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

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

Compensation Committee

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

Guidelines For Selecting Director Nominees

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

Code of Conduct and Ethics

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

Conflicts of Interest

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

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

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

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

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

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

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

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

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

the corporation could financially undertake the opportunity;

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

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

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

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

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

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

Section 16(a) Beneficial Ownership Reporting Compliance

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

Item 11.

EXECUTIVE COMPENSATION

Officer and Director Compensation

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

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

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

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

Compensation Committee Interlocks and Insider Participation

None.

Compensation Committee Report

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

This report is provided by the board of directors:

Moshe Bar-Niv

Liora Lev

Yehoshua (Shuki) Gleitman

Elisha Yanay

Yoram Buki

Nathan Sharony

Yacov Rozen

Item 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

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

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

each of our officers and directors; and

all of our officers and directors as a group.

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

Name and Address(1)	Amount and Nature of Beneficial Ownership		Percent of Shares Outstanding
5% Stockholders
M.O.T.A. Holdings Ltd.		1,461,042		5.4	%
OLEV Holdings Ltd		1,461,041		5.4	%
FSGL Holdings Ltd		1,461,042		5.4	%
Fir Tree, Inc. and Fir Tree SPAC Holdings 1, LLC (2)		1,435,300		5.3	%
HBK Investments L.P., HBK Services LLC, HBK New York LLC, HBK Partners II L.P., HBK Management LLC, and HBK Master Fund L.P. (3)		1,698,361		6.3	%
QVT Financial LP, QVT Financial GP LLC, QVT Fund LP, and QVT Associates GP LLC (4)		2,313,667		8.6	%
Drawbridge DSO Securities LLC, Drawbridge Special Opportunities Fund LP, Drawbridge Special Opportunities GP LLC, Drawbridge Special Opportunities Advisors LLC, Fortress Principal Investment Holdings IV LLC, FIG LLC, Fortress Operating Entity I LP, FIG Corp. and Fortress Investment Group LLC (5)		1,856,250		6.9	%
Jonathan M. Glaser (6)		1,767,240		6.6	%
Andrew M. Weiss, Ph.D. (7)		1,471,115		5.5	%

Directors and Executive Officers
Moshe Bar-Niv (8)		1,461,042		5.4	%
Liora Lev (9)		1,461,041		5.4	%
Yehoshua Gleitman (10)		1,461,042		5.4	%
Ido Bahbut		15,000		*
Elisha Yanay		82,500		*
Yoram Buki		0		0
Nathan Sharony		0		0
Yacov Rozen		0		0
All directors and executive officers as a group (6 persons)		4,480,625		16.6	%

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

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

(2)

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

(3)

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

(4)

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

(5)

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

(6)

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

(7)

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

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

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

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

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

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

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

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

Item 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Transactions with Related Persons

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

Name	Number of Warrants		Relationship to Us
M.O.T.A. Holdings Ltd. (1)		708,334	Stockholder
FSGL Holdings Ltd (2)		708,333	Stockholder
OLEV Holdings Ltd (3)		708,333	Stockholder
Shrem, Fudim Technologies Ltd.		933,333	Stockholder
Shrem, Fudim Group Ltd.		466,667	Stockholder
Elisha Yanay		100,000	Stockholder and Director

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

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

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

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

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

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

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

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

Review, Approval or Ratification of Transactions with Related Persons

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

Item 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit and Non-Audit Services

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

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

Total	$	41,805	$	19,000

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

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

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

PART IV

Item 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

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

(1)

Financial Statements.

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

(2)

Financial Statement Schedule .

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

(3)

Exhibits .

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

SIGNATURES

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

ADVANCED TECHNOLOGY ACQUISITION CORP.

By:	/s/ Liora Lev
	Liora Lev

Date: March 31, 2009

POWER OF ATTORNEY

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

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

Signature	Title	Date

/s/ Moshe Bar-Niv	Chairman of the Board of Directors	March 31, 2009
Moshe Bar-Niv

/s/ Liora Lev	Chief Executive Officer and Director	March 31, 2009
Liora Lev

/s/ Yehoshua Gleitman	Chief Technology Officer and Director	March 31, 2009
Yehoshua Gleitman

/s/ Ido Bahbut	Chief Financial Officer, Treasurer and Secretary	March 31, 2009
Ido Bahbut	(principal financial and accounting officer)

/s/ Elisha Yanay	Director	March 31, 2009
Elisha Yanay

/s/ Yoram Buki	Director	March 31, 2009
Yoram Buki

/s/ Yacov Rozen	Director	March 31, 2009
Yacov Rozen

EXHIBIT INDEX

Exhibit Number		Description

3.1		Form of Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K, filed on June 22, 2007).

3.2		Bylaws (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

4.1		Specimen of Unit Certificate (incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

4.2		Specimen of Common Stock Certificate (incorporated by reference to Exhibit 4.2 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

4.3		Specimen of Warrant Certificate (incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

4.4		Specimen Founder Warrant Certificate (incorporated by reference to Exhibit 4.4 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

4.5		Specimen Underwriter Unit Certificate (incorporated by reference to Exhibit 4.5 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

4.6		Specimen Underwriter Warrant Certificate (incorporated by reference to Exhibit 4.6 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

4.7		Form of Unit Purchase Option to be granted to certain of the Underwriters (incorporated by reference to Exhibit 4.7 of the Company’s Registration Statement on Form S-1/A (Registration No. 333-137863), filed on June 14, 2007.

4.8		Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant (incorporated by reference to Exhibit 4.8 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.1		Letter Agreement of M.O.T.A. Holdings Ltd., as an Initial Stockholder of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.1 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006; Letter Agreement of M.O.T.A. Holdings Ltd., as an Initial Stockholder of the Company, dated February 16, 2007 (incorporated by reference to Exhibit 10.1 of the Company’s Registration Statement on Form S-1/A (Registration No. 333-137863), filed on February 16, 2007.

10.2		Letter Agreement of FSGL Holdings Ltd, as an Initial Stockholder of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.2 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006); Letter Agreement of FSGL Holdings Ltd, as an Initial Stockholder of the Company, dated February 16, 2007 (incorporated by reference to Exhibit 10.2 of the Company’s Registration Statement on Form S-1/A (Registration No. 333-137863), filed on February 26, 2007).

10.3		Letter Agreement of OLEV Holdings Ltd, as an Initial Stockholder of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.3 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006); Letter Agreement of OLEV Holdings Ltd, as an Initial Stockholder of the Company, dated February 16, 2007 (incorporated by reference to Exhibit 10.3 of the Company’s Registration Statement on Form S-1/A (Registration No. 333-137863), filed on February 16, 2007).

Exhibit Number		Description

10.4(a)		Letter Agreement of Josef Neuhaus Ltd, as an Initial Stockholder of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.4 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.4(b)		Letter Agreement of Ido Bahbut, as an Initial Stockholder of the Company, dated February 16, 2007 (incorporated by reference to Exhibit 10.4(b) of the Company’s Registration Statement on Form S-1/A (Registration No. 333-137863), filed on February 16, 2007).

10.5		Letter Agreement of Shrem, Fudim, Kelner - Technologies Ltd., as an Initial Stockholder of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.5 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.6		Letter Agreement of Shrem, Fudim, Kelner & Co. Ltd., as an Initial Stockholder of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.6 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.7		Letter Agreement of Avigdor Kaplan, as an Initial Stockholder of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.7 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.8		Letter Agreement of Elisha Yanay, as an Initial Stockholder of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.8 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.9(a)		Letter Agreement of Josef Neuhaus, as an Officer of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.9 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.9(b)		Letter Agreement of Ido Bahbut, as an Officer of the Company, dated February 16, 2007 (incorporated by reference to Exhibit 10.9(b) of the Company’s Registration Statement on Form S-1/A (Registration No. 333-137863), filed on February 16, 2007).

10.10		Letter Agreement of Elisha Yanay, as a Director of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.10 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.11		Letter Agreement of Avigdor Kaplan, as a Director of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.11 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.12		Letter Agreement of Moshe Bar-Niv, as a Director and Officer of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.12 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006); Letter Agreement of Moshe Bar-Niv, as a Director and Officer of the Company, dated February 16, 2007 (incorporated by reference to Exhibit 10.12 of the Company’s Registration Statement on Form S-1/A (Registration No. 333-137863), filed on February 16, 2007).

10.13		Letter Agreement of Shuki Gleitman, as a Director and Officer of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.13 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006); Letter Agreement of Shuki Gleitman, as a Director and Officer of the Company, dated February 12, 2007 (incorporated by reference to Exhibit 10.13 of the Company’s Registration Statement on Form S-1/A (Registration No. 333-137863), filed on February 16, 2007).

Exhibit Number		Description

10.14		Letter Agreement of Liora Lev, as a Director and Officer of the Company, dated September 29, 2006 (incorporated by reference to Exhibit 10.14 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006); Letter Agreement of Liora Lev, as a Director and Officer of the Company, dated February 16, 2007 (incorporated by reference to Exhibit 10.14 of the Company’s Registration Statement on Form S-1/A (Registration No. 333-137863), filed on February 16, 2007).

10.15		Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant (incorporated by reference to Exhibit 10.15 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.16		Form of Stock Escrow Agreement between the Registrant, Continental Stock Transfer & Trust Company and the Initial Stockholders (incorporated by reference to Exhibit 10.16 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.17		Form of Promissory Note (incorporated by reference to Exhibit 10.17 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.18		Form of Registration Rights Agreement among the Registrant and the Initial Stockholders (incorporated by reference to Exhibit 10.18 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.19(a)		Letter Agreement, dated September 29, 2006, between the Registrant and each of the Initial Stockholders (incorporated by reference to Exhibit 10.19 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.19(b)		Letter Agreement, dated February 16, 2007, between the Registrant and Ido Bahbut, in his capacity as an Initial Stockholder (incorporated by reference to Exhibit 10.19(b) of the Company’s Registration Statement on Form S-1/A (Registration No. 333-137863), filed on February 16, 2007).

10.20		Form of Subscription Agreement, dated September 29, 2006, between the Registrant and each of the purchasers of the founder warrants (incorporated by reference to Exhibit 10.20 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.21		Letter Agreement, dated September 29, 2006, between the Registrant and LMS Nihul regarding administrative support (incorporated by reference to Exhibit 10.21 of the Company’s Registration Statement on Form S-1 (Registration No. 333-137863), filed on October 6, 2006).

10.22		Form of Letter Agreement relating to forfeiture of shares of common stock, between the Registrant, the Underwriters and certain of the Initial Stockholders of the Company (incorporated by reference to Exhibit 10.22 of the Company’s Registration Statement on Form S-1/A (Registration No. 333-137863), filed on March 21, 2007).

10.23		Form of Promissory Note among the Underwriters and certain of the Initial Stockholders of the Company (incorporated by reference to Exhibit 10.23 of the Company’s Registration Statement on Form S-1/A (Registration No. 333-137863), filed on June 14, 2007.

10.24		Form of Pledge Agreement among the Underwriters and certain of the Initial Stockholders of the Company and the Escrow Agent (incorporated by reference to Exhibit 10.24 of the Company’s Registration Statement on Form S-1/A (Registration No. 333-137863), filed on June 14, 2007).

10.24		Letter of Intent, dated as of December 19, 2008, between Advanced Technology Acquisition Corp. and Bioness Inc. (incorporated by reference to Exhibit 10.1 of the Company’s Current Report of Form 8-K, filed December 22, 2008).

Exhibit Number		Description

14.1		Code of Conduct and Business (incorporated by reference to Exhibit 14.1 of the Company’s Annual Report on Form 10-K, filed on March 26, 2008).

31.1		Certification of Principal Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1		Audit Committee Charter (incorporated by reference to Exhibit 99.1 of the Company’s Annual Report on Form 10-K, filed on March 26, 2008).

ADVANCED TECHNOLOGY ACQUISITION CORP .

(A Development Stage Corporation)

Financial Statements as of December 31, 2008

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-2

Attestation Report of Independent Registered Public Accounting Firm	F-3

Financial statements

Balance Sheets	F-5

Statements of Operations	F-6

Statement of Changes in Stockholders’ Equity	F-7

Statement of Cash Flows	F-8

Notes to Financial Statements	F-9– F-16

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and the shareholders of

Advanced Technology Acquisition Corp.

We have audited the accompanying consolidated balance sheets of Advanced Technology Acquisition Corp. (a development stage corporation) (“the Company”) as of December 31, 2008 and 2007, and the related statements of operations, shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2008, the period August 24, 2006 (inception) to December 31, 2006 and the period August 24, 2006 (inception) to December 31, 2008. These financial statements are the responsibility of the Company’s Board of Directors and management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Advanced Technology Acquisition Corp. (a development stage corporation) as of December 31, 2008 and 2007, and the results of operations and cash flows for each of the two years in the period ended December 31, 2008 the period August 24, 2006 (inception) to December 31, 2006 and the period August 24, 2006 (inception) to December 31, 2008, in conformity with accounting principles generally accepted in United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 31, 2009 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ Brightman Almagor Zohar & Co.

Certified Public Accountants

A Member Firm of Deloitte Touche Tohmatsu

March 31, 2009

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To Board of Directors and the shareholders of

Advanced Technology Acquisition Corp.

We have audited the internal control over financial reporting of Advanced Technology Acquisition Corp. (a development stage corporation) (the "Company") as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's Board of Directors and management are responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in ITEM 9A. CONTROLS AND PROCEDURES - Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

F-3

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A material weakness relating to lack of segregation of duties because of limited staff members has been identified and included in management's assessment. This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended December 31, 2008, of the Company and this report does not affect our report on such financial statements.

In our opinion, because of the effect of the material weakness identified above on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements as of and for the year ended December 31, 2008 of the Company and our report dated March 31, 2009 expressed an unqualified opinion on those financial statements.

/s/ Brightman Almagor Zohar & Co.

Certified Public Accountants

A Member Firm of Deloitte Touche Tohmatsu

Tel Aviv, Israel

March 31, 2009

F-4

ADVANCED TECHNOLOGY ACQUISITION CORP.

(A Development Stage Corporation)

Balance Sheets

	December 31, 2 0 0 8		December 31, 2 0 0 7

ASSETS
Current assets
Cash and cash equivalents	$	32,301	$	41,869
Bank deposit		1,300,000		775,000
Prepaid expenses		-		162,150
Investment held in escrow (Note 6)		174,542,411		-

Long-term assets
Investment held in escrow (Note 6)		-		171,554,122
Total assets	$	175,874,712	$	172,533,141

LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	316,119	$	70,011
Total liabilities		316,119		70,011

Commitments and Contingencies (Note 4)

Redeemable common stock (note 5)
Issued and outstanding 8,625,000 shares as of December 31, 2008 and 2007		67,807,500		67,807,500

Stockholders’ equity (notes 5 & 7)
Preferred stock, $0.0001 par value Authorized 1,000,000 shares; none issued
Common stock, $0.0001 par value Authorized 100,000,000 shares Issued and outstanding 18,328,125 shares as of December 31, 2008 and 2007 exclusive of 8,625,000 shares outstanding classified as Redeemable common stock		1,833		1,833
Warrants		3,625,000		3,625,000
Additional paid-in capital		98,172,475		98,172,475
Retained earnings during the development stage		5,951,785		2,856,322
Total stockholders’ equity		107,751,093		104,655,630

Total liabilities and stockholders’ equity	$	175,847,712	$	172,533,141

The accompanying notes are an integral part of these Financial Statements.

F-5

ADVANCED TECHNOLOGY ACQUISITION CORP.

(A Development Stage Corporation)

Statements of Operations

	Year ended December 31, 2 0 0 8		Year ended December 31, 2 0 0 7		For the period August 24, 2006 (inception) to December 31, 2 0 0 6			For the period August 24, 2006 (inception) to December 31, 2 0 0 8

Formation and operating costs	$	816,379	$	274,919	$	5,000		$	1,096,298
Financial income		3,911,842		3,136,241		—			7,048,083
Net income		3,095,463		2,861,322		(5,000	)		5,951,785

Weighted average shares outstanding (Note 2b)		26,953,125		20,665,509		6,250,000
Basic and diluted loss per share	$	0.11	$	0.14	$	0.00

The accompanying notes are an integral part of these Financial Statements.

F-6

ADVANCED TECHNOLOGY ACQUISITION CORP.

(A Development Stage Corporation)

Statement of Changes in Stockholders’ Equity

	Common stock				Additional paid-in				Retained earnings (Accumulated deficit) during the			Stockholders’
	Shares		Amount		capital		Warrants		development stage			equity
Common shares issued at $0.0001 per share		4,687,500	$	469	$	18,281	$	-	$	-		$	18,750
Net Loss		-		-		-		-		(5,000	)		(5,000	)

Balance at December 31, 2006		4,687,500		469		18,281		-		(5,000	)		13,750

Common shares issued at $0.0001 per share (net of issuance expenses of $933,505)		12,937,500		1,294		98,151,452		-		-			98,152,746

Issuance of warrants		-		-		-		3,625,000		-			3,625,000

Reclassification of redeemable shares that are no longer redeemable to permanent equity		703,125		70		2,742		-		-			2,812

Net income		-		-		-		-		2,861,322			2,861,322

Balance at December 31, 2007 (1)		18,328,125		1,833		98,172,475		3,625,000		2,856,322			104,655,630

Net income		-		-		-		-		3,095,463			3,095,463

Balance at December 31, 2008 (1)		18,328,125	$	1,833	$	98,172,475	$	3,625,000	$	5,951,785		$	107,751,093

(1) Exclusive of 8,625,000 shares outstanding classified as Redeemable common stock

The accompanying notes are an integral part of these Financial Statements.

F-7

ADVANCED TECHNOLOGY ACQUISITION CORP.

(A Development Stage Corporation)

Statement of Cash Flows

	Year ended December 31, 2 0 0 8			Year ended December 31, 2 0 0 7			For the period August 24, 2006 (inception) to December 31, 2 0 0 6			For the period August 24, 2006 (inception) to December 31, 2 0 0 8

Cash flows from operating activities
Net income (loss)	$	3,095,463		$	2,861,322		$	(5,000	)	$	5,951,785
Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Interest receivable from deposits in escrow		(3,013,289	)		(453,806	)		-			(3,467,095	)

Changes in operating assets and liabilities:
Increase in deferred offering costs		-			-			(233,013	)		(233,013	)
Decrease in Notes and accounts payables – Stockholders		-			(74,842	)					(74,842	)
Decrease (Increase) in prepaid expenses		162,150			(162,150	)		-			-
Increase in accounts payable		246,108			70,011						316,119

Net cash provided by (used in) operating activities		490,432			2,240,535			(238,013	)		2,492,954

Cash flows used in investment activities

Investment in bank deposit and escrow		(500,000	)		(171,875,315	)		—			(172,375,315	)

Net cash used in investment activities		(500,000	)		(171,875,315	)		—			(172,375,315	)

Cash flows from financing activities
Repayment of notes to payable to shareholders		-			(219,000	)		-			(219,000	)
Proceeds from issuance of notes payable to stockholders		-			-			219,000			219,000
Proceeds from sale of shares of common stock		-			-			25,000			25,000
Proceeds from issuance of shares of common stock, net		-			166,264,662			-			166,264,662
Proceeds from issuance of warrants		-			3,625,000			-			3,625,000

Net cash provided by financing activities		-			169,670,662			244,000			169,914,662

Net increase (decrease) in cash and cash equivalents		(9,568	)		35,882			5,987			32,301

Cash and cash equivalents at the beginning of the period		41,869			5,987			-			-

Cash and cash equivalents at the end of the period	$	32,301		$	41,869		$	5,987		$	32,301

Non-cash activities
Deferred offering costs paid by shareholders	$	-		$	-		$	74,842		$	-

The accompanying notes are an integral part of these Financial Statements.

F-8

ADVANCED TECHNOLOGY ACQUISITION CORP.

(A Development Stage Corporation)

Notes to Financial Statements

NOTE 1 -

ORGANIZATION AND BUSINESS OPERATIONS

Advanced Technology Acquisition Corp. (the “Company”) was incorporated in Delaware on August 24, 2006 as a blank check company whose objective is to effect a merger, capital stock exchange, asset acquisition, stock purchase or other similar business combination with a technology or technology-related business that has operations or facilities located in Israel, or that intends to establish operations or facilities in Israel, such as research and development, manufacturing or executive offices, following its initial business combination.

At December 31, 2008, the Company had not yet commenced any operations. All activities through December 31, 2008 relate to the Company’s formation and the Public Offering (“Offering”) described below. The Company has selected December 31 as its fiscal year-end.

On June 22, 2007 the Company completed the offering. Substantially all net proceeds of this Offering are intended to be generally applied toward consummating a business combination with a technology or technology related business that has operations or facilities located in Israel, or that intends to establish operations or facilities in Israel, such as research and development, manufacturing or executive offices, following the Company’s initial business combination (“Business Combination”). The Company’s management has complete discretion in identifying and selecting the target business. There is no assurance that the Company will be able to successfully effect a Business Combination. Upon the closing of the Offering, 98.27% or $169,518,750 of the proceeds from the Offering were deposited in trust account (“Trust Account”) until the earlier of (i) the completion of a Business Combination and (ii) liquidation of the Company. The placing of funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, prospective target businesses or other entities it engages execute agreements with the Company waiving any right in or to any monies held in the Trust Account, there is no guarantee that they will execute such agreements. The remaining net proceeds (not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions, and initial and continuing general and administrative expenses (including formation expenses). The Company, after signing a definitive agreement for the acquisition of a target business, is required to submit such transaction for stockholder approval. The Company will proceed with the initial business combination only if both a majority of the shares of common stock voted by the public stockholders are voted in favor of the business combination and public stockholders owning less than 40% of the shares sold in this offering exercise their conversion rights described below. All of the Company’s stockholders prior to the Offering, including all of the officers and directors of the Company (“Initial Stockholders”), have agreed to vote their founding shares of common stock in accordance with the vote of the majority in interest of all other stockholders of the Company (“Public Stockholders”) with respect to any Business Combination. After consummation of a Business Combination, these voting safeguards will no longer be applicable.

F-9

ADVANCED TECHNOLOGY ACQUISITION CORP.

(A Development Stage Corporation)

Notes to Financial Statements

NOTE 1 -

ORGANIZATION AND BUSINESS OPERATIONS (Cont.)

With respect to a Business Combination which is approved and consummated, the Company will offer each of its Public Stockholders the right to have such stockholder’s shares of common stock converted into cash if the stockholder votes against the business combination. The per share conversion price will equal the amount in the Trust Account, calculated as of two business days prior to the consummation of the proposed Business Combination, less any remaining tax liabilities relating to interest income, divided by the number of shares of common stock held by Public Stockholders at the consummation of the Offering. Public Stockholders who convert their stock into their share of the trust account retain their warrants. The Company will not complete any proposed business combination which our Public Stockholders owning 40% or more of the shares sold in this offering both vote against and exercise their conversion rights.

The Company’s Certificate of Incorporation provides for mandatory liquidation of the Company in the event that the Company does not consummate a Business Combination within 18 months from the date of the consummation of the Offering, or 24 months from the consummation of the Offering if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months after the consummation of the Offering and the business combination relating thereto has not yet been consummated within such 18-month period. In the event of liquidation, it is likely that the per share value of the residual assets remaining available for distribution (including Trust Fund assets) will be less than the IPO price per share in the Offering (assuming no value is attributed to the Warrants contained in the Units to be offered in the Offering discussed in Note 3).

F-10

ADVANCED TECHNOLOGY ACQUISITION CORP.

(A Development Stage Corporation)

Notes to Financial Statements

NOTE 2 -

SIGNIFICANT ACCOUNTING POLICIES

Deferred taxes

Deferred income taxes are provided for the differences between the bases of assets and liabilities for financial reporting and income tax purposes. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.

Earning per share

Basic and diluted earning per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. The 6,250,000 Shares issued to the Company’s initial stockholders were issued for $0.004 per share, which is considerably less than the IPO per share price. Under the provisions of FASB No. 128 and SAB Topic 4:D such shares have been assumed to be retroactively outstanding for the period since inception. 26,953,125 options were not included in diluted earning per share because the necessary conditions for their exercisability have not been met.

Use of estimates

F-11

ADVANCED TECHNOLOGY ACQUISITION CORP.

(A Development Stage Corporation)

Notes to Financial Statements

NOTE 2 -

SIGNIFICANT ACCOUNTING POLICIES

Recently issued accounting pronouncements

On October 10, 2008, the FASB issued FSP FAS 157-3, which amends Statement 157 by incorporating “an example to illustrate key considerations in determining the fair value of a financial asset” in an inactive market. The FSP’s example emphasizes the following principles from Statement 157:

Objective of fair value — The objective of fair value measurement is to determine the price that would be received to sell an asset “in an orderly transaction that is not a forced liquidation or distressed sale” between market participants as of the measurement date. This objective does not change even when “there is little, if any, market activity for an asset” as of the measurement date.

Distressed transactions — Paragraph 9(a) of the FSP states, “Even in times of market dislocation, it is not appropriate to conclude that all market activity represents forced liquidations or distressed sales.

Management’s assumptions about nonperformance and liquidity risks — The use of management’s internal “assumptions about future cash flows and appropriately risk adjusted discount rates is acceptable” when there are no relevant observable market data. However, any assumptions or valuation techniques must take into account adjustments for nonperformance and liquidity risks that market participants would consider in valuing the asset.

Third-party pricing quotes — Quotes and information obtained from brokers or pricing services “are not necessarily determinative if an active market does not exist for the financial asset” being measured. In addition, “an entity should place less reliance on quotes that do not reflect actual market transactions.”

The Company believes that the carrying amount of its investment in the trust is the fair value of that investment as required by SFAS No. 157 and FSP SFAS 157-3.

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

F-12

ADVANCED TECHNOLOGY ACQUISITION CORP.

(A Development Stage Corporation)

Notes to Financial Statements

NOTE 3 -

PUBLIC OFFERING

The Offering called for the Company to offer for public sale 18,750,000 Units at a proposed offering price of $8.00 per Unit (plus additional 2,812,500 units solely to cover over-allotments).

Each Unit consisted of one share of the Company’s common stock and one Redeemable Common Stock Purchase Warrants (“Warrants”). Each Warrant entitles the holder to purchase from the Company one share of common stock at an exercise price of $6.00 commencing the later of the completion of a Business Combination and one year from the effective date of the Offering and expiring four years from the effective date of the Offering. The Company may redeem the Warrants, at a price of $.01 per Warrant upon 30 days’ notice after the Warrants become exercisable, if, and only if, the last sales price of the Company’s common stock equals or exceeds $11.50 per share for any 20 trading days within a 30 trading day period ending three business days before the Company sends the notice of redemption. The Company has agreed to pay to the underwriter in the Offering an underwriting discount of 3.25% of the gross proceeds of the Offering and an additional contingent fee of 3.75% of the gross proceeds of the Proposed Offering. Such additional contingent fees are payable after the consummation of the initial business combination. The Company issued additional 3,625,000 warrants to certain of its initial stockholders (“founder warrants”) in the amount of $3,625,000, which took place in a private placement simultaneously with the consummation of this offering.

NOTE 4 -

COMMITMENTS AND CONTINGENCIES

The Company presently occupies office space provided by certain of the Initial Stockholders. Such stockholders have agreed that, until the Company consummates a Business Combination, it will make such office space, as well as certain office and secretarial services, available to the Company, as may be required by the Company from time to time. The Company has agreed to pay such stockholders $10,000 per month for such services commencing on the effective date of the Offering.

The initial stockholders will be entitled to make up to two demands that the Company register their shares pursuant to an agreement to be signed in connection with the IPO. The holders of the majority of these shares can elect to exercise these registration rights at any time after the date on which the lock-up period expires. In addition, these stockholders have unlimited piggy-back registration rights on registration statements filed subsequent to such date. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

The Company has sold to the underwriter for $100, as additional compensation, an option to purchase up to a total of 1,125,000 units at a price of $8.80 per unit. The units issuable upon exercise of this option are identical to those offered by the Company, except that the warrants underlying such units will expire five years from the date of the offering and will become exercisable on the later of completion of a business combination and 18 months from the date of the offering .

F-13

ADVANCED TECHNOLOGY ACQUISITION CORP.

(A Development Stage Corporation)

Notes to Financial Statements

NOTE 4 -

COMMITMENTS AND CONTINGENCIES (Cont.)

Effective June 16, 2008 the Company decided to compensate three newly appointed board members with $2,000 per month and $500 per meeting. Such compensation is contingent and payable upon the consummation of an initial business combination, as approved by a majority of the shares of common stock of the Company voted by the Company’s public stockholders. As the business combination has not materialized yet, the provision of $ 22,500 for the compensation of the new board members has not been recorded in the financial statements as of December 31, 2008.

NOTE 5 -

REDEEMABLE COMMON STOCK

The balance as at December 31, 2008 represents the amount of shares that may be converted by the shareholders. The amount equals 40% of the proceeds held in the trust.

Following the change in structure of the Offering the Company was granted a right to cancel up to an aggregate of 1,562,500 shares of common stock held by existing stockholders in the event that the collective ownership of such persons or entities exceeds 20.0% following the completion of the offering and the exercise of the over-allotment option by the underwriters. In accordance with the agreement with the underwriters, this right to cancel shares will be only in an amount sufficient to cause the existing stockholders to maintain control over 20.0% of the Company’s outstanding shares after giving effect to the offering and the exercise of the underwriters’ over-allotment option. Upon the consummation of the Offering, 859,375 of the 1,562,500 were cancelled.

NOTE 6 -

INVESTMENT HELD IN ESCROW

The Company accounts for its investments in accordance with SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities" (“SFAS 115”). The investment was managed by Lehman Brothers.

The investment in escrow consists of short maturity tax exempted municipal bonds. This investment is classified as available for sale which is recorded at fair value, with any unrealized appreciation or depreciation in value recorded in Other Comprehensive Income ("OCI"). Interest received during the period is recognized in earnings. The carrying amount of the investment as of the transfer to Wachovia Securities (as described below) approximated its initial cost plus interest received, thus no amounts recorded in OCI. Following the collapse of Lehman Brothers the Company transferred the trust amount to Wachovia Securities and purchased the same type of investment as described above. The Company incurred no losses in that transfer.

During March 2009, the company moved its investment held in escrow from the short maturity tax exempted municipal bonds it holds into US Treasury bills .

F-14

ADVANCED TECHNOLOGY ACQUISITION CORP.

(A Development Stage Corporation)

Notes to Financial Statements

NOTE 7 -

PREFERRED STOCK

The Company is authorized to issue 1,000,000 shares of blank check preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors.

NOTE 8 -

DEFINITE AGREEMENT WITH BIONESS INC.

In December 22, 2008, the Company had entered into a letter of intent (the “LOI”) to complete a business combination by means of a merger ( the “Merger”) with Bioness, Inc., a Delaware corporation (“Bioness”) having significant business operations in Israel. Pursuant to the Company’s Amended and Restated Certificate of Incorporation, the execution of the LOI affords the Company a six-month extension for completion of a business combination, until June 22, 2009.

The LOI provides that, within four business days following the date of its execution: (1) certain principal stockholders of the Company (the “Founders”) must enter into an agreement to cancel an aggregate of 3,625,000 warrants (the “Founder Warrants”) purchased by the Founders in connection with the Company’s initial public offering (the "IPO") and (2) the underwriters of the Company’s IPO must enter into an agreement to cancel the option to purchase up to an aggregate of 1,125,000 units (consisting of the Company Common Stock and warrants to purchase the Company Common Stock) (the “Unit Purchase Option”) that was granted to such underwriters in connection with such IPO. The LOI also provides that, immediately prior the execution of a definitive agreement, the Founders will deliver to the Company for cancellation for no consideration an aggregate of 1,000,000 shares of Company Common Stock.

The LOI provides that, following execution of a definitive agreement, Bioness will commence a tender offer for the purchase of the Company’s outstanding warrants for four cents per warrant. The LOI further provides that, as a condition to the tender offer, 100% of the outstanding warrants will be tendered and not withdrawn. It is a condition to the commencement of the tender offer that, not later than one business day prior to the announcement by Bioness of the tender offer, all Founder Warrants and Unit Purchase Option will be canceled with the consent of the holders thereof. All warrants purchased in the tender offer will be terminated immediately following their purchase. Bioness’ obligation to consummate the Merger is conditioned upon satisfaction of the foregoing conditions to the tender offer. All costs and expenses related to the tender offer will be paid by Bioness.

Subject to certain exceptions, the LOI provides that each of the Company stockholder that (a) purchased shares of the Company Common Stock in the Company’s IPO or subsequently purchased shares of the Company Common Stock on the American Stock Exchange, (b) voted in favor of the Merger, and (c) holds any shares of the Company Common Stock following the closing of the Merger will be granted a non-transferable put option to sell such shares to the Company at a price of $8.20 per share. Such put option will be exercisable during the 30-day period commencing on the second anniversary of the closing of the Merger.

F-15

ADVANCED TECHNOLOGY ACQUISITION CORP.

(A Development Stage Corporation)

Notes to Financial Statements

NOTE 8 -

DEFINITE AGREEMENT WITH BIONESS INC. (Cont.)

To secure payment to the holders of the put option, all available funds of the Company (minus all transaction costs and expenses), on the date of the closing of the Merger minus a working capital reserve, will be set aside in trust (the “Option Trust”).

The consummation of the business combination is subject to, among other things, negotiation and execution of a definitive agreement, reasonable satisfaction of due diligence inquires and required stockholder approval. There can be no assurances that a business combination will be consummated.

Bioness Inc. is a neuromodulation company marketing non-invasive medical devices and developing minimally-invasive implantable products intended to treat the tens of millions of individuals suffering from disabling conditions caused by various neurological events and conditions (such as stroke and multiple sclerosis), chronic pain and urological syndromes. Bioness’ non-invasive technologies are used for central nervous system disorders and may provide such patients with increased levels of physical independence, productivity and symptom management. Bioness' investigational lines of minimally-invasive implantable devices target the peripheral nervous system. The devices are in various stages of research and design, including clinical trials, and are intended to be smaller, less invasive, less expensive, more site-specific and safer than current implantable devices.

F-16

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