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EX-31.2 - ISRAEL GROWTH PARTNERS ACQUISITION CORP.v168072_ex31-2.htm
EX-32.1 - ISRAEL GROWTH PARTNERS ACQUISITION CORP.v168072_ex32-1.htm
EX-32.2 - ISRAEL GROWTH PARTNERS ACQUISITION CORP.v168072_ex32-2.htm
EX-31.1 - ISRAEL GROWTH PARTNERS ACQUISITION CORP.v168072_ex31-1.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-K
 
(Mark One)
 þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended July 31, 2009
OR
 
 o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from          to
 
Commission File Number 000-51980
 
ISRAEL GROWTH PARTNERS ACQUISITION CORP.
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
 
20-3233358
(State or Other Jurisdiction of
 
(I.R.S. Employer
Incorporation or Organization)
 
Identification No.)

1600 Tysons Boulevard
Suite 1150
McLean, Virginia 22102
(703) 286-1390
(Address including zip code, and telephone number, including area code, of principal executive offices)
 
Securities registered pursuant to Section 12(g) of the Act:
 
None
 
Securities registered pursuant to Section 12(b) of the Act:
 
Common Stock, par value $.0001 per share
Class W Warrants, each to purchase one share of common stock
Class Z Warrants, each to purchase one share of common stock
Series A Units, each consisting of two shares of common stock and ten Class Z warrants
(Title of Class)
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o     No þ
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o     No þ
 
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 (the “Exchange Act”) 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 o     No þ
 
Indicate by check mark whether the registrant (1) has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o     No o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the 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.  o
 
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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer o
 
Accelerated filer o
 
Non-accelerated filer o
 
Smaller reporting company þ
             
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes þ   No o
 
The aggregate market value of the common stock held by nonaffiliates of the registrant (530,800 shares) based on the $0.055 closing price of the registrant’s common stock as reported on the Over-the-Counter bulletin board on November 30, 2009, was approximately $29,194. For purposes of this computation, all officers, directors and 10% beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed to be an admission that such officers, directors or 10% beneficial owners are, in fact, affiliates of the registrant.
 
As of November 30, 2009, there were 1,065,100 outstanding shares of the registrant’s common stock.

 
 

 

CAUTIONARY NOTES REGARDING FORWARD-LOOKING STATEMENTS
 
This report on Form 10-K contains forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
 
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “intends,” “potential” and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. We discuss many of these risks in greater detail under the heading “Risk Factors” in Item 1A.  Also, these forward-looking statements represent our estimates and assumptions only as of the date of this report. Except as required by law, we assume no obligation to update any forward-looking statements after the date of this report.

 
1

 

PART I
 
Item 1.  Business
 
Overview
 
We were formed on August 1, 2005 to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination with a currently unidentified operating business which has operations or facilities located in Israel, or which is a company operating outside of Israel which our management believes would benefit from establishing operations or facilities in Israel.  On July 18, 2006, we completed our initial public offering of 500,000 Series A Units and 4,600,000 Series B Units.  We have neither engaged in any operations, nor generated any revenues, nor incurred any debt or expenses other than in connection with our initial public offering and thereafter, expenses related to identifying and pursuing acquisitions of targets and expenses related to liquidating our trust fund for the benefit of our Class B common stockholders and reconstituting the Company as an ongoing business corporation.  We have incurred expenses only in connection with (i) the preparation and filing of our quarterly reports on Form 10-Q, annual reports on Form 10-K and proxy statements in connection with the February 16, 2009 Stockholders’ Meeting and (ii) travel expenses related to finding and developing acquisition candidates.  Our travel expense policies are consistent with good business practice, and we try to minimize such costs to the extent possible.
 
At a special meeting of our stockholders held on February 16, 2009, our stockholders approved a proposal to distribute our trust fund for the benefit of our Class B common stockholders, without the requirement that we dissolve and liquidate.  As a result of the stockholder vote, we filed an amendment to our certificate of incorporation which resulted in the cancellation of all shares of our Class B common stock, and the conversion of those shares into the right to receive a pro rata share of the trust fund distribution.  Thereafter, our Class B common stock and Series B Units ceased to be quoted on the Over-The-Counter bulletin board and ceased to trade or be tradable, and the trust fund was distributed to the holders of Class B common stock.
 
At a continuation of the special stockholder meeting held on February 17, 2009, our stockholders (then consisting only of holders of common stock) approved proposals to amend and restate our certificate of incorporation to (i) remove certain blank check company-related restrictions, including provisions which required us to dissolve following the distribution of the trust fund and provisions authorizing the Class B common stock, and (ii) increase the authorized shares of common stock from 40,000,000 shares to 80,000,000 shares.  As a result of this stockholder vote, we filed an amended and restated certificate of incorporation, which allowed us to continue our corporate existence following the distribution of the trust fund.
 
We believe that our previous focus on operating businesses which have operations or facilities located in Israel, or which are operating outside of Israel but would benefit from establishing operations or facilities in Israel, was too limiting and we are now broadening our search without regard to the industry in which potential targets operate. We seek a business which is profitable, with positive cash flow, with significant growth potential and which can benefit from (i) the advantages which typically accrue to a public company such as greater visibility, greater ability to finance growth through acquisition, and greater ability to attract talent by offering incentive and contingent compensation, and (ii) the strategic, financial and operational expertise and experience our management can offer on an ongoing basis.
 
We are a “blank check” company.  The Securities and Exchange Commission. or the SEC, defines those companies as “any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.” Under SEC Rule 12b-2 under the Exchange Act, we also qualify as a “shell company,” because we have no or nominal assets (other than cash) and no or nominal operations.  Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.
 
Our current plan is to acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our current business consists solely of identifying, researching and negotiating the purchase of a business management deems to be in the best interest of our shareholders.  Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings.  We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.  We cannot assure you that we will be able to locate an appropriate target business or that we will be able to engage in a business combination with a target business on favorable terms.
 
 
2

 
 
The analysis of new business opportunities will be undertaken by or under the supervision of our officers and directors.  We are not currently a party to any definitive agreement with any party.  We have unrestricted flexibility in seeking, analyzing and participating in potential business opportunities.  In our effort to analyze potential acquisition targets, we will consider the following kinds of factors:
 
 
·
Potential for growth, indicated by new technology, anticipated market expansion or new products;
 
 
·
Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;
 
 
·
Strength and diversity of management, either in place or scheduled for recruitment;
 
 
·
Capital requirements and anticipated availability of required funds, to be provided by us or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;
 
 
·
The cost of our participation as compared to the perceived tangible and intangible values and potentials;
 
 
·
The extent to which the business opportunity can be advanced;
 
 
·
The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and
 
 
·
Other relevant factors.
 
In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Due to our limited capital available for investigation, we may not discover or adequately evaluate adverse facts about the opportunity to be acquired.
 
Management
 
In connection with the changes to our business identified above, we expect that our management may change in the future.  J. Patrick McMahon is expected to continue as our Chief Executive Officer and our sole director indefinitely.  However, in light of the our new, broader investment focus beyond the Israel and the expectation we may raise additional capital to fund ongoing operations, it is likely that the composition of our board of directors will change to include representation by or with respect to the individuals or institutions providing that additional capital.
 
No Identified Target Business
 
To date, we have not identified any specific potential acquisition candidates other than those associated with our previous focus on Israel and referred to in previous public disclosures, and we have not made preliminary or firm offers to or completed a business combination with any target. We cannot assure you that we will be able to identify a target business or that we will be able to engage in a business combination with a target business on favorable or acceptable terms. We have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
 
Sources of Target Businesses
 
Based on our management’s experience in finance and industry and with transactions involving the acquisition of operating businesses, we believe that there are numerous acquisition candidates. In general, our review procedure is expected to be as follows: Once an operating business passes an initial screening intended to eliminate any obviously unsuitable candidates, we will examine it through analysis of available information and general due diligence. We will then pursue in more detail and at greater expense in time, money and effort the most promising businesses we identify. In addition to our management’s, directors’ and advisors’ extensive experience and personal networks, potential target businesses may be brought to our attention by 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, meetings or mailings. These sources may also introduce us to target businesses they think we may be interested in on an unsolicited basis, since we are known to be looking for acquisition candidates. We may agree (and have agreed in the past) to pay unaffiliated parties a fee if a purchase transaction is consummated with the target company brought to our attention by such a party. Our management continues to broaden its network of contacts by attending seminars, trade shows and conventions. We may engage firms in the finance or transaction businesses in the future, in which event we may pay a finder’s fee or other compensation to them in an amount and on such terms to be determined at the time of the engagement in an arm’s length negotiation. A finder’s fee or other compensation payable by us might be conditioned, in whole or in part, on the consummation of the related acquisition and would likely be a percentage of the fair market value of the transaction, with the percentage to be determined on an arm’s length basis based on market conditions at the time we enter into an agreement with a finder or broker.
 
 
3

 
 
Competition
 
In identifying, evaluating and selecting a target business, we may encounter intense competition from other entities having a business objective similar to ours. There are numerous “public shell” companies either actively or passively seeking operating businesses with which to merge in addition to a large number of “blank check” companies formed and capitalized specifically to acquire operating businesses. Additionally, we are subject to competition from other companies looking to expand their operations through the acquisition of a target business. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources will be relatively limited when contrasted with those of many of these competitors. Our ability to compete in acquiring certain sizable target businesses is limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of a target business. Further, our outstanding warrants and the future dilution they potentially represent may not be viewed favorably by certain target businesses.
 
Any of these factors may place us at a competitive disadvantage in successfully negotiating a business combination. 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 with a business objective similar to ours to acquire a target business on favorable terms.
 
If we succeed in effecting a business combination, there will be, in all likelihood, intense competition from competitors of the target business. Many of our target business’ competitors are likely to be significantly larger and have far greater financial and other resources than we will. Some of these competitors may be divisions or subsidiaries of large, diversified companies that have access to financial resources of their respective parent companies. Our target business may not be able to compete effectively with these companies or maintain them as customers while competing with them on other projects. In addition, it is likely that our target business will face significant competition from smaller companies that have specialized capabilities in similar areas. We cannot accurately predict how our target business’ competitive position may be affected by changing economic conditions, customer requirements or technical developments. We cannot assure you that, subsequent to a business combination, we will have the resources to compete effectively.
 
Facilities
 
Our sole office is located at 1600 Tysons Blvd., Suite 1150, McLean, Virginia, and is presently provided free of charge by FI Investment Group, LLC, one of our shareholders.  We consider our current office space adequate for our current operations.
 
Employees
 
We do not have any employees. Our sole director currently serves in an executive capacity in order for the board of directors to be able to discharge its responsibilities until such time as we acquire an operating business. This individual has other business interests and is not obligated to contribute any specific number of hours to our matters and intend to devote only as much time as they deems necessary to our affairs. The amount of time he will devote in any time period will vary based on whether a target business has been selected for a business combination and the stage of our business combination process. When a target business which is believed to be worthy of further examination as a potential acquisition, he will spend more time investigating that target business and negotiating a potential business combination (and consequently more time on our affairs) than he will when no specific target business has been identified. We do not intend to have any full time employees prior to the consummation of a business combination.
 
Available Information
 
We file or submit to the SEC annual, quarterly and current periodic reports, proxy statements and other information meeting the informational requirements of the Exchange Act.  While we do not have a website with available filings, we will provide at no additional charge, copies of these reports, proxy and information statements and other information upon request to our address at 1600 Tysons Blvd., Suite 1150, McLean, Virginia. You may also inspect and copy these reports, proxy and information statements and other information, and related exhibits and schedules, at the Public Reference Room of the SEC at 100 F Street, NE, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a website that contains reports, proxy, information statements and other information filed electronically by us with the SEC which are available on the SEC’s website at http://www.sec.org.
 
 
4

 
 
Item 1A.  Risk Factors
 
The absence of operations and revenues raises substantial doubt about our ability to continue as a going concern.
 
The report of our independent auditor included in this report indicates that we are in the development stage, have suffered losses from operations, and have yet to generate cash flow, and that these factors raise substantial doubt about our ability to continue as a going concern.  In addition, we have no significant assets or financial resources.  We will continue to sustain operating expenses without corresponding revenues, at least until the consummation of a business combination.  This will result in continued net operating losses that will increase until we can consummate a business combination with a profitable target business.  In light of our limited resources, we cannot assure you that we will be able to continue operations, that we will be able to identify a suitable target business or that we will consummate a business combination.
 
We are not generating any revenue, have limited capital resources and are dependent entirely upon our largest stockholder to fund our operations.
 
We are not generating any revenues and possess limited capital to fund our operations, including for such purposes as preparing and filing periodic reports under the Exchange Act, identifying a target business and negotiating a business combination.  We are dependent entirely on our largest stockholder to provide funds for the foregoing requirements and for any other corporate purposes that may arise in the future.  Though our largest stockholder has advised us of its intention to fund our operations, there is no written agreement binding it to do so.  Our operating and financial condition renders it unlikely that we would be able to obtain third-party financing to sustain operations, if necessary.   In the even that our largest stockholder does not fund our capital requirements, we may not be able to continue operations and stockholders could lose the entire amount of their investment in us.
 
We may have insufficient resources to cover our operating expenses and the costs and expenses of consummating a business combination.
 
At July 31, 2009, we had cash on hand of $22,689.  We do not expect that these funds will be sufficient to cover our operating costs and expenses, including those we will incur in connection with satisfying our reporting obligations under the Exchange Act and consummating a business combination.  If our financial resources are inadequate to cover our costs and expenses, we will require additional financing and we cannot be certain that such financing will be available to us on acceptable terms, if at all.  Our failure to secure funds necessary to cover our costs and expenses would have an adverse affect on our operations and ability to achieve our objective.
 
We are a development stage company with no operating history and, accordingly, you will not have any basis on which to evaluate our ability to achieve our business objective.
 
We are a development stage company and have not engaged in any revenue generating activities to date.  Since we do not have any operating history, you will have no basis upon which to evaluate our ability to achieve our business objective.  We are currently in the process of evaluating and identifying targets for a business combination.  We are not presently engaged in, and will not engage in, any substantive commercial business or generate any revenue until we consummate a such a transaction, if ever.  We cannot assure you as to when or if a business combination will occur.
 
Our future success is dependent on the ability of management to complete a business combination with a target business that operates profitably. The nature of our operations is highly speculative.  The future success of our plan of operation will depend entirely on the operations, financial condition and management of the target business with which we may enter into a business combination.  While management intends to seek to enter into a business combination with an entity having an established, profitable operating history, we cannot assure you that we will be successful in consummating a business combination with a candidate that meets that criterion.  In the event we complete a business combination, the success of our operations will be dependent upon management of the target business and numerous other factors beyond our control.
 
Because there are numerous companies with a business plan similar to ours seeking to effectuate a business combination, it may be difficult for us to complete a business combination.
 
There are a large number of “public shell” companies, “blank check” companies and operating companies seeking to acquire operating businesses and we are subject to competition from these and other companies seeking to consummate a business combination. We cannot assure you that we will be able to successfully compete for an attractive business combination.
 
 
5

 
 
Since we have not yet identified a target business, we cannot currently ascertain the merits or risks of the business which we may ultimately acquire.
 
We may consummate a business combination with any entity that has an operating business. We are currently in the process of evaluating and identifying targets for a business combination. We have not engaged or retained any agent or other representative to identify or locate any suitable target, although we may do so in the future. Accordingly, there is no current basis for you to evaluate the possible merits or risks of the particular target business which we may ultimately acquire. To the extent we complete a business combination with a financially unstable business or an entity in its development stage, we may be affected by numerous risks inherent in the operations of that business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors.
 
Initially, we will only be able to complete one business combination, which will cause us to be solely dependent on a single business and a limited number of products or services.
 
Because of our uncertain and limited capital position, it is likely that any business combination we enter into with an operating business will likely be for stock, or will be closed simultaneously with an equity or debt transaction to raise additional capital for the purchase transaction and possibly for working capital as well. Thus, we expect that initially we will have the ability to complete only a single business combination, although this may entail the simultaneous acquisitions of several closely related operating businesses. By consummating a business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the security industry. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:
 
 
·
solely dependent upon the performance of a single business; or
 
 
·
dependent upon the development or market acceptance of a single or limited number of products, processes or services.
 
Alternatively, if our business combination entails the simultaneous acquisitions of several operating businesses and with different sellers, each such seller will need to agree that the purchase of its business is contingent upon simultaneous closings of the other acquisitions, which may make it more difficult for us, and delay our ability, to complete the business combination. If we were to consummate a business combination with several operating businesses, we could also face additional risks, including burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies into a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
 
Because of our limited resources and structure, we may not be able to consummate an attractive business combination.
 
We expect to encounter intense competition from other entities with business objectives similar to ours including blank check companies, 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. Additionally, our outstanding Class W warrants and Class Z warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Any of these factors may place us at a competitive disadvantage in successfully negotiating a business combination.
 
We may have insufficient capital or be unable to obtain additional financing, if required, to complete a business combination or to fund the operations and growth of the target business, which could compel us to restructure the transaction or abandon a particular business combination.
 
We cannot ascertain the capital requirements for any particular transaction. If the capital available to us proves to be insufficient, either because of the size of the business combination or the depletion of the available net proceeds in search of a target business, we will be required to seek additional financing. We cannot assure you that such financing would be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to consummate a particular business combination, we would be compelled to restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, if we consummate a business combination, we may require additional financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after a business combination.
 
 
6

 
 
Our sole officer and director will apportion his time to other businesses which may cause conflicts of interest in his determination as to how much time to devote to our affairs.  This conflict of interest could have a negative impact on our ability to consummate a business combination.
 
Our sole officer and director engages in other businesses and is not required to devote his full time or any specific number of hours to our affairs, which could create a conflict of interest when allocating his time between our operations and his other commitments.  We do not have and do not expect to have any full time employees prior to the consummation of a business combination.  If our management’s other business affairs requires him to devote more substantial amounts of time to such affairs, it could limit his ability to devote time to our affairs and could have a negative impact on our ability to consummate a business combination.  We cannot assure you that these conflicts will be resolved in our favor.
 
Our outstanding warrants and options may have an adverse effect on the market price of our common stock and warrants and make it more difficult to effect a business combination.
 
We issued warrants to purchase 15,561,000 shares of common stock in our initial public offering.  We have also issued to our initial security holders, warrants to purchase 4,950,000 shares of common stock at an exercise price of $5.00 per share. We also issued an option to certain of our securities to the representative of the underwriters of our initial public offering which, if exercised, will result in the issuance of an additional 510,000 shares of common stock and 710,000 warrants.  To the extent we issue shares of common stock to effect a business combination, the potential for the issuance of substantial numbers of additional shares upon exercise of these warrants and option could make us a less attractive acquisition vehicle in the eyes of a target business as such securities, when exercised, will increase the number of issued and outstanding shares of our common stock and reduce the value of the shares issued to complete the business combination. Accordingly, our warrants and option may make it more difficult to effectuate a business combination or increase the cost of the target business. Additionally, the sale, or even the possibility of sale, of the securities underlying the warrants and option could have an adverse effect on the market price for our securities or on our ability to obtain future public financing. If and to the extent these warrants and option are exercised, our existing stockholders may experience dilution of their holdings.
 
Item 2. Properties
 
We do not own any material property.  Our sole office is located at 1600 Tysons Blvd., Suite 1150, McLean, Virginia, and is presently provided free of charge by FI Investment Group, LLC, one of our shareholders.  We consider our current office space adequate for our current operations.
 
Item 3.  Legal Proceedings
 
To the knowledge of our officers and directors, we are not a party to any legal proceeding or litigation.

 
7

 

PART II
 
Item 5.  Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 
Following our initial public offering in July 2006, our Series A units, Series B units, common stock, Class B common stock, Class W warrants and Class Z warrants were listed on the Over-the-Counter bulletin board under the symbols IGPAU, IGPBU, IGPAA, IGPAB, IGPAW and IGPAZ, respectively.
 
Our Class B common stock ceased trading on the Over-the-Counter bulletin board and was cancelled and converted into a right to receive approximately $5.40 per share from our trust fund on February 17, 2009. As a result of the cancellation of the Class B common stock, our Series B units were mandatorily separated from their associated Class W warrants and then cancelled on February 17, 2009.  Our Series A units, common stock, Class W warrants and Class Z warrants now trade on the Over-the-Counter bulletin board under the symbols IGPUE, IGPAE, IGPWE and IGPZE, respectively.
 
The following table sets forth, for the calendar quarter indicated, the quarterly high and low closing sale prices of our securities as reported on the Over-the-Counter bulletin board in US dollars. The quotations listed below reflect interdealer prices, without retail markup, markdown or commission and may not necessarily represent actual transactions.
 
   
Common Stock
   
Class W
Warrants
   
Class Z
Warrants
   
Series A Units
 
   
High
   
Low
   
High
   
High
   
High
   
High
   
High
   
High
 
2007 
                                               
Third Quarter
    1.85       1.32       0.20       0.15       0.50       0.30       6.53       5.42  
Fourth Quarter
    1.60       0.80       0.15       0.06       0.30       0.15       5.55       2.75  
                                                                 
2008
 
First Quarter
    1.01       0.60       0.18       0.04       0.20       0.13       3.50       2.00  
Second Quarter
    0.60       0.18       0.05       0.01       0.14       0.01       2.00       0.62  
Third Quarter
    1.47       0.24       0.10       0.01       0.13       0.01       3.60       0.60  
Fourth Quarter
    5.00       0.75       0.01       0.002       0.04       0.01       4.00       1.05  
2009
 
First Quarter
    5.00       5.00       0.002       0.0007       0.01       0.01       1.05       1.05  
Second Quarter
    5.00       5.00       0.0007       0.0001       0.01       0.01       1.05       1.05  
Third Quarter
    5.00       5.00       0.0001       0.0001       0.01       0.01       1.05       0.11  
 
The trading of our securities, especially our Class W and Class Z warrants, is limited, and therefore there may not be deemed to be an established public trading market under guidelines set forth by the SEC.  As of November 30, 2009, there were 3 stockholders of record of our common stock, 8 holders of record of our Class W warrants, 8 holders of record of our Class Z warrants, and 1 holder of record of our Series A units. Such numbers do not include beneficial owners holding shares, units or warrants through nominee names.
 
Dividends
 
We have not paid any dividends on our units or our common stock to date and do not intend to pay dividends.
 
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
The following discussion should be read in conjunction with our financial statements and footnotes thereto contained in this report.
 
General
 
We were formed on August 1, 2005 to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination with a currently unidentified operating business which has operations or facilities located in Israel, or which is a company operating outside of Israel which our management believes would benefit from establishing operations or facilities in Israel. On July 18, 2006, we completed our initial public offering of 500,000 Series A Units and 4,600,000 Series B Units.   We have neither engaged in any operations, nor generated any revenues, nor incurred any debt or expenses other than in connection with our initial public offering and thereafter, expenses related to identifying and pursuing acquisitions of targets and expenses related to liquidating our trust fund for the benefit of our Class B common stockholders and reconstituting the Company as an ongoing business corporation.  We have incurred expenses only in connection with (i) the preparation and filing of our quarterly reports on Form 10-Q, annual reports on Form 10-K and proxy statements in connection with the February 16, 2009 Stockholders’ Meeting and (ii) travel expenses related to finding and developing acquisition candidates.  Our travel expense policies are consistent with good business practice, and we try to minimize such costs to the extent possible.
 
 
8

 
 
At a special meeting of our stockholders held on February 16, 2009, our stockholders approved a proposal to distribute our trust fund for the benefit of our Class B common stockholders, without the requirement that we dissolve and liquidate.  As a result of the stockholder vote, we filed an amendment to our certificate of incorporation which resulted in the cancellation of all shares of our Class B common stock, and the conversion of those shares into the right to receive a pro rata share of the trust fund distribution.  Thereafter, our Class B common stock and Series B Units ceased to be quoted on the Over-The-Counter bulletin board and ceased to trade or be tradable, and the trust fund was distributed to the holders of Class B common stock.
 
At a continuation of the special stockholder meeting held on February 17, 2009, our stockholders (then consisting only of holders of common stock) approved proposals to amend and restate our certificate of incorporation to (i) remove certain blank check company-related restrictions, including provisions which required us to dissolve following the distribution of the trust fund and provisions authorizing the Class B common stock, and (ii) increase the authorized shares of common stock from 40,000,000 shares to 80,000,000 shares.  As a result of this stockholder vote, we filed an amended and restated certificate of incorporation, which allowed us to continue our corporate existence following the distribution of the trust fund.
 
Our current plan is to acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our current business consists solely of identifying, researching and negotiating the purchase of a business management deems to be in the best interest of our shareholders.  Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings.  We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.  We cannot assure you that we will be able to locate an appropriate target business or that we will be able to engage in a business combination with a target business on favorable terms.
 
Results of Operations
 
Net loss for the year ended July 31, 2009 of $(66,898) consisted of interest income on the trust fund investment of $304,526 and interest on cash and cash equivalents of $1,616, offset by professional fees of $238,028, Delaware franchise taxes of $8,052 and other operating expenses of $126,960, which consist of $17,903 for a monthly administrative services agreement with an affiliate, $88,826 for insurance, $1,137 for travel, and $19,904 for other expenses.
 
Net income for the year ended July 31, 2008 of $798,309 consisted of interest income on the trust fund investment of $1,470,978 and interest on cash and cash equivalents of $27,725, offset by professional fees of $427,454, Delaware franchise taxes of $77,631 and other operating expenses of $195,309, which consist of $90,000 for a monthly administrative services agreement with an affiliate, $61,110 for insurance, $33,3935 for travel, and $10,806 for other expenses.
 
Net income for the period from inception (August 1, 2005) to July 31, 2009 of $2,125,834 consisted of interest income on the trust fund investment of $3,623,908 and interest on cash and cash equivalents of $91,837, offset by professional fees of $825,066, Delaware franchise taxes of $229,520 and other operating expenses of $535,325, consisting of $202,984 for a monthly administrative services agreement with an affiliate, $224,840 for insurance, $68,124 for travel and $39,377 for other expenses.
 
Liquidity and Capital Resources
 
We consummated our initial public offering of 500,000 Series A units and 4,600,000 Series B units on July 18, 2006. On July 26, 2006, we consummated the closing of an additional 32,500 Series A Units and 518,000 Series B Units that were subject to the over-allotment option. Proceeds from our initial public offering were approximately $52.9 million, net of underwriting and other expenses of approximately $3.3 million, of which $51,691,800 was deposited into the trust fund with American Stock Transfer & Trust Company as trustee, and the remaining $1.2 million was held outside of the trust fund. The proceeds held outside the trust are available to be used by us, and are being used by us, to provide for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses.  The proceeds held in the trust fund were distributed to our Class B stockholders beginning on February 18, 2009 (see Note 3 to our audited financial statements included elsewhere in this report).
 
 
9

 
 
As indicated in the accompanying financial statements, at July 31, 2009, we had $22,689 in cash, current liabilities of $60,117 and working capital deficit of $$37,42. Further, we have incurred and expect to continue to incur costs in pursuit of acquisition plans.  We believe that we will need to raise capital to fund ongoing operations, and we may be unable to continue operations unless further financing is consummated. Costs for ongoing operations are anticipated to include the compliance cost of continuing to remain a public reporting company, and to fund the acquisition of an operating business. There is no assurance that the Company’s plans to raise capital or to consummate a transaction will be successful.
 
We do not currently have any specific capital-raising plans. We may seek to issue equity securities, including preferred securities for which we may determine the rights and designations, common stock, warrants, equity rights, convertibles notes and any combination of the foregoing. Any such offering may take the form of a private placement, public offering, rights offering, other offering or any combination of the foregoing at fixed or variable market prices or discounts to prevailing market prices. We cannot assure you that we will be able to raise sufficient capital on favorable, or any, terms. If the proposals, discussed above, are approved we may be deemed to be a “blank check company” for purposes of the federal securities laws. If we are deemed to be “blank check company”, regulatory restrictions that are more restrictive than those currently set forth in our certificate of incorporation may apply to any future public offerings by us and may further limit our ability to raise funds for our operations.
 
Critical Accounting Policies
 
Our significant accounting policies are described in Note 3 to our audited financial statements included elsewhere in this report. We believe the following critical accounting polices involved the most significant judgments and estimates used in the preparation of our financial statements.
 
Item 9A(T).  Controls and Procedures
 
Evaluation of Disclosure Controls and Procedures
 
Based on the evaluation of our disclosure controls and procedures (as defined in the Rules 13a-15(e) and 15d-15(e) under the Exchange Act) required by Exchange Act Rules 13a-15(b) or 15d-15(b), our chief executive officer and our chief financial officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective.
 
Limitations on the effectiveness of controls
 
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives.
 
Management's Report on Internal Control Over Financial Reporting
 
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process used to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles in the United States. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles in the United States, and that our receipts and expenditures are being made only in accordance with the authorization of our board of directors and management; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
 
An internal control system over financial reporting has inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. However, these inherent limitations are known features of the financial reporting process.  Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
 
Our management assessed the effectiveness of our internal control over financial reporting as of July 31, 2009. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework. Based on management’s assessment and those criteria, our management believes that we maintained effective internal control over financial reporting as of July 31, 2009.
 
 
10

 
 
 
Changes in Internal Controls
 
There were no changes in our internal controls over financial reporting during the quarter ended July 31, 2009 that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.
 
 
11

 
 
PART III
 
Item 10.  Directors, Executive Officers and Corporate Governance
 
Our sole executive officer and director as of November 30, 2009 is as follows:
 
Name 
 
Age
 
Position 
         
J. Patrick McMahon
 
67
 
Director, Chief Executive Officer, President, Chief Financial Officer, Secretary and Treasurer
 
J. Patrick McMahon has served as a member of our board of directors and our Chief Executive Officer, President, Chief Financial Officer, Secretary and Treasurer since October, 2009.  Since November 2008, Mr. McMahon has served as a counsel with the Government Contracts Group at General Counsel, P.C. in McLean, VA, where he practices corporate law with a primary focus on companies that offer information technology products and services to the federal government.  From 1985 until 2008, Mr. McMahon was a partner at the law firm of Barton, Baker, McMahon & Tolle, LLP.  Mr. McMahon has a Bachelor of Arts degree from the University of Portland and a Juris Doctorate from Willamette University College of Law.
 
Members of our board of directors are elected at the annual meeting of stockholders and are to serve until the next annual meeting of stockholders.
 
Our board of directors does not have an audit committee nor do we have an audit committee financial expert.  We do not believe the nature of our business is such that an audit committee or audit committee financial expert would be useful or necessary. Furthermore, we believe that the Company has inadequate financial resources at this time to hire an audit committee financial expert.
 
We have not adopted a Code of Ethics that applies to our principal executive officer or principal financial officer, or persons performing similar functions, primarily because we do not and will not have any operations until such time as we enter into a business combination. We intend to adopt a Code of Ethics at or prior to such time as we enter into a business combination.
 
Conflicts of Interest and Other Information
 
Potential investors should be aware of the following potential conflicts of interest:
 
 
·
Mr. McMahon is not required to commit his full time to the Company’s affairs and, accordingly, may have conflicts of interest in allocating management time among various business activities.
 
 
·
In the course of his other business activities, Mr. McMahon may become aware of investment and business opportunities which may be appropriate for presentation to the Company as well as the other entities with which he is affiliated. Mr. McMahon may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
 
 
·
Mr. McMahon 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 the Company.
 
 
·
Mr. McMahon may enter into consulting or employment agreements with the Company as part of a business combination pursuant to which he may be entitled to compensation for his services following the business combination. The personal and financial interests of Mr. McMahon may influence his motivation in identifying and selecting a target business, and completing a business combination in a timely manner.
 
In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:
 
 
·
the corporation could financially undertake the opportunity;
 
 
·
the opportunity is within the corporation’s line of business; and
 
 
·
it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation.
 
12

 
Accordingly, as a result of multiple business affiliations, Mr. McMahon 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 of directors evaluates a particular business opportunity with respect to the above-listed criteria. We cannot assure you that any of the above mentioned conflicts will be resolved in our favor. If any of these conflicts are not resolved in our favor, it may diminish our ability to complete a favorable business combination.
 
 
Our board of directors held a total of 3 meetings during the fiscal year ended July 31, 2009, in addition to taking action by unanimous written consent on 2 occasions.  During the fiscal year ended July 31, 2009, no director attended fewer than 75% of the aggregate of the total number of meetings of our board of directors.
 
Section 16(a) Beneficial; Ownership Reporting Compliance
 
Section 16(a) of the Exchange Act requires our directors, officers, and persons that own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. Our officers, directors and 10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. We prepare Section 16(a) forms on behalf of our directors and officers based on the information provided by them. Based solely on review of this information, we believe that, during the 2009 fiscal year, no reporting person failed to file the forms required by Section 16(a) of the Exchange Act on a timely basis.
 
Item 11.  Executive Compensation
 
None of our executive officers or directors has received any cash compensation for services rendered to the Company.
 
Since August 1, 2005 and continuing through October 12, 2008, we paid Danash Investment and Management Ltd., an entity owned solely by Dror Gad, our former Chief Financial Officer and a former member of our board of directors, a fee of $7,500 per month for office space and certain office and administrative services. From August 1, 2005 through October 12, 2008, a total of approximately $203,831 has been paid by us to Danash under this agreement.  We believe, based on rents and fees for similar services in the Tel-Aviv, Israel metropolitan area, that the fee charged by Danash was at least as favorable as we could have obtained from an unaffiliated person. Other than this $7,500 per-month fee, no compensation of any kind, including finder’s and consulting fees, will be paid to any of our officers or directors, or any of their respective affiliates, for services rendered prior to or in connection with a business combination. However, persons who were stockholders prior to our IPO, including our former officers and directors, have received reimbursement for out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations.
 
Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 
The following table sets forth certain information regarding the beneficial ownership of our common stock on November 30, 2009, by (1) each director and named executive officer of our Company, (2) all directors and named executive officers of our Company as a group, and (3) each person known by us to own more than 5% of our common stock.  Applicable percentage ownership in the following table is based on 1,065,100 shares of common stock outstanding as of November 30, 2009.
 
Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options held by that person that are currently exercisable or will become exercisable within 60 days after November 30, 2009, are deemed outstanding, while the shares are not deemed outstanding for purposes of computing percentage ownership of any other person. Unless otherwise indicated in the footnotes below, the persons and entities named in the table have sole voting or investment power with respect to all shares beneficially owned, subject to community property laws where applicable.
 
Unless otherwise indicated, the principal address of each of the persons below is c/o FI Investment Group, LLC, 1600 Tysons Blvd., Suite 1150, McLean, Virginia 22102.
 
13

 
  
 
Number of
       
  
 
Shares
   
Percentage of
 
  
 
Beneficially
   
Outstanding
 
  
 
Owned
   
Shares
 
  
           
Executive Officers and Directors 
           
J. Patrick McMahon
    -       * %
All executive officers and directors as a group (1 person)
    -       * %
Other 5% Stockholders 
               
FI Investment Group, LLC
    534,300       50.2 %
Jack  Silver
    92,000       8.6 %
 
——————
*  Represents beneficial ownership of less than 1%.
(1)
Based on information contained in a Schedule 13D filed by FI Investment Group, LLC and Frank Islam on August 6, 2008.  FI Investment Group, LLC and Frank Islam share voting and dispositive power with respect to 534,300 shares of our common stock.  Frank Islam is the principal of FI Investment Group, LLC.
(2)
Based on information contained in a Schedule 13G filed on February 17, 2009 by Jack Silver and Sherleigh Associates Inc. Profit Sharing Plan.  Jack Silver beneficially owns 92,000 shares of our common stock held by Sherleigh Associates Inc. Profit Sharing Plan, a trust of which Mr. Silver is the trustee.  Mr. Silver has the sole voting and dispositive power with respect to all 92,000 shares of common stock beneficially owned by him.  The address for Mr. Silver and the Sherleigh Associates Inc. Profit Sharing Plan is c/o SIAR Capital LLC, 660 Madison Avenue, New York, New York 10021.
 
Item 13.  Certain Relationships and Related Transactions.
 
Other than the transactions described below, since August 1, 2009 there have not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a participant in which the amount involved exceeded or will exceed $120,000, and in which any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.
 
On September 12, 2008, we entered into an agreement with FI Investment Group LLC, or FIIG, pursuant to which we propose to our stockholders, including the holders of our Class B common stock, as an alternative to dissolution, amendments to our certificate of incorporation allowing us to maintain our corporate existence and provide for the prompt distribution of the funds being held in the trust fund for the benefit of the holders of Class B common stock.  Our agreement to present this alternative to our stockholders was subject to obtaining from FIIG a commitment to extend a credit facility to provide us with additional financial support if our funds were insufficient to meet our on-going obligations and the costs associated with the proposals which were presented to our stockholders.
 
Since August 1, 2005 and continuing through October 12, 2008, we paid Danash Investment and Management Ltd., an entity owned solely by Dror Gad, our former Chief Financial Officer and a former member of our board of directors, a fee of $7,500 per month for office space and certain office and administrative services. From August 1, 2005 through October 12, 2008, a total of approximately $203,831 has been paid by us to Danash under this agreement.  We believe, based on rents and fees for similar services in the Tel-Aviv, Israel metropolitan area, that the fee charged by Danash was at least as favorable as we could have obtained from an unaffiliated person.  However, at the time the Company entered into the arrangement with Danash, none of its directors were deemed to be “independent” and, therefore, the Company did not have the benefit of disinterested directors approving the transaction.
 
We have reimbursed our initial securityholders, including our former officers and directors, for any reasonable out-of-pocket business expenses incurred by them in connection with certain activities on our behalf such as identifying and investigating possible target businesses and business combinations.
 
Other than the $7,500 per-month administrative fee which we paid Danash and the reimbursements for out-of-pocket expenses paid to our former officers and directors, no compensation or fees of any kind, including finders and consulting fees, were paid to any of our initial securityholders, former officers or directors, or to any of their affiliates prior to the distribution of the trust fund.
 
None of our officers and directors is required to or does commit his full time to our affairs, and, accordingly, they may have conflicts of interest in allocating their time among various business activities. Our directors own warrants that are subject to lock-up agreements restricting their sale until a business combination is successfully completed. Accordingly, our board may have a conflict of interest in determining whether a particular target business is an appropriate one with which to effect a business combination. Additionally, such individuals may purchase units in the open market.
 
Item 14.  Principal Accounting Fees and Services
 
Ziv Haft, a BDO member firm and independent auditor, has audited our financial statements for the fiscal year ended July 31, 2008.
 
14

 
On June 12, 2009, we appointed retained Gruber & Company, LLC as our independent auditors for the fiscal year ended July 31, 2009. We anticipate that the Gruber & Company will provide assistance during fiscal year 2010 with respect to review of our quarterly filings with the SEC. However, we have not yet selected an independent auditor with respect to the audit of our 2010 financial statements.
 
The aggregate fees billed to us by Ziv Haft for the fiscal years ended July 31, 2009 and 2008 are as follows:
 
   
2009
   
2008
 
         
 
 
Audit Fees
  $ 20,250     $ 28,000  
Audit-Related Fees
  $ -     $ 42,500  
Total
  $ 20,250     $ 70,500  

(1) 
Audit Fees consist of fees incurred for the audits of our annual financial statements and the review of our interim financial statements.

(2) 
Audit-Related Fees consist of fees incurred for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under the category “Audit Fees,” and include, but are not limited to, professional services related to consultation on proposed business combinations.

The aggregate fees billed to us by Gruber & Company, LLC  for the fiscal year ended July 31, 2009 are as follows:

   
2009
 
       
Audit Fees
 
$
6,025
 
Audit-Related Fees
 
$
-
 
Total
 
$
6,025
 

(1)
Audit Fees consist of fees incurred for the audits of our annual financial statements and the review of our interim financial statements.
 
2)
Audit-Related Fees consist of fees incurred for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under the category “Audit Fees.”

We currently do not have an audit committee. However, our board of directors has approved the services described above.
 
 
15

 

 
Item 15.   Exhibits and Financial Statement Schedules
 
(a)  Documents filed as part of this report:
 
Financial Statements:
 
Reports of Independent Registered Public Accounting Firms for the years ended July 31, 2009 and 2008;
 
Balance sheets as of July 31, 2009 and 2008;
 
Statements of operations for the years ended July 31, 2009 and 2008;
 
Statements of cash flows for the years ended July 31, 2009 and 2008;
 
Statements of shareholders’ equity for the years ended July 31, 2009 and 2008; and
 
Notes to financial statements.
 
All other financial schedules are not required under the related instructions or are inappropriate and, therefore, have been omitted.
 
(b)  Exhibits
 
The exhibits listed in the accompanying Index to Exhibits are filed or incorporated by reference as part of this report.
 
 
16

 

 
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.
 
 
ISRAEL GROWTH PARTNERS ACQUISITION CORP.
     
 
By:
/s/ J. Patrick McMahon  
   
J. Patrick McMahon
   
Director, Chief Executive Officer, President, Chief Financial Officer, Secretary and Treasurer
 Date:  December 2, 2009
   

 
17

 
 
Report of independent Registered Public Accounting Firm
 
Board of Directors and Stockholders
Israel Growth Partners Acquisition Corp.

We have audited the accompanying balance sheet of Israel Growth Partners Acquisition Corp. (a development stage company) (the “Company”) as of July 31, 2009 and the related statements of operations, stockholders equity (deficit), and cash flows for the year ended July 31, 2009.  These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audit.  We did not audit the cumulative data from August 1, 2005 to July 31, 2008 in the consolidated statements of operations, stockholders’ equity (deficit) and cash flows, which were audited by other auditors whose report dated October 31, 2008 which expressed unqualified opinions (the report was modified related to the uncertainty of the Company’s ability to continue as a going concern) have been furnished to us.  Our opinion, insofar as it relates to the amounts included for the cumulative period from August 1, 2005 (inception) to July 31, 2008 is based solely on the report of the other auditors.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Israel Growth Partners Acquisition Corp. (a development stage company) as of July 31, 2009, and the results of its operations and cash flows for the year ended July 31, 2009 and for the period from August 1, 2005 (inception) through July 31, 2009 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the financial statements,  the Company has incurred and expects to continue to incur costs in pursuit of its acquisition plan.   These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans regarding those matters are also described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
Gruber & Company, LLC

Lake Saint Louis, Missouri
November 30, 2009

 
F-1

 
 
 
Report of Independent Registered Public Accounting Firm
 
Board of Directors and Stockholders
Israel Growth Partners Acquisition Corp.
 
We have audited the accompanying balance sheets of Israel Growth Partners Acquisition Corp. a corporation in the development stage (The “Company”) as of July 31, 2008 and 2007 and the related statements of operations, stockholders’ equity, and cash flows for the years ended July 31, 2008 and July 31, 2007 and for the period from inception (August 1, 2005) to July 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the statements of operations, stockholders’ equity and cash flows for the period from August 1, 2005 (inception) to July 31, 2006. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for such period, is based solely on the report of the other auditors.
 
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.
 
As discussed in Note 1, the Company’s Certificate of Incorporation provided for mandatory liquidation of the Company in the event that the Company did not consummate a business combination within 18 months from the date of the consummation of its initial public offering (“Offering”) (such date was January 18, 2008) or 24 months from the consummation of the Offering if certain extension criteria had been satisfied (such date was July 18, 2008). In July 2008 the Company announced its termination of letters of intent for potential business combinations, plans to distribute the amount held in the Trust Fund to its Class B stockholders and intends to adopt a plan for continued corporate existence. On October 20, 2008, the Company filed with the United States Securities and Exchange Commission (“SEC”) a Preliminary Proxy Statement in which it called a meeting of its shareholders to approve, among other things, the distribution of the Trust Fund. Following approval by the shareholders, the Trust Fund shall be liquidated and the proceeds distributed among the holders of the Company’s Class B stockholders.
 
In our opinion, based on our audit and the report of other auditor, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of July 31, 2008 and 2007, and the results of its operations and its cash flows for the years ended July 31, 2008 and 2007 and for the period from inception (August 1, 2005) to July 31, 2008, in conformity with accounting principles generally accepted in the United States of America.
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company will liquidate the Trust Fund and distribute the proceeds among the holders of its Class B stockholders following approval of a resolution to distribute of the Trust Fund by the Company’s shareholders at the forthcoming shareholders’ meeting. Additionally, outside of the Trust Fund the Company , has a remaining cash balance of $438,699, current liabilities of $169,965 and expects to incur costs in pursuit of its acquisition plans for which further financing will be required. The possibility that such further financing and acquisitions will not be consummated raises substantial doubt as to its ability to continue as a going concern.
 
   
   
   
   
   
Tel-Aviv, Israel
         
October 31, 2008
   
/s/ Ziv Haft
   
     
Certified Public Accountants (Isr.)
   
     
a BDO member firm
   


F-2

Israel Growth Partners Acquisition Corp.
Balance Sheets
 
                 
 
As of
   
As of
 
                 
 
July 31, 2009
   
July 31, 2008
 
                 
           
ASSETS
           
Current Assets:
           
  Cash and cash equivalents
  $ 22,689     $ 438,699  
  Investments held in Trust
               
    including interest receivable of $0 and $77,146 (Note 1)
    -       55,011,182  
  Prepaid expenses
    -       63,986  
                 
Total assets 
  $ 22,689     $ 55,513,867  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
 
               
Current Liabilities:
               
  Accrued expenses
  $ 60,117     $ 169,965  
  Common stock, Class B subject to redemption, (Notes 1)
    -       55,011,182  
 
               
Total current liabilities
    60,117       55,181,147  
 
               
Commitments (Note 4)
               
 
               
Stockholders' Equity (Deficit) (Notes 2, 4 and 5)    
               
  Common stock, par value $.0001 per share,
               
    80,000,000 shares authorized, 1,065,100 shares
               
    issued and outstanding
    107       107  
  Common stock, Class B, par value $.0001 per share,
               
    12,000,000 shares authorized, 8,189,824 shares issued
    -       819  
    and outstanding (excluding 2,046,176 shares subject to
               
    conversion)
               
  Additional paid-in-capital
    1,460,540       1,458,444  
  Retained earnings (deficit) accumulated in the development stage
    (1,498,075 )     (1,126,650 )
 
               
Total stockholders' equity (deficit)
    (37,428 )     332,720  
 
               
Total liabilities and stockholders' equity
  $ 22,689     $ 55,513,867  
 
See Notes to  the Financial Statements
 
 
F-3

 

Israel Growth Partners Acquisition Corp.
Statements of Operations
 
             
 
For the year ended
   
Period from inception
 
             
       
 (August 1, 2005) to
 
             
 
July 31, 2009
   
July 31, 2008
   
July 31, 2009
 
Revenue      
  $ -     $ -     $ -  
Operating expenses:    
                       
  Professional fees    
    238,028       427,454       825,066  
  Delaware franchise tax     
    8,052       77,631       229,520  
  Other general and administrative expenses (Note 4)
    126,960       195,309       535,325  
             
                       
Loss from operations    
    (373,040 )     (700,394 )     (1,589,911 )
             
                       
Interest Income      
    306,142       1,498,703       3,715,745  
             
                       
Income (loss) before provision for income taxes            
    (66,898 )     798,309       2,125,834  
             
                       
Provision for income taxes     
    -       -       -  
             
                       
Net income (loss) for the period    
  $ (66,898 )   $ 798,309     $ 2,125,834  
             
                       
Accretion of Trust Fund relating to Class B  
                       
  common stock subject to conversion  
    (64,605 )     (294,049 )     (734,003 )
             
                       
Net income (loss) attributable to other Class B stockholders
                       
  and common stockholders    
  $ (131,503 )   $ 504,260     $ 1,391,831  
             
                       
Weighted average Class B common shares outstanding
                       
  subject to conversion (no Class B common shares outstanding
                       
  on July 31, 2009)    
    1,108,345       2,046,176          
             
                       
Net income per Class B common share subject to  
                       
  conversion, basic and diluted    
  $ (0.12 )   $ 0.14          
             
                       
Weighted average number of shares outstanding, basic and diluted
    5,501,255       9,254,924          
             
                       
Net income (loss)per share, basic and diluted  
  $ (0.02 )   $ 0.05          
 
See Notes to the Financial Statements
 
 
F-4

 

Israel Growth Partners Acquisition Corp.
 Statement of Stockholders’ Equity
 
                               
Deficit
       
                         
Additional
   
accumulated in
       
   
Common Stock
 
Common Stock, Class B
   
Paid -In
   
the development
       
   
Shares
   
Amount
 
Shares
   
Amount
   
Capital
   
stage
   
Total
 
                                         
Balance, August 1, 2005 (inception)
    -     $ -     -     $ -     $ -     $ -     $ -  
                                                       
Issuance of Common Stock to initial
                                                     
stockholder
    100       -     -       -       500       -       500  
                                                       
Issuance of 4,950,000 Warrants
                                                     
    at $0.05 Per Warrant
    -       -     -       -       247,500       -       247,500  
                                                       
Sale of 532,500 Series A Units, 5,118,000
                                                     
Series B Units through public offering
                                                     
net of underwriters' discount and offering
                                                     
expenses and net of proceeds of 10,333,190
                                                     
allocable to 2,046,176 shares of common stock,
                                                     
Class B subject to possible conversion
    1,065,000       107     8,189,824       819       42,567,464       -       42,568,390  
                                                       
Proceeds from sale of underwriters'
                                                     
    purchase option
    -       -     -       -       100               100  
                                                       
Accretion relating to Class B common stock
                                                     
subject to possible conversion
                                  (5,853 )             (5,853 )
                                                       
Net loss for the period
    -       -     -       -       -       (84,852 )     (84,852 )
                                                       
Balance, July 31, 2006
    1,065,100       107     8,189,824       819       42,809,711       (84,852 )     42,725,785  
                                                       
Accretion relating to Class B common stock
                                                     
subject to possible conversion
                                  (369,496 )             (369,496 )
                                                       
Net income for the period
                                          1,479,275       1,479,275  
                                                       
Balance, July 31, 2007
    1,065,100     $ 107     8,189,824     $ 819     $ 42,440,215     $ 1,394,423     $ 43,835,564  
                                                       
Accretion relating to Class B common stock
                                                     
subject to possible conversion
                                  (294,049 )             (294,049 )
Net income for the period
                                          798,309       798,309  
Net income from inception to July 31, 2008
                                                     
before reclassification of interest earned on trust account
                                          2,192,732       -  
Reclassification of interest earned on trust account since
                                                     
inception to additional paid-in capital
                                  3,319,382       (3,319,382 )     -  
Reclassification of Class B common stock value
                                                     
subject to redemption to current liability
                                  (44,014,447 )     -       (44,014,447 )
Proceeds from sale by beneficial owner of Class B stock
                                  7,343               7,343  
                                                       
Balance, July 31, 2008
    1,065,100     $ 107     8,189,824     $ 819     $ 1,458,444     $ (1,126,650 )   $ 332,720  
                                                       
Accretion relating to Class B common stock
                                                     
subject to possible conversion
                                  (64,605 )             (64,605 )
Reclassification of interest earned on trust account
                                                     
 to additional paid-in capital
                                  304,527       (304,527 )     -  
Reclassification of Class B common stock value
                                                     
subject to redemption to current liability
                                  (238,645 )             (238,645 )
Cancellation of B Common Stock
                  (8,189,824 )     (819 )     819               -  
Net income for the period
                                          (66,898 )     (66,898 )
Balance, April 30, 2009
    1,065,100     $ 107     -     $ -     $ 1,460,540     $ (1,498,075 )   $ (37,428 )
 
See Notes to Financial Statements
 
 
F-5

 

Israel Growth Partners Acquisition Corp.
Statements of Cash Flows
 
             
 
For the year ended
   
Period from inception
(August 1, 2005) to
 
             
 
July 31, 2009
   
July 31, 2008
   
July 31, 2009
 
CASH FLOWS FROM OPERATING ACTIVITIES
                 
  Net income (loss) for the period
  $ (66,898 )   $ 798,309     $ 2,125,835  
  Adjustments to reconcile net income to net cash used in operating activities:
                       
    Gain on maturity of Securities held in Trust Fund
    (380,396 )     (1,545,605 )     (3,622,634 )
  Changes in operating assets and liabilities:
                       
    Decrease (increase) in interest receivable in trust
    77,146       74,627       -  
    Decrease in accounts receivable - interest
    -       1,025       -  
    Decrease (Increase) in prepaid expenses
    63,986       (56,245 )     -  
    (Decrease) Increase in accrued expenses
    (109,848 )     35,389       60,117  
Net cash used in operating activities
    (416,010 )     (692,500 )     (1,436,682 )
             
                       
CASH FLOWS FROM INVESTING ACTIVITIES
                       
  Purchase of Securities held in trust      
    (331,216,341 )     (651,834,229 )     (1,665,222,246 )
  Maturity of Securities held in trust      
    331,216,341       651,834,229       1,613,530,446  
Net cash used in investing activities      
    -       -       (51,691,800 )
             
                       
CASH FLOWS FROM FINANCING ACTIVITIES    
                    -  
  Proceeds from issuance of common stock to initial stockholder
    -       -       500  
  Proceeds from issuance of warrants      
    -       -       247,500  
  Proceeds from sale of underwriters' purchase option    
    -               100  
  Portion of net proceeds from sale of Series B units    
                       
    through public offering allocable to shares of     
                       
    common stock, Class B subject to possible    
                       
    conversion      
    -       -       10,327,338  
  Proceeds from sale by beneficial owner of Class B stock  
    -       7,343       7,343  
  Net proceeds from sale of Series A and B units through public
                       
    offering allocable to stockholders' equity    
    -       -       42,568,390  
             
                       
Net cash (used in) provided by financing activities    
    -       7,343       53,151,171  
             
                       
Net increase (decrease) in cash and cash equivalents    
    (416,010 )     (685,157 )     22,689  
             
                       
Cash and cash equivalents      
                       
  Beginning of period      
    438,699       1,123,856       -  
             
                       
  End of period      
  $ 22,689     $ 438,699     $ 22,689  
             
                       
Supplemental disclosure of non-cash financing activities:
                       
  Fair value of underwriter purchase option included in offering costs
  $ -     $ -     $ 641,202  
             
                       
  Accretion of Trust Fund relating to Class B common stock subject to possible coversion
  $ (65,605 )   $ (294,049 )   $ (735,003 )
             
                       
  Reclassification of Class B common stock to liability
  $ -     $ 44,014,447     $ -  
             
                       
  Reclassification of Class B, subject to possible conversion to liability
  $ -     $ 10,996,735     $ -  
 
See Notes to the Financial Statements
 
 
F-6

 
 
NOTES TO FINANCIAL STATEMENTS
 
NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS
 
Israel Growth Partners Acquisition Corp. (the “Company”) was incorporated in Delaware on August 1, 2005 to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination with a currently unidentified operating business which has operations or facilities located in Israel, or which is a company operating outside of Israel which the Company’s management believes would benefit from establishing operations or facilities in Israel (a “Target Business”). All activity from inception (August 1, 2005) through July 31, 2009 related to the Company’s formation and capital raising activities. The Company has selected July 31 as its year end.
 
The Company is considered to be a development stage company and as such the financial statements presented herein are presented in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 7, Accounting and Reporting By Development Stage Enterprises
 
Organization:
 
The registration statement for the Company’s initial public Offering (“Offering”) was declared effective on July 11, 2006. The Company consummated the Offering of 500,000 series A Units (Note 2) and 4,600,000 Series B Units (Note 2) on July 18, 2006. On July 26, 2006, the Company consummated the closing of an additional 32,500 Series A Units and 518,000 Series B Units which were subject to an over-allotment option granted to the underwriters. The Offering generated total net proceeds of approximately $52.9 million of which $51.7 million was placed in trust. The Company’s management has broad authority with respect to the application of the proceeds of the Offering although substantially all of the proceeds of the Offering are intended to be applied generally toward consummating a merger, capital stock exchange, asset acquisition or other similar transaction with a Target Business (a “Business Combination”). An amount of $55,011,182 including accrued interest of $77,146 was being held in an interest-bearing trust account (“Trust Fund”) to be returned to the holders of Class B common stock if a Business Combination was  not contracted in 18 months, or consummated in 24 months, subsequent to the Offering (the “Target Business Acquisition Period”).
 
Both the Company's common stock and Class B common stock had one vote per share. However, the Class B stockholders could, and the common stockholders could not, vote in connection with a Business Combination. Since a Business Combination was not consummated during the Target Business Acquisition Period, as noted above the Trust Fund will be distributed pro-rata to all of the Class B common stockholders and their Class B common shares will be cancelled and returned to the status of authorized but unissued shares. Common stockholders will not receive any of the proceeds from the Trust Fund.
 
Operations:
 
The registration statement for the Company’s initial public offering (“Offering”) was declared effective on July 11, 2006. The Company consummated the Offering of 500,000 series A Units (Note 2) and 4,600,000 Series B Units (Note 2) on July 18, 2006. On July 26, 2006, the Company consummated the closing of an additional 32,500 Series A Units and 518,000 Series B Units which were subject to an over-allotment option granted to the underwriters. The Offering generated total net proceeds of approximately $52.9 million of which $51.7 million was placed in an interest-bearing trust account (“Trust Fund”). The Company’s management was given broad authority with respect to the application of the proceeds of the Offering although substantially all of the proceeds of the Offering were intended to be applied generally toward consummating a merger, capital stock exchange, asset acquisition or other similar transaction with a Target Business (a “Business Combination”).  Under the terms of the Company’s certificate of incorporation, the funds held in the Trust Fund were required to be returned to the holders of Class B common stock if a Business Combination was not contracted in 18 months, or consummated in 24 months, subsequent to the Offering (the “Target Business Acquisition Period”).  Under the Offering, the Company indicated its intent to dissolve in the event of a failure to consummate a Business Combination within the Target Business Acquisition Period.
 
Both the Company’s common stock and Class B common stock had one vote per share. However, the Class B stockholders could, and the common stockholders could not, vote in connection with a Business Combination.
 
On March 6, 2008 the Company entered into a merger agreement with Negevtech Ltd., an Israeli company. On July 18, 2008, the Company announced that it and Negevtech had terminated their definitive agreement due to an inability to consummate the transaction by that date, which was the last possible date that the Company could consummate a transaction under its certificate of incorporation as amended.  As a result, the Company announced plans to distribute the amount held in the Trust Fund to its Class B stockholders.
 
On September 12, 2008 the Company and FI Investment Group., LLC (“FIIG”), the largest holder of shares of the Company’s $.0001 par value common stock, entered into an agreement under which the Company, at the request of FIIG, agreed to propose to its stockholders, including the holders of its shares of $.0001 par value Class B common stock, as an alternative to dissolution, amendments to its certificate of incorporation allowing the Company to maintain its corporate existence and provide for the prompt distribution of the funds being held in trust for the benefit of the holders of Class B common stock in connection with the cancellation of their Class B shares.
 
 
F-7

 
 
The agreement also provided FIIG with the right to appoint a member to the Company’s board of directors.  Additionally, it provided for the resignation of each of the Company’s directors and officers that were serving the Company as of the date of the agreement upon the Company’s stockholders approval of the amendments to the Company’s certificate of incorporation described in the agreement and after all of the assets in the trust fund are distributed to the holders of Class B common stock.
 
On October 14, 2008, the Company announced that it had determined, in light of current market uncertainties, to authorize the transfer of the funds being held in the IPO trust account from a money market fund invested primarily in municipal bonds into the Federated Treasury Obligations Fund - Institutional Shares ($33.5 billion in assets as of September 30, 2008), a money market fund invested in U.S. treasury and treasury repurchase agreements. The fund is held in a brokerage account at Barclays Capital. The IPO trust account assets are held in a custodial account at State Street Bank & Trust. The transfer of $55,222,377.61 in IPO trust account assets was effected at par on October 7, 2008.
 
On October 20, 2008, the Company filed a preliminary proxy statement, at the request of FIIG, to hold a special stockholders meeting to consider proposals for the distribution of the funds in the IPO trust account to the Class B common stockholders and the cancellation of the outstanding shares of the Class B common stock, without the requirement that the Company dissolve and liquidate, and to allow the Company to continue its corporate existence after the distribution of the trust fund by removing those provisions in the Company’s certificate of incorporation that would require the Company to dissolve or liquidate and that limit its status to a blank check company.
 
On January 27, 2009 the Company’s Board of Directors set a meeting date of February 16, 2009, for the Company’s special meeting of stockholders to be held to consider proposals to approve certain amendments to the Company’s certificate of incorporation to allow the Company to distribute the proceeds of the Company’s IPO trust account to the holders of its Class B common stock, and to allow the Company to continue its corporate existence after the distribution of the trust account, without requiring the dissolution and liquidation of the Company or to approve the dissolution and liquidation of the Company.
 
At a special meeting of stockholders held on February 16, 2009, the Company’s stockholders approved a proposal to distribute the Company’s trust fund for the benefit of its Class B common stockholders, without the requirement that the Company dissolve and liquidate.  As a result of the stockholder vote, the Company filed an amendment to its certificate of incorporation which resulted in the cancellation of all shares of the Company’s Class B common stock, and the conversion of those shares into the right to receive a pro rata share of the trust fund distribution.  Thereafter, the Company’s Class B common stock and Series B Units ceased to be quoted on the over-the-counter bulletin board and ceased to trade or be tradeable, and the trust fund was distributed to the holders of Class B common stock.  The total amount of funds in the Trust Fund distributed to the holders of Class B common stock was $55,315,709.   FIIG, the largest holder of shares of the Company’s common stock, became the Company’s majority stockholder as a result of the cancellation of the outstanding Class B common stock.
 
At a continuation of the special stockholder meeting held on February 17, 2009, the Company’s stockholders (then consisting only of holders of common stock) approved proposals to amend and restate the Company’s certificate of incorporation to (1) remove certain blank check company-related restrictions, including provisions which required the Company to dissolve following the distribution of the trust account and provisions authorizing the Class B common stock, and (2) increase the authorized shares of common stock from 40,000,000 shares to 80,000,000 shares.  As a result of this stockholder vote, the Company filed an amended and restated certificate of incorporation, which allowed the Company to continue its corporate existence following the distribution of the trust fund.
 
At a meeting of the Company’s Board of Directors held on March 13, 2009, the Board of Directors appointed Richard J. Roth, FIIG’s Managing Director and Chief Financial Officer, and Abhishek Jain, Chief Executive Officer of WTP Capital, LLC, to the Board of Directors.  Immediately following the appointment of Mr. Roth and Mr. Jain, each of the remaining members of the Board of Directors, Matty Karp, Carmel Vernia and Dror Gad, resigned from the Board of Directors and as officers of the Company, resulting in Mr. Roth and Mr. Jain continuing as the sole members of the Board of Directors.
 
Going concern consideration— As indicated in the accompanying financial statements, at July 31, 2009, the Company had $22,689 in cash, current liabilities of $60,117 and working capital deficit of $37,428. Further, the Company has incurred and expects to continue to incur costs in pursuit of its acquisition plans. These factors, among others, indicate that the Company may be unable to continue operations as a going concern unless further financing is consummated. There is no assurance that the Company’s plans to raise capital or to consummate a transaction will be successful.
 
 
F-8

 

NOTE 2 – OFFERING
 
In the Offering, effective July 11, 2006, the Company sold to the public an aggregate of 532,500 Series A Units (the “Series A Units” or a “Series A Unit”) and 5,118,000 Series B Units (the “Series B Units” or a “Series B Unit”) at a price of $8.50 and $10.10 per unit, respectively. Proceeds from the Offering, totaled approximately $52.9 million, which was net of approximately $3.3 million in underwriting expenses and other registration costs incurred through July 26, 2006. Each Series A Unit consists of two shares of the Company’s common stock, and ten Class Z Warrants (each a “Class Z Warrant”). Each Series B Unit consists of two shares of the Company’s Class B common stock, and two Class W Warrants (each a “Class W Warrant”).
 
Each Class W Warrant included in the units sold in the Offering entitles the holder to purchase from the Company one share of common stock at an exercise price of $5.00, subject to adjustment in certain circumstances, commencing on the later of (a) July 11, 2007 and (b) the completion of a Business Combination. The Class W Warrants will expire on July 10, 2011 or earlier upon redemption. Each Class Z Warrant included in the units sold in the Offering entitles the holder to purchase from the Company one share of common stock at an exercise price of $5.00, subject to adjustment in certain circumstances, commencing on the later of (a) July 11, 2007 and (b) the completion of a Business Combination. The Class Z Warrants will expire on July 10, 2013 or earlier upon redemption. The Company may redeem the outstanding Class W Warrants and/or Class Z Warrants with the prior consent of HCFP/Brenner Securities LLC (“HCFP”), the representative of the underwriters of the Offering, in whole or in part, at a price of $.05 per warrant at any time after the warrants become exercisable, upon a minimum of 30 days’ prior written notice of redemption, and if, and only if, the last sale price of the Company’s common stock equals or exceeds $7.50 per share and $8.75 per share, for a Class W Warrant and a Class Z Warrant, respectively, for any 20 trading days within any 30 trading day period ending three business days before the Company sent the notice of redemption.
 
The Company has also sold to certain of the underwriters for an aggregate of $100, an option (the “Underwriter’s Purchase Option” or “UPO”) to purchase up to a total of 25,000 additional Series A Units and/or 230,000 additional Series B Units (see Note 6).
 
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
CASH AND CASH EQUIVALENTS – Included in cash and cash equivalents are deposits with financial institutions as well as short-term money market instruments with maturities of three months or less when purchased.
 
CONCENTRATION OF CREDIT RISK – Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents. The Company maintain deposits in federally insured financial institutions in excess of federally insured limits. However, management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.
 
INVESTMENTS HELD IN TRUST – Investments held in the Trust Fund at July 31, 2008 consisted of municipal money fund securities with maturities of up to 30 days. Such securities generate current income which is exempt from federal income tax and therefore no provision for income taxes is required for the periods ended July 31, 2009 or 2008.   The entire amount in the Trust Fund was transferred on October 7, 2008 at par into the Federated Treasury Obligations Fund - Institutional Shares ($33.5 billion in assets as of September 30, 2008), a money market fund invested in U.S. treasury and treasury repurchase agreements. The fund was held in a brokerage account at Barclays Capital. See Note 1 – Organization and Business Operations – Recent Events.  On February 16, 2009 the total amount of funds in the Trust Fund totaling $55,315,709 were distributed to the holders of the Class B Common Stock.
 
INCOME TAXES – Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts and are based in enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount expected to be realized. Franchise taxes incurred in the State of Delaware are included in general and administrative expenses.
 
NET INCOME PER SHARE – Net income per share is computed based on the weighted average number of shares of common stock and Class B common stock outstanding.
 
Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted average common shares outstanding for the period. Basic net income per share is calculated by dividing net income attributable to (1) common and Class B stockholders and (2) Class B common stockholders subject to possible conversion by their weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Since the effect of outstanding warrants to purchase common stock and the UPO are antidilutive, as their exercise prices are greater than the average market price of common stock during the period, they have been excluded from the Company’s computation of net income per share. Therefore, basic and diluted income per share were the same for the period from inception (August 1, 2005) through July 31, 2009.
 
 
F-9

 
 
FAIR VALUE OF FINANCIAL INSTRUMENTS – The fair values of the Company’s assets and liabilities that qualify as financial instruments under SFAS No. 107 approximate their carrying amounts presented in the accompanying condensed balance sheets at July 31, 2009 and July 31, 2008
 
USE OF ESTIMATES – The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
 
NEW ACCOUNTING PRONOUNCEMENTS
 
In December 2007, the FASB issued SFAS 141 (revised 2007), Business Combinations (“SFAS 141(R)”). SFAS 141(R) retains the fundamental requirements of the original pronouncement requiring that the purchase method be used for all business combinations, but also provides revised guidance for recognizing and measuring identifiable assets and goodwill acquired and liabilities assumed arising from contingencies, the capitalization of in-process research and development at fair value, and the expensing of acquisition-related costs as incurred. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008. In the event that the Company completes acquisitions subsequent to its adoption of SFAS 141 (R), the application of its provisions will likely have a material impact on the Company’s results of operations, although the Company is not currently able to estimate that impact.
 
In December 2007, the FASB issued SFAS 160, Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51. SFAS 160 requires that ownership interests in subsidiaries held by parties other than the parent, and the amount of consolidated net income, be clearly identified, labeled and presented in the consolidated financial statements. It also requires once a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value. Sufficient disclosures are required to clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. It is effective for fiscal years beginning after December 15, 2008, and requires retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other requirements are applied prospectively. The Company does not expect the adoption of SFAS 160 to have a material impact on its financial condition or results of operations.
 
The Company does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
 
NOTE 4 – COMMITMENTS
 
Administrative Services
 
Commencing on July 11, 2006, the effective date of the Offering, the Company was obligated to pay an affiliate of the Company’s chief financial officer, $7,500 per month for office, secretarial and administrative services. An amount of $17,903 and $90,000 for the year ended July 31, 2009 and ,2008, respectively, is included in general and administrative expenses on the accompanying condensed statements of operations and $202,984 for period from Inception (August 1, 2005) to July 31, 2009. The administrative service agreement was terminated on October 18, 2008.
 
Financial Advisory Services
 
HCFP was been engaged by the Company to act as the Company’s non-exclusive investment banker in connection with a proposed Business Combination. For assisting the Company in structuring and negotiating the terms of a Business Combination, the Company would have paid HCFP a cash transaction fee of $1,500,000 upon consummation of a Business Combination. The financial advisory service agreement has been terminated.
 
Solicitation Services
 
The Company had engaged HCFP, on a non-exclusive basis, to act as its agent for the solicitation of the exercise of the Company’s Class W Warrants and Class Z Warrants. In consideration for solicitation services, the Company would have paid HCFP a commission equal to 5% of the exercise price for each Class W Warrant and Class Z Warrant exercised after July 10, 2007 if the exercise is solicited by HCFP. No solicitation services were provided during the year  ended July 31, 2009 and the agreement has been terminated.
 
 
F-10

 

NOTE 5 – CAPITAL STOCK
 
Preferred Stock
 
The Company is authorized to issue up to 5,000 shares of Preferred Stock with such designations, voting, and other rights and preferences as may be determined from time to time by the Board of Directors. No preferred shares were issued and outstanding at July 31, 2008 or 2009.
 
Common Stock and Class B Common Stock
 
As of April 30, 2009, the Company is authorized to issue 80,000,000 shares of common stock. As of April 30, 2009, there are 1,065,100 shares of the Company’s common stock issued and outstanding.
 
As of April 30, 2009, there are 46,967,900 authorized but unissued shares of the Company’s common stock available for future issuance, after appropriate reserves for the issuance of common stock in connection with the Class W Warrants and Class Z Warrants, the Underwriters Purchase Option and the officer’s and director’s Class W Warrants and Class Z Warrants.
 
The Company currently has no commitments to issue any shares of common stock other than as described herein; however, the Company will, in all likelihood, issue a substantial number of additional shares in connection with any Business Combination or future financing of the Company. To the extent that additional shares of common stock are issued, dilution to the interests of the Company’s stockholders who participated in the Offering will occur.
 
NOTE 6 – WARRANTS AND OPTION TO PURCHASE COMMON STOCK
 
Warrants
 
In August 2005, the Company sold and issued Class W Warrants to purchase 2,475,000 shares of the Company’s common stock, and Class Z Warrants to purchase 2,475,000 shares of the Company’s common stock to its initial securityholders, for an aggregate purchase price of $247,500, or $0.05 per warrant.
 
The Class W and Class Z Warrants outstanding prior to the offering are also subject to a registration rights agreement. On January 31, 2006, the Company and the initial security holders entered into a registration rights agreement and a letter agreement which revised the terms of the Company’s obligations under the warrant and registration rights agreement to clarify that the Company will only deliver unregistered common shares on the exercise of the warrants.
 
The Class W Warrants and Class Z Warrants outstanding prior to the Offering may be exercised with cash on or prior to their respective expiration dates. Although the Company’s initial security holders may make a written demand that the Company file a registration statement, the Company is only required to use its best efforts to cause the registration statement to be declared effective and, once effective, only to use its best efforts to maintain its effectiveness. Accordingly, the Company’s obligation is merely to use its best efforts in connection with the registration rights agreement and upon exercise of the warrants, the Company can satisfy its obligation by delivering unregistered shares of common stock.
 
Prior to entering into to the registration rights agreement and the letter agreement on January 31, 2006, the Company accounted for the Class W and Class Z Warrants issued to the initial security holders as liabilities in accordance with the guidance of EITF 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock. Accordingly, the Company recorded the fair value of the warrants of $247,500 as a non-current liability on its balance sheet from the date of issuance through January 31, 2006. As a result of entering into the registration rights agreement, the warrants no longer are accounted for as liabilities and are classified in stockholder’s equity. For the period from inception (August 1, 2005) to July 31, 2008, no income (loss) was recorded related to recording the derivative to market value as there was no change in the fair value of such securities. The Company determined the fair value of the Class W and Class Z Warrants issued in August 2005 based on the aggregate purchase price paid to the Company of $247,500, or $0.05 per Warrant.
 
On January 31, 2006, the date of reclassification of the Warrants from liability to equity, the Company estimated that the fair value of the Class W and Class Z Warrants was still $0.05 per Warrant. The determination to value the Warrants at $0.05 was based on the cash purchase price paid in August 2005 by the holders, the fact that the Warrants were not publicly traded, the inherent price of $0.05 per Warrant contained in the Series A and Series B Units which were sold in the Offering, and an evaluation of the differences in the rights and privileges of the Warrants sold and issued in August 2005 versus the Warrants which were sold in the Offering.
 
Each Class W Warrant issued in the Offering and to the initial security holders is exercisable with cash for one share of common stock. Except as set forth below, the Class W Warrants entitle the holder to purchase shares at $5.00 per share, subject to adjustment in the event of stock dividends and splits, reclassifications, combinations and similar events for a period commencing on the later of: (a) completion of the Business Combination and (b) July 10, 2007 and ending July 10, 2011. As of July 31, 2009 there were 12,711,000 Class W Warrants outstanding.
 
 
F-11

 
 
Each Class Z Warrant issued in the Offering and to the initial security holders is exercisable with cash for one share of common stock. Except as set forth below, the Class Z warrants entitle the holder to purchase shares at $5.00 per share, subject to adjustment in the event of stock dividends and splits, reclassifications, combinations and similar events for a period commencing on the later of: (a) completion of the Business Combination and (b) July 10, 2007 and ending July 10, 2013. As of July 31, 2009 there were 7,800,000 Class Z Warrants outstanding.
 
The Class W Warrants and Class Z Warrants outstanding prior to the Offering, all of which are held by the Company’s initial security holders or their affiliates, shall not be redeemable by the Company as long as such warrants continue to be held by such security holders or their affiliates. Except as set forth in the preceding sentence, the Company may redeem the Class W Warrants and/or Class Z Warrants with the prior consent of HCFP, in whole or in part, at a price of $.05 per warrant at any time after the warrants become exercisable, upon a minimum of 30 days’ prior written notice of redemption, and if, and only if, the last sale price of the Company’s common stock equals or exceeds $7.50 per share and $8.75 per share, for a Class W Warrant and Class Z Warrant, respectively, for any 20 trading days within a 30 trading day period ending three business days before the Company sent the notice of redemption (the “Measurement Period”). In addition, the Company may not redeem the Class W Warrants and/or the Class Z Warrants unless the shares of common stock underlying such warrants are covered by an effective registration statement from the beginning of the measurement period through the date fixed for redemption.
 
The Class W and Class Z Warrants issued in the Offering will not be exercisable unless a registration statement covering the securities underlying the warrants is effective or an exemption from registration is available. Accordingly if the warrants are not able to be exercised such warrants may expire worthless. The Company has no obligation to net cash settle the exercise of the warrants.
 
The holders of Class W Warrants and Class Z Warrants do not have the rights or privileges of holders of the Company’s common stock or any voting rights until such holders exercise their respective warrants and receive shares of the Company’s common stock. As the proceeds from the exercise of the Class W Warrants and Class Z
 
Warrants will not be received until after the completion of a Business Combination, the expected proceeds from exercise will not have any effect on the Company’s financial condition or results of operations prior to a Business Combination.
 
Underwriter Purchase Option
 
In connection with the Offering, the Company has issued to certain of the underwriters the UPO for $100 to purchase up to 25,000 Series A Units at an exercise price of $14.025 per unit and/or up to 230,000 Series B Units at an exercise price of $16.665 per unit. The Series A Units and Series B Units underlying the UPO will be exercisable in whole or in part, solely at HCFP’s discretion, commencing on the later of (a) completion of a Business Combination and (b) July 10, 2007 and ending July 10, 2011. The fair value of the UPO, inclusive of the receipt of the $100 cash payment, has been accounted as an expense of the Offering resulting in a charge directly to stockholders’ equity with a corresponding credit to additional paid-in-capital. The Company computed the fair value of the 25,000 Series A Units and 230,000 Series B Units underlying the UPO was approximately $641,000 using a Black-Scholes option-pricing model.
 
The fair value of the UPO granted was estimated as of the date of grant using the following assumptions: (1) expected volatility of 38.419%, (2) risk-free interest rate of 5.10% and (3) contractual life of 5 years. The UPO may be exercised for cash or on a “cashless” basis, at the holder’s option, such that the holder may use the appreciated value of the UPO (the difference between the exercise prices of the UPO and the underlying warrants and the market price of the units and underlying securities) to exercise the UPO without the payment of any cash. Each of the Series A Units and Series B Units included in the UPO are identical to the Series A Units and Series B Units sold in the Offering, except that the exercise price of the Class W Warrants underlying the Series B Units and the Class Z Warrants underlying the Series A Units will be $5.50 per share and the Class Z Warrants underlying the Series A Units shall only be exercisable until the fifth anniversary of the Offering.
 
During the registration process for the offering, the Company amended the form of UPO to clarify that the Company has no obligation to net cash settle the exercise of the UPO or the warrants underlying the UPO. The holder of the UPO will not be entitled to exercise the UPO or the warrants underlying the UPO unless a registration statement covering the securities underlying the UPO is effective or an exemption from registration is available. If the holder is unable to exercise the UPO or underlying warrants, the UPO or warrants, as applicable, will expire worthless.
 
NOTE 7 – SUBSEQUENT  EVENTS
 
Effective October 1, 2009, J. Patrick McMahon is appointed as a member of the Board of Directors, and as Chief Executive Officer, President, Chief Financial Officer, Secretary and Treasurer, of Israel Growth Partners Acquisition Corp. (the “Company”).  Also effective on October 1, 2009, each of Abhishek Jain and Richard J. Roth will resign as directors and officers of the Company.  As a result, as of October 1, 2009, Mr. McMahon will constitute the sole member of the Company’s Board of Directors and the sole officer of the Company.
 
 
F-12

 
 
In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” ("SFAS 165") [ASC 855-10-05], which provides guidance to establish general standards of accounting for and disclosures of events that occur after the balance sheet date  but before financial statements are issued or are available to be issued. SFAS 165 also requires entities to disclose the date through which subsequent events were evaluated as well as the rationale for why that date was selected. SFAS 165 is effective for interim and annual periods ending after June 15, 2009, and accordingly, the Company adopted this pronouncement during the last  quarter of its fiscal year ended July 31, 2009. SFAS 165 requires that public entities evaluate subsequent events through the date that the financial statements are issued.  The Company has looked at subsequent events through November 30, 2009 and has included all subsequent events in Note 7 – Subsequent Events.
 
 
F-13

 

Index to Exhibits
 
Exhibit
Number
 
Description
3.1 (1)
 
Third Amended and Restated Certificate of Incorporation
3.2 (2)
 
Bylaws
4.1 (3)
 
Specimen Series A Unit Certificate
4.2 (2)
 
Specimen Common Stock Certificate
4.3 (4)
 
Specimen Class W Warrant Certificate
4.4 (4)
 
Specimen Class Z Warrant Certificate—-1 IS 2, 2 IS 3 and 4 IS 4
4.5 (4)
 
Unit Purchase Option granted to HCFP/Brenner Securities LLC
4.6 (4)
 
Warrant Agreement between American Stock Transfer & Trust Company and the Registrant
10.1 (5)
 
Investment Management Trust Agreement between American Stock Transfer & Trust Company and the Registrant
10.2 (6)
 
Agreement among the Registrant and FI Investment Group, LLC, dated September 12, 2008
31.1*
 
Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.
31.2*
 
Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.
32.1*
 
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*
  Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 

*
Filed herewith.
(1)
Incorporated by reference to an exhibit to the Registrant’s Current Report on Form 8-K filed with the Commission on March 19, 2009.
(2)
Incorporated by reference to an exhibit to the Registrant’s Registration Statement of Form S-1 filed with the Commission on September 15, 2005.
(3)
Incorporated by reference to an exhibit to Amendment No. 2 to the Registrant’s Registration Statement of Form S-1 filed with the Commission on February 17, 2006.
(4)
Incorporated by reference to an exhibit to Amendment No. 9 to the Registrant’s Registration Statement of Form S-1 filed with the Commission on July 6, 2006.
(5)
Incorporated by reference to an exhibit to Amendment No. 7 to the Registrant’s Registration Statement of Form S-1 filed with the Commission on June 22, 2006.
(6)
Incorporated by reference to an exhibit to the Registrant’s Current Report on Form 8-K filed with the Commission on September 17, 2008.