Israel Acquisitions Corp. (NASDAQ:ISRL) has signed a non-binding letter of intent (LOI) to combine with Tel Aviv-based software development company Pomvom (TA:PMVM).

The clearly news comes at a sensitive time for both ends of the transaction as the war in Gaza grinds on and Tel Aviv braces for intermittent rocket attacks.

As the SPAC’s name suggests, its team led by tech investor Ziv Elul was always aiming to take an Israeli company public, but it has made an interesting choice to announce this LOI now with everything else going on. After all, it can automatically extend its deadline from January 18 to July 17, 2024 so it is not under a time crunch.

But, perhaps, the team aims to project a sense of normalcy in the Tel Aviv tech sector. One way or the other, the news has shot up Pomvom’s stock on the Tel Aviv exchange +30.5%, while the SPAC’s has seen little movement before market open in New York.

Founded in 2016, Pomvom provides an end-to-end solution for automated photography through image recognition software. The company has developed an image recognition AI platform, capable of recognizing individuals in real-time in a crowd and in various conditions.

Currently, the expected pre-money equity valuation for Pomvom stands at approximately $125 million. Nevertheless, it’s important to note that this valuation is subject to potential changes, both upward and downward, contingent on specific factors that will be jointly determined by the parties. The deal will also incorporate a minimum cash closing requirement of $20 million.

The LOI includes a 12-month lock-up period that is applicable to officers, directors and affiliated shareholders holding more than 5% of the company’s capital. It also extends to the initial SPAC’s sponsors. Subsequently, for an additional 12-month period, the individuals will be subject to a lock-up period, as determined in the final and binding agreement.

Following the consummation of the potential merger, the combined company is expected to be a non-US corporation listed on the Nasdaq.

Both sides expect the transaction to be completed by the end of the first quarter of 2024, but the specific timeline will be established in the definitive agreement. Further details about the potential merger will be released once a final agreement is signed, which is expected to be six weeks from now.

Israel Acquisition Corp. has approximately $146.6 million in its trust and has until July 2024 to complete a deal.

Since there is no guarantee that this LOI will make it to the definitive agreement stage, Israel Acquisitions Corp. will stay in SPACInsider’s searching column for now.