Bowen Acquisition p(BOWN) - 2024 Q2 - Quarterly Report

Part I - Financial Information Financial Statements This section presents the unaudited consolidated financial statements for Bowen Acquisition Corp, detailing its SPAC structure, trust account investments, and a proposed business combination Consolidated Balance Sheets As of June 30, 2024, total assets were $73.64 million, primarily trust account investments, with $73.28 million in redeemable ordinary shares Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash | $272,630 | $426,913 | | Investment held in Trust Account | $73,284,700 | $71,419,358 | | Total Assets | $73,644,738 | $71,925,752 | | Liabilities & Equity | | | | Total Current Liabilities | $219,730 | $103,860 | | Ordinary shares subject to possible redemption | $73,284,700 | $71,419,358 | | Total Shareholders' Equity | $140,308 | $402,534 | | Total Liabilities and Shareholders' Equity | $73,644,738 | $71,925,752 | Consolidated Statements of Operations Net income for the three and six months ended June 30, 2024, was $816,754 and $1,603,116 respectively, driven by trust account interest income Statement of Operations Summary (Unaudited) | Metric | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Formation and operating costs | ($125,096) | ($262,226) | | Interest earned on investments | $941,850 | $1,865,342 | | Net income | $816,754 | $1,603,116 | | Basic and diluted net income per share (redeemable) | $0.12 | $0.24 | Consolidated Statements of Changes in Shareholders' Equity Shareholders' equity decreased from $402,534 to $140,308 by June 30, 2024, primarily due to reclassification of trust account interest Changes in Shareholders' Equity for Six Months Ended June 30, 2024 (Unaudited) | Description | Amount | | :--- | :--- | | Balance as of January 1, 2024 | $402,534 | | Subsequent measurement of redeemable stock (interest earned) | ($1,865,342) | | Net income | $1,603,116 | | Balance as of June 30, 2024 | $140,308 | Consolidated Statements of Cash Flows Net cash outflow from operating activities was $154,283 for the six months ended June 30, 2024, reducing cash balance to $272,630 Cash Flow Summary for Six Months Ended June 30, 2024 (Unaudited) | Cash Flow Item | Amount | | :--- | :--- | | Net Income | $1,603,116 | | Adjustments (incl. non-cash interest income) | ($1,757,399) | | Net cash used in operating activities | ($154,283) | | Net change in cash | ($154,283) | | Cash at beginning of period | $426,913 | | Cash at end of period | $272,630 | Notes to Consolidated Unaudited Financial Statements Notes detail the company's SPAC formation, IPO, trust account, proposed merger with Qianzhi Group, and a going concern uncertainty - The company was incorporated on February 17, 2023, for the purpose of effecting a business combination and has not commenced any operations[12][13] - On January 18, 2024, the Company entered into an Agreement and Plan of Reorganization with Qianzhi Group Holding (Cayman) Limited ("NewCo") for a proposed business combination[19] - Management has identified conditions that raise substantial doubt about the Company's ability to continue as a going concern, primarily related to the requirement to complete a Business Combination within the permitted period[21] - The company corrected an immaterial error in its Q2 2023 Form 10-Q, which was an omission of a non-cash item in the Cash Flow Statement related to offering costs for EBC founder shares[42][43] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) MD&A discusses the company's status as a blank check company, its reliance on trust account interest, liquidity, and going concern uncertainty regarding business combination completion - The company is a blank check company with no operations, focused on effecting a business combination with a target, with an intended focus on businesses in Asia[70] Results of Operations Summary | Period | Net Income / (Loss) | Key Driver | | :--- | :--- | :--- | | Six Months Ended June 30, 2024 | $1,603,116 | Interest income of $1,865,342 offset by operating costs | | Period from Feb 17, 2023 to June 30, 2023 | ($3,105) | Formation and operating costs | - As of June 30, 2024, the company had cash of $272,630[77] - Management has substantial doubt about the company's ability to continue as a going concern due to the need to complete a business combination within the specified period[77] - The company has engaged EBC as a business combination advisor and will pay a service fee of $2,415,000 (3.5% of IPO gross proceeds) upon consummation of the initial business combination[60][82] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, the company is not required to provide the information otherwise required under this item[86] Controls and Procedures Management concluded disclosure controls were ineffective as of June 30, 2024, due to a material weakness from a lack of qualified SEC reporting professionals - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were not effective as of June 30, 2024[87] - The ineffectiveness is due to a material weakness in internal control over financial reporting related to the company's lack of qualified SEC reporting professionals; remediation efforts are underway[87] Part II - Other Information Unregistered Sales of Equity Securities and Use of Proceeds This section details the unregistered issuance of founder shares and the deposit of $69.69 million from the IPO and private placements into the trust account - Prior to the IPO, the company issued 1,725,000 ordinary shares to its sponsor for $25,000 and 180,000 shares to EarlyBirdCapital, Inc. for $2,520 in unregistered transactions[90] - Simultaneously with the IPO, the company sold 330,000 Private Placement Units at $10.00 each, and an additional 31,500 units with the over-allotment exercise, through unregistered sales[92][93] - As of July 18, 2023, an aggregate of $69,690,000 from the IPO and private placements was deposited into the trust account[93] Other Information No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2024 - During the quarter ended June 30, 2024, no director or officer adopted or terminated any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement"[94] Exhibits This section lists exhibits filed with Form 10-Q, including SOX certifications and Inline XBRL financial data files - The filing includes certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[95] - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, and Presentation) are included as part of the filing[95]