Bowen Acquisition p(BOWN) - 2024 Q3 - Quarterly Report

Part I - Financial Information Financial Statements The company's financial statements for the period ended September 30, 2024, show an increase in total assets to $74.5 million, primarily from interest earned on the trust account, with net income of $2.4 million solely from interest income offsetting operating costs Consolidated Balance Sheets As of September 30, 2024, total assets increased to $74.5 million, driven by investments in the trust account, while total shareholders' equity sharply decreased to $12,879 due to a reduction in retained earnings Consolidated Balance Sheet Highlights (Unaudited) | Account | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash | $271,847 | $426,913 | | Investment held in Trust Account | $74,237,487 | $71,419,358 | | Total Assets | $74,534,486 | $71,925,752 | | Liabilities & Equity | | | | Total Current Liabilities | $284,120 | $103,860 | | Ordinary shares subject to possible redemption | $74,237,487 | $71,419,358 | | Total Shareholders' Equity | $12,879 | $402,534 | | Total Liabilities and Shareholders' Equity | $74,534,486 | $71,925,752 | Consolidated Statements of Operations For the three and nine months ended September 30, 2024, the company reported net incomes of $825,358 and $2,428,474, respectively, entirely from interest earned on trust account investments offsetting operating costs Statement of Operations Summary (Unaudited) | Metric | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | | Loss from operations | $(127,429) | $(389,655) | $(187,428) | | Interest earned on investments | $952,787 | $2,818,129 | $760,871 | | Net income | $825,358 | $2,428,474 | $573,444 | Consolidated Statements of Changes in Shareholders' Equity Shareholders' equity declined from $402,534 at the start of 2024 to $12,879 by September 30, 2024, primarily due to the re-measurement of common stock subject to redemption - Total Shareholders' Equity decreased from $402,534 on January 1, 2024, to $12,879 on September 30, 2024[7][8] - The reduction in equity is mainly due to the accounting treatment for redeemable shares, where interest earned on the trust account ($2,818,129 for the nine months) is reclassified from equity, offsetting the reported net income ($2,428,474)[7][8][43] Consolidated Statements of Cash Flows For the nine months ended September 30, 2024, the company experienced a net cash outflow of $155,066 from operating activities, with no investing or financing activities Cash Flow Summary (Unaudited) - Nine Months Ended Sep 30, 2024 | Cash Flow Activity | Amount | | :--- | :--- | | Net cash used in operating activities | $(155,066) | | Net cash used in investing activities | $0 | | Net cash provided by financing activities | $0 | | Net change in cash | $(155,066) | | Cash at beginning of period | $426,913 | | Cash at end of period | $271,847 | Notes to Consolidated Unaudited Financial Statements The notes detail the company's SPAC status, IPO, proposed business combination, key accounting policies, related party transactions, and a going concern uncertainty due to the limited timeframe for completing a business combination - The company is a SPAC formed to effect a business combination and has not commenced any operations, with activities limited to its formation, IPO, and search for a business combination[12][14] - On January 18, 2024, the company entered into a merger agreement with Shenzhen Qianzhi BioTechnology Co. Ltd. and Qianzhi Group Holding (Cayman) Limited[23] - Management has concluded there is substantial doubt about the Company's ability to continue as a going concern, as it must complete a Business Combination within the specified period or face liquidation[27] - As of October 7, 2024, the company extended the time to consummate a business combination to January 14, 2025, by securing a $690,000 loan from its sponsors' designees, which was deposited into the Trust Account[21][81] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's status as a blank check company with no current operations, where financial results are driven by interest income from the trust account offsetting operating expenses, and reiterates going concern risk - The company is a blank check company with activities limited to organizational tasks and identifying a target for a business combination, not expecting to generate operating revenues until after a business combination is complete[84][85] Net Income Summary | Period | Net Income | Key Driver | | :--- | :--- | :--- | | Three months ended Sep 30, 2024 | $825,358 | Interest income of $952,787 offset operating loss of $127,429 | | Nine months ended Sep 30, 2024 | $2,428,474 | Interest income of $2,818,129 offset operating loss of $389,655 | - Management believes the current cash of $271,847 and working capital of $12,879, combined with funds outside the trust, are sufficient for operating the business prior to a business combination, but acknowledges a going concern risk[94] Quantitative and Qualitative Disclosures About Market Risk The company is a smaller reporting company and is not required to provide the information for this item - As a smaller reporting company, the registrant is exempt from providing disclosures about market risk[99] Controls and Procedures Management concluded that disclosure controls and procedures were not effective as of September 30, 2024, due to a material weakness in internal control over financial reporting, which the company is taking steps to remediate - The CEO and CFO concluded that disclosure controls and procedures were not effective as of September 30, 2024[101] - The ineffectiveness is due to a material weakness related to the company's lack of qualified SEC reporting professionals[101] - Management intends to remediate this by enhancing access to accounting literature, consulting with third-party professionals, and considering additional experienced staff[101] - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[102] Part II - Other Information Unregistered Sales of Equity Securities and Use of Proceeds This section details the issuance of founder shares, the consummation of the IPO which raised $60 million, and a simultaneous private placement of units that generated $3.3 million, with a total of $69.69 million deposited into the trust account - In July 2023, the company completed its IPO of 6,000,000 units at $10.00 per unit, generating $60 million in gross proceeds[105] - Simultaneously with the IPO, a private placement of 330,000 units at $10.00 per unit to sponsors generated $3.3 million[106] - The underwriters' over-allotment option was fully exercised, resulting in the sale of an additional 900,000 units for $9 million and 31,500 private placement units for $315,000[107] - A total of $69,690,000 from the IPO and private placements was deposited into the trust account[108] Other Information During the quarter ended September 30, 2024, no director or officer of the company adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the third quarter of 2024[109] Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer, and Inline XBRL documents - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[110] - Inline XBRL data files are also included as exhibits[110] Signatures Signatures The report is duly signed and authorized by Jiangang Luo, Chief Executive Officer, and Jing Lu, Chief Financial Officer, on November 14, 2024 - The Form 10-Q was signed on November 14, 2024, by Jiangang Luo (CEO) and Jing Lu (CFO)[113]