UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
OR
| 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:
(Exact name of registrant as specified in its charter)
| N/A | ||
| (State or other jurisdiction | (IRS Employer | |
| of incorporation or organization) | Identification Number) |
| (Address of principal executive offices) | (Zip code) |
(Issuer’s telephone number including area code)
| Securities registered pursuant to Section 12(b) of the Act: | ||||
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☐ | Accelerated filer ☐ | ||
| Smaller
reporting company |
|||
| Emerging
growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of November 9, 2023, the registrant had ordinary shares, $0.0001 par value, outstanding.
INDEX
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Part I - Financial Information
Item 1 – Financial Statements
BOWEN ACQUISITION CORP
BALANCE SHEET
(UNAUDITED)
| September 30, 2023 | ||||
| ASSETS | ||||
| Cash | $ | |||
| Prepaid expenses | ||||
| Total Current Assets | ||||
| Cash held in Trust Account | ||||
| Total Assets | $ | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
| Current Liabilities: | ||||
| Accrued offering costs and expenses | $ | |||
| Total Current Liabilities | ||||
| Total Liabilities | ||||
| Commitments and contingencies | ||||
| Ordinary shares subject to possible redemption, shares at redemption value of $ | ||||
| Shareholders’ Equity: | ||||
| Preferred shares, $ par value; shares authorized; issued and outstanding | ||||
| Ordinary shares, $ par value; shares authorized; shares issued and outstanding at September 30, 2023 (excluding shares subject to redemption) | ||||
| Retained earnings | ||||
| Total Shareholders’ Equity | ||||
| Total Liabilities and Shareholders’ Equity | $ | |||
The accompanying notes are an integral part of the unaudited financial statements.
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BOWEN ACQUISITION CORP
STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended September 30, 2023 | For the Period from February 17, 2023 (Inception) Through September 30, 2023 | |||||||
| Formation and operating costs | $ | $ | ||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income: | ||||||||
| Interest and dividend earned on marketable securities held in trust account | ||||||||
| Total other income | ||||||||
| Net income | $ | $ | ||||||
| Basic and diluted weighted average ordinary shares outstanding, redeemable ordinary shares | ||||||||
| Basic and diluted net income per share, redeemable ordinary shares | $ | $ | ||||||
| Basic and diluted weighted average ordinary shares outstanding, non-redeemable ordinary shares | ||||||||
| Basic and diluted net loss per share, non-redeemable ordinary shares | $ | ) | $ | ) | ||||
The accompanying notes are an integral part of the unaudited financial statements.
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BOWEN ACQUISITION CORP
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(UNAUDITED)
Ordinary Shares | Additional Paid-in | Retained Earnings (Accumulated | Total Shareholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit) | Equity | ||||||||||||||||
| Balance on February 17, 2023 (inception) | $ | $ | $ | $ | ||||||||||||||||
| Issuance of ordinary shares to Sponsor | ||||||||||||||||||||
| Issuance of ordinary shares to Underwriter | ||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2023 | ( | ) | ||||||||||||||||||
| Balance as of June 30, 2023 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Proceeds from sale of public units | ||||||||||||||||||||
| Proceeds from over-allotment | ||||||||||||||||||||
| Sale of Private Units | ||||||||||||||||||||
| Over-allotment of Private Units | ||||||||||||||||||||
| Underwriter’s commission on sale of Public Units | - | ( | ) | ( | ) | |||||||||||||||
| Underwriter’s commission on Over-allotment | - | ( | ) | ( | ) | |||||||||||||||
| Other offering costs | - | ( | ) | ( | ) | |||||||||||||||
| Initial measurement of Ordinary shares Subject to redemption under ASC 480-10-S99 against additional paid-in capital | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Allocation of offering costs to ordinary shares subject to redemption | - | |||||||||||||||||||
| Deduction for increase of carrying value of redeemable shares | - | ( | ) | ( | ) | |||||||||||||||
| Subsequent measurement of Common stock subject to possible redemption (interest earned on trust account) | - | ( | ) | ( | ) | ( | ) | |||||||||||||
| Net income | - | |||||||||||||||||||
| Balance as of September 30, 2023 | $ | $ | $ | $ | ||||||||||||||||
The accompanying notes are an integral part of the unaudited financial statements.
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BOWEN ACQUISITION CORP
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the Period from February 17, 2023 (Inception) Through September 30, 2023 | ||||
| Cash flows from operating activities: | ||||
| Net income | $ | |||
| Adjustment to reconcile net loss to net cash used in operating activities | ||||
| Income earned on investment held in Trust Account | ( | ) | ||
| Accrued offering costs and expenses | ||||
| Prepaid expenses | ( | ) | ||
| Net cash used in operating activities | ( | ) | ||
| Cash flows from investing activities: | ||||
| Investment held in Trust Account | ( | ) | ||
| Net cash provided by investing activities | ( | ) | ||
| Cash flows from financing activities: | ||||
| Proceeds from issuance of founder shares | ||||
| Proceeds from sale of ordinary shares | ||||
| Proceeds from Private Placement | ||||
| Payments of underwriter’s discount | ( | ) | ||
| Payments to related party | ( | ) | ||
| Payment of offering costs | ( | ) | ||
| Net cash provided by financing activities | ||||
| Net change in cash | ||||
| Cash at beginning of period | ||||
| Cash at the end of period | $ | |||
| Supplemental disclosure of noncash financing activities | ||||
| Offering costs paid by Sponsor in exchange for issuance of ordinary shares | $ | |||
| Offering costs adjusted from prepaid expenses | $ | |||
| Offering costs charged to Additional Paid-in Capital | $ | |||
| Reclassification of ordinary shares subject to redemption | $ | |||
| Allocation of offering costs to ordinary shares subject to redemption | $ | |||
| Remeasurement adjustment on ordinary shares subject to possible redemption | $ | |||
| Subsequent measurement of ordinary shares subject to possible redemption (income earned on Trust Account) | $ | |||
The accompanying notes are an integral part of the unaudited financial statements.
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BOWEN ACQUISITION CORP
UNAUDITED Notes to the financial statements
NOTE 1 — ORGANIZATION AND BUSINESS OPERATIONS
Organizational and General
Bowen Acquisition Corp (the “Company”) was incorporated in the Cayman Islands on February 17, 2023. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses (the “Business Combination”).
The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
The Company’s sponsors are Createcharm Holdings Ltd., a British Virgin Islands company, and Bowen Holding LP, a Delaware limited partnership (the “Sponsors”). As of September 30, 2023, the Company had not commenced any operations. All activity for the period from February 17, 2023 (inception) through September 30, 2023 relates to the Company’s formation and the initial public offering (“IPO”), which is described below. The Company will not generate any operating revenues until after the completion of an initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the IPO. The Company has selected December 31 as its fiscal year end.
The
registration statement for the Company’s IPO (the “Registration Statement”) was declared effective on July 11,
2023. On July 14, 2023, the Company consummated the IPO of
of its units (“Public Units”). Each Public Unit consists of one ordinary share, $
par value (“Ordinary Shares”), of the Company and one right (“Rights”), each Right entitling the holder
thereof to receive one-tenth of one ordinary share upon the completion of the Company’s initial business combination. The
Public Units were sold at an offering price of $
per Unit, generating gross proceeds of $
Simultaneously
with the consummation of the IPO, the Company consummated the private placement (“Private Placement”) of
units (“Private Placement Units”) at a price of $
per Private Placement Unit, generating total proceeds of $
On
July 17, 2023, the underwriters exercised their over-allotment option in full to purchase an additional Units. As a result, on
July 18, 2023, the Company sold an additional Units at $ per Unit, generating gross proceeds of $
As
of July 18, 2023, transaction costs amounted to $
The Company will have until 15 months from the closing of the IPO (or up to 18 months, if the Company extends the time to complete a Business Combination as permitted in its Amended and Restated Memorandum and Articles of Association) to consummate a Business Combination (the “Combination Period”). However, if the Company has not completed a Business Combination within the Combination Period and shareholders have not otherwise amended the Amended and Restated Memorandum and Articles of Association to extend this period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned and not previously released to us to pay the Company’s taxes, if any (less certain amount of interest to pay dissolution expenses), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish the rights of the Public Shareholders as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining Public Shareholders and its Board of Directors, liquidate and dissolve, subject to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
Going Concern Consideration
As
of September 30, 2023, the Company had cash of $
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NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statement has been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. The interim results for the period ended September 30, 2023 are not necessarily indicative of the results that may be expected through December 31, 2023.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the financial statement in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and cash equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had a cash balance of $
Investments Held in Trust Account
The
Company’s portfolio of investments held in the Trust Account is comprised of investments only in U.S. government securities
with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company
Act which invest only in direct U.S. government treasury obligations. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are
presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair
value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the
accompanying statements of operations. The estimated fair value of investments held in the Trust Account is determined using
available market information. As of September 30, 2023, the Trust Account had balance of $
Offering Costs
Offering costs consist of legal, accounting, and other costs (including underwriting discounts and commissions) incurred through the balance sheet date that are directly related to the IPO and that were charged to shareholders’ equity upon the completion of the IPO on July 14, 2023.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
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ASC
740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be
sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits
as income tax expense. There were
There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements.
The Company complies with accounting and disclosure requirements of FASB ASC 260, Earnings Per Share. The statements of operations include a presentation of income (loss) per redeemable share and income (loss) per non-redeemable share following the two-class method of income per share. In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable shares and non-redeemable shares and the undistributed income (loss) is calculated using the total net loss less any dividends paid. The Company then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable shares. Any remeasurement of the accretion to redemption value of the common shares subject to possible redemption was considered to be dividends paid to the public shareholders. As of September 30, 2023, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted income (loss) per share is the same as basic income (loss) per share for the period presented.
The net income (loss) per share presented in the statements of operations is based on the following:
| For the Three Months Ended September 30, 2023 | For the Period from February 17, 2023 (Inception) Through September 30, 2023 | |||||||
| Net income | $ | $ | ||||||
| Interest earned on investment held in Trust Account | ( | ) | ( | ) | ||||
| Accretion of temporary equity into redemption value | ( | ) | ( | ) | ||||
| Net loss including accretion of common stock to redemption value | ( | ) | ( | ) | ||||
Three months ended September 30, 2023 | For the Period from February 17, 2023 (Inception) Through September 30, 2023 | |||||||||||||||
| Redeemable | Non-Redeemable | Redeemable | Non-Redeemable | |||||||||||||
| Particulars | Shares | Shares | Shares | Shares | ||||||||||||
| Basic and diluted net income/(loss) per share: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| Ownership percentage | % | % | % | % | ||||||||||||
| Numerators: | ||||||||||||||||
| Allocation of net loss including accretion of temporary equity | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income earned on Trust Account | ||||||||||||||||
| Accretion of temporary equity to redemption value | ||||||||||||||||
| Allocation of net income/(loss) | ( | ) | ( | ) | ||||||||||||
| Denominators: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| Basic and diluted net income/(loss) per share | ) | ) | ||||||||||||||
Concentration of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which, at times, may exceed the Federal Depository Insurance Coverage of $
| 9 |
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature.
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
| Public offering proceeds | $ | |||
| Less: | ||||
| Proceeds allocated to Public Rights | ( | ) | ||
| Allocation of offering costs related to redeemable shares | ( | ) | ||
| Plus: | ||||
| Accretion of carrying value to redemption value | ||||
| Ordinary shares subject to possible redemption | $ | |||
| Over-allotment | ||||
| Plus: | ||||
| Over-allotment proceeds | ||||
| Less: | ||||
| Proceeds allocated to Public Rights | ( | ) | ||
| Allocation of offering costs related to redeemable shares | ( | ) | ||
| Plus: | ||||
| Accretion of carrying value to redemption value | ||||
| Subsequent measurement of ordinary shares subject to possible redemption (income earned on trust account) | ||||
| Ordinary shares subject to possible redemption | $ |
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
NOTE 3 — INITIAL PUBLIC OFFERING
On
July 14, 2023, the Company sold Units at a price of $ per Unit.
NOTE 4 — PRIVATE PLACEMENTS
The
Sponsors and EBC have agreed to purchase an aggregate of Private Placement Units ( Private Placement Units to be purchased
by the Sponsors and Private Placement Units to be purchased by EBC or its designees), or Private Placement Units if the
underwriters’ over-allotment is exercised in full, at a price of $ per Private Placement Unit ($
Simultaneously
with the closing of the IPO on July 14, 2023, the Company consummated the private sale of Private Placement Units.
On July 17, 2023, the underwriters exercised the over-allotment option in full. See Note 1 for more details.
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NOTE 5 — RELATED PARTIES
Founder Shares and EBC Founder Shares
On
February 27, 2023, the Sponsors received of the Company’s ordinary shares (“Founder Shares”) in exchange
for $
On
March 15, 2023, the Company issued to EBC ordinary shares (“EBC founder shares”) for a purchase price of $ per
share and an aggregate purchase price of $
The fair value of the EBC founder shares was estimated at March 15, 2023. The Company used the following assumptions to estimate the fair value of EBC founder shares:
| Time to expiration | ||||
| Risk-free rate | % | |||
| Volatility | % | |||
| Dividend yield | % |
The Sponsors have agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) six months after the completion of the initial Business Combination and (B) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction after an initial Business Combination that results in all of the Company’s public shareholders having the right to exchange their ordinary shares for cash, securities or other property. EBC has also agreed, subject to exceptions, that the EBC founder shares cannot be sold, transferred or assigned, until the consummation of an initial business combination.
Promissory Note — Related Party
On
February 27, 2023, the Sponsors issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which
the Company may borrow up to an aggregate principal amount of $
Underwriting Agreement
The Company granted the underwriters a 45-day option from the date of IPO to purchase up to additional Units to cover over-allotments, at the IPO price less the underwriting discounts and commissions.
The
underwriters were entitled to a cash underwriting discount of $
On
July 17, 2023, the underwriters exercised the over-allotment option in full to purchase Units. As a result, on July 18, 2023,
the Company sold an additional Units at $ per Unit, generating gross proceeds to the Company of $
Due to Related Party
The
Sponsors paid certain formation, operating or offering costs on behalf of the Company. These amounts were due on demand and non-interest
bearing. As of September 30, 2023, the Sponsors had paid $
Initial Accounting Service Fee
The Company has engaged TenX Global Capital, a related party of the Company, to assist in the preparation of financial statements and other accounting consulting services.
During
the period from February 17, 2023 (inception) through September 30, 2023, a service fee of $
Accounting Service Agreement
The
Company has engaged TenX Global Capital, a related party of the Company, to assist in preparing quarterly and annual financial statements
commencing following the consummation of the IPO. The Company has agreed to pay for these services at a fixed quarterly rate of $
Administration Fee
Commencing
on the effectiveness of the Registration Statement on July 11, 2023, an affiliate of the Sponsors will be allowed to charge the Company
an allocable share of its overhead, up to $
NOTE 6 — COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the Founder Shares, EBC founder shares, Private Placement Units will be entitled to registration rights pursuant to a registration rights agreement dated on the effectiveness of the Registration Statement on July 11, 2023 requiring the Company to register such securities for resale. Subject to certain limitations set forth in such agreement, the holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
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Business Combination Marketing Agreement
The
Company has engaged EBC as an advisor in connection with its Business Combination to assist in holding meetings with the Company
stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to
potential investors that are interested in purchasing its securities in connection with its initial Business Combination and assist
with press releases and public filings in connection with the Business Combination. The Company will pay EBC a service fee for such
services upon the consummation of its initial Business Combination in an amount of $
NOTE 7 — SHAREHOLDERS’ EQUITY
Preferred
Shares — The Company is authorized to issue preferred shares with a par value of $ per share with such
designations,
Ordinary
Shares — The Company is authorized to issue ordinary shares with a par value of $ per share.
Rights
— Except in cases where the Company is not the surviving company in a business combination,
NOTE 8 — Fair Value Measurements
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at September 30, 2023 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
| Quoted | Significant | Significant | ||||||||||||||
| Prices in | Other | Other | ||||||||||||||
| As of | Active | Observable | Unobservable | |||||||||||||
| September 30, | Markets | Inputs | Inputs | |||||||||||||
| 2023 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Assets: | ||||||||||||||||
| Investment held in Trust Account | $ | $ | $ | $ | ||||||||||||
NOTE 9 — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were available to be issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
| 12 |
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
References to the “Company,” “our,” “us” or “we” refer to Bowen Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes related thereto. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. While we intend to focus our search on businesses in Asia, we are not limited to a particular industry or geographic region for purposes of consummating an initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the private placement of the private units, the proceeds of the sale of our securities in connection with our initial business combination, our shares, debt or a combination of cash, stock and debt.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception through September 30, 2023 were organizational activities, those necessary to prepare for the IPO described below and identifying a target company for our initial Business Combination. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We expect to generate non-operating income in the form of interest income on marketable securities held after the IPO. We expect that we will incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a Business Combination.
For the three months ended September 30, 2023, we had a net income of $573,444, which consists of loss of $187,428 derived from formation and operating costs offset by income earned on Trust Account of $760,871.
For the period from February 17, 2023 (inception) through September 30, 2023, we had a net income of $570,338, which consists of loss of $190,533 derived from formation and operating costs offset by income earned on Trust Account of $760,871.
Liquidity and Capital Resources
On July 14, 2023, we consummated our IPO of Units, at $10.00 per Unit, generating gross proceeds of $60,000,000. Simultaneously with the closing of our IPO, we consummated the sale of 330,000 Private Placement Units at a price of $10.00 per Private Placement Unit in a private placement to the Sponsors, generating total gross proceeds of $3,300,000.
On July 17, 2023, the underwriters exercised the over-allotment option in full to purchase 900,000 Units. As a result, on July 18, 2023, we sold an additional 900,000 Units at $10.00 per Unit, generating gross proceeds of $9,000,000. Simultaneously with the closing of the full exercise of the over-allotment option, we completed the private sale of an aggregate of 31,500 Private Placement Units, at a purchase price of $10.00 per Private Placement Unit, generating gross proceeds of $315,000. Transaction costs amounted to $3,243,898 consisting of $1,725,000 of cash underwriting fees and $1,518,898 of other offering costs.
Following the closing of the IPO and the sale of over-allotment units, an amount of $69,690,000 ($10.10 per Unit) from the net proceeds of the sale of the Units in the IPO and the Private Placement was placed in a trust account. The funds held in the Trust Account may be invested in U.S. government securities with a maturity of 185 days or less. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account, to complete our initial business combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination, we will have available to us the approximately $700,000 of proceeds held outside the trust account. We will use these funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination, and to pay taxes to the extent the interest earned on the trust account is not sufficient to pay our taxes.
We expect our primary liquidity requirements during that period to include approximately $200,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $100,000 for legal and accounting fees related to regulatory reporting requirements; $120,000 for advisory and administrative services, $70,000 for NASDAQ continued listing fees and approximately $160,000 for general working capital that will be used for miscellaneous expenses, director and officer’s liability insurance, general corporate purposes, liquidation obligations and reserves net of estimated interest income.
These amounts are estimates and may differ materially from our actual expenses. If our available funds are not sufficient, we may be unable to continue searching for, or conducting due diligence with respect to, prospective target businesses.
We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.
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Related Party Transactions
Please refer to Financial Statement Note 5 - Related Parties.
Other Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities reflected on our balance sheet.
Registration Rights
The holders of the Founder Shares, EBC founder shares, Private Placement Units will be entitled to registration rights pursuant to a registration rights agreement dated July 11, 2023 requiring the Company to register such securities for resale. Subject to certain limitations set forth in such agreement, the holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Business Combination Marketing Agreement
We have engaged EBC as an advisor in connection with its Business Combination to assist in holding meetings with the Company stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing its securities in connection with its initial Business Combination and assist with press releases and public filings in connection with the Business Combination. The Company will pay EBC a service fee for such services upon the consummation of its initial Business Combination in an amount equal to 3.5% of the gross proceeds of the IPO. In addition, the Company will pay EBC a service fee in an amount equal to 1.0% of the total consideration payable in the initial Business Combination if it introduces the Company to the target business with whom it completes an initial Business Combination and the amount will be payable in cash and is due at the closing date of the initial Business Combination.
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Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical accounting policies or estimates.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
Item 3 – Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
Item 4 – Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2023. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective due solely to the material weakness in our internal control over financial reporting related to the accretion adjustment. As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with US GAAP. Accordingly, management believes that the financial statements included in this Form 10-Q present fairly, in all material respects, our financial position, result of operations and cash flows for the periods presented.
Management’s Report on Internal Controls Over Financial Reporting
This Quarterly Report on Form 10-Q does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, other than as described herein. Management has identified a material weakness in internal controls related to the accretion adjustment as described above. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance our system of evaluating and implementing the accounting standards that apply to our financial statements, including through enhanced analyses by our personnel and third-party professionals with whom we consult regarding complex accounting applications.
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Part II - Other Information
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds
On February 27, 2023, Bowen Holding LP acquired an aggregate of 1,725,000 ordinary shares for an aggregate purchase price of $25,000. Bowen Holding LP thereafter transferred an aggregate of 1,155,750 ordinary shares to Createcharm Holdings Ltd, our other sponsor. The Company also issued to EarlyBirdCapital, Inc. 180,000 ordinary shares for an aggregate purchase price of $2,520 on March 15, 2023. The issuance of the foregoing securities was exempt pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (“Securities Act”).
On July 14, 2023, the Company consummated the Initial Public Offering of 6,000,000 Units. Each Unit consists of one Ordinary Share, $0.0001 par value, of the Company and one Right, each Right entitling the holder thereof to receive one-tenth of one Ordinary Share upon the completion of the Company’s initial business combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $60,000,000. EarlyBirdCapital, Inc. acted as sole book-running manager of the Initial Public Offering and Revere Securities acted as co-manager of the Initial Public Offering. The securities in the offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-272076). The Securities and Exchange Commission declared the registration statement effective on July 11, 2023.
Simultaneously with the consummation of the Initial Public Offering, the Company consummated the Private Placement of 330,000 Private Placement Units at a price of $10.00 per Private Placement Unit, generating total proceeds of $3,300,000. The Private Placement Units were purchased by Createcharm Holdings Ltd and EarlyBirdCapital, Inc. The Private Placement Units are identical to the Units sold in the Initial Public Offering. The purchasers of the Private Placement Units have agreed not to transfer, assign or sell any of the Private Placement Units or underlying securities (except to certain transferees) until after the completion of the Company’s initial business combination. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
On July 17, 2023, the underwriters exercised their over-allotment option in full to purchase an additional 900,000 Units. As a result, on July 18, 2023, the Company sold an additional 900,000 Units at $10.00 per Unit, generating gross proceeds of $9,000,000. In connection with this sale, Createcharm Holdings Ltd and EarlyBirdCapital, Inc. also purchased an additional 31,500 Private Placement Units from the Company, generating gross proceeds of $315,000. The issuance of the additional Private Placement Units was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
As of July 18, 2023, an aggregate of $69,690,000 has been deposited in the trust account established with Continental Stock Transfer & Trust Company acting as trustee in connection with the Initial Public Offering ($10.10 per unit sold in the offering, including the over-allotment option).
We paid a total of $1,725,000 in underwriting discounts and commissions related to the Initial Public Offering.
For a description of the use of the proceeds generated in the Initial Public Offering, see Part I, Item 2 of this Form 10-Q.
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Item 6 – Exhibits
| Exhibit No. | Description | |
| 31.1* | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1** | Certification of Principal 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 Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | Inline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | Cover Page Interactive Data File. The cover page XBRL tags are embedded within the Inline XBRL document. |
* Filed herewith
** These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
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SIGNATURES
Pursuant to the requirements 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.
| BOWEN ACQUISITION CORP | ||
| Dated: November 9, 2023 | By. | /s/ Jiangang Luo |
| Jiangang Luo | ||
Chief Executive Officer (Principal Executive Officer) | ||
| Dated: November 9, 2023 | By. | /s/ Jing Lu |
| Jing Lu | ||
Chief Financial Officer (Principal Financial and Accounting Officer) | ||
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