10-Q 1 bel908q.txt QUARTERLY REPORT ON FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2008 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 0-31383 BELLOWS ACQUISITION CORPORATION (Exact name of registrant as specified in its charter) Delaware 52-2257543 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) c/o Empire Advisory, 152 West 57th Street, 27th Floor, New York, New York 10019 (Address of principal executive offices) (zip code) 212/247-4447 (Registrant's telephone number, including area code) 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. Yes X No 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. Large accelerated filer Accelerated Filer Non-accelerated filer Smaller reporting company X (do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at September 30, 2008 Common Stock, par value $0.0001 2,500,000 Documents incorporated by reference: None PART I -- FINANCIAL INFORMATION BELLOWS ACQUISITION CORPORATION (A DEVELOPMENT STAGE COMPANY) CONDENSED BALANCE SHEET AS OF September 30, 2008 ----------------------- ASSETS ------ As of As of Sept. 30, 2008 Dec. 31, 2007 (Unaudited) Cash $ 250 $ 100 ------ ------ TOTAL ASSETS $ 250 $ 100 ------ ------ LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIENCY) ------------------------------------------------- LIABILITIES Accrued expenses $2,500 -- ------ ------ TOTAL LIABILITIES 2,500 -- ------ ------ STOCKHOLDER'S EQUITY (DEFICIENCY) Preferred Stock, $.0001 par value, 20,000,000 shares authorized, none issued and outstanding - - Common Stock, $.0001 par value, 100,000,000 shares authorized, 2,500,000 issued and outstanding 250 100 Additional paid-in capital 2,095 2,095 Deficit accumulated during development stage (4,595) (2,095) -------- ------- Total Stockholder's Equity (deficiency) (2,250) 100 -------- ------- TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 250 $ 100 (DEFICIENCY) ======== ======= See accompanying notes to condensed financial statements 2 BELLOWS ACQUISITION CORPORATION (A DEVELOPMENT STAGE COMPANY) CONDENSED STATEMENTS OF OPERATIONS (Unaudited) -----------------------

See accompanying notes to condensed financial statements 3 BELLOWS ACQUISITION CORPORATION (A DEVELOPMENT STAGE COMPANY) STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIENCY) FOR THE PERIOD FROM MARCH 24, 1999 (INCEPTION) THROUGH SEPTEMBER 30, 2008 (Unaudited) --------------------

See accompanying notes to condensed financial statements 4

See accompanying notes to condensed financial statements 5 BELLOWS ACQUISITION CORPORATION (A DEVELOPMENT STAGE COMPANY) NOTES TO CONDENSED FINANCIAL STATEMENTS AS OF September 30, 2008 (Unaudited) --------------- NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (A) Organization and Business Operations Bellows Acquisition Corporation (a development stage company) ("the Company") was incorporated in Delaware on March 24, 1999 to serve as a vehicle to effect a merger, exchange of capital stock, asset acquisition or other business combination with a domestic or foreign private business. On August 11, 2008, the Company effected a change in control by issuance of 2,000,000 shares of its common stock and redemption of 500,000 shares of its outstanding common stock. The Company reflected the above transaction as a stock split and has retroactively restated the shares outstanding as of the first period presented. Other than such change in control, as of September 30, 2008, the Company had not yet commenced any formal business operations. The Company's fiscal year end is December 31. The Company's ability to commence operations is contingent upon its ability to identify a prospective target business. (B) Interim Financial Statements The accompanying unaudited condensed financial statements have been prepared by the Company and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of three and nine month periods ended September 30, 2008, and the period March 24, 1999 (inception) through September 30, 2008, in accordance with accounting principles generally accepted in the United States of America for interim financial statements and pursuant to Form 10-Q and Regulation S-X. Certain information and footnote disclosures normally included in the Company's annual audited finanical statements have been condensed or omitted pursuant to such rules and regulations. The results of operations for the three and nine month periods ended September 30, 2008, are not necessarily indicative of the results of operations to be expected for a full fiscal year. These interim condensed financial statements should be read in conjunction with the financial statements for the fiscal year ended December 31, 2007, which are included in the Company's Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on March 31, 2008. (C) Use of Estimates The preparation of the condensed financial statements in conformity with generally accepted accounting principles requires 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 condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (D) Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. (E) Fair Value of Financial Instruments The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. Financial instruments applicable to the Company include cash and accrued expenses. The carrying amounts approximate the fair value due to their short maturities of less than one year. (F) Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequence attributable to differences between the financial statement 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 be applied to taxable income in the years in which those temporary differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. There were no current or deferred income tax expense or benefits due to the Company not having any material operations for the period ended September 30, 2008. 6 BELLOWS ACQUISITION CORPORATION (A DEVELOPMENT STAGE COMPANY) NOTES TO CONDENSED FINANCIAL STATEMENTS AS OF September 30, 2008 (Unaudited) -------------------------------- (G) Loss Per Share Basic loss per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no potentially dilutive securities for the three and nine month periods ended September 30, 2008. (H) Recent Accounting Pronouncements In December 2007, the FASB issued SFAS No. 141 (R), Business Combinations, and SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements. SFAS No. 141 (R) requires an acquirer to measure the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at their fair values on the acquisition date, with goodwill being the excess value over the net identifiable assets acquired. SFAS No. 160 clarifies that a non-controlling interest in a subsidiary should be reported as equity in the consolidated financial statement. The calculation of earnings per share will continue to be 7 BELLOWS ACQUISITION CORPORATION (A DEVELOPMENT STAGE COMPANY) NOTES TO CONDENSED FINANCIAL STATEMENTS AS OF September 30, 2008 (Unaudited) -------------------------------- based on income amounts attributable to the parent. SFAS No. 141 (R) and SFAS No. 160 are effective for financial statements issued for fiscal years beginning after December 15, 2008. Early adoption is prohibited. We have not yet determined the effect on our financial statements, if any, upon adoption of SFAS No. 141 (R) or SFAS No. 160. NOTE 2 STOCKHOLDER'S EQUITY (A) Preferred Stock The Company is authorized to issue 20,000,000 shares of preferred stock at $.0001 par value, with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors. (B) Common Stock The Company is authorized to issue 100,000,000 shares of common stock at $.0001 par value. In March, 1999, the Company issued 1,000,000 shares of its common stock to Pierce Mill Associates, Inc. pursuant to Section 4(2) of the Securities Act of 1933 for an aggregate consideration of $100. (C) Additional Paid-In Capital Additional paid-in capital as of September 30, 2008 represents the fair value of the amount of organization and professional costs incurred by related parties on behalf of the Company (See Note 4). NOTE 3 RELATED PARTIES Legal counsel to the Company is a 100% owner of Pierce Mill Associates, Inc., a shareholder of the Company. Note 4 CHANGE IN CONTROL On August 11, 2008 the following events occurred which resulted in a change of control of the Company: 1. 500,000 shares of the 1,000,000 shares of common stock of the Company owned by Pierce Mill Associates, Inc. were redeemed at par. 2. The Company issued 2,000,000 shares of common stock to the following shareholders in the following amounts representing 80% of the now outstanding 2,500,000 shares of common stock: Scoville Walker 1,000,000 Jerry L. Jones 1,000,000 The following persons were elected to the Board of Directors of the Company: Scoville Walker Jerry L. Jones Tony Axam The following persons were appointed to the following offices of the Company: Scoville Walker Chief Executive Officer Jerry L. Jones President Briana Ramsey Secretary/Treasurer James Cassidy resigned as President and Secretary and as a director of the Company. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS On August 11, 2008 the following events occurred which resulted in a change of control of the Company: 1. 500,000 shares of the 1,000,000 shares of common stock of the Company owned by Pierce Mill Associates, Inc. were redeemed at par. 2. The Company issued 2,000,000 shares of common stock to the following shareholders in the following amounts representing 80% of the now outstanding 2,500,000 shares of common stock: Scoville Walker 1,000,000 Jerry L. Jones 1,000,000 The following persons were elected to the Board of Directors of the Company: Scoville Walker Jerry L. Jones Tony Axam The following persons were appointed to the following offices of the Company: Scoville Walker Chief Executive Officer Jerry L. Jones President Briana Ramsey Secretary/Treasurer James Cassidy resigned as President and Secretary and as a director of the Company. The Company intends to enter into a business combination with Magnum Business Management, Inc., a Nevada corporation. Magnum Business Management, Inc. was formed to enter into exclusive sales and marketing agrements for mining and natural resources in Central Africa. No agreement has been reached for the business combination with Magnum Business Management, Inc. and no agreements or contracts have yet been executed for such a combination. In September 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 157, "Fair Value Measurements," which provides enhanced guidance for using fair value to measure assets and liabilities. SFAS No. 157 provides a common definition of fair value and establishes a framework to make the measurement of fair value in generally accepted accounting principles more consistent and comparable. SFAS No. 157 also requires expanded disclosures to provide information about the extent to which fair value is used to measure assets and liabilities, the methods and assumptions used to measure fair value, and the effect of fair value measures on earnings. SFAS No. 157 is effective as of January 1, 2008. This statement was adopted without effect on its results of operations, financial position or cash flows. In December 2007, the FASB issued SFAS No. 141 (R), Business Combinations, and SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements. SFAS No. 141 (R) requires an acquirer to measure the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at their fair values on the acquisition date, with goodwill being the excess value over the net identifiable assets acquired. SFAS No. 160 clarifies that a non-controlling interest in a subsidiary should be reported as equity in the consolidated financial statement. The calculation of earnings per share will continue to be based on income amounts attributable to the parent. SFAS No. 141 (R) and SFAS No. 160 are effective for financial statements issued for fiscal years beginning after December 15, 2008. Early adoption is prohibited. We have not yet determined the effect on our financial statements, if any, upon adoption of SFAS No. 141 (R) or SFAS No. 160. ITEM 3. Quantitative and Qualitative Disclosures About Market Risk. Information not required to be filed by Smaller reporting companies. ITEM 4(T). Controls and Procedures. Disclosures and Procedures Pursuant to Rules adopted by the Securities and Exchange Commission. the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules. This evaluation was done as of the end of the period covered by this report under the supervision and with the participation of the Company's principal executive officer (who also serves as the principal financial officer). There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of the evaluation. Based upon that evaluation, he believes that the Company's disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to ensure that the information required to be disclosed by the Company in its periodic reports is recorded, summarized and processed timely. The principal executive officer is directly involved in the day-to-day operations of the Company. This Quarterly Report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this Quarterly Report. Changes in Internal Controls The Company effected a change in control including changes its executive officers, majority shareholders and board of directors. As such there was a change in the Company's internal control over financial reporting matters. However, the Company is maintaining the procedures and controls over all its financial reporting in that all reports and procedures are handled directly by the Chief Executive Officer who reports directly to the Board of Diretors. PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS On August 11, 2008, the Company issued 2,000,000 shares of its common stock at par. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The sole shareholder of the Company voted to effect the change in control of the Company effected on August 11, 2008, with the election of new directors and the acceptance of a redemption at par of 500,000 of the 1,000,000 shares of outstanding stock owned by it. ITEM 5. OTHER INFORMATION (a) A Report on Form 8-K was filed on August 11, 2008. (b) 407(c)(3) of Regulation S-K: During the quarter covered by this Report, there have not been any material changes to the procedures by which the Company's security holders may recommend nominees to the Board of Directors. ITEM 6. EXHIBITS (a) Exhibits 31 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 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. BELLOWS ACQUISITION CORPORATION By: /S/ Scoville Walker President, Chief Financial Officer Dated: November 19, 2008 Pursuant to the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. NAME OFFICE DATE /s/ Scoville Walker Director November 19, 2008

BELLOWS ACQUISITION CORP 10-Q