Beard Energy Transition Acquisition (BRD) - 2021 Q4 - Annual Report

FORM 10-K General Information This Form 10-K for FY2021 details Beard Energy Transition Acquisition Corp.'s status as a non-accelerated, smaller reporting, and emerging growth company with NYSE-listed securities Filing Details Details Beard Energy Transition Acquisition Corp.'s FY2021 Form 10-K filing, company status, and NYSE-listed securities - The registrant is Beard Energy Transition Acquisition Corp., a Delaware corporation, with Commission File Number 001-41098[2] - The company is a non-accelerated filer, a smaller reporting company, and an emerging growth company[2] Securities Registered on NYSE | Title of each class | Symbol(s) | Name of each exchange on which registered | |:----------------------------------------------------------------------------------|:----------|:------------------------------------------| | Units, each consisting of one share of Class A Common Stock and one-half of one warrant | BRD.U | The New York Stock Exchange | | Class A common stock, par value $0.0001 per share | BRD | The New York Stock Exchange | | Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share | BRD.WS | The New York Stock Exchange | Table of Contents This section provides an index to the report's various sections and financial statements Certain Terms This section defines key terms used throughout the Annual Report on Form 10-K for clarity Definitions Defines key terms such as 'common stock,' 'founder shares,' 'Public Offering,' and 'sponsor' for report clarity - Key terms defined include 'common stock' (Class A and non-economic Class V), 'founder shares' (Class B Units of Opco and corresponding Class V common stock), 'Public Offering' (initial public offering closed November 29, 2021), and 'sponsor' (Beard Energy Transition Acquisition Sponsor LLC)[6] Cautionary Note Regarding Forward-Looking Statements This note warns that the report contains forward-looking statements subject to risks and uncertainties Forward-Looking Statements Disclosure Discloses that the report contains forward-looking statements subject to risks and uncertainties, with no obligation to update them - Forward-looking statements include expectations about the company's operating history, revenue generation, ability to select and complete an initial business combination, performance of target businesses, retention of key personnel, potential conflicts of interest, additional financing, and the impact of the COVID-19 pandemic[9] - The company explicitly states it is a newly formed entity with no operating history and no revenues, and its ability to achieve its business objective is uncertain[9] - The forward-looking statements are based on current expectations and beliefs, but actual results may vary materially due to risks and uncertainties discussed in the 'Risk Factors' section[10] Risk Factors Summary Summarizes key risks for investors in this blank check company, including lack of operating history and business combination challenges Key Risks Overview Summarizes key risks for investors in this blank check company, including lack of operating history and business combination challenges - The company is a newly formed entity with no operating history or revenues, offering no basis to evaluate its ability to achieve its business objective[13] - Public stockholders may not have a vote on the proposed business combination, and even if they do, initial stockholders and management may vote in favor regardless of public stockholder sentiment[13] - The ability of public stockholders to redeem shares for cash may make the company financially unattractive to potential targets, complicating business combination efforts[13] - Failure to complete an initial business combination within 18-21 months would lead to liquidation, where public stockholders may receive only their pro rata portion of trust funds, and warrants would expire without value[13] - The company faces significant competition for business combination opportunities, and its limited resources may hinder its ability to secure attractive targets[15] - Conflicts of interest may arise due to the sponsor, officers, and directors losing their initial investment if a business combination is not completed, potentially influencing their decisions[17] PART I Item 1. Business. Beard Energy Transition Acquisition Corp. is a blank check company formed to effectuate a business combination in the energy transition sector - The company was incorporated on February 8, 2021, as a blank check company to effectuate a business combination[20] Public Offering and Private Placement Details (November 2021) | Item | Gross Proceeds | |:----------------------|:---------------| | Public Offering | $230,000,000 | | Private Placement | $12,225,000 | | Total Gross Proceeds | $242,225,000 | | Deposited in Trust Account | $234,625,500 | - The company's strategy is to identify and acquire a company focused on the electricity transmission and distribution sector, benefiting from decarbonization and electrification trends[36][38] - Acquisition criteria include sound financial performance, high-growth markets, unique business attributes, unrecognized value, and being at an inflection point where management expertise can accelerate growth[39] - The company must complete a business combination with an aggregate fair market value of at least 80% of the net assets held in trust[42] - Public stockholders have redemption rights upon completion of a business combination, allowing them to receive a pro rata portion of the trust account (approximately $10.20 per share)[94] - If no initial business combination is completed within 18 months (or 21 months with extension) from the Public Offering closing, the company will liquidate, redeeming public shares at a per-share price from the trust account, and warrants will expire worthless[117] Introduction Beard Energy Transition Acquisition Corp. was formed in February 2021 as a blank check company, raising $242.225 million in its Public Offering and private placement, with most proceeds in a trust account - The company was incorporated on February 8, 2021, as a Delaware corporation, for the purpose of effectuating a business combination[20] Public Offering and Private Placement Proceeds | Event | Gross Proceeds | |:------------------|:---------------| | Public Offering | $230,000,000 | | Private Placement | $12,225,000 | | Total | $242,225,000 | | Deposited in Trust Account | $234,625,500 | - Units began trading on NYSE on November 29, 2021, and separate trading of Class A common stock and public warrants commenced on January 14, 2022[2][29] Market Opportunity The energy industry's transformation, driven by decarbonization and electrification, creates significant market opportunities in electricity transmission and distribution - The energy industry is undergoing significant transformation due to decarbonization and sustainability goals, leading to a shift towards renewable energy and increased electricity demand[29] - U.S. electricity consumption is projected to increase over 50% to 6 terawatt hours by 2030, a 15-fold increase in annual growth rate, placing a large burden on electric transmission and distribution systems[30] - The shift to distributed, intermittent renewable sources (wind and solar) increases transmission system complexity, requiring clean-technologies, software, equipment, and services for efficient integration[31][33] - Global capital investment in grids is projected to rise from $235 billion in 2020 to over $600 billion annually, with $120 billion needed in the U.S., primarily for smart grids, smart meters, and grid management[34] Business Strategy The company's strategy is to acquire and grow a platform company in the electricity transmission and distribution sector, leveraging its management's expertise - The company aims to acquire and grow a platform company in the electricity transmission and distribution sector, benefiting from system capacity and complexity increases[36] - The strategy leverages the management team's deep relationship networks across private equity, venture capital, family businesses, corporate executives, and investment banks for deal sourcing[36] - The company focuses on opportunities where its management's strategic vision, operating expertise, and capital markets experience can drive growth and competitive advantage[36] Acquisition Criteria The company seeks target businesses with sound financial performance, high-growth market presence, unique attributes, unrecognized value, and a need for strategic capital or expertise - Target businesses should demonstrate sound financial performance with visible revenue and cash flow growth and predictable future financial performance[39] - Targets should operate in high-growth, large addressable markets with favorable long-term market dynamics[39] - The company seeks businesses with unique attributes or product offerings, unrecognized value, desirable returns on capital, and a need for capital or management expertise to accelerate growth[39]