PART I - FINANCIAL INFORMATION Item 1. Financial Statements Presents unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in stockholders' deficit, cash flows, and detailed notes Condensed Consolidated Balance Sheets The condensed consolidated balance sheets show a significant decrease in total assets and investments held in the Trust Account from December 31, 2022, to September 30, 2023, primarily due to redemptions of Class A Common Stock, with increased current liabilities and a widened total stockholders' deficit | Metric | Sep 30, 2023 ($) | Dec 31, 2022 ($) | | :-------------------------- | :--------------- | :--------------- | | Cash | 316,543 | 1,076,578 | | Total current assets | 4,432,650 | 1,403,838 | | Investments held in Trust Account | 76,110,991 | 237,947,675 | | Total assets | 80,543,641 | 239,351,513 | | Total current liabilities | 4,724,588 | 1,434,679 | | Total liabilities | 12,774,588 | 9,484,679 | | Total stockholders' deficit | (8,341,938) | (8,080,842) | Condensed Consolidated Statements of Operations The company reported increased net income for both the three and nine months ended September 30, 2023, compared to the same periods in 2022, driven by higher interest and dividend income from investments in the Trust Account, despite incurring operating and formation costs | Metric | 3 Months Ended Sep 30, 2023 ($) | 3 Months Ended Sep 30, 2022 ($) | 9 Months Ended Sep 30, 2023 ($) | 9 Months Ended Sep 30, 2022 ($) | | :------------------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | | Operating and formation costs | 96,826 | 162,118 | 713,136 | 844,561 | | Franchise tax | 50,000 | 50,000 | 150,000 | 150,000 | | Loss from operations | (146,826) | (212,118) | (863,136) | (994,561) | | Interest and dividend income on investments held in Trust Account | 976,867 | 1,038,232 | 5,651,328 | 1,360,721 | | Income before income taxes | 830,041 | 826,114 | 4,788,192 | 366,160 | | Income tax expense | (194,642) | (207,529) | (1,155,279) | (217,148) | | Net income | 635,399 | 618,585 | 3,632,913 | 149,012 | | Basic and diluted net income per share, Class A common stock | 0.09 | 0.03 | 0.23 | 0.01 | Condensed Consolidated Statements of Changes in Stockholders' Deficit The statements show a decrease in redeemable Class A Common Stock due to redemptions, leading to a significant reduction in the associated amount, while accumulated deficit increased, reflecting net income and accretion adjustments for redeemable Class A common stock - Redemption of 15,872,896 Class A common shares resulted in a $165,730,694 decrease in redeemable Class A Common Stock and a corresponding reduction in the Trust Account215226 - Accumulated deficit increased from $(8,001,245) at December 31, 2022, to $(8,262,538) at September 30, 2023, reflecting net income and accretion adjustments4226 Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2023, the company experienced significant cash flows from investing activities due to advances from the Trust Account for stockholder redemptions and tax payments, while financing activities were dominated by payments to redeeming stockholders | Cash Flow Activity | 9 Months Ended Sep 30, 2023 ($) | 9 Months Ended Sep 30, 2022 ($) | | :---------------------------------- | :------------------------------ | :------------------------------ | | Net cash used in operating activities | (3,155,928) | (550,115) | | Net cash provided by investing activities | 167,488,012 | — | | Net cash (used in) provided by financing activities | (165,092,119) | 22 | | Net Change in Cash | (760,035) | (550,093) | | Cash - End of period | 316,543 | 1,182,681 | - Investing activities for the nine months ended September 30, 2023, included $165,730,694 in advances from the Trust Account for redeeming stockholders and $2,397,318 for tax payments92228 - Financing activities for the nine months ended September 30, 2023, primarily consisted of $165,730,694 in payments to redeeming stockholders, partially offset by $640,000 from the Suntuity Promissory Note228333 Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations of the company's financial position, operations, and significant events, including its formation as a SPAC, the proposed business combination with Suntuity, related party transactions, accounting policies, and the going concern uncertainty Note 1. Description of Organization and Business Operations Beard Energy Transition Acquisition Corp. is a blank check company formed to effect a business combination, completed an IPO in November 2021, is pursuing a business combination with Suntuity, and faces going concern uncertainty due to insufficient operating cash and the deadline for completing a business combination - The Company was formed on February 8, 2021, as a blank check company to effect a business combination9301 - Initial Public Offering (IPO) on November 29, 2021, raised $230,000,000 from 23,000,000 units, with proceeds placed in a Trust Account213230 - On May 18, 2023, the Company entered into a Business Combination Agreement with Suntuity Renewables LLC, involving a series of mergers to become wholly-owned subsidiaries of New PubCo15235303 - The Company extended its business combination period to 25 months from the IPO closing, now December 29, 2023, following a stockholder vote on May 25, 202313215 - As of September 30, 2023, 15,872,896 shares of Class A common stock were redeemed at approximately $10.44 per share, leaving 7,128,354 shares outstanding and $76,110,991 in the Trust Account215 - The company has a working capital deficit of $291,938 as of September 30, 2023, and anticipates insufficient cash to operate until the business combination deadline, raising substantial doubt about its ability to continue as a going concern4495172 Note 2. Summary of Significant Accounting Policies This note outlines the accounting principles, including consolidation, financial statement presentation, use of estimates, cash and cash equivalents, investments in the Trust Account, offering costs, warrant classification, fair value measurements, Class A common stock redemption accounting, income taxes, and recent accounting pronouncements - The condensed consolidated financial statements are prepared in conformity with U.S. GAAP and SEC rules for interim reporting, with certain disclosures condensed or omitted62 - Investments held in the Trust Account consist solely of U.S. government securities or money market funds investing in such securities, presented at fair value26247298 - Offering costs of $13,308,754 were incurred, including $4,600,000 cash underwriting fees and $8,050,000 deferred underwriting fees, charged against Class A common stock or stockholders' deficit27231 - Warrants are classified as equity instruments based on specific terms and ASC 480/815 guidance, with Public Warrants and Private Placement Warrants being equity classified48130311 - Class A common stock subject to redemption is classified outside of permanent equity, with changes in redemption value recognized immediately and reflected in accumulated deficit54146255 - The company uses the asset and liability method for income taxes (ASC 740) and applies a discrete effective tax rate method for interim periods due to uncertainty in estimating annual pretax earnings55297 Note 3. Initial Public Offering The company completed its IPO on November 29, 2021, issuing 23,000,000 units, each comprising one Class A common stock and one-half of one redeemable Public Warrant - The IPO on November 29, 2021, generated gross proceeds of $230,000,000 from 23,000,000 units230276 - Each unit consisted of one share of Class A common stock and one-half of one redeemable Public Warrant, with each whole Public Warrant exercisable at $11.50 per share276 Note 4. Related Party Transactions This note details transactions with related parties, including the issuance of Founder Shares and Sponsor Shares, the sale of Private Placement Warrants to the Sponsor, indemnification agreements, administrative support arrangements, and potential Working Capital Loans from the Sponsor or affiliates - Founder Shares (5,750,000 Class B Units of Opco and corresponding Class V common stock) and Sponsor Shares (1,250 Class A common stock, 1,250 Class V common stock, and 1,250 Class A Units of Opco) were issued to the Sponsor and its affiliate59277 - 12,225,000 Private Placement Warrants were sold to the Sponsor for $1.00 each, generating $12,225,000, with proceeds placed in the Trust Account10140281 - The Sponsor has agreed to indemnify the Company for certain third-party claims that reduce the Trust Account below $10.20 per Public Share, subject to waivers304 - The Company reimburses an affiliate of the Sponsor up to $25,000 per month for administrative support, incurring $50,001 and $150,003 for the three and nine months ended September 30, 2023, respectively264338 - Working Capital Loans from the Sponsor or affiliates may be used to fund deficiencies or transaction costs, repayable upon business combination or from funds outside the Trust Account if no combination occurs; no balance was outstanding as of September 30, 2023118139267305 Note 5. Warrants This note describes the terms and conditions of Public Warrants and Private Placement Warrants, including their exercisability, redemption features, and accounting classification as equity instruments - Public Warrants become exercisable 30 days after a business combination and expire five years from completion, or earlier upon redemption or liquidation287 - The Company may redeem Public Warrants for $0.01 per warrant if the Class A common stock price equals or exceeds $18.00 for 20 trading days within a 30-day period, with 30 days' prior notice268288 - Private Placement Warrants are substantially identical to Public Warrants but are non-redeemable by the Company and may be exercised for cash or on a 'cashless basis'290 - All 23,725,000 warrants (Public and Private Placement) are accounted for as equity-classified instruments in accordance with ASC 480 and ASC 815311 Note 6. Stockholders' Deficit This note details the components of stockholders' deficit, including authorized and outstanding shares of preferred stock, Class A common stock, Class V common stock, and Opco units, as well as the accounting for non-controlling interests - The Company is authorized to issue 1,000,000 shares of preferred stock and 200,000,000 shares of Class A common stock; as of September 30, 2023, 7,128,354 Class A common shares were outstanding and subject to redemption290291 - 5,751,250 shares of Class V common stock were issued and outstanding as of September 30, 2023313 - Class B Units of Opco convert into Class A Units of Opco on a one-for-one basis upon an initial Business Combination, subject to adjustments315 - The value of Class B Units is classified as non-controlling interests, with a balance of $79,975 as of September 30, 2023316 - Holders of Founder Shares, Sponsor Shares, Private Placement Warrants, and Public Warrants are entitled to registration rights for resale of their securities294317 Note 7. Commitments and Contingencies This note addresses the deferred underwriting commission and the waiver agreement with the underwriter, noting that the conditions for liability extinguishment had not been met as of September 30, 2023 - The underwriter is entitled to a deferred underwriting commission of $8,050,000, payable upon completion of the initial Business Combination75143295 - On May 18, 2023, the underwriters agreed to waive their rights to this deferred fee, contingent upon the consummation of the Business Combination with Suntuity1475109143231 - As of September 30, 2023, the conditions for liability extinguishment for the deferred underwriting fee had not been met because the Business Combination with Suntuity was not completed75143 Note 8. Income Tax This note provides details on the company's effective tax rates and the primary reasons for the difference from the statutory rate, mainly due to a full valuation allowance on deferred tax assets | Period | Effective Tax Rate | | :------------------------------------ | :----------------- | | 3 Months Ended September 30, 2023 | 23.4% | | 9 Months Ended September 30, 2023 | 24.1% | | 3 Months Ended September 30, 2022 | 25.1% | | 9 Months Ended September 30, 2022 | 59.3% | - The effective tax rate differs from the statutory 21% rate primarily due to recording a full valuation allowance on deferred tax assets297 Note 9. Fair Value Measurements This note presents the fair value hierarchy for the company's financial assets, specifically investments held in the Trust Account, which are measured at fair value on a recurring basis | Description | Amount at Fair Value (Sep 30, 2023) ($) | Level 1 ($) | Level 2 ($) | Level 3 ($) | | :------------------------------ | :------------------------------------ | :---------- | :---------- | :---------- | | U.S. Treasury Securities Money Market Funds | 76,110,991 | 76,110,991 | — | — | - All investments held in the Trust Account are classified as Level 1 in the fair value hierarchy, indicating they are valued using unadjusted quoted prices in active markets for identical assets77253298 Note 10. Subsequent Events The company evaluated subsequent events up to the financial statement issuance date and did not identify any requiring adjustment or disclosure - No subsequent events requiring adjustment or disclosure were identified after the balance sheet date up to the date the financial statements were issued299 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of the company's financial condition and results of operations, highlighting recent developments related to its business combination efforts, liquidity challenges, and going concern uncertainty, and discusses the impact of stockholder redemptions and efforts to extend the business combination deadline Overview The company is a blank check company formed to complete an initial business combination, with its activities primarily focused on organizational efforts and the search for a target business, generating non-operating income from interest on Trust Account investments - The Company is a blank check company incorporated on February 8, 2021, for the purpose of effecting a business combination301 - Operations to date have been limited to organizational activities and the search for a prospective initial business combination89212 - Non-operating income is generated from interest income on cash and cash equivalents held in the Trust Account89212 Recent Developments Recent developments include the Business Combination Agreement with Suntuity, related lock-up and sponsor agreements, a fee waiver from Citigroup, the approval of an initial extension for the business combination deadline, the Suntuity Promissory Note for extension payments, and a notice of non-compliance from the NYSE regarding internal audit function - On May 18, 2023, the Company entered into a Business Combination Agreement with Suntuity Renewables LLC, which will result in both companies becoming wholly-owned subsidiaries of New PubCo through a series of mergers96120303 - The merger consideration for Suntuity equityholders will be 19,000,000 newly issued shares of New PubCo Class A Common Stock17335 - Lock-Up Agreements were entered into, restricting transfer of New PubCo Class A Common Stock received by Lock-Up Parties for one year post-closing, with early release conditions18324 - Citigroup Global Markets Inc. waived $8,050,000 in deferred underwriting commissions, contingent upon the consummation of the Suntuity Business Combination109326 - Stockholders approved an initial extension to complete a business combination until December 29, 2023, and the company is seeking a second extension326328 - Suntuity agreed to loan the Company up to $1,120,000 via a non-interest bearing promissory note to fund extension payments into the Trust Account, with an outstanding balance of $640,000 as of September 30, 2023122242349 - The Company received a notice from the NYSE on August 16, 2023, for non-compliance with the requirement to establish an internal audit function, which was not cured by the deadline112217329337 Results of Operations The company's results of operations for the three and nine months ended September 30, 2023, show net income primarily driven by interest and dividend income from the Trust Account, offset by operating and formation costs and income tax expenses | Metric | 3 Months Ended Sep 30, 2023 ($) | 3 Months Ended Sep 30, 2022 ($) | 9 Months Ended Sep 30, 2023 ($) | 9 Months Ended Sep 30, 2022 ($) | | :------------------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | | Net income | 635,399 | 618,585 | 3,632,913 | 149,012 | | Interest and dividend income on investments held in Trust Account | 976,867 | 1,038,232 | 5,651,328 | 1,360,721 | | Operating and formation costs | 96,826 | 162,118 | 713,136 | 844,561 | | Income tax expense | 194,642 | 207,529 | 1,155,279 | 217,148 | Liquidity, Capital Resources and Going Concern The company faces significant liquidity challenges and going concern uncertainty due to a working capital deficit and insufficient cash outside the Trust Account to operate until the business combination deadline, with its ability to continue depending on successfully completing a business combination or securing additional capital - As of September 30, 2023, the Company had a working capital deficit of $291,938 and cash of $316,543 outside the Trust Account44172341 - The Company anticipates that cash held outside the Trust Account will not be sufficient to operate until December 29, 2023, the deadline for completing a business combination4495172331 - These conditions raise substantial doubt about the Company's ability to continue as a going concern for a period within one year after the financial statements' issuance date4495172331 - Management plans to address this uncertainty through a business combination and expects access to Working Capital Loans from the Sponsor, though no current commitment exists2295118123173 - Effective October 19, 2023, the Company liquidated Trust Account investments into cash to mitigate investment company risk, which may reduce interest income158175176 Related Party Transactions The company engages in various transactions with its Sponsor, officers, and directors, including reimbursement for out-of-pocket expenses and administrative support fees, with these transactions reviewed by the audit committee - The Sponsor, officers, and directors are reimbursed for out-of-pocket expenses incurred on the Company's behalf, with no cap on reimbursement125265 - The Company incurred $50,001 and $150,003 in administrative support expenses from an affiliate of the Sponsor for the three and nine months ended September 30, 2023, respectively125264338 Off-Balance Sheet Arrangements As of September 30, 2023, and December 31, 2022, the company did not have any off-balance sheet arrangements - The Company did not have any off-balance sheet arrangements as of September 30, 2023, and December 31, 2022141 Critical Accounting Policies The critical accounting policies involve significant management estimates and assumptions, particularly concerning warrants and Class A common stock subject to redemption, which are classified based on specific terms and accounting guidance - The preparation of financial statements requires management to make estimates and assumptions, particularly for warrants and Class A common stock subject to redemption129130145146 - Warrants are classified as equity or liability based on ASC 480 and ASC 815, with Public and Private Placement Warrants currently equity-classified130145 - Class A common stock subject to redemption is classified outside of permanent equity, with changes in redemption value recognized immediately and reflected in accumulated deficit131146 Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards would have a material effect on the condensed consolidated financial statements if currently adopted - Management does not believe that any recently issued, but not yet effective, accounting standards would materially affect the financial statements if adopted57148 JOBS Act As an 'emerging growth company' under the JOBS Act, the company is allowed to delay the adoption of new accounting standards and is exempt from certain reporting requirements, which may affect comparability with other public companies - The Company qualifies as an 'emerging growth company' under the JOBS Act132149 - The Company elects to delay the adoption of new or revised accounting standards, potentially affecting comparability with non-emerging growth companies132150 - Exemptions include not providing an independent auditor's attestation report on internal controls and reduced compensation disclosure150 Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the registrant is not required to provide the information typically required by this Item - As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk169 Item 4. Controls and Procedures The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control over financial reporting during the most recently completed fiscal quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2023170 - No material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter134 PART II – OTHER INFORMATION Item 1. Legal Proceedings There is no material litigation, arbitration, or governmental proceeding currently pending against the company or its management team - No material litigation, arbitration, or governmental proceeding is currently pending against the company or its management154 Item 1A. Risk Factors This section updates the risk factors from the Annual Report on Form 10-K, emphasizing new risks related to the uncertainty of completing a business combination, potential delisting from the NYSE, and the impact of converting Trust Account investments to cash - The company's financial condition raises substantial doubt about its ability to continue as a going concern if a business combination is not consummated within one year155172 - There is no assurance that the initial or second extension will enable the company to consummate a business combination, and redemptions could leave insufficient cash156157270 - The NYSE may delist the company's securities due to stockholder redemptions or failure to maintain an internal audit function, leading to reduced liquidity and other adverse consequences161177179271272 - To mitigate investment company risk, Trust Account funds were converted to cash effective October 19, 2023, which may limit interest income available for taxes and dissolution expenses158175176 Item 2. Recent Sales of Securities; Use of Proceeds from Registered Offerings No recent sales of securities or use of proceeds from registered offerings were reported in this period - No recent sales of securities or use of proceeds from registered offerings were reported180 Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported - No defaults upon senior securities were reported181 Item 4. Mine Safety Disclosures No mine safety disclosures are applicable to the company - Mine safety disclosures are not applicable to the company164187 Item 5. Other Information This section contains no additional information Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including the Business Combination Agreement, organizational documents, warrant agreements, and certifications - Key exhibits include the Business Combination Agreement (Exhibit 2.1), various certificates of incorporation and bylaws (Exhibits 3.1-3.5), specimen unit, stock, and warrant certificates (Exhibits 4.1-4.4), and warrant agreements (Exhibits 4.5-4.6)188 - Certifications by the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (Exhibits 101.INS, 101.CAL, 101.PRE, 101.SCH, 101.DEF, 101.LAB, 104) are also included183184185189190191192273 SIGNATURE The report is duly signed on behalf of Beard Energy Transition Acquisition Corp. by its Chief Financial Officer and Chief Accounting Officer, Sarah James, on November 13, 2023 - The report was signed by Sarah James, Chief Financial Officer and Chief Accounting Officer, on November 13, 2023194195
Beard Energy Transition Acquisition (BRD) - 2023 Q3 - Quarterly Report