brd-10q_20220930.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


Beard Energy Transition Acquisition Corp.
(Exact name of registrant as specified in its charter)
Delaware	001-41098		86-1990354
(State or other jurisdiction of incorporation)	(Commission File Number)		(I.R.S. Employer Identification No.)

595 Madison Avenue, 29^th Floor New York, NY		10022
(Address of principal executive offices)		(Zip Code)

(713) 446-6259
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading 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

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 ☒ No ☐

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the 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	☐
Non-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). Yes ☒ No ☐

As of November 1, 2022, 23,001,250 shares of Class A common stock, par value $0.0001 per share, and 5,751,250 shares of Class V common stock, par value $0.0001 per share, were issued and outstanding.

Table of Contents

		Page No.
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Recent Sales of Securities; Use of Proceeds from Registered Offerings	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits.	31
SIGNATURE		33

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements

BEARD ENERGY TRANSITION ACQUISITION CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2022			December 31, 2021
	(Unaudited)
Assets:
Current assets:
Cash	$	1,182,681		$	1,732,774
Prepaid expenses		460,152			708,821
Total current assets		1,642,833			2,441,595
Investments held in Trust Account		235,987,680			234,626,959
Total assets	$	237,630,513		$	237,068,554
Liabilities, Redeemable Class A Common Stock and Stockholders' Deficit:
Current liabilities:
Accounts payable	$	3,872		$	4,129
Accrued expenses and other current liabilities		225,988			1,790
Accrued offering costs		175,000			175,000
Income tax payable		217,148		—
Franchise tax payable		150,000			178,142
Total current liabilities		772,008			359,061
Deferred underwriting fee payable		8,050,000			8,050,000
Total liabilities		8,822,008			8,409,061
Commitments and Contingencies (Note 7)
Class A common stock subject to possible redemption, 23,001,250 shares at redemption value		235,987,681			234,626,959
Stockholders' Deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding	—			—
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; no shares issued and outstanding (excluding 23,001,250 shares subject to possible redemption)	—			—
Class V common stock, $0.0001 par value; 20,000,000 shares authorized; 5,751,250 issued and outstanding		575			575
Additional paid-in capital	—			—
Accumulated deficit		(7,099,521	)		(5,887,803	)
Total Beard Energy Transition Acquisition Corp. deficit		(7,098,946	)		(5,887,228	)
Non-controlling interest in subsidiary		(80,230	)		(80,238	)
Total stockholders' deficit		(7,179,176	)		(5,967,466	)
Total Liabilities, Redeemable Class A Common Stock and Stockholders' Deficit	$	237,630,513		$	237,068,554

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

BEARD ENERGY TRANSITION ACQUISITION CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended September 30, 2022			Three Months Ended September 30, 2021			Nine Months Ended September 30, 2022			For the Period from February 8, 2021 (inception) through September 30, 2021
Operating and formation costs	$	162,118		$	4,380		$	844,561		$	15,641
Franchise tax		50,000		—				150,000		—
Loss from operations		(212,118	)		(4,380	)		(994,561	)		(15,641	)
Interest and dividend income on investments held in Trust Account		1,038,232		—				1,360,721		—
Income (loss) before income taxes		826,114			(4,380	)		366,160			(15,641	)
Income tax expense		(207,529	)	—				(217,148	)	—
Net income (loss)	$	618,585		$	(4,380	)	$	149,012		$	(15,641	)
Net income (loss) attributable to non-controlling interest in subsidiary		34			(2,190)			8			(7,820)
Net income (loss) attributable to Beard Energy Transition Acquisition Corp.	$	618,551		$	(2,190	)	$	149,004		$	(7,821	)
Basic and diluted weighted average shares outstanding, Class A common stock		23,001,250			1,250			23,001,250			1,250
Basic and diluted net income (loss) per share, Class A common stock	$	0.03		$	(1.75	)	$	0.02		$	(6.26	)
Basic and diluted weighted average shares outstanding, Class V common stock		5,751,250			5,001,250			5,751,250			5,001,250
Basic and diluted net loss per share, Class V common stock	$	(0.01	)	$	—		$	(0.04	)	$	—

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

BEARD ENERGY TRANSITION ACQUISITION CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY

(UNAUDITED)

	Nine Months Ended September 30, 2022
		Stockholders' Deficit
	Redeemable Class A Common Stock				Class V Common Stock				Additional Paid-in		Accumulated			Non- controlling Interest in			Total Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Subsidiary			Deficit
Balance – December 31, 2021		23,001,250	$	234,626,959		5,751,250	$	575	$	—	$	(5,887,803	)	$	(80,238	)	$	(5,967,466	)
Subsequent accretion of Class A common stock subject to redemption to redemption amount as of March 31, 2022		—		15,144		—		—		—		(15,144	)		—			(15,144	)
Net loss		—		—		—		—		—		(403,862	)		(22	)		(403,884	)
Balance – March 31, 2022		23,001,250		234,642,103		5,751,250		575		—		(6,306,809	)		(80,260	)		(6,386,494	)
Subsequent accretion of Class A common stock subject to redemption to redemption amount as of June 30, 2022		—		307,345		—		—		—		(307,345	)		—			(307,345	)
Net loss		—		—		—		—		—		(65,685	)		(4	)		(65,689	)
Balance – June 30, 2022		23,001,250		234,949,448		5,751,250		575		—		(6,679,839	)		(80,264	)		(6,759,528	)
Subsequent accretion of Class A common stock subject to redemption to redemption amount as of September 30, 2022		—		1,038,233		—		—		—		(1,038,233	)		—			(1,038,233	)
Net income		—		—		—		—		—		618,551			34			618,585
Balance – September 30, 2022		23,001,250	$	235,987,681		5,751,250	$	575	$	—	$	(7,099,521	)	$	(80,230	)	$	(7,179,176	)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

BEARD ENERGY TRANSITION ACQUISITION CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY

(UNAUDITED)

	For the Period from February 8, 2021 (inception) through September 30, 2021
	Stockholders' Equity
	Class A Common Stock				Class V Common Stock				Additional Paid-in		Accumulated			Non- controlling Interest in			Total Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Subsidiary			Equity
Balance – February 8, 2021 (inception)		—	$	—		—	$	—	$	—	$	—		$	—		$	—
Issuance of Class A and Class V common stock to an affiliate of the Sponsor and the Sponsor (1)		1,250		—		5,751,250		575		11,925		—			—			12,500
Issuance of Class A Units in Opco to an affiliate of the Sponsor and Class B Units in Opco to the Sponsor		—		—		—		—		—		—			12,500			12,500
Net loss		—		—		—		—		—		(2,033	)		(2,033	)		(4,066	)
Balance – March 31, 2021		1,250		—		5,751,250		575		11,925		(2,033	)		10,467			20,934
Net loss		—		—		—		—		—		(3,598	)		(3,597	)		(7,195	)
Balance – June 30, 2021		1,250		—		5,751,250		575		11,925		(5,631	)		6,870			13,739
Net loss		—		—		—		—		—		(2,190	)		(2,190	)		(4,380	)
Balance – September 30, 2021		1,250	$	—		5,751,250	$	575	$	11,925	$	(7,821	)	$	4,680		$	9,359

⁽¹⁾ Retroactively restated for surrender of 1,437,500 shares of Class V common stock to the Company by the Sponsor for no consideration in October 2021.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

BEARD ENERGY TRANSITION ACQUISITION CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended September 30, 2022			For the Period from February 8, 2021 (inception) through September 30, 2021
Cash Flows from Operating Activities:
Net income (loss)	$	149,012		$	(15,641	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Interest and dividend income on investments held in Trust Account		(1,360,721	)
Payment of formation and operating costs through promissory note - related party		—			266
Changes in operating assets and liabilities:
Prepaid expenses		248,669			(724	)
Accounts payable		(257	)
Accrued expenses		224,176
Income tax payable		217,148			—
Franchise tax payable		(28,142)			—
Net cash used in operating activities		(550,115	)		(16,099	)
Cash Flows from Financing Activities:
Proceeds from promissory note - related party		—			256,000
Repayment of promissory note - related party		—			(11,633	)
Repayment to an affiliate of the Sponsor for offering costs paid on behalf of the Company		—			(114,546	)
Offering costs paid		—			(80,980	)
Advance from related party		1,966			—
Repayment of advance from related party		(1,944)			—
Net cash provided by financing activities		22			48,841
Net Change in Cash		(550,093	)		32,742
Cash - Beginning of period		1,732,774			—
Cash - End of period	$	1,182,681		$	32,742
Supplemental disclosures of non-cash investing and financing activities:
Deferred offering costs included in accrued offering costs	$	—		$	340,150
Deferred offering costs paid by an affiliate of the Sponsor	$	—		$	114,546
Deferred offering costs paid by an affiliate of the Sponsor in exchange for Class A and Class V common stock and Class A Units in Opco	$	—		$	25,000
Subsequent accretion of Class A common stock subject to redemption to redemption amount as of September 30, 2022	$	1,360,722		$	—

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

BEARD ENERGY TRANSITION ACQUISITION CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Beard Energy Transition Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on February 8, 2021. As used herein, “the Company” refers to Beard Energy Transition Acquisition Corp. and its majority-controlled operating subsidiary, Beard Energy Transition Acquisition Holdings LLC (the “Opco”), unless the context indicates otherwise. The Company is 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”).

All activity for the nine months ended September 30, 2022 and for the period from February 8, 2021 (inception) through September 30, 2021 relates to the Company’s formation, initial public offering (“Initial Public Offering”), and, since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering and a portion of the proceeds derived from the sale of Private Placement Warrants (as defined below) that were placed in the Trust Account (as defined below). The Company has selected December 31 as its fiscal year end.

The registration statement for the Company's Initial Public Offering was declared effective on November 23, 2021. On November 29, 2021, the Company consummated the Initial Public Offering of 23,000,000 units, (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), including 3,000,000 Units issued pursuant to the exercise of the underwriter's over-allotment option in full, generating gross proceeds of $230,000,000, which is discussed in Note 3.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 12,225,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to Beard Energy Transition Acquisition Sponsor LLC (the “Sponsor”), including 1,200,000 Private Placement Warrants issued pursuant to the exercise of the underwriter's over-allotment option in full, generating gross proceeds of $12,225,000, which is described in Note 4.

Following the closing of the Initial Public Offering on November 29, 2021, an amount of $234,625,500 from the net proceeds of the sale of the Units in the Initial Public Offering and a portion of the proceeds of the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), and will be invested only in U.S. government treasury obligations with maturities 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, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds held in the Trust Account, as described below.

Transaction costs related to the issuances described above amounted to $13,308,754, consisting of $4,600,000 of cash underwriting fees, $8,050,000 of deferred underwriting fees and $658,754 of other offering costs.

Following the Initial Public Offering, the Public Stockholders (as defined below) hold a direct economic equity ownership interest in the Company in the form of shares of Class A common stock, and an indirect ownership interest in Opco through the Company’s ownership of Class A Units of Opco. By contrast, the Initial Stockholders (as defined below) own direct economic interests in Opco in the form of Class A and Class B Units of Opco and a corresponding non-economic voting equity interest in the form of the Company’s Class V common stock, as well as a direct interest in the form of the Company’s Class A common stock. The Class A common stock forming part of the Sponsor Shares (as defined in Note 4) were purchased for $10.00 each and, in the absence of an initial Business Combination, will generally participate in liquidation or other payments on a pari passu basis with the shares of Class A common stock purchased as part of Units in the Initial Public Offering.

The Company will provide the holders (the “Public Stockholders”) of the Public Shares with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in

BEARD ENERGY TRANSITION ACQUISITION CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. Unless otherwise stated herein, the term “Public Shares” includes the 1,250 shares of Class A common stock of the Company held by the Sponsor and forming part of the Sponsor Shares (as defined in Note 4). The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially $10.20 per Public Share). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter. The Public Shares are recorded at a redemption value and classified as temporary equity in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity ("ASC 480").

The holders of the Founder Shares and Sponsor Shares (the “Initial Stockholders”) will not be entitled to (i) redemption rights with respect to any Founder Shares, Sponsor Shares or Public Shares held by them in connection with the completion of a Business Combination, (ii) redemption rights with respect to any Founder Shares, Sponsor Shares or Public Shares held by them in connection with a stockholder vote to approve an amendment to the Company's amended and restated certificate of incorporation (the “Amended and Restated Certificate of Incorporation”) (a) in a manner that would affect the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company has not consummated an initial Business Combination within 18 months (or 21 months, as applicable) from the closing of the Initial Public Offering or (b) with respect to any other provision relating to the rights of holders of the Class A common stock or pre-initial business combination activity or (iii) rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if the Company fails to complete a Business Combination within 18 months (or 21 months, as applicable) from the closing of the Initial Public Offering, although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares and any Sponsor Shares (Class A common stock and Class A Units only) they hold if the Company fails to complete a Business Combination within such time period.

The Company will have until 18 months (or 21 months, as applicable) from the closing of the Initial Public Offering (the “Combination Period”) to complete a Business Combination. If the Company is unable to complete a Business Combination within the Combination 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 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 on the funds held in the Trust Account and not previously released to pay taxes of the Company or Opco (less an amount required to satisfy taxes of the Company and Opco and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares and Class A Units of Opco (other than those held by the Company), which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire without value to the holder thereof if the Company fails to complete a Business Combination within the Combination Period.

The underwriter has agreed to waive their rights to their deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit.

Liquidity, Capital Resources, and Going Concern

As of September 30, 2022, the Company had a working capital surplus of $870,825, including $1,182,681 in its operating bank account. The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. The Company anticipates that the cash held outside of the Trust Account as of September 30, 2022, will not be sufficient to allow the Company to operate until May 29, 2023, the date at which the Company

BEARD ENERGY TRANSITION ACQUISITION CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

must complete a Business Combination. While the Company expects to have sufficient access to additional sources of capital under Working Capital Loans (as defined in Note 4), there is no current commitment on the part of any financing source to provide additional capital and no assurances can be provided that such additional capital will ultimately be available if necessary. Further, if a Business Combination is not consummated by May 29, 2023, there will be a mandatory liquidation and subsequent dissolution of the Company. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that these condensed financial statements are issued.

Management plans to address this uncertainty through a Business Combination as discussed above. There is no assurance that the Company’s plans to consummate a Business Combination will be successful or successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Condensed Financial Statement Presentation

The accompanying condensed consolidated financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations 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 comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s Form 10-K as filed with the SEC on February 25, 2022. The interim results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future periods.

The condensed consolidated financial statements include the accounts of the Company and its majority-owned and controlled operating subsidiary after elimination of all intercompany transactions and balances as of September 30, 2022 and December 31, 2021.

Non-controlling Interest

The ownership interest of non-controlling participants in the operating subsidiary is included as a separate component of stockholders’ deficit.

The non-controlling interest in the operating subsidiary consists of Class A Units in Opco issued to an affiliate of the Sponsor and Class B Units in Opco issued to the Sponsor. Prior to an initial Business Combination, profits and losses of Opco are allocated to the holders of the Class A Units pro rata in accordance with the number of Class A Units held by such holder. Holder of the Class B Units do not participate in the profits and losses of Opco until conversion of the Class B Units to Class A Units in connection with an initial Business Combination. See Note 6 for additional details regarding Class A and Class B Units issued by Opco.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those

BEARD ENERGY TRANSITION ACQUISITION CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

estimates. The initial valuation of the Public Warrants (as defined in Note 3), Private Placement Warrants, and Class A common stock subject to redemption required management to exercise significant judgement in its 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 and cash equivalents. The Company did not have any cash equivalents as of September 30, 2022 and December 31, 2021.

Investments Held in Trust Account

As of September 30, 2022 and December 31, 2021, the assets held in the Trust Account are comprised solely of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. Such securities and investments in money market funds are presented on the condensed consolidated balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in income from investments held in the Trust Account in the accompanying condensed consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC Topic 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed consolidated statements of operations. The Public Warrants and Private Placement Warrants are equity classified (see Note 5).

Offering Costs associated with the Initial Public Offering

The Company complies with the requirements of ASC Topic 340, Other Assets and Deferred Costs and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering. Offering costs consist of legal and other expenses incurred through the condensed consolidated balance sheet date that are directly related to the Initial Public Offering. Offering costs are charged against the carrying value of Class A common stock or stockholders' deficit based on the relative value of the shares of Class A common stock and the Warrants, as described below, to the proceeds received from the Units sold upon the completion of the Initial Public Offering. The Company incurred offering costs amounting to $13,308,754, consisting of $4,600,000 of cash underwriting fees, $8,050,000 of deferred underwriting fees and $658,754 of other offering costs in connection with the Initial Public Offering. As such, the Company recorded $12,512,144 of offering costs as a reduction of temporary equity and $796,610 of offering costs as a reduction of permanent equity.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

BEARD ENERGY TRANSITION ACQUISITION CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Net Income (Loss) Per Common Share

Net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 23,725,000 shares in the calculation of diluted income (loss) per share, since the exercise of the warrants is contingent upon the occurrence of future events. In order to determine the net income (loss) attributable to both the Class A common stock and Class V common stock, the Company first considered the total income (loss) allocable to both sets of shares. This is calculated using the total net income (loss) less any dividends paid. For purposes of calculating net income (loss) per share, any remeasurement of the accretion to redemption value of the Class A common stock subject to possible redemption was considered to be dividends paid to the holders of the Class A common stock. Subsequent to calculating the total income (loss) allocable to both sets of shares, the Company split the amount to be allocated pro rata between Class A and Class V common stock for the three and nine months ended September 30, 2022, for the three months ended September 30, 2021, and for the period from February 8, 2021 (inception) through September 30, 2021, reflective of the respective participation rights.

The following tables reflect the calculation of basic and diluted net loss per common share (in dollars, except per share amounts):

	For the three months ended September 30, 2022			For the three months ended September 30, 2021			For the nine months ended September 30, 2022			For the period from February 8, 2021 (inception) through September 30, 2021
Net income (loss)	$	618,551		$	(2,190	)	$	149,004		$	(7,821	)
Accretion of Class A common stock to redemption amount		(1,038,233	)		—			(1,360,722	)		—
Net loss including accretion of temporary equity to redemption value	$	(419,682	)	$	(2,190	)	$	(1,211,718	)	$	(7,821	)

BEARD ENERGY TRANSITION ACQUISITION CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

	For the three months ended September 30, 2022						For the three months ended September 30, 2021					For the nine months ended September 30, 2022						For the period from February 8, 2021 (inception) through September 30, 2021
	Class A			Class V			Class A			Class V		Class A			Class V			Class A			Class V
Basic and diluted net loss per share:
Numerator:
Net loss including accretion of temporary equity to redemption value	$	(335,734	)	$	(83,947	)	$	(2,190	)	$	—	$	(969,343	)	$	(242,375	)	$	(7,821	)	$	—
Accretion of Class A common stock to redemption amount		1,038,233		—			—			—			1,360,722		—			—			—
Net income (loss)	$	702,499		$	(83,947	)	$	(2,190	)	$	—	$	391,379		$	(242,375	)	$	(7,821	)	$	—
Denominator: