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 March 31, 2023

☐ 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 001-40940

ACCRETION ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

Delaware

86-2332228

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

, Colorado

240 Saint Paul, Suite 502

Denver, Colorado

80206

(Address of principal executive offices)

(Zip Code)

(720) 328-5070

(Registrant’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
Units, each consisting of one share of common stock, one right entitling the holder to receive one-tenth of one share of common stock upon the consummation of an initial business combination, and one-half of one redeemable warrant	ENERU	The Nasdaq Stock Market LLC

Common Stock, par value $0.001 per share	ENER	The Nasdaq Stock Market LLC

Rights, each right entitling the holder to receive one-tenth of one share of common stock upon the consummation of an initial business combination	ENERR	The Nasdaq Stock Market LLC

Redeemable warrants, exercisable for shares of common stock at an exercise price of $11.50 per share	ENERW	The Nasdaq Stock Market LLC

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 May 15, 2023, 10,599,296 shares of common stock of the registrant were outstanding.

		Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022		F-1
Condensed Statements of Operations for the three months ended March 31, 2023 and for the three months ended March 31, 2022 (unaudited)		F-2
Condensed Statements of Changes in Stockholders’ Deficit for the three months ended March 31, 2023 and for the three months ended March 31, 2022 (unaudited)		F-3
Condensed Statements of Cash Flows for the three months ended March 31, 2023 and for the three months ended March 31, 2022 (unaudited)		F-4
Notes to Condensed Financial Statements (unaudited)		F-5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		4
Item 3. Quantitative and Qualitative Disclosures About Market Risk		8
Item 4. Controls and Procedures		8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		9
Item 1A. Risk Factors		9
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		9
Item 3. Defaults Upon Senior Securities		9
Item 4. Mine Safety Disclosures		9
Item 5. Other Information		9
Item 6. Exhibits		10


	March 31, 2023		December 31, 2022
	(Unaudited)		(Audited)
Assets
Cash	$	3,646	$	106,226
Prepaid expenses - current		167,443		241,314
Total Current Assets		171,089		347,540
Cash held in Trust Account		214,284,306		212,089,872
Total Assets	$	214,455,395	$	212,437,412

Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Deficit
Current Liabilities

Promissory note - related party	$	73,250	$	—
Accrued expenses		643,043		543,025
Related party payable		172,318		142,318
Income tax payable		1,049,772		584,234
Franchise tax payable		50,000		72,412
Total Current Liabilities		1,988,383		1,341,989
Deferred underwriting commission		7,245,000		7,245,000
Total Liabilities		9,233,383		8,586,989

Commitments and Contingencies (Note 6)

Common stock subject to possible redemption, $0.001 par value; 20,700,000 shares at $10.33 per share redemption value as of March 31, 2023 and at $10.25 per share redemption value as of December 31, 2022		213,768,768		212,089,872

Stockholders’ Deficit
Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued or outstanding		—		—
Common stock, $0.001 par value; 50,000,000 shares authorized; 5,295,000 shares issued and outstanding		5,295		5,295
Additional paid-in capital		—		—
Accumulated deficit		(8,552,051)		(8,244,744)
Total Stockholders’ Deficit		(8,546,756)		(8,239,449)
Total Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Deficit	$	214,455,395	$	212,437,412



	For The Three		For The Three
	Months Ended		Months Ended
	March 31, 2023		March 31, 2022
Operating costs	$	379,719	$	507,374
Franchise tax expense		50,000		50,000
Loss on operations		(429,719)		(557,374)
Other income:
Dividend received		2,266,846		17,229
Profit (loss) before provision for income taxes		1,837,127		(540,145)
Income tax expense		(465,538)		—
Net profit (loss)	$	1,371,589	$	(540,145)

Basic and diluted weighted average shares outstanding of redeemable common stock		20,700,000		20,700,000
Basic and diluted net profit (loss) per share, redeemable common stock	$	0.05	$	(0.02)
Basic and diluted weighted average shares outstanding of non-redeemable common stock		5,295,000		5,295,000
Basic and diluted net profit (loss) per share, non-redeemable common stock	$	0.05	$	(0.02)


					Additional				Total
	Common Stock				Paid-in		Accumulated		Stockholders’
	Shares		Amount		Capital		Deficit		Deficit
Balance – January 1, 2023	$	5,295,000	$	5,295	$	—	$	(8,244,744)	$	(8,239,449)
Remeasurement of common stock subject to possible redemption to redemption value		—		—		—		(1,678,896)		(1,678,896)
Net profit		—		—		—		1,371,589		1,371,589
Balance - March 31, 2023	$	5,295,000	$	5,295	$	—	$	(8,552,051)	$	(8,546,756)


	Three Months Ended		Three Months Ended
	March 31, 2023		March 31, 2022
Cash Flows from Operating Activities:
Net profit (loss)	$	1,371,589	$	(540,145)
Adjustments to reconcile net loss to net cash used in operating activities:
Dividend earned from Trust Account		(2,266,846)		(17,229)
Changes in operating assets and liabilities:
Prepaid expenses - current		73,871		12,613
Prepaid expenses - non-current		—		73,871
Accrued expenses		100,018		284,140
Related party payable		30,000		—
Income tax payable		465,538		—
Franchise tax payable		(22,412)		(68,177)
Net cash used in operating activities		(248,242)		(254,927)
Cash Flows from Investing Activities:
Transfer from Trust Account		72,412		—
Net cash provided by investing activities		72,412		—
Cash Flows from Financing Activities:
Proceeds from promissory note - related party		73,250		—
Net cash provided by financing activities		73,250		—
Net change in cash:		(102,580)		(254,927)
Cash - Beginning		106,226		661,776
Cash - Ending	$	3,646	$	406,849

Supplemental disclosure of non-cash financing activities:
Remeasurement of common stock subject to possible redemption to redemption value	$	1,678,896	$	—


Gross proceeds	$	207,000,000
Less:
Proceeds allocated to public warrants		(3,321,653)
Proceeds allocated to rights issue		(16,892,298)
Issuance cost of redeemable common stock		(10,763,962)
Plus:
Remeasurement of common stock subject to possible redemption to redemption value		36,067,785
Contingently redeemable common stock, December 31, 2022		212,089,872

Plus:
Remeasurement of common stock subject to possible redemption to redemption value		1,678,896
Contingently redeemable common stock, March 31, 2023	$	213,768,768


			Significant		Significant
	Quoted Prices		Other		Other
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)
Assets:
U.S Treasury securities	$	214,284,306	$	—	$	—
	$	214,284,306	$	—	$	—

Exhibit Number		Description of Document
10.1		Promissory Note dated February 2, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on February 6, 2023).
31.1		Certification of Principal Executive Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, 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.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		Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.


	ACCRETION ACQUISITION CORP.
	(Registrant)

Date: May 18, 2023	By:	/s/ Brad Morse
	Name:	Brad Morse
	Title:	Chief Executive Officer

SEC Form 10-Q filed by Accretion Acquisition Corp.