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 June 30, 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.)




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 August 14, 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 June 30, 2023 (unaudited) and December 31, 2022		4
Condensed Statements of Operations for the three and six months ended June 30, 2023 and June 30, 2022 (unaudited)		5
Condensed Statements of Changes in Stockholders’ Deficit for the three and six months ended June 30, 2023 and June 30, 2022 (unaudited)		6
Condensed Statements of Cash Flows for the six months ended June 30, 2023 and June 30, 2022 (unaudited)		7
Notes to Condensed Financial Statements (unaudited)		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		27
Item 3. Quantitative and Qualitative Disclosures About Market Risk		31
Item 4. Controls and Procedures		31

PART II. OTHER INFORMATION
Item 1. Legal Proceedings		33
Item 1A. Risk Factors		33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		33
Item 3. Defaults Upon Senior Securities		33
Item 4. Mine Safety Disclosures		33
Item 5. Other Information		33
Item 6. Exhibits		33


	June 30, 2023		December 31, 2022
	(Unaudited)
Assets
Cash	$	1,653	$	106,226
Prepaid expenses - current		92,751		241,314
Income tax receivable		248,126		—
Total Current Assets		342,530		347,540
Cash held in Trust Account		54,981,626		212,089,872
Total Assets	$	55,324,156	$	212,437,412

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

Promissory note - related party	$	672,750	$	—
Accrued expenses		421,610		543,025
Related party payable		243,331		142,318
Income tax payable		—		584,234
Franchise tax payable		33,280		72,412
Excise tax payable		1,590,376		—
Total Current Liabilities		2,961,347		1,341,989
Deferred underwriting commission		7,245,000		7,245,000
Total Liabilities		10,206,347		8,586,989

Commitments and Contingencies (Note 6)

Common stock subject to possible redemption, $0.001 par value; 5,304,296 shares at $10.26 per share redemption value as of June 30, 2023 and 20,700,000 shares at $10.25 per share redemption value as of December 31, 2022		54,416,088		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		(9,303,574)		(8,244,744)
Total Stockholders’ Deficit		(9,298,279)		(8,239,449)
Total Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Deficit	$	55,324,156	$	212,437,412


	For The Three		For The Three		For The Six		For The Six
	Months Ended		Months Ended		Months Ended		Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Operating costs	$	285,765	$	328,596	$	665,484	$	835,970
Franchise tax expense		50,000		50,000		100,000		100,000
Loss on operations		(335,765)		(378,596)		(765,484)		(935,970)
Other income:
Dividend received		1,085,293		296,941		3,352,139		314,170
Profit (loss) before provision for income taxes		749,528		(81,655)		2,586,655		(621,800)
Income tax expense		(217,411)		(20,764)		(682,949)		(20,764)
Net profit (loss)	$	532,117	$	(102,419)	$	1,903,706	$	(642,564)

Basic and diluted weighted average shares outstanding of redeemable common stock		2,990,000		20,700,000		11,845,000		20,700,000
Basic and diluted net profit (loss) per share, redeemable common stock	$	0.06	$	(0.00)	$	0.11	$	(0.02)
Basic and diluted weighted average shares outstanding of non-redeemable common stock		5,295,000		5,295,000		5,295,000		5,295,000
Basic and diluted net profit (loss) per share, non-redeemable common stock	$	0.06	$	(0.00)	$	0.11	$	(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)
Remeasurement of common stock subject to possible redemption to redemption value	—		—		—		306,736		306,736
Excise tax payable attributable to redemption of common stock	—		—		—		(1,590,376)		(1,590,376)
Net profit	—		—		—		532,117		532,117
Balance - June 30, 2023	5,295,000	$	5,295	$	—	$	(9,303,574)	$	(9,298,279)


	Six Months Ended		Six Months Ended
	June 30, 2023		June 30, 2022
Cash Flows from Operating Activities:
Net profit (loss)	$	1,903,706	$	(642,564)
Adjustments to reconcile net profit (loss) to net cash used in operating activities:
Dividend earned from Trust Account		(3,352,139)		(314,170)
Changes in operating assets and liabilities:
Prepaid expenses - current		148,563		15,423
Prepaid expenses - non-current		—		148,563
Income tax receivable		(248,126)		—
Accrued expenses		(121,415)		491,809
Related party payable		101,013		60
Income tax payable		(584,234)		20,764
Franchise tax payable		(39,132)		(65,396)
Net cash used in operating activities		(2,191,764)		(345,511)
Cash Flows from Investing Activities:
Proceeds in connection with extension loan		(240,000)		—
Transfer from Trust Account		1,654,441		—
Redemption of Public Shares		159,045,944		—
Net cash provided by investing activities		160,460,385		—
Cash Flows from Financing Activities:
Proceeds from promissory note - related party		672,750		—
Redemption of Public Shares		(159,045,944)		—
Net cash used in financing activities		(158,373,194)		—
Net change in cash:		(104,573)		(345,511)
Cash - Beginning		106,226		661,776
Cash - Ending	$	1,653	$	316,265

Supplemental disclosure of non-cash financing activities:
Remeasurement of common stock subject to possible redemption to redemption value	$	1,372,160	$	317,051
Excise tax payable	$	1,590,376	$	—


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		1,372,160
Stockholders redemption		(159,045,944)
Contingently redeemable common stock, June 30, 2023	$	54,416,088

SEC Form 10-Q filed by Accretion Acquisition Corp.