During the day germs build up in the mouth and the enamel is demineralized (it loses minerals that help to keep teeth strong) through exposure to acidic food & drinks.
During the night, plaque builds up on the teeth, on the back of the tongue and on the gum line.
Additionally, the salivary flow rate is extremely low during the night which may make the teeth and oral cavity more susceptible to damage by bacteria.
When breaking down nutrients, plaque bacteria produce acids, which can further demineralize the enamel, and foul gases. This plaque build-up together with the low salivary flow rate can cause bad breath in the morning.