DEF: Newbury Street Seeks Another Extension Amidst SPAC Challenges

Newbury Street Acquisition Corporation requests stockholder approval to extend its deadline to complete a business combination to March 25, 2026, following the termination of its merger agreement with Infinite Reality and significant prior share redemptions.

Summary

• A Special Meeting will be held virtually on September 24, 2025, at 10:00 a.m. Eastern Time, to vote on extending the date to complete an initial business combination from September 25, 2025, to March 25, 2026.
• The previous Agreement and Plan of Merger with Infinite Reality, Inc. was mutually terminated on December 19, 2024.
• Infinite Reality is required to pay the Company a total of $5.25 million in installments through September 18, 2025, as per a General Release and Settlement Agreement, with a potential discount of up to $300,000 for early payments.
• The Company's securities were delisted from Nasdaq on September 9, 2024, due to non-compliance with listing criteria and failure to close a business combination by the required deadline.
• Significant share redemptions have occurred with each prior extension approval: $78.8 million in March 2023, $32.0 million in September 2023, $9.8 million in March 2024, $6.1 million in September 2024, and $5.7 million in March 2025.
• As of September 8, 2025, the Trust Account held approximately $821,405.94, with an estimated per-share redemption price of $11.48.
• The closing price of the Company's Common Stock on September 8, 2025, was $10.02.
• The Sponsor owns approximately 72.0% of the total outstanding Common Stock and 91.68% of voting shares as of the record date, giving it sufficient votes to approve the proposals.

Sentiment

Score: 2

Explanation: The company has a history of repeated failures to complete a business combination, necessitating multiple extensions, experiencing significant redemptions, and being delisted from Nasdaq. While management expresses optimism about finding a future business combination, the factual circumstances are highly negative, indicating severe operational and market challenges.

Positives

• The Board believes that an initial business combination opportunity is in the best interests of the Company and its stockholders.
• The Company is actively using its best efforts to complete an initial business combination as soon as practicable.
• A settlement agreement with Infinite Reality will result in a $5.25 million cash payment to the Company.

Negatives

• The Company has repeatedly failed to complete an initial business combination, necessitating multiple extensions.
• The definitive merger agreement with Infinite Reality, Inc. was mutually terminated.
• Significant share redemptions have drastically reduced the Trust Account balance and the number of public shares outstanding over time.
• The Company's securities were delisted from Nasdaq on September 9, 2024, leading to reduced liquidity, visibility, and potential investor interest.
• Warrants will expire worthless if a business combination is not completed by the extended deadline.
• The current stock price of $10.02 is below the estimated per-share redemption price of $11.48.

Risks

• There is no assurance that the proposed extension will enable the Company to complete an initial business combination.
• Further redemptions could leave the Company with insufficient cash to consummate an initial business combination on commercially acceptable terms, or at all.
• Stockholders may be unable to recover their investment except through sales on the over-the-counter market, and the price of shares may be volatile.
• If the Extension Proposal is not approved, the Company will be required to liquidate, and public stockholders may receive only approximately $11.48 per share, or less, and warrants will expire worthless.
• Changes to laws or regulations, or their interpretation (e.g., SEC SPAC Rules, SPAC Guidance), may adversely affect the Company's business and ability to complete an initial business combination.
• The Company could be deemed an investment company under the Investment Company Act of 1940, potentially forcing liquidation.
• Potential regulatory review or approval by U.S. or foreign authorities (e.g., CFIUS) for certain target companies, especially given the Sponsor's ties to non-U.S. persons, may limit the pool of potential targets and delay transactions.
• A 1% U.S. federal excise tax may be imposed on redemptions, potentially reducing cash available for a business combination or redemptions (though Trust Account funds will not be used for this).
• Delisting from Nasdaq adversely impacts market quotations, liquidity, trading activity, news and analyst coverage, ability to issue additional securities or obtain financing, and investor confidence.

Future Outlook

The Board believes that an initial business combination opportunity is in the best interests of the Company and its stockholders. The Company is using its best efforts to complete an initial business combination as soon as practicable and is seeking the extension to provide sufficient time to do so. If the extension is approved, the Company expects to continue working towards consummating an initial business combination by the Extended Date of March 25, 2026.

Management Comments

• "The Board believes that an initial business combination opportunity is in the best interests of the Company and its stockholders."
• "While we are using our best efforts to complete an initial business combination as soon as practicable, the Board believes that in order to be able to complete an initial business combination, it is appropriate to obtain the Extension."

Industry Context

The filing reflects the ongoing challenges within the Special Purpose Acquisition Company (SPAC) market, where many entities struggle to identify and consummate suitable business combinations within their mandated timelines. The repeated need for extensions, significant shareholder redemptions, and the ultimate termination of a definitive merger agreement are common indicators of a difficult operating environment for SPACs. Furthermore, the delisting from Nasdaq underscores the heightened scrutiny and stricter compliance requirements in the evolving regulatory landscape for SPACs, including new SEC rules and guidance that can impact operational costs and timelines.

Comparison to Industry Standards

• The Company's history of five prior extensions and the request for a sixth extension significantly exceeds the typical timeline for SPACs to complete an initial business combination, indicating substantial difficulties compared to industry averages.
• The high rate of share redemptions with each extension, which has reduced the public shares outstanding from an initial large number to only 71,265 shares, is far greater than redemption rates seen in successful SPAC transactions.
• The termination of a definitive merger agreement with Infinite Reality, Inc. after multiple amendments is a notable failure compared to SPACs that successfully close their announced deals.
• The delisting from Nasdaq places the Company in a less favorable market position, contrasting with other SPACs that either successfully merge or maintain their listing compliance.

Corporate Governance

Legal Proceedings

• A dispute regarding the payment of a $7,000,000 termination fee from Infinite Reality, Inc. was resolved through a General Release and Settlement Agreement, requiring Infinite Reality to pay the Company $5.25 million in installments through September 18, 2025.

Related Party Transactions

• The Sponsor and its designees made various contributions to the Trust Account in connection with previous extensions.
• The Sponsor, the Company's directors, officers, and their respective affiliates may purchase Public Shares or enter into non-redemption agreements to increase the likelihood of proposal approval and minimize redemptions.
• The Sponsor and the Company's officers and directors have interests that may differ from public stockholders, including the risk of losing their entire investment in Founder Shares and Private Units if a business combination is not completed.
• Mr. Bushey and Mr. King, as managing members of the Sponsor, may receive a higher allocation of Founder Shares upon the successful consummation of an initial business combination.
• The Sponsor has agreed to be liable to the Company for certain claims by vendors or target businesses that reduce the Trust Account funds if a business combination is not completed.
• The Company's officers and directors are entitled to indemnification and exculpation, which would not be performable if the Company liquidates.

Stakeholder Impact

• **Public Stockholders**: Face significant risk of losing their investment if no business combination is completed, with warrants expiring worthless. Those who redeem will receive cash at an estimated $11.48 per share, which is currently higher than the market price.
• **Warrant Holders**: Warrants will expire worthless if the Company fails to complete an initial business combination by the extended deadline.
• **Sponsor and Insiders**: Risk losing their entire investment in Founder Shares and Private Units if a business combination is not completed. They have a strong incentive to approve the extension and complete a deal.
• **Potential Target Companies**: The reduced Trust Account balance and delisted status may make the Company a less attractive acquisition partner.

Next Steps

• Hold a Special Meeting on September 24, 2025, to vote on the Extension Proposal and, if necessary, the Adjournment Proposal.
• If the Extension Proposal is approved, file the Amended Charter with the Secretary of State of the State of Delaware.
• Continue efforts to complete an initial business combination by the new deadline of March 25, 2026.
• If the Extension Proposal is not approved or an initial business combination is not consummated by the extended date, the Company will cease operations, redeem public shares, and liquidate.
• Announce preliminary voting results at the Special Meeting and disclose final results via a Current Report on Form 8-K within four business days.

Key Dates

Recommendation

The company has a history of repeated failures to complete a business combination, culminating in the termination of its only announced merger target and delisting from Nasdaq. The significant and continuous redemptions have severely depleted the Trust Account, leaving minimal capital for a future transaction. While an extension is sought, the company's track record, reduced public float, and regulatory risks (including potential Investment Company Act issues) make a successful outcome highly improbable. The current stock price ($10.02) is below the estimated redemption value ($11.48), suggesting that even liquidation would yield a higher return than holding the shares, and warrants are likely to expire worthless. Investors should consider selling to realize the redemption value or avoid further losses.

Keywords

SPAC, Special Purpose Acquisition Company, Extension Proposal, Business Combination, Merger Agreement Termination, Infinite Reality, Share Redemption, Nasdaq Delisting, Trust Account, Proxy Solicitation, Corporate Governance, Risk Factors, SEC Filing, Newbury Street Acquisition Corporation