Risk Factors Dashboard

Once a year, publicly traded companies issue a comprehensive report of their business, called a 10-K. A component mandated in the 10-K is the ‘Risk Factors’ section, where companies disclose any major potential risks that they may face. This dashboard highlights all major changes and additions in new 10K reports, allowing investors to quickly identify new potential risks and opportunities.

Risk Factors - NBST

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Item 1A. Risk Factors” below.Risk Factors.

Additionally, on January 24, 2024, the SEC (as defined below) adopted the 2024 SPAC Rules (as defined below), which will become effective on July 1, 2024, that will affect SPAC (as defined below) Business Combination transactions. The 2024 SPAC Rules require, among other matters, (i) additional disclosures relating to SPAC Business Combination transactions; (ii) additional disclosures relating to dilution and to conflicts of interest involving sponsors and their affiliates in both SPAC initial public offerings and Business Combination transactions; (iii) additional disclosures regarding projections included in SEC filings in connection with proposed Business Combination transactions; and (iv) the requirement that both the SPAC and its target company be co-registrants for Business Combination registration statements. In addition, the SEC’s adopting release provided guidance describing circumstances in which a SPAC could become subject to regulation under the Investment Company Act (as defined below), including its duration, asset composition, business purpose, and the activities of the SPAC and its management team in furtherance of such goals. The 2024 SPAC Rules may materially affect our ability to negotiate and complete our initial Business Combination and may increase the costs and time related thereto.

The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

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Unless otherwise stated in this Report, or the context otherwise requires, references to:

“2021 Annual Report” are to our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC on March 31, 2022;
“2022 Annual Report” are to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the SEC on March 31, 2023;
“2024 SPAC Rules” are to the new rules and regulations for SPACs adopted by the SEC on January 24, 2024, which will become effective on July 1, 2024;
“Administrative Support Agreement” are to the Administrative Support Agreement, dated March 22, 2021, which we entered into with our Sponsor (as defined below);
“Amended and Restated Charter” are to our Amended and Restated Certificate of Incorporation, as amended and currently in effect;
“ASC” are to the FASB (as defined below) Accounting Standards Codification;
“ASU” are to the FASB Accounting Standards Update;
“Audit Committee” are to the audit committee of our Board of Directors (as defined below);
“Board of Directors” or “Board” are to our board of directors;
“Business Combination” are to a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses;
“Combination Period” are to the 42-month period, from the closing of the Initial Public Offering (as defined below) to September 25, 2024 (or such earlier date as determined by the Board), as extended following approval of the Third Extension Amendment Proposal (as defined below) at the Third Special Meeting (as defined below), that we have to consummate an initial Business Combination;
“Common Stock” are to our common stock, par value $0.0001 per share;
“Company,” “our,” “we,” or “us” are to Newbury Street Acquisition Corporation, a Delaware corporation;
“Continental” are to Continental Stock Transfer & Trust Company, trustee of our Trust Account and warrant agent of our Public Warrants (as defined below);
“DGCL” are to the Delaware General Corporation Law;
“DWAC System” are to the Depository Trust Company’s Deposit/Withdrawal At Custodian System;
“EBC” are to EarlyBirdCapital, Inc., representative of the underwriters for our Initial Public Offering;
“Exchange Act” are to the Securities Exchange Act of 1934, as amended;
“Excise Tax” are to the U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023 as provided for by the Inflation Reduction Act of 2022;
“FASB” are to the Financial Accounting Standards Board;
“FINRA” are to the Financial Industry Regulatory Authority;
“First Extension Amendment Proposal” are to the proposal approved by our stockholders at the First Special Meeting (as defined below) to extend the time by which we had to consummate a Business Combination from March 25, 2023 to September 25, 2023;
“First Merger Agreement Amendment” are to the amendment to the Infinite Reality Merger Agreement (as defined below) entered into by the Infinite Reality Merger Agreement Amendment Parties (as defined below) on May 15, 2023;
“First Special Meeting” are to our special meeting of stockholders held on March 21, 2023;
“First Special Meeting Redemptions” are to the 7,744,085 Public Shares whose holders properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.17 per share in connection with the approval of the First Extension Amendment Proposal;
“Founder Shares” are to the shares of Common Stock initially purchased by our Sponsor prior to the Initial Public Offering (for the avoidance of doubt, such shares of Common Stock are not “Public Shares” (as defined below));
“GAAP” are to the accounting principles generally accepted in the United States of America;
“IFRS” are to the International Financial Reporting Standards, as issued by the International Accounting Standards Board;
“Infinite Reality” are to Infinite Reality, Inc., a Delaware corporation;
“Infinite Reality Business Combination” are to the proposed Business Combination between us and Infinite Reality, including all of the transactions contemplated by the Infinite Reality Merger Agreement;

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“Infinite Reality Merger Agreement” are to the Agreement and Plan of Merger, dated December 12, 2022, which we entered into with Infinite Reality, Pubco (as defined below) and the Merger Subs (as defined below), as amended by the First Merger Agreement Amendment, Second Merger Agreement Amendment (as defined below) and Third Merger Agreement Amendment (as defined below);
“Infinite Reality Merger Agreement Parties” are to our Company, Infinite Reality, Pubco and the Merger Subs, which are the parties to the Infinite Reality Merger Agreement;
“Infinite Reality Merger” are to the merger between the Infinite Reality Merger Sub and Infinite Reality, where Infinite Reality will be the surviving entity under the Infinite Reality Merger Agreement;
“Infinite Reality Merger Sub” are to Infinity NBIR Company Merger Sub Inc., a Delaware corporation and a direct wholly-owned subsidiary of Pubco in connection with the Infinite Reality Merger Agreement;
“Infinite Reality Registration Statement” are to the Registration Statement on Form S-4, which will include a proxy statement/prospectus of our Company, to be filed by Pubco with the SEC in connection with the Infinite Reality Business Combination;
“Initial Contribution” are to the contribution by the Sponsor or its designees to us of (i) the lesser of (x) an aggregate of $600,000 or (y) $0.04 for each Public Share that was not redeemed in connection with the First Special Meeting Redemptions;
“Initial Public Offering” or “IPO” are to the initial public offering that we consummated on March 25, 2021;
“Initial Stockholders” are to holders of our Common Stock prior to our Initial Public Offering (excluding the holders of the Representative Shares (as defined below));
“Investment Company Act” are to the Investment Company Act of 1940, as amended;
“IPO Promissory Note” are to that certain unsecured promissory note in the principal amount of up to $300,000 issued to our Sponsor on November 23, 2020;
“IPO Registration Statement” are to the Registration Statement on Form S-1 initially filed with the SEC on February 1, 2021, as amended, and declared effective on March 22, 2021 (File No. 333-252602);
“JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;
“Letter Agreement” are to the Letter Agreement, dated March 22, 2021, which we entered into with our Sponsor and our directors and officers;
“Management” or our “Management Team” are to our executive officers and directors;
“Marcum” are to Marcum LLP, our independent registered public accounting firm;
“Merger Subs” are to the Purchaser Merger Sub (as defined below) and the Infinite Reality Merger Sub;
“Mergers” are to the Purchaser Merger (as defined below) and the Infinite Reality Merger;
“Monthly Extension Fees” are to the monthly fees Infinite Reality has agreed to pay into our Trust Account until the completion of the Mergers, in connection with the approvals of the Second Extension Amendment Proposal (as defined below) and Third Extension Amendment Proposal, pursuant to the Second Merger Agreement Amendment and the Third Merger Agreement Amendment;
“Nasdaq” are to the Nasdaq Stock Market LLC;
“Panel” are to an independent Hearings Panel of Nasdaq, before which we submitted a timely request for a hearing, which was held on May 23, 2024;
“PCAOB” are to the Public Company Accounting Oversight Board (United States);
“Private Placement” are to the private placement of Private Units (as defined below) that occurred simultaneously with the closing of our Initial Public Offering;
“Private Shares” are to the shares of our Common Stock included within the Private Units purchased by our Sponsor and EBC in the Private Placement;
“Private Units” are to the units issued to our Sponsor and EBC in the Private Placement;
“Private Warrants” are to the warrants included within the Private Units purchased by our Sponsor and EBC in the Private Placement;
“Pubco” are to Infinite Reality Holdings, Inc., a Delaware corporation and our direct wholly-owned subsidiary;
“Public Shares” are to the shares of Common Stock sold as part of the Units (as defined below) in our Initial Public Offering (whether they were purchased in our Initial Public Offering or thereafter in the open market);
“Public Stockholders” are to the holders of our Public Shares, including our Initial Stockholders and Management Team to the extent our Initial Stockholders and/or the members of our Management Team purchase Public Shares, provided that each Initial Stockholder’s and member of our Management Team’s status as a “Public Stockholder” will only exist with respect to such Public Shares;

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“Public Warrants” are to the redeemable warrants sold as part of the Units in our Initial Public Offering (whether they were subscribed for in our Initial Public Offering or purchased in the open market);
“Purchaser Merger” are to the merger between us and the Purchaser Merger Sub, where we will be the surviving entity under the Infinite Reality Merger Agreement;
“Purchaser Merger Sub” are to Infinity Purchaser Merger Sub Inc., a Delaware corporation and a direct wholly-owned subsidiary of Pubco;
“Registration Rights Agreement” are to the Registration Rights Agreement, dated March 22, 2021, which we entered into with the Sponsor and EBC;
“Report” are to this Annual Report on Form 10-K for the fiscal year ended December 31, 2023;
“Representative Shares” are to the 200,000 shares of our Common Stock issued to EBC and/or its designees at the closing of our Initial Public Offering;
“Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002;
“SEC” are to the U.S. Securities and Exchange Commission;
“Second Merger Agreement Amendment” are to the second amendment to the Infinite Reality Merger Agreement entered into by the Infinite Reality Merger Agreement Amendment Parties on July 21, 2023;
“Second Extension Amendment Proposal” are to the proposal approved by our stockholders at the Second Special Meeting (as defined below) to extend the time by which we had to consummate a Business Combination from September 25, 2023 to March 25, 2024;
“Second Special Meeting” are to our special meeting of stockholders held on September 22, 2023;
“Second Special Meeting Redemptions” are to the 3,060,282 Public Shares whose holders properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.46 per share in connection with the approval of the Second Extension Amendment Proposal;
“Securities Act” are to the Securities Act of 1933, as amended;
“SPACs” are to special purpose acquisition companies;
“Sponsor” are to Newbury Street Acquisition Sponsor LLC, a Delaware limited liability company;
“Third Merger Agreement Amendment” are to the third amendment to the Infinite Reality Merger Agreement entered into by the Infinite Reality Merger Agreement Amendment Parties on February 26, 2024;
“Third Extension Amendment Proposal” are to the proposal approved by our stockholders at the Third Special Meeting to extend the time by which we had to consummate a Business Combination from March 25, 2024 to September 25, 2024;
“Third Special Meeting” are to our special meeting of stockholders held on March 20, 2024;
“Third Special Meeting Redemptions” are to the 908,496 Public Shares whose holders properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.75 per share in connection with the approval of the Third Extension Amendment Proposal;
“Trust Account” are to the U.S.-based trust account in which an amount of $128,439,370 from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Units in the Private Placement was placed following the closing of the Initial Public Offering;
“Trust Agreement” are to the Investment Management Trust Agreement, dated March 22, 2021, which we entered into with Continental, as trustee of the Trust Account;
“Units” are to the units sold in our Initial Public Offering, which consist of one Public Share and one-half of one Public Warrant;
“Warrant Agreement” are to the Warrant Agreement, dated as of March 22, 2021, which we entered into with Continental, as warrant agent;
“Warrants” are to the Private Warrants and the Public Warrants, together;
“WCL Promissory Note” are to that certain unsecured promissory note in the principal amount of up to $2.1 million issued to the Sponsor initially on May 3, 2022, which was amended and restated in its entirety on March 15, 2023 and further amended and restated on March 22, 2023; and
“Working Capital Loans” are to funds that, in order to provide working capital or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of our directors and officers may, but are not obligated to, loan us.

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PART I

Item 1. Business.

Overview

We are a blank check company incorporated on November 6, 2020 as a Delaware corporation and formed for the purpose of effecting an initial Business Combination. While we may pursue an acquisition or Business Combination target in any business or industry, we have focused our search on a technology business in the consumer internet or media space, including sports and entertainment verticals, with enterprise values of approximately $500 million to $2.5 billion. In particular, we have focused on finding disruptive, high growth companies, such as Infinite Reality, with a global ambition that take advantage of: (i) the rise of new consumer behaviors driven by the internet or new technologies, or (ii) paradigm shifts in media, sports and entertainment that give rise to disruptive new entrants here to stay for the coming decades.

Our Management Team is composed of experienced dealmakers and highly regarded industry veterans in the consumer internet and media space. The Management Team has decades of experience investing into and operating innovative and transformative platforms in consumer internet and media, as well as scaling businesses into new geographies, especially Asia. We believe that the experience and capabilities of our Management Team make us an attractive partner to potential target businesses, enhance our ability to complete a successful Business Combination, and add value to the business post-Business Combination.

Our Management Team represents a unique combination of operating, investing, financial and transactional experience. Our Management Team has a strong track record of creating value for shareholders in multiple consumer internet and media companies that they have led, managed and/or invested in. Our Management Team also has a history of making substantial non-control investments that allow existing teams to continue their growth.

We believe we are an attractive partner to a target company, such as Infinite Reality. Our Management Team has an extensive history scaling businesses and improving public companies. We have a diverse and value-added network to source and find follow-on opportunities. Our Management Team also has experience navigating the complexities of operating as a public company. Our view is that supportive capital and a long-term orientation are attractive as a partner first mentality that differentiates us from competition. We intend to help our target company focus on sustainable long-term value creation post close, with a high return on reinvestment.

The 2024 SPAC Rules may materially affect our ability to negotiate and complete our initial Business Combination and may increase the costs and time related thereto.

Initial Public Offering

On March 25, 2021, we consummated our Initial Public Offering of 12,000,000 Units. Each Unit consists of one Public Share and one-half of one Public Warrant, with each whole Public Warrant entitling the holder thereof to purchase one share of Common Stock for $11.50 per share. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to our Company of $120.00 million.

Simultaneously with the closing of the Initial Public Offering, we completed the private sale of an aggregate of 390,000 Private Units to our Sponsor and EBC in the Private Placement at a purchase price of $10.00 per Private Unit (340,000 Units to our Sponsor and 50,000 Units to EBC), generating gross proceeds of $3.90 million. On March 30, 2021, the underwriters exercised the over-allotment option in part and purchased an additional 843,937 Units, generating gross proceeds of approximately $8.44 million. In connection with the exercise of the underwriters’ over-allotment option, our Sponsor and EBC purchased an aggregate of 16,879 Private Units (14,715 Units to our Sponsor and 2,164 Units to EBC), generating gross proceeds of $168,790.

A total of $128.44 million, comprised of $125.87 million of the proceeds from the Initial Public Offering and $2.57 million of the proceeds of the Private Placement, was placed in the Trust Account maintained by Continental, acting as trustee.

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It is the job of our Sponsor and Management Team to complete our initial Business Combination. Our Management Team is led by Matthew Hong, our Chairman and the former Chief Operating Officer of Turner Sports, and seasoned executives Thomas Bushey, our Chief Executive Officer, and Kenneth King, our Chief Financial Officer. Mr. Bushey and Mr. King have decades of experience identifying, acquiring, investing in and operating businesses, and provide depth of knowledge in capital markets. We must complete our initial Business Combination by September 25, 2024, the end of our Combination Period, which is 42 months from the closing of our Initial Public Offering. If our initial Business Combination is not consummated by the end of our Combination Period, then, unless our Board of Directors shall otherwise determine, our existence will terminate, and we will distribute all amounts in the Trust Account.

Extensions of Our Combination Period

We initially had up to 24 months from the closing of the Initial Public Offering, or until March 25, 2023, to complete a Business Combination, which was extended to (i) September 25, 2023 at the First Special Meeting upon approval by our stockholders of the First Extension Amendment Proposal, (ii) March 25, 2024 at the Second Special Meeting upon approval by our stockholders of the Second Extension Amendment Proposal and (iii) September 25, 2024 at the Third Special Meeting upon approval by our stockholders of the Third Extension Amendment Proposal.

In connection with the vote to approve the First Extension Amendment Proposal, the holders of 7,744,085 Public Shares properly exercised their right to redeem their Public Shares for cash at a redemption price of approximately $10.17 per share, for an aggregate redemption amount of approximately $78.77 million. As a result, approximately $78.77 million was removed from the Trust Account to pay such holders. Following the First Special Meeting Redemptions, we had 8,917,715 shares of Common Stock issued and outstanding.

In connection with the vote to approve the Second Extension Amendment Proposal, the holders of 3,060,282 Public Shares properly exercised their right to redeem their Public Shares for cash at a redemption price of approximately $10.46 per share, for an aggregate redemption amount of approximately $32.00 million. As a result, approximately $32.00 million was removed from the Trust Account to pay such holders. Following the Second Special Meeting Redemptions, we had 5,857,433 shares of Common Stock issued and outstanding.

In connection with the vote to approve the Third Extension Amendment Proposal, the holders of 908,496 Public Shares properly exercised their right to redeem their Public Shares for cash at a redemption price of approximately $10.75 per share, for an aggregate redemption amount of approximately $9.77 million. As a result, approximately $9.77 million was removed from the Trust Account to pay such holders. Following the Third Special Meeting Redemptions, we had 4,948,937 shares of Common Stock issued and outstanding.

As of December 31, 2023, following the First Special Meeting Redemptions and the Second Special Meeting Redemptions, we had approximately $21.58 million in the Trust Account.

In connection with the approval of the First Extension Amendment Proposal, the Sponsor or its designees agreed to contribute to us, under the WCL Promissory Note, (i) the Initial Contribution, plus, (ii) an aggregate of $200,000 per month (commencing on June 23, 2023 and on the 23rd day of each subsequent month) until September 25, 2023, or portion thereof, that was needed to complete an initial Business Combination, which amount was to be deposited into the Trust Account.

On March 24, 2023, the Sponsor made the Initial Contribution of $600,000, which was deposited into the Trust Account. On June 26, 2023, $200,000 was deposited into the Trust Account, which was comprised of a $100,000 payment from the Sponsor and a $100,000 payment from Infinite Reality. The remaining Monthly Extension Fees in connection with the approval of the First Extension Amendment Proposal were paid by Infinite Reality pursuant to the Second Merger Agreement Amendment.

In connection with the approval of the Second Extension Amendment Proposal, Infinite Reality agreed to contribute the Monthly E