NEWBURY STREET ACQUISITION CORPORATION The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Overview
We are a blank check company formed under the laws of the
All activity through
Factors That May Adversely Affect the Company's Results of Operations
The Company's results of operations and the Company's ability to complete an
initial business combination may be adversely affected by various factors that
could cause economic uncertainty and volatility in the financial markets, many
of which are beyond the Company's control. The Company's business could be
impacted by, among other things, downturns in the financial markets or in
economic conditions, increases in oil prices, inflation, increases in interest
rates, supply chain disruptions, declines in consumer confidence and spending,
the ongoing effects of the COVID-19 pandemic, including resurgences and the
emergence of new variants, and geopolitical instability, such as the military
conflict in the
Recent Developments
On
Extension Meeting
On
In connection with approval of the Extension Proposal, the holders of 7,744,085
shares of common stock of the Company properly exercised their right to redeem
their shares for cash at a redemption price of approximately
Additionally, in connection with the approval of the Extension Proposal, the
sponsor or its designees have agreed to contribute to the Company as a note (i)
the lesser of (a) an aggregate of
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Accordingly, the amount deposited per share depends on the number of public shares that remain outstanding after the redemption and the length of the extension period that will be needed to complete an initial business combination.
For additional information regarding the Special Meeting and related matters, see Note 11. Subsequent Events in the Notes to the Financial Statements.
Results of Operations
The Company has neither engaged in any operations nor generated any revenues to
date. The Company's only activities from commencement of operations through
For the year ended
For the period from
Liquidity and Capital Resources
As of
Until the consummation of the initial public offering, the Company's only source of liquidity was an initial purchase of common stock by the sponsor and loans from its sponsor.
On
Following the initial public offering and the private placement, a total of
approximately
As of
As of
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businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with a business combination, the Company's sponsor or an affiliate of
the Company's sponsor or certain of the Company's officers and directors may,
but are not obligated to, loan the Company funds as may be required. If the
Company completes a business combination, the Company may repay such loaned
amounts out of the proceeds of the trust account released to the Company. In the
event that a business combination does not close, the Company may use a portion
of the working capital held outside the trust account to repay such loaned
amounts, but no proceeds from the Company's trust account would be used for such
repayment. Up to
In addition, on
The Company, pursuant to the Note, may at any time prior to payment in full of
the principal balance of the Note elect to convert all or any portion of the
unpaid principal balance of the Note into units (the "Conversion Units") at a
conversion price of
Additionally, the Note entitles the sponsor to two demand registrations and unlimited piggyback registration rights for the Conversion Units (including underlying securities), which rights are the same as the registration rights provided under the registration rights agreement.
On
On
In connection with the Company's assessment of going concern considerations in accordance with Accounting Standards Codification ("ASC") Subtopic 205-40, "Presentation of Financial Statements - Going Concern", the Company has until the end of the Combination Period to consummate a business combination. If a business combination is not consummated by this date and an extension not obtained, there will be a mandatory liquidation and subsequent dissolution of the Company. Although the Company intends to consummate a business combination on or before the end of the Combination Period, it is uncertain whether the Company will be able to consummate a business combination by this time. Management has determined that the mandatory liquidation, should a business combination not occur and an extension is not obtained, and potential subsequent dissolution, as well as the potential for the Company to have insufficient funds available to operate its business prior to a business combination, raise substantial doubt about the Company's ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the end of the Combination Period.
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Off-Balance Sheet Arrangements
The Company had no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of
Contractual Obligations
The Company does not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than described below.
Business Combination Marketing Agreement
The Company has engaged
Registration Rights
Pursuant to a registration rights agreement entered into on
The holders of a majority of the representative shares, private units and units issued in payment of working capital loans made to us (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates a business combination. Notwithstanding anything to the contrary, EBC. may only make a demand on one occasion and only during the five-year period beginning on the effective date of the Registration Statement. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to consummation of a business combination; provided, however, that EBC may participate in a "piggy-back" registration only during the seven-year period beginning on the effective date of the Registration Statement.
The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company's securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a 45-day option from the date of the initial public offering to purchase up to 1,800,000 additional units to cover over-allotments, if any, at the public offering price less the underwriting discounts and commissions.
The underwriters were entitled to an underwriting discount of
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additional 843,937 units at
Administrative Support Agreement
The Company has agreed to pay the sponsor
For the period from
Critical Accounting Estimates
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company's financial statements.
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Net Loss Per Share of Common Stock
The Company complies with accounting and disclosure requirements of Financial Accounting Standards Board Accounting Standard Codification, or FASB ASC, Topic 260, "Earnings Per Share." Net loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, excluding common stock subject to forfeiture. The Company applies the two-class method in calculating earnings per share. The calculation of diluted loss per share of common stock does not consider the effect of the warrants issued in connection with the initial public offering since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
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Warrants
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC Topic 480 and ASC Subtopic 815-15.
The Company accounts for the warrants, as either equity or liability-classified instruments based on an assessment of the specific terms of the warrants and the applicable authoritative guidance in FASB ASC Topic 815, Derivatives and Hedging. The assessment considers whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to its own common stock and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of its control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of issuance of the warrants and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, such warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, such warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of liability-classified warrants are recognized as a non-cash gain or loss on the statements of operations.
The private warrants are recognized as derivative liabilities in accordance with ASC Subtopic 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company's statement of operations. The fair value of the private warrants was initially measured at fair value using a Monte Carlo simulation model and subsequently, the fair value of the private warrants have been estimated using a Monte Carlo simulation model each measurement date.
Common Stock Subject to Possible Redemption
The Company accounts for the common stock subject to possible redemption in
accordance with the guidance in ASC Topic 480 "Distinguishing Liabilities from
Equity." Shares of common stock subject to mandatory redemption (if any) are
classified as a liability instrument and are measured at fair value.
Conditionally redeemable shares of common stock (including shares of common
stock that feature redemption rights that are either within the control of the
holder or subject to redemption upon the occurrence of uncertain events not
solely within the Company's control) are classified as temporary equity. At all
other times, shares of common stock are classified as stockholders' equity. The
Company's shares of common stock that were sold as part of units in the initial
public offering feature certain redemption rights are considered to be outside
of the Company's control and subject to the occurrence of uncertain future
events. Accordingly, as of
In connection with the Special Meeting and the approval of the Extension
Proposal, the holders of 7,744,085 shares of common stock of the Company
properly exercised their right to redeem their shares for cash at a redemption
price of approximately
For additional information regarding the Special Meeting and related matters. (See Note 11)
Recent Accounting Pronouncements
In
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debt and freestanding instruments that are indexed to and settled in an entity's own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments.
The provisions of ASU 2020-06 are applicable for fiscal years beginning after
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company's financial statements.
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