UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant
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preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
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| Large accelerated filer ☐ | Accelerated filer ☐ | |
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| Emerging growth company |
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As of May 15, 2025, there were
NEWBURY STREET II ACQUISITION CORP
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025
TABLE OF CONTENTS
i
Unless otherwise stated in this Report (as defined below), or the context otherwise requires, references to:
| ● | “2024 Annual Report” are to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC (as defined below) on March 31, 2025; |
| ● | “2024 SPAC Rules” are to the rules and regulations for SPACs (as defined below) adopted by the SEC on January 24, 2024, which became effective on July 1, 2024; |
| ● | “Administrative Support Agreement” are to the Administrative Support Agreement, dated October 31, 2024, which we entered into with an affiliate of our Sponsor (as defined below); |
| ● | “Amended and Restated Articles” are to our Amended and Restated Memorandum and Articles of Association, as amended and restated, and currently in effect; |
| ● | “ASC 280” are to the FASB (as defined below) Accounting Standards Codification Topic 280, “Segment Reporting”; |
| ● | “ASU 2023-07” are to the FASB Accounting Standards Update Topic 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”; |
| ● | “BTIG” are to BTIG, LLC, the underwriter of the Initial Public Offering (as defined below); |
| ● | “Business Combination” are to a merger, capital share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses; |
| ● | “Certifying Officers” are to our Chief Executive Officer and Chief Financial Officer, together; |
| ● | “Class A Ordinary Shares” are to our Class A ordinary shares, par value $0.0001 per share; |
| ● | “Class B Ordinary Shares” are to our Class B ordinary shares, par value $0.0001 per share; |
| ● | “CODM” are to the chief operating officer decision maker; |
| ● | “Combination Period” are to the 24-month period, from the closing of the Initial Public Offering to November 4, 2026, that we have to consummate an initial Business Combination; provided that the Combination Period may be extended pursuant to an amendment to the Amended and Restated Articles and consistent with applicable laws, regulations and stock exchange rules; |
| ● | “Company,” “our,” “we,” or “us” are to Newbury Street II Acquisition Corp, a Cayman Islands exempted company; |
| ● | “Deferred Discount” are to the additional fee of 3.5% of the gross proceeds of the Initial Public Offering to which the underwriter of the Initial Public Offering is entitled that is payable only upon our completion of the initial Business Combination; |
| ● | “Exchange Act” are to the Securities Exchange Act of 1934, as amended; |
| ● | “FASB” are to the Financial Accounting Standards Board; |
| ● | “Founder Shares” are to the Class B Ordinary Shares initially purchased by our Sponsor prior to the Initial Public Offering and the Class A Ordinary Shares that will be issued (i) upon the automatic conversion of the Class B Ordinary Shares at the time of our initial Business Combination or (ii) at the option of the holders thereof, as described herein (for the avoidance of doubt, such Class A Ordinary Shares will not be “Public Shares”); |
ii
| ● | “GAAP” are to the accounting principles generally accepted in the United States of America; |
| ● | “Initial Public Offering” or “IPO” are to the initial public offering that we consummated on November 4, 2024; |
| ● | “Initial Shareholders” are to holders of our Ordinary Shares prior to our Initial Public Offering; |
| ● | “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 June 4, 2024; |
| ● | “IPO Registration Statement” are to the Registration Statement on Form S-1 initially filed with the SEC on August 9, 2024, as amended, and declared effective on October 31, 2024 (File No. 333- 281456); |
| ● | “Management” or our “Management Team” are to our executive officers and directors; |
| ● | “Nasdaq” are to The Nasdaq Stock Market LLC; |
| ● | “Nasdaq 36-Month Requirement” are to the requirement pursuant to the Nasdaq Rules (as defined below) that a SPAC must complete one or more Business Combinations within 36 months following the effectiveness of its initial public offering registration statement; |
| ● | “Nasdaq Rules” are to the continued listing rules of Nasdaq, as they exist as of the date of this Report; |
| ● | “Option Units” are to the 2,250,000 units of our Company that were purchased by the underwriter of the Initial Public Offering pursuant to the full exercise of the Over-Allotment Option (as defined below); |
| ● | “Ordinary Shares” are to the Class A Ordinary Shares and the Class B Ordinary Shares, together; |
| ● | “Over-Allotment Option” are to the 45-day option that the underwriter of the Initial Public Offering had to purchase up to an additional 2,250,000 Option Units to cover over-allotments, if any, pursuant to the Underwriting Agreement (as defined below), which was fully exercised; |
| ● | “Private Placement” are to the private placement of Private Placement Units (as defined below) that occurred simultaneously with the closing of our Initial Public Offering pursuant to the Private Placement Units Purchase Agreement (as defined below); |
| ● | “Private Placement Shares” are to the Class A Ordinary Shares included within the Private Placement Units purchased by our Sponsor and BTIG in the Private Placement; |
| ● | “Private Placement Units” are to the units of our Company issued to our Sponsor and BTIG in the Private Placement; |
iii
| ● | “Private Placement Warrants” are to the warrants included within the Private Placement Units purchased by our Sponsor and BTIG in the Private Placement; |
| ● | “Private Placement Units Purchase Agreements” are to the (i) Private Placement Units Purchase Agreement, dated October 31, 2024, which we entered into with our Sponsor and (ii) the Private Placement Units Purchase Agreement, dated October 31, 2024, which we entered into with BTIG, together; |
| ● | “Public Shares” are to the Class A Ordinary Shares sold as part of the Public 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 Shareholders” are to the holders of our Public Shares, including our Initial Shareholders and Management Team to the extent our Initial Shareholders and/or the members of our Management Team purchase Public Shares, provided that each Initial Shareholders’ and member of our Management Team’s status as a “Public Shareholder” will only exist with respect to such Public Shares; |
| ● | “Public Units” are to the units sold in our Initial Public Offering, which consist of one Public Share and one-half of one Public Warrant (as defined below); |
| ● | “Public Warrants” are to the redeemable warrants sold as part of the Public Units in our Initial Public Offering (whether they were subscribed for in our Initial Public Offering or purchased in the open market); |
| ● | “Report” are to this Quarterly Report on Form 10-Q for the quarter ended March 31, 2025; |
| ● | “Representative Shares” are to 100,000 Class A Ordinary Shares purchased by BTIG in connection with the Initial Public Offering for a purchase price of $100, or $0.001 per share; |
| ● | “SEC” are to the U.S. Securities and Exchange Commission; |
| ● | “Securities Act” are to the Securities Act of 1933, as amended; |
| ● | “SPACs” are to special purpose acquisition companies; |
| ● | “Sponsor” are to Newbury Street II Acquisition Sponsor LLC, a Delaware limited liability company; |
| ● | “Trust Account” are to the U.S.-based trust account in which an amount of $173,362,500 from the net proceeds of the sale of the Public Units in the Initial Public Offering and the Private Placement Units in the Private Placement was placed following the closing of the Initial Public Offering; |
| ● | “Underwriting Agreement” are to the Underwriting Agreement, dated October 31, 2024, which we entered into with BTIG, as the underwriter in the Initial Public Offering; |
| ● | “Units” are to the Private Placement Units and the Public Units, together; |
| ● | “Warrants” are to the Private Placement Warrants and the Public Warrants, together; 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. |
iv
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
NEWBURY STREET II ACQUISITION CORP
CONDENSED BALANCE SHEETS
| March 31, 2025 | December 31, 2024 | |||||||
| Unaudited | ||||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Due from Sponsor | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Long-term prepaid insurance | ||||||||
| Cash and securities held in Trust Account | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION, AND SHAREHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued offering costs | ||||||||
| Total Current Liabilities | ||||||||
| Deferred underwriting fee | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 6) | ||||||||
| Class A Ordinary Shares subject to possible redemption | ||||||||
| Shareholders’ Deficit | ||||||||
| Class A Ordinary Shares, $ | ||||||||
| Class B Ordinary Shares, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Shareholders’ Deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION, AND SHAREHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
1
NEWBURY STREET II ACQUISITION CORP
CONDENSED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2025
(UNAUDITED)
| Operating costs | $ | |||
| Loss from Operations | ( | ) | ||
| Other income: | ||||
| Interest earned on cash and securities held in Trust Account | ||||
| Interest on operating account | ||||
| Total other income | ||||
| Net Income | $ | |||
| Weighted average shares outstanding of redeemable Class A Ordinary Shares outstanding | ||||
| Basic Net Income per Ordinary Share, Redeemable Class A Ordinary Shares | $ | |||
| Weighted average shares outstanding of non-redeemable Class A and Class B Ordinary Shares outstanding | ||||
| Basic Net Income per Ordinary, Share, Non-Redeemable Class A and Class B Ordinary Shares | $ |
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
NEWBURY STREET II ACQUISITION CORP
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2025
(UNAUDITED)
| Class A | Class B | Additional | Total | |||||||||||||||||||||||||
| Ordinary Shares | Ordinary Shares | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance - December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Accretion for Class A Ordinary Shares to redemption amount | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||
| Balance - March 31, 2025 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
3
NEWBURY STREET II ACQUISITION CORP
CONDENSED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2025
(UNAUDITED)
| Cash Flows from Operating Activities: | ||||
| Net income | $ | |||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||
| Interest earned on cash and securities held in Trust Account | ( | ) | ||
| Changes in operating assets and liabilities: | ||||
| Prepaid expenses | ||||
| Long-term prepaid insurance | ||||
| Accounts payable and accrued expenses | ||||
| Accrued offering costs | ( | ) | ||
| Net Cash Used in Operating Activities | ( | ) | ||
| Net Change in Cash | ( | ) | ||
| Cash - Beginning of period | ||||
| Cash - End of period | $ | |||
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
NEWBURY STREET II ACQUISITION CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Organization and General
Newbury Street II Acquisition Corp (the “Company”) was incorporated as a Cayman Islands exempted company on June 18, 2024. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses that the Company has not yet identified (the “Business Combination”). The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
As of March 31, 2025, the Company had not yet commenced operations. All activity for the period from June 18, 2024 (inception) through March 31, 2025 related to the Company’s formation and the Initial Public Offering (as defined below), and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenue until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.
Sponsor and Initial Financing
The Company’s sponsor
is Newbury Street II Acquisition Sponsor LLC (the “Sponsor”). The Registration Statement on Form S-1 for the Initial
Public Offering, initially filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 9, 2024,
as amended (File No. 333-281456), was declared effective on October 31, 2024 (the “IPO Registration Statement”).
On November 4, 2024, the Company consummated the initial public offering of
Simultaneously with the closing
of the Initial Public Offering, the Company consummated the sale of an aggregate of
Transaction costs amounted
to $
5
NEWBURY STREET II ACQUISITION CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
The Trust Account
Following the closing of the
Initial Public Offering, on November 4, 2024, an amount of $
Initial Business Combination
The Company’s
management (“Management”) has broad discretion with respect to the specific application of the net proceeds of the
Initial Public Offering, although substantially all of the net proceeds of the Initial Public Offering are intended to be generally
applied toward consummating a Business Combination. The initial Business Combination must occur with one or more target businesses
that together have an aggregate fair market value of at least
The Company will provide the
holders of Public Shares (the “Public Shareholders”) with the opportunity to redeem, regardless of whether they abstain, vote
for, or against, the initial Business Combination, all or a portion of their Public Shares upon the completion of the initial Business
Combination either (i) in connection with a general meeting called to approve the initial Business Combination or (ii) by means
of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed Business Combination or conduct
a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of
the transaction and whether the terms of the transaction would require the Company to seek shareholder approval under applicable law or
stock exchange listing requirement. Asset acquisitions and share purchases would not typically require shareholder approval while direct
mergers with the Company where it does not survive and any transactions where the Company issue more than
The Amended and Restated Articles
provides that the Company has until November 4, 2026, or such earlier liquidation date as the Company’s board of directors (the
“Board”) may approve to consummate the initial Business Combination (the “Combination Period”). If the Company
is unable to complete the initial Business Combination within the Combination Period, the Company will (i) cease all operations except
for the purpose of winding up, (ii) as promptly as reasonably possible, but not more than ten business days thereafter (and
subject to lawfully available funds therefor), redeem the Public Shares, at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (less up to $
6
NEWBURY STREET II ACQUISITION CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
The Sponsor and the Company’s executive officers and directors have entered into a letter agreement with the Company, dated October 31, 2024 (the “Letter Agreement”), pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect to their Founder Shares (as defined in Note 5) and Private Placement Shares if the Company fails to complete the initial Business Combination within the Combination Period. However, if the Sponsor and the Company’s executive officers and directors acquire Public Shares, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete the initial Business Combination within the Combination Period. The underwriter of the Initial Public Offering has agreed to waive its rights to its Deferred Discount held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares.
The Sponsor and the Company’s
executive officers and directors have also agreed, pursuant to the Letter Agreement, that they will not propose any amendment to the Amended
and Restated Articles (i) in that would modify the substance or timing of the obligation to allow redemption in connection with the
initial Business Combination or to redeem
Risks and Uncertainties
The United States and global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the recent escalation of the Israel-Hamas conflict. In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system. Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine and to Israel, increasing geopolitical tensions among a number of nations. The invasion of Ukraine by Russia and the escalation of the Israel-Hamas conflict and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional and global economies. Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased cyberattacks against U.S. companies. Additionally, any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.
Recently, the United States has implemented a range of new tariffs and increases to existing tariffs. In response to the tariffs announced by the United States, other countries have imposed, are considering imposing, and may in the future impose new or increased tariffs on certain exports from the United States. There is currently significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations and tarrifs, and the Company cannot predict whether, and to what extent, current tariffs will continue or trade policies will change in the future.
Tariffs, or the threat of tariffs or increased tariffs, could have a significant negative impact on certain businesses (either due to domestic businesses’ reliance on imported goods or dependence on access to foreign markets, or foreign businesses’ reliance on sales into the United States). In addition, retaliatory tariffs could have a significant negative impact on foreign businesses that rely on imports from the United States, and domestic businesses that rely on exporting goods internationally. These tariffs and threats of tariffs and other potential trade policy changes could negatively affect the attractiveness of certain initial Business Combination targets, or lead to material adverse effects on a post-Business Combination company. Among other things, historical financial performance of companies affected by trade policies and/or tariffs may not provide useful guidance as to the future performance of such companies, because future financial performance of those companies may be materially affected by new U.S. tariffs or foreign retaliatory tariffs, or other changes to trade policies.
7
NEWBURY STREET II ACQUISITION CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
Any of the above-mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine, the escalation of the Israel-Hamas conflict and subsequent sanctions or related actions, could adversely affect the Company’s search for a Business Combination and any target business with which the Company may ultimately consummate a Business Combination.
Liquidity
As of March 31, 2025, the
Company had $
The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the initial Business Combination.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
8
NEWBURY STREET II ACQUISITION CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
Use of Estimates
The preparation of the accompanying unaudited condensed financial statements in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the accompanying unaudited condensed financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires Management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the accompanying unaudited condensed financial statements, which Management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all
short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $
Securities Held in Trust Account
As of March 31, 2025 and December
31, 2024, the assets held in the Trust Account, amounting to $
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.
Concentration of Credit Risk
Financial instruments that
potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times,
may exceed the Federal Deposit Insurance Corporation coverage limit of $
Offering Costs Associated with the Initial Public Offering
The Company complies with the requirements of the FASB ASC Topic 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Deferred offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC Topic 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Units between Class A Ordinary Shares subject to possible redemption and Warrants, using the residual method by allocating Initial Public Offering proceeds first to assigned value of the Warrants and then to the Class A Ordinary Shares subject to possible redemption. Offering costs allocated to Class A Ordinary Shares subject to possible redemption were charged to temporary equity while offering costs allocated to the Public Warrants and Private Placement Warrants were charged to shareholders’ deficit as Public Warrants and Private Placement Warrants after Management’s evaluation are accounted for under equity treatment.
9
NEWBURY STREET II ACQUISITION CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
Income Taxes
The Company accounts for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”), which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. Management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2025 and December 31, 2024, there were unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is considered
to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes
or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was
Warrant Instruments
The Company accounted for the Warrants issued in connection with the Initial Public Offering and the Private Placement in accordance with the guidance contained in FASB ASC Topic 815, “Derivatives and Hedging.” Accordingly, the Company evaluated and recorded the warrant instruments under equity treatment at their assigned values.
Net Income per Ordinary Share
Net income per Ordinary Share
is computed by dividing net income by the weighted average number of Ordinary Shares outstanding during the period, excluding Ordinary
Shares subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of
| For the Three Months Ended March 31, 2025 | ||||||||
| Redeemable Class A Ordinary Shares | Non-Redeemable Class A and Class B Ordinary Shares | |||||||
| Basic net income per Ordinary Share: | ||||||||
| Numerator: | ||||||||
| Allocation of net income, basic | $ | $ | ||||||
| Denominator: | ||||||||
| Basic weighted average Ordinary Shares outstanding | ||||||||
| Basic net income per Ordinary Share | $ | $ | ||||||
10
NEWBURY STREET II ACQUISITION CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
Class A Ordinary Shares Subject to Possible Redemption
The Public Shares contain
a redemption feature that allows for the redemption of such Public Shares in connection with the Company’s liquidation, or if there
is a shareholder vote or tender offer in connection with the initial Business Combination and with amendments to the Amended and Restated
Articles. In accordance with FASB ASC Topic 480-10-S99, “Distinguishing Liabilities from Equity”, the Company classifies Public
Shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company.
The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of redeemable Ordinary
Shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering,
the Company recognized the accretion from initial book value to redemption value. The change in the carrying value of redeemable Public
Shares will result in charges against additional paid-in capital (to the extent available) and accumulated deficit.
As of March 31, 2025 | As of December 31, 2024 | |||||||
| Balance brought forward | $ | $ | ||||||
| Gross proceeds | ||||||||
| Less: | ||||||||
| Proceeds allocated to Public Warrants | ( | ) | ||||||
| Public Shares issuance costs | ( | ) | ||||||
| Plus: | ||||||||
| Remeasurement of carrying value to redemption value | ||||||||
| Class A Ordinary Shares subject to possible redemption | $ | $ | ||||||
Segment Reporting
The Company complies with FASB Accounting Standards Update (“ASU”) Topic 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses among other disclosure requirements.
Recently Issued Accounting Standards
In August 2020, the FASB issued ASU Topic 2020-06, “Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2020-06”), to simplify certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible 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. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis. Early adoption was permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted ASU 2020-06 as of June 18, 2024 (inception). There was no effect on the accompanying unaudited condensed financial statements.
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the accompanying unaudited condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
On November 4, 2024, the Company
sold
11
NEWBURY STREET II ACQUISITION CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing
of the Initial Public Offering, the Sponsor and BTIG, LLC (“BTIG”) purchased an aggregate of
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On June 20, 2024, the
Company issued an aggregate of
The Sponsor has agreed not
to transfer, assign or sell any of its Founder Shares until the earlier to occur of (i) one year after the completion of the initial
Business Combination or (ii) subsequent to the initial Business Combination (x) if the last reported sale price of the Class A
Ordinary Shares equals or exceeds $
Registration Rights Agreement
The holders of the Founder Shares, Representative Shares (as defined in Note 6), Private Placement Units (including the underlying securities) and any private placement equivalent units (and underlying securities) that may be issued on conversion of any Working Capital Loans (as defined below) and Class A Ordinary Shares upon conversion of the Founder Shares are entitled to registration rights pursuant to a registration rights agreement entered into at the Initial Public Offering requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A Ordinary Shares). The holders of these securities are entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain piggyback registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
12
NEWBURY STREET II ACQUISITION CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
Administrative Support Agreement
Commencing on November 1,
2024, the Company agreed to pay the Sponsor or an affiliate thereof an amount equal to $
Related Party Loans
On June 20, 2024,
the Company and the Sponsor entered into a promissory note, whereby the Sponsor agreed to loan the Company an aggregate of up to
$
Due from Sponsor
On November 4, 2024, the Company
repaid $
Working Capital Loans
In addition, in order to finance
transaction costs in connection with its initial Business Combination, the Sponsor or an affiliate of the Sponsor, or the Company’s
officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”).
If the Company completes its initial Business Combination, the Company would repay the Working Capital Loans. In the event that the initial
Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital
Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. If the Sponsor makes any Working Capital
Loans, up to $
NOTE 6. COMMITMENTS AND CONTINGENCIES
Underwriting Agreement
The Company granted the underwriters
a
The Company paid an underwriting
discount of
13
NEWBURY STREET II ACQUISITION CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
Representative Shares
The Company issued to BTIG,
the underwriter of the Initial Public Offering,
NOTE 7. SHAREHOLDERS’ DEFICIT
Preference Shares
The Company is authorized
to issue
Ordinary Shares
The authorized Ordinary Shares
include up to (i)
The Sponsor agreed to forfeit
up to an aggregate of
As of March 31, 2025 and December 31, 2024, there
were (i)
Public Warrants
As of March 31, 2025, there
were
14
NEWBURY STREET II ACQUISITION CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
The Company has not registered
Class A Ordinary Shares issuable upon exercise of the Public Warrants. However, the Company has agreed that as soon as practicable, but
in no event later than
Beginning
| ● | In whole and not in part; | |
| ● | At a price of $ | |
| ● | Upon not less than | |
| ● | if, and only if, the last sale price of the Class A Ordinary Shares equals or exceeds $ |
Private Placement Warrants
The Private Placement Warrants
are non-redeemable. The Private Placement Warrants may also be exercised for cash or on a cashless basis. The Private Placement Warrants
have terms and provisions that are identical to those of the Public Warrants, except with certain limited exceptions, the Private Placement
Warrants (including the Class A Ordinary Shares issuable upon exercise thereof) will not be transferable, assignable or salable until
15
NEWBURY STREET II ACQUISITION CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
NOTE 8. FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial assets and liabilities reflects Management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
| Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
| Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
| Level 3: | Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability. |
The following table presents information about the Company’s assets that are measured at fair value as of March 31, 2025 and November 4, 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| Description | Level | March 31, 2025 | November 4, 2024 | |||||||
| Assets: | ||||||||||
| Cash and securities held in Trust Account | 1 | $ | $ | |||||||
| Equity: | ||||||||||
| Fair value of Public Warrants for Class A Ordinary Shares subject to possible redemption allocation | 3 | $ | $ | |||||||
| Fair value of the Representative Shares | 3 | $ | $ | |||||||
The fair values of Public Warrants for Class A Ordinary Shares subject to possible redemption allocation and Representatives Shares as of November 4, 2024 (the date of the Initial Public Offering) were used in allocation of the equity components and are not revalued and remeasured in subsequent periods.
The fair value of Public
Warrants was determined using the Monte Carlo simulation. The Public Warrants have been classified within shareholders’ deficit
and will not require remeasurement after issuance.
| November 4, 2024 | ||||
| Underlying share price | $ | |||
| Term (years) | ||||
| Risk-free rate | % | |||
| Market adjustment | % | |||
| Volatility | % | |||
16
NEWBURY STREET II ACQUISITION CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
The fair value of the Representative
Shares was determined using the Monte Carlo simulation. The Representative Shares have been classified within shareholders’ deficit
and will not require remeasurement after issuance.
| November 4, 2024 | ||||
| Volatility | % | |||
| Term | ||||
| Average trading price post-Business Combination | $ | |||
| Discount on market adjustment | % | |||
NOTE 9. SEGMENT INFORMATION
FASB ASC Topic 280, “Segment Reporting” (“ASC 280”), establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the chief operating officer decision maker (“CODM”), or group, in deciding how to allocate resources and assess performance.
The Company’s CODM has
been identified as the Chief Financial Officer, who reviews the assets, operating results, and financial metrics for the Company as a
whole to make decisions about allocating resources and assessing financial performance. Accordingly, Management has determined that there
is only
The CODM assesses performance
for the single segment and decides how to allocate resources based on net income that also is reported on the condensed statement of operations
as net income. The measure of segment assets is reported on the accompanying condensed balance sheets as total assets.
| March 31, 2025 | December 31, 2024 | |||||||
| Trust Account | $ | $ | ||||||
| Cash | $ | $ | ||||||
| For the Three Months Ended March 31, 2025 | ||||
| Operating costs | $ | |||
| Interest earned on cash and securities held in Trust Account | $ | |||
The CODM reviews interest earned on marketable securities held in Trust Account to measure and monitor shareholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the Investment Management Trust Agreement, dated October 31, 2024, which the Company entered into with Continental, as trustee of the Trust Account.
Operating costs are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business Combination or similar transaction within the Combination Period. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. Operating costs, as reported on the accompanying unaudited condensed statement of operations, are the significant segment expenses provided to the CODM on a regular basis.
All other segment items included in net income are reported on the condensed statement of operations and described within their respective disclosures.
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date up to the date that the accompanying unaudited condensed financial statements were issued. Based upon this review, other than as set forth below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the accompanying unaudited condensed financial statements.
17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Report including, without limitation, statements under this Item regarding our financial position, business strategy and the plans and objectives of Management for future operations, are forward-looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our Management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of our Management, as well as assumptions made by, and information currently available to, our Management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto included in this Report under Item 1. “Financial Statements”.
Overview
We are a blank check company incorporated in the Cayman Islands on June 18, 2024 formed for the purpose of effecting a Business Combination. We intend to effectuate our initial Business Combination using cash derived from the proceeds of the Initial Public Offering and the Private Placement, offerings of equity securities, debt or a combination of cash, equity securities and debt.
We expect to incur significant costs in the pursuit of our acquisition plans. There can be no assurance that our plans to complete an initial Business Combination will be successful.
In 2024, the SEC adopted additional rules and regulations relating to SPACs. The 2024 SPAC Rules require, among other matters, (i) additional disclosures relating to SPAC sponsors and related persons; (ii) additional disclosures relating to SPAC Business Combination transactions; (iii) additional disclosures relating to dilution and to conflicts of interest involving sponsors and their affiliates in connection with proposed Business Combination transactions; (iv) additional disclosures regarding projections included in SEC filings in connection with proposed Business Combination transactions; and (v) the requirement that both the SPAC and its target company be co-registrants in connection with registration statements relating to proposed Business Combination transactions. 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, including its duration, asset composition, business purpose, and the activities of the SPAC and its management team. 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.
18
We may seek to extend the Combination Period consistent with applicable laws, regulations and stock exchange rules by amending our Amended and Restated Articles. Such an amendment would require the approval of our Public Shareholders, who will be provided the opportunity to redeem all or a portion of their Public Shares in connection with the vote on such approval. Such redemptions will decrease the amount held in our Trust Account and our capitalization, and may affect our ability to maintain our listing on Nasdaq. In addition, the Nasdaq Rules currently require SPACs (such as us) to complete our initial Business Combination in accordance with the Nasdaq 36-Month Requirement. If we do not meet the Nasdaq 36-Month Requirement, our securities will likely be subject to a suspension of trading and delisting from Nasdaq.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from June 18, 2024 (inception) through March 31, 2025 were organizational activities and those necessary to prepare for and consummate the Initial Public Offering, described below, and following the consummation of the Initial Public Offering, searing for a Business Combination target. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance, among other things), as well as for due diligence expenses.
For the three months ended March 31, 2025, we had a net income of $1,685,254, which consists of interest earned on marketable securities held in Trust Account of $1,828,144, interest on operating account of $12,216 and operating costs of $155,106.
Factors That May Adversely Affect our Results of Operations
Our results of operations and our 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 our control. Our results of operations and our ability to complete an initial Business Combination could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, fluctuations in interest rates, increases in tariffs, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. We cannot at this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial Business Combination.
Liquidity and Capital Resources
Until the consummation of the Initial Public Offering, our only source of liquidity was proceeds from an initial purchase of Class B Ordinary Shares by the Sponsor and loans from the Sponsor pursuant to the IPO Promissory Note.
On June 20, 2024, we issued the IPO Promissory Note to the Sponsor, whereby the Sponsor agreed to loan us an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering. The IPO Promissory Note was non-interest bearing and payable on the earlier of June 30, 2025, or the date on which we consummated the Initial Public Offering. On November 4, 2024, we repaid the total outstanding balance of the IPO Promissory Note and as of March 31, 2025, there was $0 outstanding under the IPO Promissory Note. Borrowings under the IPO Promissory Note are no longer available. On November 4, 2024, we repaid $25,000 to the Sponsor in excess of the IPO Promissory Note. As of March 31, 2025, the $25,000 is due to be repaid to us from the Sponsor.
19
We consummated the Initial Public Offering of 17,250,000 Public Units, which includes 2,250,000 Option Units purchased upon the full exercise of the Over-Allotment Option, at $10.00 per Public Unit, generating gross proceeds of $172,500,000. Simultaneously with the closing of the Initial Public Offering and pursuant to the Private Placement Units Purchase Agreement, we consummated the sale of an aggregate of 648,375 Private Placement Units at a price of $10.00 per Private Placement Unit in the Private Placement to the Sponsor and BTIG, generating gross proceeds of $6,483,750.
Following the Initial Public Offering, the full exercise of the Over-Allotment Option, and the Private Placement, a total of $173,362,500 was placed in the Trust Account. We incurred $10,113,129 in offering expenses, consisting of $3,450,000 of cash underwriting fee, $6,037,500 of Deferred Discount to the underwriters, and $625,629 of other offering costs. The proceeds held in the Trust Account are invested in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The holding of these assets in this form is intended to be temporary and for the sole purpose of facilitating the intended Business Combination. To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that we hold investments in the Trust Account, we may, at any time, (based on our Management Team’s ongoing assessment of all factors related to our potential status under the Investment Company Act) instruct the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in cash or in an interest-bearing demand deposit account at a bank.
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable, if any), to complete our Business Combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of March 31, 2025, we had cash of $1,128,699. We use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform 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 an initial Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with an initial Business Combination, the Sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us Working Capital Loans as may be required. If we complete an initial Business Combination, we would repay such Working Capital Loans. In the event that an initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such Working Capital Loans, but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such Working Capital Loans may be convertible into units of the post-Business Combination entity at a price of $10.00 per unit at the option of the lender. The units would be identical to the Private Placement Units. The terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such Working Capital Loans.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such initial Business Combination.
20
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than as set forth below.
Administrative Support Agreement
Commencing on November 3, 2025, and until completion of our initial Business Combination or liquidation, we pay an affiliate of our Sponsor $10,000 per month for certain office space, utilities and secretarial and administrative support pursuant to the Administrative Support Agreement. Under the Administrative Support Agreement, $30,000 was incurred and paid for the three months ended March 31, 2025.
Underwriting Agreement
We granted the underwriter of the Initial Public Offering a 45-day option to purchase up to 2,250,000 Option Units to cover any over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. On November 4, 2024, in connection with the closing of the Initial Public Offering, the Over-Allotment Option was exercised in full and additional 2,50,000 Option Units were purchased at $10.00 per Option Unit.
We paid an underwriting discount of 2.0% of the per Public Unit offering price to the underwriters at the closing of the Initial Public Offering, or $3,450,000 in the aggregate. In addition, the underwriters are entitled to an additional fee of 3.5% of the gross offering proceeds payable only upon our completion of the initial Business Combination, or $6,037,500 in the aggregate. The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event we complete an initial Business Combination.
We also issued to BTIG, the underwriter for the Initial Public Offering, 100,000 Class A Ordinary Shares in connection with the Initial Public Offering. We accounted for the Representative Shares as an expense of the Initial Public Offering, resulting in a charge directly to shareholders’ deficit. BTIG has agreed not to transfer, assign or sell any such shares without our prior consent until the completion of the initial Business Combination. In addition, the Representative Shares are deemed to be underwriting compensation by FINRA pursuant to FINRA Rule 5110 and are, accordingly, subject to certain transfer restrictions or a period of 180 days beginning at the Initial Public Offering. Furthermore, BTIG agreed (and any of its designees to whom the Representative Shares are issued will agree) (i) to waive its redemption rights (or right to participate in any tender offer) with respect to such Representative Shares in connection with the completion of the initial Business Combination and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such shares if we fail to complete a Business Combination within the Combination Period.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with GAAP requires our Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Making estimates requires Management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which Management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could materially differ from those estimates. As of March 31, 2025, we did not have any critical accounting estimates or policies to be disclosed.
Recent Accounting Standards
In November 2023, the FASB issued ASU 2023-07. The amendments in ASU 2023-07 require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the CODM, as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. ASU 2023-07 requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities are required to provide all annual disclosures currently required by ASC 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in ASU 280 and existing segment disclosures in ASC 280. ASU 2023-07 was effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
21
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to Management, including our Certifying Officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our Management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were effective as of the end of the quarterly period ended March 31, 2025.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the period covered by the Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
22
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
To the knowledge of our Management Team, there is no material litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property.
Item 1A. Risk Factors.
As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report. For additional risks relating to our operations, other than as set forth below, see the section titled “Risk Factors” contained in our (i) IPO Registration Statement and (ii) 2024 Annual Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise that may also affect our business or ability to consummate an initial Business Combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Changes in international trade policies, tariffs and treaties affecting imports and exports may have a material adverse effect on our search for an initial Business Combination target or the performance or business prospects of a post-Business Combination company.
There have recently been significant changes to international trade policies and tariffs affecting imports and exports. Any significant increases in tariffs on goods or materials or other changes in trade policy could negatively affect our search for a target and/or our ability to complete our initial Business Combination.
Recently, the U.S. has implemented a range of new tariffs and increases to existing tariffs. In response to the “tariffs announced by the U.S., other countries have imposed, are considering imposing, and may in the future impose new or increased tariffs on certain exports from the United States. There is currently significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations and tariffs. and we cannot predict whether, and to what extent, current tariffs will continue or trade policies will change in the future.
Tariffs, or the threat of tariffs or increased tariffs, could have a significant negative impact on certain businesses (either due to domestic businesses’ reliance on imported goods or dependence on access to foreign markets, or foreign businesses’ reliance on sales into the United States). In addition, retaliatory tariffs could have a significant negative impact on foreign businesses that rely on imports from the United States, and domestic businesses that rely on exporting goods internationally. These tariffs and threats of tariffs and other potential trade policy changes could negatively affect the attractiveness of certain initial Business Combination targets, or lead to material adverse effects on a post-Business Combination company. Among other things, historical financial performance of companies affected by trade policies and/or tariffs may not provide useful guidance as to the future performance of such companies, because future financial performance of those companies may be materially affected by new U.S. tariffs or foreign retaliatory tariffs, or other changes to trade policies. The business prospects of a particular target for a Business Combination could change even after we enter into a Business Combination agreement, as a result of tariffs or the threat of tariffs that may have a material impact on that target’s business, and it may be costly or impractical for us to terminate that Business Combination agreement. These factors could affect our selection of a Business Combination target.
We may not be able to adequately address the risks presented by these tariffs or other potential trade policy changes. As a result, we may deem it costly, impractical or risky to complete an initial Business Combination with a particular target or with a target in a particular industry or from a particular country. Consequently, the pool of potential target companies may be reduced, which could impair our ability to identify a suitable target and to complete an initial Business Combination. If we complete an initial Business Combination with such a target, the post-Business Combination company’s operations and financial results could be adversely affected as a result of tariffs or changes to trade policies, which may cause the market value of the securities of the post-Business Combination company to decline.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
There were no sales of unregistered securities during the quarterly period covered by the Report. However, simultaneously with the closing of the Initial Public Offering and pursuant to the Private Placement Units Purchase Agreement, we completed the private placement of an aggregate of 648,375 Private Placement Units to the Sponsor and BTIG, the underwriter of the Initial Public Offing, at $10.00 per Private Placement Unit. Each Private Placement Unit consists of one Private Placement Share and one-half of one Private Placement Warrant, with each whole Private Placement Warrant exercisable to purchase one Class A Ordinary Share. Of those 648,375 Private Placement Units, the Sponsor purchased 484,500 Private Placement Units and BTIG purchased 163,875 Private Placement Units. The Private Placement Warrants are identical to the Public Warrants, except as otherwise disclosed in the IPO Registration Statement. No underwriting discounts or commissions were paid with respect to such sale. The issuance of the Private Placement Units was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Use of Proceeds
For a description of the use of proceeds generated in our Initial Public Offering and Private Placement, see Part II, Item 2 of our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, as filed with the SEC on December 16, 2024. There has been no material change in the planned use of proceeds from our Initial Public Offering and Private Placement as described in the IPO Registration Statement. The specific investments in our Trust Account may change from time to time.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Trading Arrangements
During the quarterly period
ended March 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act)
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Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Report.
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Dated: May 15, 2025 | Newbury Street II Acquisition Corp | |
| By: | /s/ Thomas Bushey | |
| Name: | Thomas Bushey | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Dated: May 15, 2025 | By: | /s/ Jake Gudoian |
| Name: | Jake Gudoian | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
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