Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-Q
 
 
 
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31,June 30, 2022
OR
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
                    
to
                    
 
 
SARISSA CAPITAL ACQUISITION CORP.
(Exact Name of Registrant as Specified in Charter)
 
 
 
Cayman
 
001-39640
 
98-1552641
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
660 Steamboat Rd.
Greenwich, CT 06830
(Address of Principal Executive Offices) (Zip Code)
203-302-2330
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Units
 
SRSAU
 
The Nasdaq Capital Market
Class A ordinary shares
 
SRSA
 
The Nasdaq Capital Market
Warrants
 
SRSAW
 
The Nasdaq Capital Market
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of
Regulation S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
a non-accelerated filer,
smaller reporting company, or an emerging growth company. See the definitions of “large, accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company”
in
Rule 12b-2 of
the Exchange Act.
 
Large accelerated filer ☐  Accelerated filer ☐
    
Non-accelerated
filer		 ☒  Smaller reporting company ☒
    
Emerging growth company ☒     
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
Rule 12b-2 of
the Exchange Act).    Yes  ☒    No  ☐
As of May August
12
, 2022, there
 were
20,000,000
 Class A ordinary shares, par value $0.0001 $
0.0001
per share, and 5,000,000 Class B ordinary shares, par value $0.0001 per share, issued and outstanding.
 
 
 
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Table of Contents
 
      
Page
 
PART I. FINANCIAL INFORMATION
  
Item 1.
  
Financial Statements
   13 
  
Condensed Balance Sheets as of March 31,June 30, 2022 (unaudited)(Unaudited) and December 31, 2021
   13 
  
Unaudited Condensed Statements of Operations for the three and six months ended March 31,June 30, 2022 and 2021
   24 
  
Unaudited Condensed Statements of Changes in Shareholders’ Deficit for the three and six months ended March 31,June 30, 2022 and 2021
   35 
  
Unaudited Condensed Statements of Cash Flows for the threesix months ended March 31,June 30, 2022 and 2021
   46 
  
Notes to Condensed Financial Statements (unaudited)(Unaudited)
   57 
Item 2.
  
Management’s Discussion and Analysis of Financial Condition and Results of Operations
   1621 
Item 3.
  
Quantitative and Qualitative Disclosures About Market Risk
   1924 
Item 4.
  
Controls and Procedures
   1925 
PART II. OTHER INFORMATION
  
Item 1.
  
Legal Proceedings
   2026 
Item 1A.
Risk Factors
26
Item 2.  
Unregistered Sales of Equity Securities and Use of Proceeds
   2026 
Item 3.
  
Defaults Upon Senior Securities
   2026 
Item 4.
  
Mine Safety Disclosures
   2026 
Item 5.
  
Other Information
   2026 
Item 6.
  
Exhibits
   2127 
Part III. SIGNATURES
  
22
28
 
i
2
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SARISSA CAPITAL ACQUISITION CORP.
CONDENSED BALANCE SHEETS

         
   
March 31, 2022
  
December 31,
2021
 
   (unaudited)    
Assets
         
Current assets:
         
Cash  $347,384  $512,884 
Due from related party   6,600   6,600 
Prepaid expenses   113,914   99,857 
          
Total current assets
   467,898   619,341 
Marketable securities held in Trust Account   200,030,402   200,014,811 
          
Total Assets
  
$
200,498,300
 
 
$
200,634,152
 
          
Liabilities, Class A ordinary shares subject to possible redemption and Shareholders’ Deficit
         
Current liabilities:
         
Accounts payable and accrued expenses  $98,627  $52,710 
          
Total current liabilities
   98,627   52,710 
Warrant liabilities   3,908,800   10,167,733 
Deferred underwriters’ discount payable   7,000,000   7,000,000 
          
Total liabilities
   11,007,427   17,220,443 
          
Commitments and contingencies
   0    0  
Class A ordinary shares, $0.0001 par value, subject to possible redemption at redemption value of $10.00 per share, 20,000,000 issued and outstanding at March 31, 2022 and December 31, 2021   200,000,000   200,000,000 
Shareholders’ Deficit:
         
Preference shares, $0.0001 par value; 1,000,000 shares authorized; NaNissued or outstanding at March 31, 2022 and December 31, 2021   0—     0—   
Class A ordinary shares, $0.0001
 par value; 
200,000,000
 shares authorized; 0 shares issued or outstanding (excluding 
20,000,000
 Class A shares subject to redemption) at March 31, 2022 and December 31, 2021
   0—     0—   
Class B ordinary shares, $0.0001 par value; 20,000,000
 
s
hares authorized; 5,000,000 shares issued and outstanding at March 31, 2022 and December 31, 2021
   500   500 
Additional paid-in capital
   0—     0—   
Accumulated deficit   (10,509,627)   (16,586,791) 
          
Total shareholders’ deficit
   (10,509,127)   (16,586,291) 
          
Total Liabilities, Class A ordinary shares subject to possible redemption and Shareholders’ Deficit
  
$
200,498,300
 
 
$
200,634,152
 
          
   
June 30,

2022
  
December 31,
2021
 
   
(Unaudited)
    
Assets
         
Current assets:
         
Cash  $160,933  $512,884 
Due from related party    —   6,600 
Prepaid expenses   68,131   99,857 
          
Total current assets
   229,064   619,341 
Marketable securities held in Trust Account   200,309,576   200,014,811 
          
Total Assets
  
$
200,538,640
 
 
$
200,634,152
 
          
Liabilities, Class A ordinary shares subject to possible redemption and Shareholders’ Deficit
         
Current liabilities:
         
Accounts payable and accrued expenses  $25,002  $52,710 
          
Total current liabilities
   25,002   52,710 
Warrant liabilities   1,085,867   10,167,733 
Deferred underwriter discount payable   7,000,000   7,000,000 
          
Total liabilities
   8,110,869   17,220,443 
          
Commitments and contingencies (Note 6)
   0    0  
Class A ordinary shares, $0.0001 par value, subject to possible redemption at redemption value of $10.02 
and

$10.00
per share, 20,000,000 issued and outstanding at June 30, 2022 and December 31,
2021, respectively
   200,309,576   200,000,000 
Shareholders’ Deficit:
         
Preference shares, $0.0001 par value; 1,000,000 shares authorized; NaNissued or outstanding at June 30, 2022 and December 31, 2021   0—     0—   
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 0 shares issued or outstanding (excluding 20,000,000 Class A shares subject to redemption) at June 30, 2022 and December 31, 2021   0—     0—   
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 5,000,000 shares issued and outstanding at June 30, 2022 and December 31, 2021   500   500 
Additional paid-in capital
   0—     0—   
Accumulated deficit   (7,882,305)   (16,586,791) 
          
Total Shareholders’ Deficit
   (7,881,805)   (16,586,291) 
          
Total Liabilities, Class A ordinary shares subject to possible redemption and Shareholders’ Deficit
  
$
200,538,640
 
 
$
200,634,152
 
          
See accompanying notes to the condensed financial statements.
 
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SARISSA CAPITAL ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

         
   
For the Three
Months Ended
March 31, 2022
  
For the Three
Months Ended
March 31, 2021
 
Formation and operating costs  $197,360  $129,468 
          
Loss from operations
   (197,360)   (129,468) 
Other income
         
Interest income on marketable securities held in Trust Account   15,591   2,773 
Change in fair value of warrant liabilities   6,258,933   14,221,327 
          
Total other income
   6,274,524   14,224,100 
          
Net income
  $6,077,164  $14,094,632 
          
Weighted average shares outstanding of Class A ordinary shares   20,000,000   20,000,000 
          
Basic and diluted net income per Class A ordinary share  
$
0.24
 
 
$
0.56
 
          
Weighted average shares outstanding of Class B ordinary shares   5,000,000   5,000,000 
          
Basic and diluted net income per Class B ordinary share
  
$
0.24
 
 
$
0.56
 
          
See accompanying notes to the unaudited condensed financial statements.
 
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SARISSA CAPITAL ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2022

                             
   
Ordinary
   
Additional
Paid-In

Capital
   
Accumulated

Deficit
  
Total
Shareholders’

Deficit
 
   
Class A
   
Class B
 
   
Shares
   
Amount
   
Shares
   
Amount
 
Balance as of December 31, 2021
  
 
0  
 
  
$
0  
 
  
 
5,000,000
 
  
$
500
 
  
$
0  
 
  
$
(16,586,791
) 
 
$
(16,586,291
) 
Net income   —      —      —      —      —      6,077,164   6,077,164 
                                   
Balance as of March 31, 2022
  
 
0  
 
  
$
0  
   
 
5,000,000
 
  
$
500
 
  
$
0  
 
  
$
(10,509,627
) 
 
$
(10,509,127
) 
                                   
FOR THE THREE MONTHS ENDED MARCH 31, 2021

                             
   
Ordinary
   
Additional
Paid-In

Capital
   
Accumulated

Deficit
  
Total
Shareholders’

Deficit
 
   
Class A
   
Class B
 
   
Shares
   
Amount
   
Shares
   
Amount
 
Balance as of December 31, 2020
  
 
0  
 
  
$
0  
 
  
 
5,000,000
 
  
$
500
 
  
$
0  
 
  
$
(35,983,161
) 
 
$
(35,982,661
) 
Net income   —      —      —      —      —      14,094,632   14,094,632 
                                   
Balance as of March 31, 2021
  
 
0  
 
  
$
0  
 
  
 
5,000,000
 
  
$
500
 
  
$
0  
 
  
$
(21,888,529
) 
 
$
(21,888,029
) 
                                   
See accompanying notes to the unaudited condensed financial statements.
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SARISSA CAPITAL ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

         
   
For the Three
Months Ended
March 31, 2022
  
For the Three
Months Ended
March 31, 2021
 
Cash Flows from Operating Activities:
         
Net income  $6,077,164  $14,094,632 
Adjustments to reconcile net income to net cash used in operating activities:         
Interest income on marketable securities held in Trust Account   (15,591)   (2,773) 
Change in fair value of warrant liabilities   (6,258,933)   (14,221,327) 
Changes in operating assets and liabilities:         
Prepaid expenses   (14,057)   30,822 
Accounts payable and accrued expenses   45,917   10,000 
          
Net cash used in operating activities
  
 
(165,500
) 
 
 
(88,646
) 
          
Net Change in Cash
   (165,500)   (88,646) 
Cash—Beginning of period   512,884   1,097,856 
          
Cash—End of period  
$
347,384
 
 
$
1,009,210
 
          
   
For the Three Months

Ended June 30,
  
For the Six Months

Ended June 30,
 
   
2022
  
2021
  
2022
  
2021
 
Formation and operating costs  $165,209  $145,706  $362,569  $275,174 
                  
Loss from operations
  
 
(165,209
) 
 
 
(145,706
) 
 
 
(362,569
) 
 
 
(275,174
) 
                  
Other income
                 
Interest income on marketable securities held in Trust Account   279,174   3,273   294,765   6,046 
Change in fair value of warrant liabilities   2,822,933   1,805,147   9,081,866   16,026,474 
                  
Total other income
  
 
3,102,107
 
 
 
1,808,420
 
 
 
9,376,631
 
 
 
16,032,520
 
                  
Net income
  
$
2,936,898
 
 
$
1,662,714
 
 
$
9,014,062
 
 
$
15,757,346
 
                  
Weighted average shares outstanding of Class A ordinary shares subject to possible redemption   20,000,000   20,000,000   20,000,000   20,000,000 
                  
Basic and diluted net income per Class A ordinary share subject to possible redemption
  
$
0.12
 
 
$
0.07
 
 
$
0.36
 
 
$
0.63
 
                  
Weighted average shares outstanding of Class B ordinary shares   5,000,000   5,000,000   5,000,000   5,000,000 
                  
Basic and diluted net income per Class B ordinary share
  
$
0.12
 
 
$
0.07
 
 
$
0.36
 
 
$
0.63
 
                  
See accompanying notes to the unaudited condensed financial statements.
 
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SARISSA CAPITAL ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2022
   
Ordinary
   
Additional

Paid-in

Capital
   
Accumulated

Deficit
  
Total
Shareholders’

Deficit
 
   
Class A
   
Class B
 
   
Shares
   
Amount
   
Shares
   
Amount
 
Balance as of December 31, 2021
  
 
—  
 
  
$
—  
   
 
5,000,000
 
  
$
500
 
  
$
—  
   
$
(16,586,791
) 
 
$
(16,586,291
) 
Net income   —      —      —      —      —      6,077,164   6,077,164 
                                   
Balance as of March 31, 2022 (unaudited)
  
 
—  
 
  
 
—  
 
  
 
5,000,000
 
  
 
500
 
   
—  
   
 
(10,509,627
) 
 
 
(10,509,127
) 
Accretion of carrying value to redemption value   —      —      —      —      —      (309,576)   (309,576) 
Net income   —      —      —      —      —      2,936,898   2,936,898 
                                   
Balance as of June 30, 2022 (unaudited)
  
 
—  
 
  
$
—  
   
 
5,000,000
   
$
500
 
  
$
—  
   
$
 (7,882,305
) 
$
 (7,881,805
)
                                   
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2021
   
Ordinary
   
Additional

Paid-in

Capital
   
Accumulated

Deficit
  
Total

Shareholders’

Deficit
 
   
Class A
   
Class B
 
   
Shares
   
Amount
   
Shares
   
Amount
 
Balance as of December 31, 2020
  
 
—  
 
  
$
—  
   
 
5,000,000
 
  
$
500
 
  
$
—  
   
$
(35,983,161
) 
 
$
(35,982,661
) 
Net income   —     
 
—  
 
   —      —      —      14,094,632   14,094,632 
                                   
Balance as of March 31, 2021 (unaudited)
  
 
—  
 
  
 
—  
 
  
 
5,000,000
 
  
 
500
 
  
 
—  
 
  
 
(21,888,529
) 
 
 
(21,888,029
) 
Net income   —      —      —      —      —      1,662,714   1,662,714 
                                   
Balance as of June 30, 2021 (unaudited)
  
 
—  
 
  
$
—  
   
 
5,000,000
 
  
$
500
 
  
$

—  
 
  
$
(20,225,815
) 
 
$
(20,225,315
) 
                                   
See accompanying notes to the unaudited condensed financial statements.
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SARISSA CAPITAL ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
   
For the Six
Months Ended
June 30, 2022
  
For the Six
Months Ended
June 30, 2021
 
Cash Flows from Operating Activities:
         
Net income  $9,014,062  $15,757,346 
Adjustments to reconcile net income to net cash used in operating activities:         
Interest income on marketable securities held in Trust Account   (294,765)   (6,046) 
Change in fair value of warrant liabilities   (9,081,866)   (16,026,474) 
Changes in operating assets and liabilities:         
Prepaid expenses   31,726   97,188 
Due from related party   6,600   —   
Accounts payable and accrued expenses   (27,708)   33,633 
          
Net cash used in operating activities
   (351,951)   (144,353) 
 
 
 
 
 
 
 
 
 
Net Change in Cash
   (351,951)   (144,353) 
Cash—Beginning of period   512,884   1,097,856 
          
Cash—End of period
  $160,933  $953,503 
          
See accompanying notes to the unaudited condensed financial statements.
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1—Organization and Business Operations
Organization and General
Sarissa Capital Acquisition Corp. (the “Company”) was incorporated as a Cayman Islands exempted company on August 12, 2020. 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 (thebusinesses(the “Business Combination”). The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of March 31,June 30, 2022, the Company had not yet commenced any operations. All activity through March 31,June 30, 2022 relates to the Company’s formation and the Initial Public Offering (“IPO”) described below and locating a merger target post IPO. The Company will not generate any operating revenues until after the completion of its initial business combination,Business Combination, at the earliest.
The
Company generates non-operating income in
the form of interest income from the proceeds derived from the IPO.
Trust Account
Following the closing of the IPO on October 23, 2020, an amount of $200,000,000 ($10.00 per Unit) from the net proceeds of the sale of the 20,000,000
units (the “Units”) in the IPO and the sale of the Private Placement Warrants was placed in a trust account (“Trust Account”) which was invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 
185
days or less or in money market funds meeting certain conditions under Rule
2a-7
promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, until the earlier of (a) the completion of the Company’s initial Business Combination, (b) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Company’s amended and restated memorandum of association, and (c) the redemption of the Company’s public shares if the Company is unable to complete the initial Business Combination within 
24 months from October 23, 2020 (the “Combination Period”), the closing of the IPO.
Initial Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (excluding the amount of deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the signing of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Upon the closing of the IPO, management has agreed that an amount equal to at least $10.00
per Unit sold in the IPO, will be held in the Trust Account, located in the United States at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee, and will
the proceeds held in the Trust Account may
be invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule
2a-7
of the Investment Company Act, as determined by the Company, until the earlier of (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
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The Company will provide the holders (the “Public Shareholders”) of its Class A ordinary shares, par value $0.0001, sold in the IPO (the “Public Shares”), with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00
per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay income taxes).The
per-share
amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter, Cantor Fitzgerald (as discussed in Note 6).
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
These Public Shares will be classified as temporary equity upon the completion of the IPO in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $
5,000,001$5,000,001 upon such consummation of a Business Combination and, only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a shareholder meeting are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to the amended and restated memorandum and articles of association which the Company will adopt upon the consummation of the IPO (the “Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transactions is required by law, or the Company decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules.
Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or vote at all. If the Company seeks shareholder approval in connection with a Business Combination, the initial shareholders (as defined below) have agreed to vote their Founder Shares (as defined below in Note 5) and any Public Shares purchased during or after the IPO in favor of a Business Combination. Subsequent to the consummation of the IPO, the Company will adopt an insider trading policy which will require insiders to: (i) refrain from purchasing shares during certain blackout periods and when they are in possession
of
any material non-public information and
(ii) to clear all trades with the Company’s legal counsel prior to execution. In addition, the initial shareholders have agreed to waive their redemption rights with respect to their Founder Shares in connection with the completion of a Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of its Business Combination and does not conduct redemptions in connection with its Business Combination pursuant to the tender offer rules, the Amended and Restated Memorandum and Articles of Association will provide that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Class A ordinary shares sold in the IPO, without the prior consent of the Company.
Sarissa Capital Acquisition Sponsor LLC (the “Sponsor”), and its officers and directors (the “initial shareholders”) have agreed not to propose an amendment to the Amended and Restated Memorandum and Articles of Association that would modify the substance or timing of the Company’s obligation to provide holders of its Public Shares the right to have their shares redeemed in connection with a Business Combination or to redeem 
100% of the Company’s Public Shares if the Company does not complete its Business Combination within 24 months from the closing of the IPO (the “Combination Period”) or with respect to any other provision relating to the rights of Public Shareholders, unless the Company provides the Public Shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.
If the Company has not completed a 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 thanten business days thereafter, redeem the Public Shares, at
a
per-share
price, payable in cash, equal to the aggregate
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amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay for its income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and its board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to consummate a Business Combination within the Combination Period.
The initial shareholders have agreed to waive their liquidation rights with respect to the Founder Shares held by them if the Company fails to complete a Business Combination within the Combination Period. However, if the initial shareholders acquire Public Shares in or after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period.
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
The underwriter has agreed to waive its rights to the deferred underwriting commission (see Note 6) 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 other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution (including Trust Account assets) will be only $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per Public Share due to reductions in the value of the trust assets. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (excluding the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Liquidity and Going Concern
As of March 31,June 30, 2022, the Company held cash outside the Trust Account of $347,384$160,933 available for working capital needs. All remaining cash held in the Trust Account is generally unavailable for the Company’s use, prior to an initial Business Combination, and is restricted for use either in a Business Combination or to redeem ordinary shares. As of March 31,June 30, 2022, none of the amount in the Trust Account was available to be withdrawn as described above.
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In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Update
(“ASU”) 2014-15, “Disclosures
of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until October 23, 2022 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date and an extension not requested by the Sponsor, there will be a mandatory liquidation and subsequent dissolution of the Company. The Company intends to complete a business combination prior to the mandatory liquidation date. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after October 23, 2022.
Through March 31,June 30, 2022, the Company’s liquidity needs were satisfied through receipt of $25,000
from the sale of the Founder Shares and the remaining net proceeds from the IPO and the sale of Private Placement Warrants. The Company anticipates that the $
347,384 $160,933 
held outside of the Trust Account as of March 31,June 30, 2022 and commitment letter from the Sponsor and its members for additional $600,000 funding as needed, will be sufficient to allow the Company to operate for at least the next 12 months from the issuance of the financial statements, assuming that a Business Combination is not consummated during that time. Until consummation of its Business Combination, the Company will be using the funds not held in the Trust Account, and any additional Working Capital Loans (as defined in Note 5) from the initial shareholders, the Company’s officers and directors, or their respective affiliates (which is described in Note 5), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination. The Company has obtained a commitment letter from the Sponsor and its members for additional $600,000 funding as needed.
Based upon the above, the Company does not believe it will need to raise additional funds in excess of funds available and committed by the Sponsor in order to meet the expenditures required for operating its business for the period until consummation of its Business
Combination.
In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until October 23, 2022, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date and an extension not requested by the Sponsor, there will be a mandatory liquidation and subsequent dissolution of the Company. The Company intends to complete a Business Combination prior to the mandatory liquidation date. The date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a growing concern through the liquidation date of October 23, 2022. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after October 23, 2022.
Risks and Uncertainties
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the
“COVID-19(the “COVID-19
outbreak”). In March 2020, the WHO classified
the
COVID-19
outbreak as a pandemic based on the rapid increase in exposure globally. The full impact of
the
COVID-19
outbreak continues to evolve. The impact of
the
COVID-19
outbreak on the Company’s financial position will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of
the
COVID-19
outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s financial position may be materially adversely affected. Additionally, the Company’s ability to complete an initial business combinationBusiness Combination may be materially adversely affected due to significant governmental measures being implemented to contain
the
COVID-19
outbreak or treat its impact, including travel restrictions, the shutdown of businesses and quarantines, among others, which may limit the Company’s ability to have meetings with potential investors or affect the ability of a potential target company’s personnel, vendors and service providers to negotiate and consummate an initial business combinationBusiness Combination in a timely manner. The Company’s ability to consummate an initial business combinationBusiness Combination may also be dependent on the ability to raise additional equity and debt financing, which may be impacted
by
the COVID-19
outbreak and the resulting market downturn.
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy is not determinable as of the date of these unaudited condensed financial statements and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these unaudited condensed financial statements.
Emerging Growth Company Status
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”), 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, 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 Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
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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 which is neither an emerging growth company nor an emerging growth company which has opted out of using the
extended
transition period difficult or impossible because of the potential differences in accounting standards used.
Note 2 — Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report
on
Form 10-K10-K/A as
filed with the SEC on March 31,April 1, 2022. The interim results for the periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any future interim periods.
Use of Estimates
The preparation of 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 warrant liabilities at the date of the 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 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. One of the more significant accounting estimates included in these unaudited condensed financial statements is the determination of the fair value of the warrant liabilities. Such estimates may be subject to change as more current information becomes available and 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. At March 31,June 30, 2022 and December 31, 2021, the Company had $347,384$160,933 and $512,884 in cash, respectively, and no cash equivalents.
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Marketable Securities Held in Trust Account
At March 31,June 30, 2022 and December 31, 2021, the Trust Account had $200,030,402$200,309,576 and $200,014,811 held in marketable securities, respectively. The Company’s portfolio of investments held in the Trust Account is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185
days or less, investments in money market funds that invest in U.S. government securities, cash, or a combination thereof. Gains and losses resulting from the change in fair value of these securities are included in interest income on marketable securities held in Trust Account in the accompanying unaudited condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
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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 $250,000.
As of March 31,June 30, 2022 and December 31, 2021, the Company had not experienced losses on this account.
Income Taxes
The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which 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. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31,June 30, 2022 and December 31, 2021, there were 0
 
0
unrecognized tax benefits and 0
 
0
amounts were accrued for the payment of 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 subject to income tax examinations by major taxing authorities since inception. There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s unaudited condensed financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Net Income (Loss) per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. The Company applies the
the two-class
method
in calculating earnings per share. The contractual formula utilized to calculate the redemption amount approximates fair value. The Class feature to redeem at fair value means that there is effectively only one class of stock. Changes in fair value are not considered a dividend of the purposes of the numerator in the earnings per share calculation. Net income (loss) per ordinary share is computed by dividing the pro rata net income (loss) between the Class A ordinary shares and the Class B ordinary shares by the weighted average number of ordinary shares outstanding for each of the periods. The calculation of diluted income (loss) per ordinary share does not consider the effect of the warrants issued in connection with the IPO since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
        
  
For the Three Months Ended
March 31, 2022
   
For the Three Months Ended
March 31, 2021
   
For the Three Months

Ended June 30, 2022
   
For the Three Months

Ended June 30, 2021
 
  
Class A
   
Class B
   
Class A
   
Class B
   
Class A
   
Class B
   
Class A
   
Class B
 
Basic and diluted net income per share:
                        
Numerator:                        
Allocation of net income  $4,861,732   $1,215,433   $11,275,706   $2,818,926   $2,349,518   $587,380   $1,330,171   $332,543 
Denominator:                        
Weighted-average shares outstanding   20,000,000    5,000,000    20,000,000    5,000,000    20,000,000    5,000,000    20,000,000    5,000,000 
                
Basic and diluted net income per share  $0.24   $0.24   $0.56   $0.56   $0.12   $0.12   $0.07   $0.07 
                
   
For the Six Months

Ended June 30, 2022
   
For the Six Months

Ended June 30, 2021
 
   
Class A
   
Class B
   
Class A
   
Class B
 
Basic and diluted net income per share:
                    
Numerator:                    
Allocation of net income  $7,211,250   $1,802,812   $12,605,877   $3,151,469 
Denominator:                    
Weighted-average shares outstanding   20,000,000    5,000,000    20,000,000    5,000,000 
                     
Basic and diluted net income per share
  $0.36   $0.36   $0.63   $0.63 
                     
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Warrant Liabilities
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
480
and ASC 815-15. The classification
of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. The Company accounts for its 10,666,667
ordinary share warrants issued in connection with its IPO
(6,666,667) and Private Placement (4,000,000) as derivative warrant liabilities in accordance
with
ASC 815-40.
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s unaudited condensed statementstatements of operations. At March 31,June 30, 2022 and December 31, 2021, the Company used the quoted share price in the active market to value the Public Warrants and a Modified Black Scholes to value the Private Placement Warrants with changes in fair value charged to the unaudited condensed statements of operations.
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares 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, ordinary shares are classified as shareholders’ equity.deficit. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, as of March 31,June 30, 2022 and December 31, 2021, 
20,000,000
shares of Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equitydeficit section of the Company’s condensed balance sheets.
At March 31,As of June 30, 2022 and December 31, 2021, the Class A ordinary shares reflected in the condensed balance sheets are reconciled in the following table:
     
Gross Proceeds  $200,000,000 
Less: Proceeds allocated to Public Warrants   (8,132,480) 
Less: Issuance costs related to Class A ordinary shares   (11,113,697) 
Plus: Accretion of carrying value to redemption value   19,246,177 
      
Class A ordinary shares subject to possible redemption  $200,000,000 
 
 
 
 
 
Gross Proceeds  $200,000,000 
Less: Proceeds allocated to Public Warrants   (8,132,480) 
Less: Issuance costs related to Class A ordinary shares   (11,113,697) 
Plus: Accretion of carrying value to redemption value   19,246,177 
      
Class A ordinary shares subject to possible redemption as of December 31, 2021
  
$
200,000,000
 
Plus: Accretion of carrying value to redemption value   309,576 
      
Class A ordinary shares subject to possible redemption as of June 30, 2022
  
$
200,309,576
 
      
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheets, other than derivative warrant liabilities (see Note 9).
Recent Accounting Standards
In August 2020, the FASB
issued
ASU 2020-06, Debt – “Debt
with Conversion and Other
Options
(Subtopic (Subtopic 470-20) and
Derivatives and Hedging – Contracts in Entity’s Own Equity
(SubtopicEquity (Subtopic 815-40)” (“ASU 2020-06”), to
simplify accounting for certain financial
instruments.
ASU 2020-06 eliminates
the current models that require
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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 January 1, 2024, for smaller reporting companies and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any,
that
ASU 2020-06 would
have on its financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
Note 3—Initial Public Offering
On October 23, 2020, the Company sold 20,000,000 Units at a price of $10.00 per Unit, including the issuance of 2,500,000 Units as a result of the underwriter’s partial exercise of its over-allotment option. Each Unit consists of one share of Class A ordinary shares, par value
$0.0001 $0.0001 per share and
one-third
of one redeemable
warrant (each, a “Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A ordinary shares at a price of $11.50 per share, subject to adjustment (see Note 7). The Company paid an underwriting discount at the closing of the IPO of $4,000,000.
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Note 4—Private Placement
Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of 3,333,333
Sponsor Private Placement Warrants and the underwriter purchased an aggregate of 
666,667
Cantor Private Placement Warrants, at a price of $
1.50$1.50 per unit, for an aggregate purchase price of $6,000,000. A
portion of the proceeds from the Private Placement Warrants were added to the net proceeds from the IPO held in the Trust Account. Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at $
11.50$11.50 per share.
Each Private Placement Warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $
11.50
per share. The Private Placement Warrants are identical to the warrants being sold as part of the units in IPO, subject to certain limited exceptions. If the Company does not consummate an initial Business Combination within 
24
months from the closing of this offering, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Company’s public shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. The Private Placement Warrants will be
non-redeemable
and exercisable on a cashless basis so long as they are held by the Sponsor, underwriter or their permitted transferees. If the Private Placement Warrants are held by holders other than the Sponsor, underwriter or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the Units being sold in this offering. In addition, for as long as the Private Placement Warrants are held by underwriter or its designees or affiliates, they may not be exercised after five years from the effective date of the registration statement.
Note 5—Related Party Transactions
Founder Shares
On August 13, 2020, Sarissa Capital Acquisition Sponsor LLC, the Company’s sponsor (the “Sponsor”) paid $
25,000$25,000 to cover certain offering costs and formation costs of the Company in consideration for 5,031,250
Class B ordinary shares, par value $
0.0001
(the “Founder Shares”). The Sponsor had agreed to forfeit up to 
656,250
Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriter. On October 23, 2020,23,2020, the underwriter partially exercised its over-allotment option, hence,
625,000
Founder Shares were no longer subject to forfeiture, and 
31,250 Founder Shares were forfeited, resulting in an aggregate of 5,000,000 Founders Shares issued and outstanding, so that the number of shares of Class B ordinary shares collectively equaled 20% of the Company’s issued and outstanding ordinary shares after the IPO.
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The initial shareholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of
(A) one year after the completion of the initial Business Combination and (B) subsequent to the initial Business Combination, (x) if the closing price of the Company’s Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within
any
30-trading day
period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Promissory Note—Related Party
On August 14, 2020, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover for expenses related to the IPO pursuant to a promissory note (the “Note”).
The
Note was non-interest bearing and
payable on the earlier of March 31, 2021, and the completion of the IPO. This note was repaid on October 23, 2020, and the promissory note is 0
longer available to the Company.
Administrative Service Fee
The Company entered into an agreement whereby, commencing on October 23, 2020, through the earlier of the Company’s consummation of a Business Combination and its liquidation, the Company will pay an affiliate of the Sponsor a total of $10,000 per month for office space, administrative and support services. For the three and six months ended March 31,June 30, 2022, the Company had incurred $30,000 and March 31,$60,000 of administrative fees, respectively. For the three and six months ended June 30, 2021, the Company had incurred $30,000 and $60,000 of administrative fees, of which fee is included in accrued liabilities as of March 31, 2022 on the condensed consolidated balance sheet.
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
respectively.
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the 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. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. As of March 31,June 30, 2022 and December 31, 2021, the Company had 0outstanding0 outstanding borrowings under the Working Capital Loans.
Note 6—Commitments and Contingencies
Registration Rights
The holders of Founder Shares, Private Placement Warrants, Class A ordinary shares underlying the Private Placement Warrants and warrants that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of working capital loans), will be entitled to registration rights pursuant to a registration and shareholder rights agreement that was signed upon consummation of the IPO. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of its Business Combination. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until
termination
of the applicable lock-up period, which occurs(i) in
the case of the Founder Shares, in accordance with the letter agreement the Company’s initial shareholders entered into and (ii) in the case of the Private Placement
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Warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of the Company’s Business Combination and, for as long as the Private Placement Warrants are held by the underwriter or its designees or
affiliates,
the lock-up and registration
rights limitations imposed by FINRA Rule 5110 and five years from the effective date of the registration statement for the Company’s IPO which was declared effective by the SEC on the Effective Date. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriters Agreement
On October 23, 2020, the underwriter was paid an underwriting discount of two percent
(2.0%) of the gross proceeds of the IPO, or $4,000,000.
The underwriter is entitled to an underwriting discount of $
0.35$0.35 per unit payable to Cantor Fitzgerald for deferred underwriting commissions. The deferred fee of $7,000,000 will become payable to Cantor Fitzgerald from the amounts held in the Trust Account solely in the event that the Company completes an initial Business Combination, subject to the terms of the underwriting agreement.
Note 7—Shareholders’ Deficit
Preference Shares
—
Shares—
The Company is authorized to issue 1,000,000 preference shares with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of March 31,June 30, 2022 and December 31, 2021, there were 0preference0 preference shares issued or outstanding.
Class
 A Ordinary Shares—
The Company is authorized to issue a total of 200,000,000 shares of Class A ordinary shares at par value of $0.0001 each. At March 31,June 30, 2022 and December 31, 2021, there were 20,000,000 shares issued and outstanding. All Class A ordinary shares subject to possible redemption have been classified as temporary equity (see Note 2).
Class
 B Ordinary Shares—
The Company is authorized to issue a total of 20,000,000 shares of Class B ordinary shares at par value of $0.0001 each. At March 31,June 30, 2022 and December 31, 2021, there were 5,000,000 shares of Class B ordinary shares issued and outstanding.
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Holders of the Class A ordinary shares and holders of the Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders, except as required by law or stock exchange rule; provided that only holders of the Class B ordinary shares have the right to vote on the appointment of the Company’s directors prior to the initial Business Combination and holders of a majority of the Company’s Class B ordinary shares may remove a member of the board of directors for any reason. The Class B ordinary shares will automatically convert into Class A ordinary shares on the first business day following the consummation of the initial Business Combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an
as-converted
basis, 
20
%20% of
the sum of (i) the total number of ordinary shares issued and outstanding upon the consummation of the IPO, plus (ii) the sum of the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor, members of the Company’s management team or any of their affiliates upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of
of less than one-to-one.
Note 8—Warrants
At March 31,June 30, 2022 and December 31, 2021, there were 6,666,667 Public Warrants and 4,000,000 Private Placement Warrants outstanding.
Public Warrants may only be exercised for a whole number of shares. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the IPO. The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, the Company will use its commercially reasonable efforts to file with the SEC a
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registration statement covering the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement.
If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of the initial Business Combination (except pursuant to limited exceptions to the Company’s officers and directors and other persons or entities affiliated with the initial purchasers of the Private Placement Warrants) and they will not be redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. The Sponsor, or its permitted transferees, has the option to exercise the Private Placement Warrants on a cashless basis. Except as described below, the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.
Redemption of warrants for cash.
Once the warrants become exercisable, the Company may redeem the Public Warrants for cash (except with respect to the Private Placement Warrants):
 
in whole and not in part;
 
at a price of $0.01 per warrant;
 
upon a minimum of 30 days’ prior written notice of redemption; and
 
if, and only if, the last reported sales price (the “closing price”) of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading
days
within a 30-trading day
0 period
ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, as described above, management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.
If the Company has not completed the initial Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
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The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the closing of the IPO. Accordingly, the Company has classified each warrant as a liability at its fair value and the warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value determined by the Monte Carlo simulation to value the public warrantsPublic Warrants and Modified Black Scholes to value the private warrantsPrivate Warrants with changes in fair value charged to the unaudited condensed statementstatements of operations. This liability is subject
to
re-measurement
at each balance sheet date. With each
such
re-measurement,
the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s unaudited condensed statements of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification. As such, the Company recorded
 $13,067,756 of warrant liability upon issuance as of October 23, 2020. For the
three and six months
ended
March
 31, June 30, 2022, the Company recorded a change in the fair value of the warrant liabilities in the amount of $2,822,933 and $9,081,866, respectively, on the unaudited condensed statements of operations, resulting in warrant liabilities of $1,085,867 as of June 30, 2022, on the condensed balance sheets. For the three and six months ended June 30, 2021, the Company recorded a change in the fair value of the warrant liabilities in the amount of $14,221,327$1,805,147 and $16,026,474, respectively, on the statements of operations, resulting in warrant liabilities of $16,114,857 as of
Ma
rch
 31, 2021 on the condensed balance sheet. For the three months ended March 31, 2022, the Company recorded a change in the fair value of the warrant liabilities in the amount of $6,258,933 on theunaudited condensed statements of operations, resulting in warrant liabilities of $3,908,800$14,309,710 as of March 31, 2022June 30, 2021, on the condensed balance sheet.sheets.
Note 9—Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These
tiers
consist of:
 
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
 
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
 
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
As of March 31,June 30, 2022, marketable securities held in the Company’s Trust Account consisted of a treasury securities fund in the amount of $200,030,402.$200,309,576. As of December 31, 2021, marketable securities held in the Company’s Trust Account consisted of a treasury securities fund in the amount of $200,014,811.
The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31,June 30, 2022 and December 31, 2021 and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
 
                 
   
March 31,

2022
   
Quoted

Prices In

Active

Markets

(Level 1)
   
Significant

Other

Observable

Inputs
(Level 2)
   
Significant

Other

Unobservable

Inputs

(Level 3)
 
Description                    
Assets:                    
Marketable Securities held in Trust Account  $200,030,402   $200,030,402   $—     $—   
Liabilities:                    
Warrant Liability – Public Warrants  $2,398,000   $2,398,000   $—     $—   
Warrant Liability – Private Warrants  $1,510,800   $—     $—     $1,510,800 
   
June 30,

2022
   
Quoted

Prices In

Active

Markets

(Level 1)
   
Significant

Other

Observable

Inputs
(Level 2)
   
Significant

Other

Unobservable

Inputs

(Level 3)
 
Description
                    
Assets:
                    
Marketable Securities held in Trust Account  $200,309,576   $200,309,576   $—     $—   
Liabilities:                    
Warrant Liability – Public Warrants  $666,667   $—     $666,667   $—   
Warrant Liability – Private Warrants  $419,200   $—     $—     $419,200 
 
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
   
December 31,
2021
   
Quoted

Prices In

Active

Markets

(Level 1)
   
Significant

Other

Observable

Inputs
(Level 2)
   
Significant

Other

Unobservable

Inputs

(Level 3)
 
Description                    
Assets:                    
Marketable Securities held in Trust Account  $200,014,811   $200,014,811   $—     $—   
Liabilities:                    
Warrant Liability – Public Warrants  $6,333,333   $6,333,333   $—     $—   
Warrant Liability – Private Warrants  $3,834,400   $—     $—     $3,834,400 
There were 0 transfers between LevelsThe estimated fair value of the Public Warrants transferred from a Level 1 measurement to a Level 2 or 3fair value measurement during the three and six months ended March 31,June 30, 2022 and March 31, 2021.was $666,667. At March 31,June 30, 2022 and December 31, 2021, the Company used the quoted share price in the active market to value the public warrantsPublic Warrants and a Modified Black Scholes to value the private warrantsPrivate Warrants with changes in fair value charged to the unaudited condensed statements of operations. The estimated fair value of the private warrantPrivate Warrant liability is determined using Level 3 inputs. If factors or assumptions change, the estimated fair values could be materially different. Inherent in a Modified Black Scholes pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield.
The Company estimates the implied volatility of its ordinary shares based on historical volatility that matches the expected remaining lifetrading price of the warrants and volatilities from selected publicly traded SPACs. Public Warrants as of the valuation date.
The risk-free interest rate is based on the
U.S.
Treasury zero-coupon yield curve
on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remainremaining at zero.
The following table provides quantitative
information
regarding Level 3 fair value measurements:
 
    
  
As of March 31,
2022
 
As of
December 31,
2021
   
As of June
30,
2022
 
As of
December 31,
2021
 
Share price  $              9.90  $              9.79   $ 9.89  $ 9.79 
Strike price  $11.50  $11.50   $11.50  $11.50 
Term (in years)   5.28   5.41    5.16   5.41 
Volatility   5.2%   14.5%    0.90%   14.5% 
Risk-free rate   2.42%   1.30%    3.01%   1.30% 
Dividend yield   0.0%   0.0%    0.0%   0.0% 
The primary significant unobservable input used in the fair value measurement of the Company’s private warrantsPrivate Warrants is the expected volatility of the ordinary shares. Significant increases (decreases) in the expected volatility in isolation would result in a significantly higher (lower) fair value measurement.
The following table provides a reconciliation of changes in fair value of the beginning and ending balances for the Company’s assets and liabilities classified as Level 3:
Fair Value at December 31,
2021
  $3,834,400 
Change in fair value   (2,323,600) 
      
Fair Value at March 31, 2022  $1,510,800 
Change in fair value   (1,091,600) 
      
Fair Value at June 30, 2022
  $419,200 
      
19
     
   
Warrant

Liabilities
 
Fair Value at December 31, 2021  $3,834,400 
Change in fair value   (2,323,600) 
      
Fair Value at March 31, 2022  $1,510,800 
 
 
 
 
 
Fair Value at December 31, 2020  $12,002,850 
Change in fair value   (5,887,993) 
      
Fair Value at March 31, 2021  $6,114,857 
 
 
 
 
 
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Fair Value at December 31, 2020  $12,002,850 
Change in fair value   (5,887,993) 
      
Fair Value at March 31,
2021
  $6,114,857 
Change in fair value   (671,814) 
      
Fair Value at June 30, 2021
  $5,443,043 
      
Note 10—Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date through the date that the unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.
On July 18, 2022, the Company announced that Eric Vincent, the Company’s President, stepped down from his role effective July 12, 2022, in order to pursue other interests. Mr. Vincent’s departure is not the result of any disagreement between the Company and Mr. Vincent on any matter relating to the Company’s operations, policies, or practices.
 
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Item 2. Management’s Discussion and Analysis or Financial Condition and ResolutionsResults of Operations
References to “we”, “us”, “our” or the “Company” are to Sarissa Capital Acquisition Corp., except where the context requires otherwise. The following discussion should be read in conjunction with our unaudited condensed financial statements and related notes thereto included elsewhere in this report.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly
Report
on Form 10-Q includes forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings.
Overview
We are a newly incorporated blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, capital share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to as our initial business combination. The Company’sBusiness Combination. Our IPO was declared effective by the SEC on October 20, 2020. On October 23, 2020, the Companywe consummated the IPO of 20,000,000 units (the “Units”), including the issuance of 2,500,000 Units as a result of the underwriter’s partial exercise of its over-allotment option. Each Unit consists of one Class A ordinary
share,
$0.0001 $0.0001 par value, and one-third of one redeemable warrant
entitling its holder to purchase one Class A ordinary share at a price of $11.50 per share. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $200,000,000.
Simultaneously with the closing of the IPO, the Companywe consummated the private placement (“Sponsor Private Placement”) with the Sponsor of an aggregate of 3,333,333 warrants (“Sponsor Private Warrants”), each at a price of $1.50 per Sponsor Private Warrant, generating total proceeds of $5,000,000 and with the underwriter of an aggregate of 666,667 warrants (the “Cantor Private Warrants” and together with Sponsor Private Warrants, “Private Warrants”), each at a price of $1.50 per Cantor Private Warrant, generating total proceeds of $1,000,000. We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combinationBusiness Combination will be successful.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities, those necessary to prepare for our initial public offering and identifying a target company for our initial business combination.Business Combination. We do not expect to generate any operating revenues until after completion of our initial business combination.Business Combination.
We generate non-operating income in the
form of interest income on cash and cash equivalents held in the trust account.Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective business combinationBusiness Combination candidates.
For the three months ended March 31,June 30, 2022, we had a net income of $6,077,164. We incurred $197,360$2,936,898 which consisted of formationinterest income on marketable securities held in the Trust Account of $279,174 and operating costs, consisting mostly of general and administrative expenses. The Company also recorded a change in fair value of warrant liabilities of $6,258,933$2,822,933, offset by the formation and interest incomeoperating costs of $15,591 earned form the Trust Account.$165,209.
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For the threesix months ended March 31, 2021,June 30, 2022, we had a net income of $14,094,632. We incurred $129,468$9,014,062 which consisted of formationinterest income on marketable securities held in the Trust Account of $294,765 and operating costs (not charged against shareholders’ equity), consisting mostly of general and administrative expenses. The Company also recorded a change in fair value of warrant liabilities of $14,221,327$9,081,866, offset by the formation and operating costs of $362,569.
For the three months ended June 30, 2021, we had a net income of $1,662,714 which consisted of interest income of $2,773 earned fromon marketable securities held in the Trust Account.
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TableAccount of Contents
$3,273 and change in fair value of warrant liabilities of $1,805,147, offset by the formation and operating costs of $145,706.
SARISSA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
For the six months ended June 30, 2021, we had a net income of $15,757,346 which consisted of interest income on marketable securities held in the Trust Account of $6,046 and change in fair value of warrant liabilities of $16,026,474, offset by the formation and operating costs of $275,174.
Going Concern
In connection with the Company’sour assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”)
2014-15,
“Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company haswe have until October 23, 2022, to consummate a Business Combination. It is uncertain that the Companywe will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date and an extension not requested by the Sponsor, there will be a mandatory liquidation and subsequent dissolution of us. The Company intends to complete a business combination prior to the Company.mandatory liquidation date. The date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern through the liquidation date of October 23, 2022. No adjustments have been made to the carrying amounts of assets or liabilities should the Companywe be required to liquidate after October 23, 2022.
Liquidity and Capital Resources
As of March 31,June 30, 2022, we had cash outside the trust accountTrust Account of $347,384$160,933 available for working capital needs. All remaining cash held in the Trust Account is generally unavailable for the Company’sour use, prior to an initial Business Combination, and is restricted for use either in a Business Combination or to redeem ordinary shares. As of March 31,June 30, 2022, none of the amount in the trust accountTrust Account was available to be withdrawn as described above. Through March 31,June 30, 2022, the Company’sour liquidity needs were satisfied through receipt of $25,000 from the sale of the Founder Shares and the remaining net proceeds from the IPO and the sale of private placement units.
The Company anticipatesWe anticipate that the $347,384$160,933 outside of the trust accountTrust Account as of March 31,June 30, 2022 and commitment letter from Sponsor and its members for $600,000, will be sufficient to allow the Companyus to operate for at least the next 12 months, assuming that a Business Combination is not consummated during that time. Until consummation of our Business Combination, the Companywe will be using the funds not held in the Trust Account, and any additional Working Capital Loans (as defined in Note 5 to our unaudited condensed financial statements) from the initial shareholders, the Company’sour officers and directors, or their respective affiliates (which is described in Note 5 to our unaudited condensed financial statements), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination.Business Combination.
The Company doesWe do not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the Company’sour estimates of
the
costs of undertaking in-depth due diligence and
negotiating a Business Combination is less than the actual amount necessary to do so, the Companywe may have insufficient funds available to operate its business prior to the Business Combination. Moreover, the Companywe will need to raise additional capital through loans from itsthe Sponsor, officers, directors, or third parties beyond this commitment, although the Company haswe have obtained a commitment letter from its sponsorthe Sponsor for an additional $600,000 in funding. If the Company iswe are unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The CompanyWe cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
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Off-Balance Sheet
Arrangements
We have no obligations, assets or liabilities, which
would
be considered off-balance sheet arrangements
as of MarchJune 30, 2022 and December 31, 2022.2021. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the
purpose
of facilitating off-balance sheet arrangements.
We have not
entered
into any off-balance sheet financing
arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities,
or
purchased any non-financial assets.
Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of our Sponsor a monthly fee of $10,000 for office space, utilities and administrative support provided to the Company.us. We began incurring these fees on October 23, 2020 and will continue to incur these fees monthly until the earlier of the completion of the initial Business Combination and the Company’sour liquidation.
The underwriter is entitled to deferred commissions of $0.35 per unit of the gross proceeds from the Units sold in the IPO, or $7,000,000 in the aggregate. The deferred commissions will become payable to the underwritersunderwriter from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Critical Accounting Policies and Estimates
Management’s discussion and analysis of our results of operations and liquidity and capital resources are based on our financial information. We describe our significant accounting policies in Note 2—Summary of Significant Accounting Policies, of the Notes to Condensed Financial Statements included in this report. Our unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain of our accounting policies require that management apply significant judgments in defining the appropriate assumptions integral to financial estimates. On an ongoing basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our unaudited condensed financial statements are presented fairly and in accordance with GAAP. Judgments are based on historical experience, terms of existing contracts, industry trends and information available from outside sources, as appropriate. However, by their nature, judgments are subject to an inherent degree of uncertainty, and, therefore, actual results could differ from our estimates.
Emerging Growth Company
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to 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, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of
holding
a non-binding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our 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 480 and ASC 815
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15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. We account for our 10,666,667 ordinary shares warrants issued in connection with our IPO (6,666,667) and Private Placement (4,000,000) as derivative warrant liabilities in accordance
with
ASC 815-40. Accordingly,
we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recognized in our statementunaudited condensed statements of operations. At March 31,June 30, 2022 and December 31, 2021, we used the quoted share price in the active market to value the public warrantsPublic Warrants and a Modified Black Scholes to value the private warrantsPrivate Warrants with changes in fair value charged to the statementunaudited condensed statements of operations.
Class A Ordinary Shares Subject to Possible Redemption
We account for our Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares 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 our control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity.deficit. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as of March 31,June 30, 2022 and December 31, 2021, 20,000,000 shares of Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equitydeficit section of our condensed balance sheets.
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SARISSA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Recent Accounting Standards
In August 2020, the FASB issued Accounting Standards
Update
(“ASU”) 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 accounting for 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 January 1, 2024, for smaller reporting companies and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company isWe are currently assessing the impact, if any,
that
ASU 2020-06 would
have on its financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’sour financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of the period ended March 31,June 30, 2022, we were not subject to any market or interest rate risk. Following the consummation of our IPO, the net proceeds of our IPO, including amounts deposited in the trust account,Trust Account, may be invested in U.S. government treasury bills, notes or bonds with a maturity of 185 days or less, or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk when and if the net proceeds are invested in such securities.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal period ended March 31,June 30, 2022, as such term is defined in Rules
Rules 13a-15(e) and 15d-15(e) under
the Exchange Act. Based on this evaluation, our chief executive officer and chief financial officer have concluded that during the period covered by this report, our disclosure controls and procedures were not effective, due to the material weakness in our internal control over financial reporting related to the Company’s accounting for complex financial instruments. As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this
Form
10-Q
present fairly in all material respects our financial position, results of operations and cash flows for the period presented.
Management has implemented remediation steps to improve our internal control over financial reporting. Specifically, we expanded and improved our review process for complex and related accounting standards. We plan to further improve this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications and consideration of additional staff with the requisite experience and training to supplement existing accounting professionals.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
We have commenced our remediation efforts in connection with the identification of the material weakness discussed above and have taken the following steps during the quarter ended March 31,June 30, 2022:
 
We have implemented procedures intended to ensure that we identify and apply the applicable accounting guidance to all complex transactions.
 
We are establishing additional monitoring and oversight controls designed to ensure the accuracy and completeness of our consolidated financial statements and disclosures.
Other than the changes discussed above, there have been no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
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PART II—OTHER INFORMATION
Item 1. Legal ProceedingsProceedings.
None.
Item 1A. Risk Factors.
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report
on
Form 10-K10-K/A for the
year ended December 31, 2021, as amended, filed with the SEC on March 31,April 1, 2022. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Annual Report filed with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The registration statement for the initial public offering (the “Initial Public Offering”“IPO”) was declared effective on October 20, 2020. On October 23, 2020, we consummated an Initial Public Offering of 20,000,000 units (the “Units”), including the issuance of 2,500,000 Units as a result of the underwriter’s partial exercise of its over-allotment option, at an offering price of $10.00 per Unit, generating gross proceeds of approximately $200.0 million, and incurring offering costs of approximately $11.6 million, inclusive of $7.0 million in deferred underwriting commissions.
Simultaneously with the closing of the Initial Public Offering,IPO, we consummated a private placement with the Sponsor of 3,333,333 warrants (the “Sponsor Private Warrants”), each at a price of $1.50 per Sponsor Private Warrant, generating total proceeds of $5,000,000 and a private placement with the underwriter of an aggregate of 666,667 warrants (the “Cantor Private Warrants” and together with the Sponsor Private Warrants, the “Private Warrants”), each at a price of $1.50 per Cantor Private Warrant, generating total proceeds of $1,000,000.
Upon the closing of the Initial Public OfferingIPO and the private placement of the Private Warrants (the “Private Placement”) (including the exercise of the over-allotment), $200.0 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial Public OfferingIPO and the Private Placement were placed in a trust account (“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and held as cash or invested only in U.S. “government securities,” within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in money market funds meeting certain conditions under the Investment Company Act, which invest only in direct U.S. government treasury obligations, as determined by us, until the earlier of (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described above.
We paid a total of $4.0 million in underwriting discounts and commissions (not including the $7.0 million deferred underwriting commission payable at the consummation of the initial Business Combination) and approximately $0.6 million for other costs and expenses related to our formation and the Initial Public Offering.IPO.
For a description of the use of the proceeds generated in our Initial Public Offering,IPO, see Part I, Item 2 of
this
Form 10-Q.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
 
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Item 6. Exhibits.
 
Exhibit
Number
  
Description
31.1*  Certification of Chief Executive Officer and Chairman (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*  Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*  Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*  Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS  Inline XBRL Instance Document
101.SCH  Inline XBRL Taxonomy Extension Schema Document
101.CAL  Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF  Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB  Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE  Inline XBRL Taxonomy Extension Presentation Linkbase Document
104  Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
 
*
These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
 
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PART III—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 hereunto duly authorized.
 
Dated: May 13,August 12, 2022 
SARISSA CAPITAL ACQUISITION CORP.
 By: 
/s/ Alexander Denner
 Name: Alexander Denner
 Title: Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)
Dated: May 13,August 12, 2022 
SARISSA CAPITAL ACQUISITION CORP.
 By: 
/s/ Patrice Bonfiglio
 Name: Patrice Bonfiglio
 Title: Chief Financial Officer (Principal Financial and Accounting Officer)
 
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