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/A 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's IPO was declared effective by the SEC on
October 20, 2020. On October 23, 2020, the Company 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
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 Company 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 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. We do not expect to generate any
operating revenues until after completion of our initial business combination.
We generate non-operating income in
the form of interest income on cash and cash equivalents held in the 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 combination candidates.
For the three months ended September 30, 2021, we had a net income of
$4,380,386. We incurred $164,663 of formation 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 $4,541,976. We had interest income of $3,073 of interest on the
trust account.
For the nine months ended September 30, 2021, we had a net income of
$20,137,732. We incurred $439,837 of formation 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 $20,568,450. We had interest income of $9,119 of interest on the
trust account.

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For the period from August 12, 2020 (inception) to September 30, 2020, we had a
net net loss of $3,793, which consisted entirely of formation and operating
costs.
Going Concern
In connection with the Company's 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 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.
No adjustments have been made to the carrying amounts of assets or liabilities
should the Company be required to liquidate after October 23, 2022.
Liquidity and Capital Resources
As of September 30, 2021, we had cash outside the trust account of $783,757
available for working capital needs. All remaining cash held in the trust
account are 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 September 30, 2021, none of the amount in
the trust account was available to be withdrawn as described above.
Through September 30, 2021, 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 initial public offering and the sale of private placement
units.
The Company anticipates that the $783,757 outside of the trust account as of
September 30, 2021, will be sufficient to allow the Company 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 Company will be using the funds not held in the trust account, and any
additional Working Capital Loans (as defined in Note 6 to our financial
statements) from the initial shareholders, the Company's officers and directors,
or their respective affiliates (which is described in Note 6 to our 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.
The Company does not believe it will need to raise additional funds in order to
meet the expenditures required for operating its business. However, if the
Company's estimates of the costs
of undertaking in-depth due diligence
and negotiating business combination is less than the actual amount necessary to
do so, the Company may have insufficient funds available to operate its business
prior to the business combination. Moreover, the Company will need to raise
additional capital through loans from its sponsor, officers, directors, or third
parties. None of the sponsor, officers or directors are under any obligation to
advance funds to, or to invest in, the Company. If the Company is 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 Company cannot provide any assurance that new financing
will be available to it on commercially acceptable terms, if at all.
Off-Balance Sheet
Arrangements
We have no obligations, assets or liabilities, which would be
considered off-balance sheet
arrangements as of September 30, 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. 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's
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 underwriter 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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Critical Accounting Policies and Estimates
Management's discussion and analysis of our results of operations and liquidity
and capital resources are based on our unaudited financial information. We
describe our significant accounting policies in Note 3 - Summary of Significant
Accounting Policies, of the Notes to Financial Statements included in this
report. Our unaudited 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 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 815-15. 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 statement of
operations. At September 30, 2021 and December 31, 2020, we used the quoted
share price in the active market to value the public warrants and a Modified
Black Scholes to value the private warrants with changes in fair value charged
to the statement 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. 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
September 30, 2021 and December 31, 2020, 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' equity section of our condensed
balance sheets.

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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, 2022 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 financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of the period ended September 30, 2021, 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, 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.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in our reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in
Company reports filed or submitted under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure.
As required
by Rules 13a-15 and 15d-15 under the
Exchange Act, our Chief Executive Officer and Chief Financial Officer carried
out an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures as of September 30, 2021. Based upon their
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures (as defined
in Rules 13a-15 (e)
and 15d-15 (e) under
the Exchange Act) were not effective due to the previous material weakness in
our internal control over financial reporting described. Controls and Procedures
included in our Quarterly Report on Form 10-Q as filed with the SEC on November
15, 2021, and due to the restatements of our March 31, 2021, and June 30, 2021
financial statements (the "restatements") regarding the classification of
redeemable Class A ordinary shares, as described below, which combined,
constitutes a material weakness in our internal control over financial
reporting. The material weakness was caused by the misapplication of accounting
guidance for complex financial instruments. In light of this material weakness,
we performed additional analysis as deemed necessary to ensure that our
unaudited interim financial statements were prepared in accordance with U.S.
generally accepted accounting principles. Accordingly, management believes that
the financial statements included in this Quarterly Report on Form 10-Q/A
present fairly in all material respects our financial position, results of
operations and cash flows for the period presented.
Regarding the restatements to the March 31, 2021 and June 30, 2021 quarterly
financial statements included in the Company's Form 10-Qs as filed with the SEC
on August 12, 2021 and August 23, 2021, respectively, certain redemption
provisions not solely within the control of the Company require ordinary shares
subject to redemption to be classified outside of permanent equity. The Company
had previously classified a portion of the Class A ordinary shares in permanent
equity. The Company restated its financial statements to classify all Class A
ordinary shares as temporary equity and any related impact, as the threshold in
its charter would not change the nature of the underlying shares as redeemable
and thus would be required to be disclosed outside of permanent equity.
It is noted that the non-cash adjustments to the financial statements do not
impact the amounts previously reported for our cash and cash equivalents or
total assets. In light of this material weakness, we performed additional
analysis as deemed necessary to ensure that our unaudited interim financial
statements were prepared in accordance with U.S. generally accepted accounting
principles.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that
occurred during the fiscal quarter ended September 30, 2021 covered by this
Quarterly Report on Form
10-Q/A
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting. In light of the material weakness
described above, we plan to continue to enhance our processes to identify and
appropriately apply applicable accounting requirements to better evaluate and
understand the nuances of the complex accounting standards that apply to our
condensed financial statements, including providing enhanced access to
accounting literature, research materials and documents and increased
communication among our personnel and third-party professionals with whom we
consult regarding complex accounting applications.

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