SARISSA CAPITAL ACQUISITION CORP. References to "we", "us", "our" or the "Company" are to
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 otherSecurities and Exchange Commission ("SEC") filings.
Overview
We are a blank check company incorporated as a
Simultaneously with the closing of the IPO, we 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
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
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For the six months ended
For the three months ended
For the six months ended
Going Concern
In connection with our 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," we have until
Liquidity and Capital Resources
As of
We anticipate that the
We do not believe it will need to raise additional funds in order to meet the
expenditures required for operating its business. However, if our 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, we may have insufficient funds available to operate its business prior to
the Business Combination. Moreover, we will need to raise additional capital
through loans from the Sponsor, officers, directors, or third parties beyond
this commitment, although we have obtained a commitment letter from the Sponsor
for an additional
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Table of Contents Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which
would be considered off-balance sheet arrangements
as of
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
The underwriter is entitled to deferred commissions of
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
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 unaudited condensed statements of operations. At
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' deficit. Our Class A ordinary shares feature
certain redemption rights that are outside of our control and subject to the
occurrence of uncertain future events. Accordingly, as of
Recent Accounting Standards
InAugust 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 effectiveJanuary 1, 2024 , for smaller reporting companies and should be applied on a full or modified retrospective basis, with early adoption permitted beginning onJanuary 1, 2021 . We 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 our financial statements.
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