References in this quarterly report on Form 10-Q (the "Quarterly Report") to "we," "our," "us," and "Company" refer to Science Strategic Acquisition Corp. Alpha. References to our "management" or our "management team" refer to our officers and directors, and references to our "Sponsor" refer to SSAC Alpha Sponsor, LLC. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and variations thereof and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of this Quarterly Report and the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission (the "SEC") on April 12, 2022. Except as expressly required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are a blank check company incorporated as a Delaware corporation on October 22, 2020 for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to as a Business Combination. We completed our initial public offering (our "IPO") on January 28, 2021, which is described below under "-Liquidity and Capital Resources."

While we may pursue a business combination target in any industry, we currently intend to focus our search for a target business in the direct-to-consumer brands, direct-to-consumer-services and mobile and social entertainment sectors. Since completing our IPO, we have reviewed, and continue to review, a number of opportunities to enter into a Business Combination with an operating business, but we are not able to determine at this time whether we will complete a Business Combination with any of the target businesses that we have reviewed or with any other target business. We intend to effectuate a Business Combination using cash from the proceeds of our IPO and the sale of the Private Placement Warrants (as defined below), our capital stock, debt, or a combination of cash, stock and debt.

Results of Operations

For the three months ended June 30, 2022, we had net income of $2.0 million consisting of approximately $2.1 million gain on the change in fair value of warrant liability and $0.2 million unrealized gain on marketable securities held in the Trust Account, partially offset by approximately $0.3 million in general and administrative expenses. For the three months ended June 30, 2021, we had net loss of $4.2 million consisting of approximately $4.0 million loss on the change in fair value of warrant liability and $0.2 million of general and administrative expenses.

For the six months ended June 30, 2022, we had net income of $6.7 million consisting of approximately $7.1 million gain on the change in fair value of warrant liability and $0.2 million unrealized gain on marketable securities held in the Trust Account, partially offset by approximately $0.7 million in general and administrative expenses. For the six months ended June 30, 2021, we had net loss of $2.6 million consisting of approximately $1.9 million loss on the change in fair value of warrant liability and $0.7 million of general and administrative expenses.



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Our business activities during the three and six months ended June 30, 2022 consisted primarily of identifying and evaluating prospective acquisition candidates for a Business Combination. We believe that we have access to additional funds from the Sponsor that, together with cash held outside the Trust Account (as defined below), are sufficient to effect a Business Combination with an operating business by January 28, 2023. Additionally, we have raised $750,000 of additional cash through the Working Capital Loan (as defined below). However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. There is no assurance that our plans to consummate a Business Combination or raise additional funds will be successful.

We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence and other expenses in connection with searching for a target and completing a Business Combination.

Liquidity and Capital Resources

As of June 30, 2022, we had approximately $0.5 million in our operating bank account, and working capital deficit of approximately $1.4 million.

Our liquidity needs up to the completion of our IPO on January 28, 2021 had been satisfied through a payment from our Sponsor of $25,000 for 7,762,500 shares (the "Founder Shares") of our Class B common stock and a loan of $300,000 from our Sponsor, which was repaid on February 2, 2021.

On January 28, 2021, we consummated our IPO of 31,050,000 units (the "Units"), including the issuance of 4,050,000 Units as a result of the underwriter's full exercise of its over-allotment option. Each Unit consists of one share of our Class A common stock and one-third of one warrant of the Company, with each whole warrant entitling the holder thereof to purchase one whole share of Class A common stock at a price of $11.50 per share, subject to certain adjustments. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $310,500,000. Simultaneously with the closing of our IPO, we completed the private sale of an aggregate of 5,473,333 private placement warrants (the "Private Placement Warrants") to our Sponsor at a purchase price of $1.50 per Private Placement Warrant, generating gross proceeds to us of $8,210,000.

A total of $310,500,000, comprised of the net proceeds of the IPO and the sale of the Private Placement Warrants, was placed in a U.S.-based trust account (the "Trust Account") at JP Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee. Transaction costs for the IPO and the sale of the Private Placement Warrants amounted to $17,495,500 consisting of $6,210,000 of underwriting fees, $10,867,500 of deferred underwriting fees and $418,000 of other offering costs. In addition, as of June 30, 2022, approximately $0.5 million of cash was held outside of the Trust Account and is available for working capital purposes.

As of June 30, 2022, we had marketable securities held in the Trust Account of $310,780,579 consisting of U.S. Treasury Bills with a maturity of 180 days or less. Interest income on the balance in the Trust Account may be used by us to pay taxes.

For the six months ended June 30, 2022, cash used in operating activities was $0.6 million. Net income of $6.7 million was affected by a gain on the change in fair value of our warrant liability of $7.1 million and unrealized gain on marketable securities held in the Trust Account of $0.2 million. Changes in operating assets and liabilities provided $0.1 million of cash for operating activities.

For the six months ended June 30, 2021, cash used in operating activities was $0.9 million. Net loss of $2.6 million was affected by a loss on the change in fair value of our warrant liability of $1.9 million, and unrealized gain on marketable securities held in the Trust Account of less than $0.1 million, and a non-cash warrant issuance cost of $0.4 million. Changes in operating assets and liabilities used $0.6 million of cash for operating activities.

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, which interest shall be net of taxes payable and excluding deferred underwriting commissions, to complete our Business Combination. We may make permitted withdrawals from the Trust Account to pay our taxes, including franchise taxes and income taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination,


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the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

We intend to use funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination, and to pay taxes to the extent the interest earned on the Trust Account is not sufficient to pay our taxes.

On May 27, 2022, we issued an unsecured promissory note to our Sponsor, pursuant to which our Sponsor may provide up to $750,000 to us as a working capital loan (the "Working Capital Loan"). The Working Capital Loan does not bear interest and is repayable in full on the earlier of (i) the consummation of the Company's initial Business Combination or (ii) end of the Business Combination period. Upon the consummation of a Business Combination, our Sponsor shall have the option, but not the obligation, to convert the principal balance of the Working Capital Loan, in whole or in part, into warrants at a price of $1.50 per warrant. Such warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, we may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loan but no proceeds held in the Trust Account would be used to repay the Working Capital Loan. The Working Capital Loan is subject to customary events of default, the occurrence of which automatically trigger the unpaid principal balance of the Working Capital Loan and all other sums payable with regard to the Working Capital Loan becoming immediately due and payable. As of June 30, 2022 and the date of this Quarterly Report, there was $750,000 outstanding under the Working Capital Loan.

In order to fund working capital deficiencies or finance transaction costs in connection with an intended Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our directors and officers may, but are not obligated to, loan us additional funds as may be required. Similar to the Working Capital Loan described above, up to $750,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender and such warrants would be identical to the Private Placement Warrants issued to our Sponsor.

The Company has incurred and expects to incur significant costs in pursuit of its financing and acquisition plans. Management believes that the Company has access to funds from the Sponsor that are sufficient to fund the working capital needs of the Company until the consummation of an initial Business Combination or for a minimum of one year from the date of issuance of the financial statements accompanying this Quarterly Report. However, in connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Update 2014-15, "Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that the Company's cash flow deficit and the deadline to consummate an initial Business Combination being within twelve months from the issuance of the financial statements accompanying this Quarterly Report raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements accompanying this Quarterly Report are issued. There is no assurance that the Company's plans to consummate a Business Combination or raise additional funds will be successful. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than the Working Capital Loan and as described below.

We had an agreement to pay an affiliate of our Sponsor a monthly fee of $10,000 for office space and administrative and support services provided to the Company. The Company and the affiliate of our Sponsor canceled the agreement effective March 31, 2022 as the affiliate of our Sponsor agreed to waive the monthly payments. No amounts have been accrued or paid for the period from the commencement date through June 30, 2022.

The underwriter of the IPO is entitled to a deferred discount of $0.35 per Unit, or $10,867,500 in the aggregate. The deferred discount 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

The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

Warrant Liabilities

We account for the public warrants and the Private Placement Warrants in accordance with the guidance contained in Accounting Standards Codification ("ASC") Topic 815 under which the public warrants and the Private Placement Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Under ASC Subtopic 815-40, "Derivatives and Hedging - Contracts in Entity's Own Equity" ("ASC 815-40"), the public warrants and the Private Placement Warrants are not indexed to our common stock in the manner contemplated by ASC 815-40 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. Accordingly, we classify the public warrants and the Private Placement Warrants as liabilities at their fair value and adjust the public warrants and the Private Placement Warrants to fair value at each reporting period. These liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our condensed statement of operations. The public warrants are valued using the closing price of the public warrants as of each relevant date. The Private Placement Warrants are valued using a Monte Carlo simulation model.

Working Capital Loan Payable

The Company accounted for the Working Capital Loan payable in accordance with ASC 470, "Debt". The Working Capital Loan payable is recorded at amortized cost. The conversion option feature had a fair value of $0 as of on June 1, 2022, the date of initial measurement. As such, there is no debt discount recorded as there are no proceeds to allocate to the conversion option feature.

Class A Common Stock Subject to Possible Redemption

We account for our Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity." Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features 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, Class A common stock is classified as stockholders' equity. Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders' deficit section of our condensed balance sheets.

We recognize changes in redemption value at the end of each reporting period and adjust the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Immediately upon the closing of the IPO the Company recognized the remeasurement from initial book value to redemption amount value. The change in the carrying value of redeemable common stock resulted in charges against additional paid-in capital to the extent available and accumulated deficit.

Net Income (Loss) Per Share of Common Stock

Net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period in compliance with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." The remeasurement associated with the redeemable Class A common stock is excluded from net income (loss) per share of common stock as the redemption value approximates fair value. The Company has not considered the effect of the warrants sold in the IPO and the 5,473,333 Private Placement Warrants in the calculation of diluted net income (loss) per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted net income (loss) per share of common stock is the same as basic net income (loss) per share of common stock for the periods presented.

The Company's condensed statement of operations includes a presentation of net income (loss) per share of Class A common stock subject to possible redemption and non-redeemable Class B common stock and allocates the net income (loss) into the two classes of



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shares in calculating net income (loss) per share of common stock, basic and diluted. For redeemable Class A common stock, net income (loss) per share of common stock is calculated by dividing the net income (loss) by the weighted average number of shares of Class A common stock subject to possible redemption outstanding. For non-redeemable Class B common stock, net income (loss) per share is calculated by dividing the net income (loss) by the weighted average number of shares of nonredeemable Class B common stock outstanding for the period.

Recent Accounting Standards

In August 2020, FASB issued Accounting Standards Update No. 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): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" ("ASU 2020-06"), which simplifies accounting for convertible instruments by removing major separation models required under current accounting principles generally accepted in the United States of America ("GAAP"). ASU 2020- 06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. We are currently assessing the impact, if any, that ASU 2020-06 would have on our financial position, results of operations or cash flows.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.

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