As filed with the U.S. Securities and Exchange Commission on November 21, 2022

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________

AMENDMENT NO. 3
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

__________________

Health Sciences Acquisitions Corporation 2*
(Exact name of registrant as specified in its charter)

__________________

40 10th Avenue, Floor 7
New York, NY 10014
(646) 597-6980
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

___________________________

Roderick Wong, MD
40 10th Avenue, Floor 7
New York, NY 10014
(646) 597-6980
(Name, address, including zip code, and telephone number, including area code, of agent for service)

___________________________

Copies to:

___________________________

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and after all conditions under the Merger Agreement to consummate the proposed merger are satisfied or waived.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company and 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.

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 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

*Immediately prior to the consummation of the Business Combination, the Registrant intends to effect a deregistration under Part XII of the Companies Act (2022 Revision) (As Revised) of the Cayman Islands and a domestication under Section 388 of the Delaware General Corporation Law, pursuant to which the Registrant’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware (the “Domestication”). All securities being registered will be issued by the continuing entity following the Domestication, which will be renamed “Orchestra BioMed Holdings, Inc.” upon the consummation of the Domestication. As used herein, “Domesticated Parent” refers to the Registrant after giving effect to the Domestication but before the consummation of the Business Combination, while “New Orchestra” refers to the Registrant after giving effect to both the Domestication and the Business Combination.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the SEC, acting pursuant to Section 8(a), may determine.

The information in this preliminary proxy statement/prospectus is not complete and may be changed. These securities may not be issued until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROXY STATEMENT/PROSPECTUS

SUBJECT TO COMPLETION, DATED NOVEMBER 21, 2022

PROXY STATEMENT FOR THE EXTRAORDINARY GENERAL MEETING OF
HEALTH SCIENCES ACQUISITIONS CORPORATION 2
AND
PROSPECTUS FOR 31,399,297 SHARES OF
COMMON STOCK AND 2,328,261 WARRANTS OF
HEALTH SCIENCES ACQUISITIONS CORPORATION 2
(AFTER ITS DOMESTICATION AS A DELAWARE CORPORATION)
WHICH WILL BE RENAMED “ORCHESTRA BIOMED HOLDINGS, INC.”
IN CONNECTION WITH THE DOMESTICATION DESCRIBED HEREIN.

To the Shareholders of Health Sciences Acquisitions Corporation 2,

You are cordially invited to attend the extraordinary general meeting (the “Shareholder Meeting”) of Health Sciences Acquisitions Corporation 2, a Cayman Islands exempted company (“HSAC2,” “we,” “our” or “us”), which will be held at            , Eastern time, on            , 2023 at the offices of              at             , and virtually via live webcast at https://            , or at such other time, on such other date and at such other place to which the Shareholder Meeting may be adjourned. Although the Shareholder Meeting will also be held virtually over the Internet, for the purposes of Cayman Islands law and the amended and restated memorandum and articles of association of HSAC2, the physical location of the Shareholder Meeting will be at the location specified above. Shareholders are strongly urged to attend the Shareholder Meeting online instead of attending physically. This proxy statement includes instructions on how to access the Shareholder Meeting and how to listen and vote from home or any remote location with Internet connectivity.

On July 4, 2022, HSAC2 entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) by and among HSAC2, HSAC Olympus Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of HSAC2 (“Merger Sub”), and Orchestra BioMed, Inc., a Delaware corporation (“Orchestra”). Holders of ordinary shares, par value $0.0001 per share, of HSAC2 (“HSAC2 Ordinary Shares”), will be asked to approve and adopt, among other things, the Merger Agreement and the other related proposals.

Pursuant to the terms of the Merger Agreement, a business combination between HSAC2 and Orchestra (the “Business Combination”) will occur in two steps. First, before the closing of the Business Combination (the “Closing”), HSAC2 will deregister in the Cayman Islands in accordance with the Companies Act (2022 Revision) (As Revised) of the Cayman Islands (the “Companies Act”) and domesticate as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law (the “Domestication”). Second, at the Closing, Merger Sub will merge with and into Orchestra, with Orchestra surviving such merger as the surviving entity (the “Merger”). Upon consummation of the Business Combination, Orchestra will become a wholly owned subsidiary of HSAC2. HSAC2 will then change its name to “Orchestra BioMed Holdings, Inc.” We refer to HSAC2 after giving effect to the Domestication as “Domesticated Parent” and, after giving effect to the Business Combination, as “New Orchestra.” A copy of the Merger Agreement, Amendment No. 1 and Amendment No. 2 thereto are attached as Annex A-1, Annex A-2 and Annex A-3, respectively, to this proxy statement/prospectus.

Simultaneously with the execution of the Merger Agreement, HSAC2 and Orchestra entered into separate forward purchase agreements (each a “Forward Purchase Agreement” and, together, the “Forward Purchase Agreements”) with certain funds managed by RTW Investments, LP (the “RTW Funds”) and Covidien Group S.à.r.l., an affiliate of Medtronic plc (“Medtronic” and the RTW Funds, each a “Purchasing Party”), pursuant to which each of the Purchasing Parties agreed to purchase $10 million of HSAC2 Ordinary Shares from HSAC2 immediately prior to the Domestication, less the dollar amount of HSAC2 Ordinary Shares holding redemption rights that the Purchasing Party acquires and holds until immediately prior to the Domestication (such HSAC2 Ordinary Shares either purchased from HSAC2 or acquired and held until immediately prior to the Domestication, the “Forward Purchase Shares”).

Simultaneously with the execution of the Merger Agreement and Forward Purchase Agreements, HSAC2, Orchestra and the RTW Funds entered into a Backstop Agreement (the “Backstop Agreement”), pursuant to which the RTW Funds, jointly and severally, agreed to purchase such number of HSAC2 Ordinary Shares at a price of $10.00 per share to the extent that the amount of cash remaining in HSAC2’s working capital and trust account as of immediately prior to the closing of the Merger is less than $60 million (the “Minimum Available Cash Condition”) (which calculation excludes amounts received pursuant to Medtronic’s Forward Purchase Agreement or are otherwise held in HSAC2’s trust account established pursuant to our IPO (the “Trust Account”) in respect of Medtronic’s Forward Purchase Shares, but is inclusive of amounts received pursuant to the RTW Funds’ Forward Purchase Agreement and otherwise held in the Trust Account in respect of the RTW Funds’ Forward Purchase Shares (the “Sponsor Commitment”)).

On October 21, 2022, the parties amended the Forward Purchase Agreement with the RTW Funds (the “RTW Forward Purchase Agreement”) and the Backstop Agreement, pursuant to which the RTW Funds agreed that (1) the per share price under each of the RTW Forward Purchase Agreement and the Backstop Agreement will not exceed the redemption price available to

HSAC2 shareholders exercising redemption rights at the Shareholder Meeting, (2) any shares purchased pursuant to the RTW Forward Purchase Agreement or the Backstop Agreement, or otherwise acquired by the RTW Funds outside of the existing redemption offer, will not be voted in favor of approving the Business Combination, and (3) the RTW Funds will waive redemption rights with respect to such purchases in the vote to approve the Business Combination.

The closing under the Forward Purchase Agreement with RTW occurred on July 22, 2022, the closing under the Forward Purchase Agreement with Medtronic will occur prior to the Domestication and the closing under the Backstop Agreement will occur immediately prior to the Domestication. HSAC 2 Holdings, LLC, HSAC2’s sponsor (the “Sponsor”), and the Purchasing Parties will have registration rights pursuant to the Amended and Restated Registration Rights and Lock-Up Agreement described below with respect to the shares of HSAC2 common stock, par value $0.0001 per share, received in the Domestication (“HSAC2 Common Stock”). We refer to HSAC2 Common Stock, after giving effect to the Business Combination, as “New Orchestra Common Stock.”

In addition, the Sponsor has agreed that 25% or 1,000,000 shares of its New Orchestra Common Stock received in the Domestication will be forfeited to New Orchestra on the first business day following the fifth anniversary of the Closing unless, as to 500,000 shares, the volume-weighted average price of the New Orchestra Common Stock is greater than or equal to $15.00 per share over any 20 trading days within any 30-trading day period (the “Initial Milestone Event”), and as to the remaining 500,000 shares, the volume-weighted average price of the New Orchestra Common Stock is greater than or equal to $20.00 per share over any 20 trading days within any 30-trading day period (the “Final Milestone Event”). Further, the Sponsor and HSAC2’s other initial shareholders prior to HSAC2’s initial public offering (the “IPO”) have agreed to subject (i) the 4,000,000 shares of New Orchestra Common Stock to be received in the Domestication in exchange for the 4,000,000 HSAC2 Ordinary Shares issued to HSAC2’s initial shareholders prior to the IPO (the “Insider Shares”) and (ii) the 450,000 shares of New Orchestra Common Stock to be received in the Domestication in exchange for 450,000 HSAC2 Ordinary Shares purchased in a private placement simultaneously with the IPO (the “Private Shares”) to a lock-up for up to 12 months following the Closing and the Sponsor has agreed to forfeit 50% of its 1,500,000 warrants in HSAC2 purchased upon consummation of the IPO (the “Private Warrants”), comprising 750,000 Private Warrants, for no consideration, immediately prior to the Closing (the “Sponsor Forfeiture”). Pursuant to the terms of the Merger Agreement, immediately following the Sponsor Forfeiture and prior to the Closing, HSAC2 will issue 750,000 warrants to purchase New Orchestra Common Stock to eleven specified employees and directors of Orchestra. These new warrants will have substantially similar terms to the forfeited Private Warrants, except that they will become exercisable between 24 and 36 months after the Closing. See the section titled “Proposal 1 — The Business Combination Proposal — The Business Combination and the Merger Agreement — Issuance of New Warrants.”

Upon the consummation of the Domestication, which will occur immediately prior to the Merger, each of HSAC2’s currently issued and outstanding HSAC2 Ordinary Shares will automatically convert by operation of law, on a one-for-one basis, into shares of HSAC2 Common Stock. Similarly, all of HSAC2’s outstanding warrants will become warrants to acquire shares of HSAC2 Common Stock. Upon the closing of the Merger, based on a ratio (the “Exchange Ratio”) of 0.465 shares of HSAC2 Common Stock for each whole share of Orchestra common stock, par value $0.0001 per share (the “Orchestra Common Stock”), an estimated 20,187,180 shares of New Orchestra Common Stock will be issued to Orchestra stockholders (exclusive of the additional shares subject to earnout discussed below in this paragraph) and an estimated 5,490,451 shares of New Orchestra Common Stock will be reserved for issuance pursuant to the Orchestra stock options and warrants converted into New Orchestra stock options and warrants in the Merger. Existing Orchestra stockholders will also have the opportunity to elect to participate in an earnout pursuant to which each such electing stockholder (an “Earnout Participant”) may receive a portion of additional contingent consideration of up to 8,000,000 shares of New Orchestra Common Stock in the aggregate (“Earnout Consideration”). Each Earnout Participant must agree to extend their applicable lock-up period from 6 months to 12 months, pursuant to an Earnout Election Agreement and will collectively be entitled to receive: (i) 4,000,000 shares of the Earnout Consideration, in the aggregate (“Initial Earnout Shares”), in the event that, from the time beginning immediately after the Closing until the fifth anniversary of the date of the Closing (the “Closing Date”) (the “Earnout Period”), the Initial Milestone Event occurs; and (ii) an additional 4,000,000 shares of the Earnout Consideration, in the aggregate (“Final Earnout Shares” and, together with the Initial Earnout Shares, the “Earnout Shares”), in the event that, during the Earnout Period, the Final Milestone Event occurs.

On July 26, 2022, HSAC2 shareholders approved extending the date upon which a closing of the Company’s initial business combination must occur — to February 6, 2023 — and, in connection with such approval, the holders of 9,237,883 HSAC2 Ordinary Shares originally issued in our IPO (“Public Shares”) properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.02 per share, for an aggregate redemption amount of approximately $92.6 million. As such, approximately 57.7% of the Public Shares were redeemed and approximately 42.3% of the Public Shares remain outstanding. After the satisfaction of such redemptions, the balance in our Trust Account is approximately $67.8 million. See the section titled, “Management’s Discussion and Analysis of Results of Financial Condition and Results of Operations of HSAC2 — Extension, Redemptions and Private Purchase.”

Orchestra’s pro forma fully diluted enterprise valuation in the Business Combination is $173 million, assuming pro forma combined cash of $154 million as of September 30, 2022. We anticipate that, immediately after consummation of the Business Combination, including the Domestication, the Merger, and the purchases made under the Forward Purchase Agreements, and assuming no additional redemptions, the Sponsor, directors and officers of HSAC2 and the RTW Funds (the “Sponsor and related parties”) would collectively own approximately 25.3% of the issued New Orchestra Common Stock and Medtronic plc would own approximately 15.8% of the issued New Orchestra Common Stock while the other holders of HSAC2 Ordinary Shares issued in our IPO (the “Public Shareholders”) will own approximately 15.0% of the issued New Orchestra Common Stock and the other current stockholders of Orchestra will own approximately 43.9% of the issued New Orchestra Common Stock. If the RTW Funds make the maximum purchases under the Backstop Agreement and assuming maximum redemptions, these percentages would be 40.3%, 15.8%, 0% and 43.9%, respectively. These relative percentages do not reflect the Earnout Consideration which will not be issued unless and until the Initial Milestone Event and/or the Final Milestone Event occur and assume that (i) none or all of HSAC2’s existing Public Shareholders, as indicated above, seek to convert their shares into the right to receive cash from HSAC2’s trust account, (ii) no Private Warrants are exercised, and (iii) no existing Orchestra stock options or warrants are exercised and no additional Orchestra stock options or warrants are granted prior to the Closing. If any of these assumptions are incorrect, the anticipated percentages of ownership of New Orchestra will be different. You should read “Summary of the Proxy Statement/Prospectus — The Business Combination and the Merger Agreement” and “Unaudited Pro Forma Condensed Consolidated Combined Financial Statements” for further information.

The HSAC2 Ordinary Shares are currently listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “HSAQ.” We intend to apply to continue the listing of the New Orchestra Common Stock on Nasdaq under the symbol “OBIO.” On         , 2022, (the “Record Date”), the last sale price of HSAC2 Ordinary Shares was $            .

Each shareholder’s vote is very important. HSAC2 is providing this proxy statement/prospectus and accompanying proxy card to HSAC2 shareholders in connection with the solicitation of proxies to be voted at the Shareholder Meeting and at any adjournments or postponements of the Shareholder Meeting. Whether or not you plan to attend the Shareholder Meeting, please submit your proxy card without delay. Shareholders may revoke proxies at any time before they are voted at the Shareholder Meeting. Voting by proxy will not prevent a shareholder from voting virtually at the Shareholder Meeting if such shareholder subsequently chooses to participate in the Shareholder Meeting.

After careful consideration, the board of directors of HSAC2 (the “HSAC2 Board”) has unanimously approved the Merger Agreement and unanimously recommends that HSAC2 shareholders vote “FOR” approval of each of the proposals described in the accompanying proxy statement/prospectus.

The accompanying proxy statement/prospectus provides you with detailed information about the Business Combination, the Domestication and other matters to be considered at the Shareholder Meeting. We urge you to read the accompanying proxy statement/prospectus and the documents incorporated therein by reference carefully. In particular, you should review the matters discussed in the section entitled “Risk Factors” in the accompanying proxy statement/prospectus beginning on page 47.

On behalf of the HSAC2 Board, I thank you for your support and we look forward to the successful consummation of the Business Combination.

NEITHER THE SECURITIES EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF EITHER OF THE MERGER AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This proxy statement/prospectus is dated            , 2022, and is first being mailed to HSAC2 shareholders on or about            , 2022.

Health Sciences Acquisitions Corporation 2
40 10th Avenue, Floor 7
New York, NY 10014
(646) 597-6980

NOTICE OF EXTRAORDINARY GENERAL MEETING
OF HEALTH SCIENCES ACQUISITIONS CORPORATION 2

To Be Held On            , 2023

To the Shareholders of Health Sciences Acquisitions Corporation 2:

NOTICE IS HEREBY GIVEN that you are cordially invited to attend an extraordinary general meeting of the shareholders (the “Shareholder Meeting”) of Health Sciences Acquisitions Corporation 2, a Cayman Islands exempted company (“HSAC2,” “we,” “our” or “us”), which will be held at            , Eastern time, on            , 2023 at the offices of            at       , and virtually via live webcast at https://          , or at such other time, on such other date and at such other place to which the Shareholder Meeting may be adjourned. Although the Shareholder Meeting will also be held virtually over the Internet, for the purposes of Cayman Islands law and the amended and restated memorandum and articles of association of HSAC2, the physical location of the Shareholder Meeting will be at the location specified above. In light of COVID-19, Shareholders are strongly urged to attend the Shareholder Meeting online instead of attending physically. You can participate in the Shareholder Meeting as described in ‘‘Questions and Answers About the Proposals — How may I participate in the Shareholder Meeting?”.

During the Shareholder Meeting, HSAC2’s shareholders will be asked to consider and vote upon the following proposals (collectively, the “Proposals”):

Proposal 1:    The Business Combination Proposal — To consider and vote upon an ordinary resolution to approve the Business Combination (the “Business Combination Proposal”) as follows:

“RESOLVED, as an ordinary resolution, that the Company’s entry into the Agreement and Plan of Merger, dated as of July 4, 2022, as amended by Amendment No. 1 to Agreement and Plan of Merger, dated as of July 21, 2022 and Amendment No. 2 to Agreement and Plan of Merger, dated as of November 21, 2022 (copies of which are attached to the proxy statement/prospectus as Annex A-1, Annex A-2 and Annex A-3, respectively), and as further amended or otherwise modified from time to time, by and among Health Sciences Acquisitions Corporation 2, a Cayman Islands exempted company, HSAC Olympus Merger Sub, Inc., a Delaware corporation, and Orchestra BioMed, Inc., a Delaware corporation, and the transactions contemplated thereby be confirmed, ratified and approved in all respects.”

Proposal 2:    The Domestication Proposal — To consider and vote upon, a special resolution to approve the Domestication (the “Domestication Proposal”) as follows:

“RESOLVED, as a special resolution, that HSAC2 be de-registered in the Cayman Islands pursuant to the Amended and Restated Memorandum and Articles of Association of Health Sciences Acquisitions Corporation 2 and the Companies Act (2022 Revision) (As Revised) and be registered by way of continuation as a corporation in the State of Delaware.”

Proposal 3:    The Charter Approval Proposal — To consider and vote upon a special resolution to approve and adopt the proposed new certificate of incorporation, a copy of which is attached to this proxy statement/prospectus as Annex B (the “Proposed Charter”), effective upon the consummation of the Domestication (the “Charter Approval Proposal”) as follows:

“RESOLVED, as a special resolution, that, in connection with the Business Combination, the replacement of the Amended and Restated Memorandum and Articles of Association of Health Sciences Acquisitions Corporation 2 (“HSAC2”) with the proposed amended and restated certificate of incorporation of HSAC2, in the form attached to this proxy statement/prospectus as Annex B, to be effective upon the consummation of the Domestication, be and is hereby approved and adopted.”

Proposal 4:    The Bylaws Approval Proposal — To consider and vote upon a special resolution to approve and adopt the proposed new bylaws, a copy of which is attached to this proxy statement/prospectus as Annex C (the “Proposed Bylaws”), effective upon the consummation of the Domestication (the “Bylaws Approval Proposal”) as follows:

“RESOLVED, as a special resolution that, in connection with the Business Combination, the bylaws, in the form attached to this proxy statement/prospectus as Annex C, to be effective upon the consummation of the Domestication, be and are hereby approved and adopted.”

Proposal 5:    The Advisory Governance Proposals — To consider and vote upon an ordinary resolution, on a non-binding advisory basis, to approve and adopt certain differences between HSAC2’s current amended and restated memorandum and articles of association (as amended, the “Existing Charter”), on the one hand, and the Proposed Charter and the Proposed Bylaws, on the other hand, which are being presented as separate sub-proposals (collectively, the “Advisory Governance Proposals”), as follows:

“RESOLVED, as an ordinary resolution, that, on a non-binding advisory basis, certain governance provisions contained in the Proposed Charter, being presented in accordance with the requirements of the U.S. Securities and Exchange Commission as six separate sub-proposals be and are hereby approved and adopted (collectively, as the “Advisory Governance Proposals”), none of which are conditioned on any Condition Precedent Proposals:

•        Advisory Governance Proposal A — to increase the total number of authorized shares of all classes of capital stock to 350,000,000 shares, consisting of 340,000,000 authorized shares of common stock and 10,000,000 authorized shares of preferred stock;

•        Advisory Governance Proposal B — to provide that the alteration, amendment or repeal of certain provisions of the Proposed Charter will require the affirmative vote of the holders of at least 66-2/3% of the voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class;

•        Advisory Governance Proposal C — to provide that the alteration, amendment or repeal of the Proposed Bylaws will require the affirmative vote of the holders of at least 66-2/3% of the voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class;

•        Advisory Governance Proposal D — to provide that stockholders will not be permitted to act by written consent in lieu of holding a meeting of stockholders;

•        Advisory Governance Proposal E — to provide for certain additional changes, including, among other things, (i) adopting Delaware as the exclusive forum for certain stockholder litigation and the federal district courts of the United States as the exclusive forum for certain other stockholder litigation in each case unless New Orchestra expressly consents in writing to the selection of an alternative forum and (ii) removing certain provisions related to HSAC2’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which the HSAC2 Board believes are necessary to adequately address the needs of New Orchestra after the Business Combination; and

•        Advisory Governance Proposal F — to change the post-Business Combination corporate name from “Health Sciences Acquisitions Corporation 2” to “Orchestra BioMed Holdings, Inc.”

Proposal 6:    The Nasdaq Proposal — To consider and vote upon an ordinary resolution to approve, for purposes of complying with applicable listing rules of the Nasdaq Capital Market (the “Nasdaq”), the issuance by HSAC2 of shares of common stock, par value $0.0001 per share, to equity holders of Orchestra (the “Nasdaq Proposal”) as follows:

“RESOLVED, as an ordinary resolution, for purposes of complying with applicable listing rules of the Nasdaq Capital Market, the issuance by New Orchestra of shares of common stock, par value US$0.0001 per share, to equity holders of Orchestra BioMed, Inc., a Delaware corporation, be approved in all respects.”

Proposal 7:    The Director Election Proposal — To consider and vote upon an ordinary resolution to elect Eric A. Rose, M.D., Jason Aryeh, Pamela Y. Connealy, Geoffrey W. Smith, David P. Hochman, Darren R. Sherman and Eric S. Fain, M.D. to serve staggered terms on New Orchestra’s board of directors until the 2023, 2024 and 2025 annual meetings of stockholders, as applicable, and until their respective successors are duly elected and qualified or until their earlier death, resignation or removal (the “Director Election Proposal”) as follows:

“RESOLVED, as an ordinary resolution, to elect Eric A. Rose, M.D., Jason Aryeh, Pamela Y. Connealy, Geoffrey W. Smith, David P. Hochman, Darren R. Sherman and Eric S. Fain, M.D. to serve staggered terms on New Orchestra’s board of directors until the 2023, 2024 and 2025 annual meetings of stockholders, as applicable, and until their respective successors are duly elected and qualified or until their earlier death, resignation or removal.”

Proposal 8:    The Equity Incentive Plan Proposal — To consider and vote upon an ordinary resolution to approve the Orchestra BioMed Holdings, Inc. 2022 Equity Incentive Plan (the “2022 Plan”), a copy of which is attached to this proxy statement/prospectus as Annex D, to be effective after the closing of the Business Combination (the “Equity Incentive Plan Proposal”) as follows:

“RESOLVED, as an ordinary resolution, that the Orchestra BioMed Holdings, Inc. 2022 Equity Incentive Plan, a copy of which is attached to this proxy statement/prospectus as Annex D, to be effective upon the consummation of the Business Combination, be and is hereby approved and adopted.”

and

Proposal 9:    The Adjournment Proposal — To consider and vote upon an ordinary resolution to approve the adjournment of the Shareholder Meeting by the chairman thereof to a later date, if necessary, under certain circumstances, including for the purpose of soliciting additional proxies in favor of the foregoing Proposals, in the event HSAC2 does not receive the requisite shareholder vote to approve the Proposals (the “Adjournment Proposal”) as follows:

“RESOLVED, as an ordinary resolution, that the adjournment of the general meeting to a later date or dates to be determined by the chairman of the general meeting, if necessary, be confirmed, ratified and approved in all respects.”

The Business Combination Proposal, the Advisory Governance Proposals, the Nasdaq Proposal, the Director Election Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal must be approved by an ordinary resolution as a matter of Cayman Islands law, being the affirmative vote of the holders of a majority of the HSAC2 Ordinary Shares, who, being present in person, including by virtual attendance, or represented by proxy and entitled to vote at the Shareholder Meeting, vote at the Shareholder Meeting. The Advisory Governance Proposals are voted upon on a non-binding advisory basis only. The Domestication Proposal, the Charter Approval Proposal, and the Bylaws Approval Proposal require the approval of a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds of the HSAC2 Ordinary Shares who, being present in person (including virtually) or represented by proxy and entitled to vote at the Shareholder Meeting, vote at the Shareholder Meeting. The approval of each of the Business Combination Proposal, the Domestication Proposal, the Charter Approval Proposal, the Bylaws Approval Proposal, the Nasdaq Proposal, the Director Election Proposal and the Equity Incentive Plan Proposal (the “Condition Precedent Proposals”) are conditioned on the approval of all of the other Condition Precedent Proposals. If any one of the Condition Precedent Proposals fails to receive the required approval by the HSAC2 shareholders at the Shareholder Meeting, the Business Combination will not be completed.

Pursuant to the Existing Charter, we are providing HSAC2 Public Shareholders with the opportunity to convert Public Shares, regardless of whether they vote for or against the Business Combination, into their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid. Our shareholders as of immediately prior to our initial public offering (“Initial Shareholders”) have agreed, pursuant to written letter agreements with us, not to convert any Public Shares held by them into their pro rata share of the aggregate amount then on deposit in the Trust Account. Our sponsor, HSAC 2 Holdings, LLC (our “Sponsor”), has entered into a letter agreement with us pursuant to which our Sponsor has agreed to waive its conversion rights

with respect to its Insider Shares and any Public Shares it may purchase in connection with the completion of the Business Combination. The conversion rights will be effected under the Existing Charter and Cayman Islands law as redemptions. Holders of HSAC2’s outstanding warrants do not have redemption rights with respect to such securities in connection with the Business Combination. Please see the section titled “Extraordinary General Meeting of HSAC2 Shareholders — Redemption Rights” for the procedures to be followed if you wish to redeem your Public Shares for cash.

Each of these proposals is more fully described in the accompanying proxy statement/prospectus, which we encourage you to read carefully and in its entirety before voting. Only holders of HSAC2 Ordinary Shares entered in the register of members of HSAC2 at the close of business on the Record Date are entitled to notice of the Shareholder Meeting and to vote and have their votes counted at the Shareholder Meeting and any adjournments or postponements thereof. As of the Record Date, there were            HSAC2 Ordinary Shares issued and outstanding and entitled to vote.

Investing in HSAC2’s securities involves a high degree of risk. See “Risk Factors” beginning on page 47 for a discussion of information that should be considered in connection with an investment in HSAC2’s securities.

YOUR VOTE IS VERY IMPORTANT. PLEASE VOTE YOUR SHARES PROMPTLY.

Whether or not you plan to participate in the virtual Shareholder Meeting, please complete, date, sign and return the enclosed proxy card without delay, or submit your proxy through the internet or by telephone as promptly as possible in order to ensure your representation at the Shareholder Meeting no later than the time appointed for the Shareholder Meeting or adjourned meeting. Voting by proxy will not prevent you from voting your HSAC2 Ordinary Shares online if you subsequently choose to participate in the virtual Shareholder Meeting. Please note, however, that if your shares are held of record by a broker, bank or other agent and you wish to vote at the Shareholder Meeting, you must obtain a proxy issued in your name from that record holder. Only shareholders entered in the register of members of HSAC2 at the close of business on the Record Date may vote at the Shareholder Meeting or any adjournment or postponement thereof. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not participate in the virtual Shareholder Meeting, your shares will not be counted for purposes of determining whether a quorum is present at, and the number of votes voted at, the Shareholder Meeting.

You may revoke a proxy at any time before it is voted at the Shareholder Meeting by executing and returning a proxy card dated later than the previous one, by participating in the Shareholder Meeting and casting your vote by hand or by ballot (as applicable) or by submitting a written revocation to HSAC2’s proxy solicitor, Morrow Sodali LLC, 333 Ludlow Street, 5th Floor, South Tower, Stamford CT 06902, toll-free: (800) 662-5200, collect: (203) 658-9400, email: HSAQ.info@investor.morrowsodali.com, that is received by the proxy solicitor before we take the vote at the Shareholder Meeting. If you hold your shares through a bank or brokerage firm, you should follow the instructions of your bank or brokerage firm regarding revocation of proxies.

The HSAC2 Board unanimously recommends that HSAC2 shareholders vote “FOR” approval of each of the Proposals. When you consider the HSAC2 Board’s recommendation of these Proposals, you should keep in mind that HSAC2’s directors and officers have interests in the Business Combination that may conflict or differ from your interests as a shareholder. See the section titled “Proposal 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination.”

On behalf of the HSAC2 Board, I thank you for your support and we look forward to the successful consummation of the Business Combination.

TABLE OF CONTENTS

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the Securities and Exchange Commission (the “SEC”) by HSAC2 (File No. 333-266660) (the “Registration Statement”), constitutes a prospectus of HSAC2 under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the securities to be issued if the Business Combination described below is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to the Shareholder Meeting at which HSAC2 shareholders will be asked to consider and vote upon a proposal to adopt the Merger Agreement and approve the Business Combination by approving and adopting the Business Combination Proposal, among other Proposals.

HSAC2 files reports and other information with the SEC as required by the Exchange Act. You can read HSAC2’s SEC filings, without charge, including this proxy statement/prospectus, at the SEC’s website at http://www.sec.gov.

Information and statements contained in this proxy statement/prospectus or any Annex to this proxy statement/prospectus are qualified in all respects by reference to the copy of the relevant contract or other annex filed as an exhibit to the registration statement of which this proxy statement/prospectus forms a part, which includes exhibits incorporated by reference from other filings made with the SEC.

All information contained in this proxy statement/prospectus relating to HSAC2 has been supplied by HSAC2, and all such information relating to Orchestra has been supplied by Orchestra. Information provided by one does not constitute any representation, estimate or projection of the other.

If you would like additional copies of this proxy statement/prospectus or if you have questions about the Business Combination or any of the other Proposals to be presented at the Shareholder Meeting, you should contact HSAC2’s proxy solicitor at:

Morrow Sodali LLC
Toll-Free (800) 662-5200 or Collect (203) 658-9400
Email: HSAQ.info@investor.morrowsodali.com

If you are a shareholder of HSAC2 and would like to request documents, you must request them no later than five business days before the date of the Shareholder Meeting, or no later than            , 2023. If you request any documents from us, we will mail them to you by first class mail, or another equally prompt means.

You should rely only on information contained in this document. No one has been authorized to provide you with information that is different from the information contained in this document. This document is dated            , 2022. You should not assume that the information contained in this document is accurate as of any date other than that date. Neither our mailing of this document to HSAC2 shareholders, nor the issuance of equity by HSAC2 in connection with the Business Combination subsequent to that date will create any implication to the contrary. Information on the websites of HSAC2 or Orchestra is not part of this document. You should not rely on that information in deciding how to vote.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements about the parties’ ability to close the proposed Business Combination, the anticipated benefits of the proposed Business Combination, and the financial condition, results of operations, earnings outlook and prospects of HSAC2, New Orchestra, and/or Orchestra and may include statements for the period following the consummation of the proposed Business Combination. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of the management of HSAC2 and Orchestra, as applicable, and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, including: risks related to Orchestra’s strategies; the ability to complete the proposed Business Combination due to the failure to obtain approval from HSAC2 shareholders or satisfy other Closing conditions in the definitive Merger Agreement; the amount of any conversions by existing holders of HSAC2 Ordinary Shares; the ability to recognize the anticipated benefits of the Business Combination, and other risks and uncertainties included under the header “Risk Factors” on page 47 of this proxy statement/prospectus.

These forward-looking statements are based on information available as of the date of this proxy statement/prospectus, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

In addition, statements that HSAC2 or Orchestra “believes” and similar statements reflect such parties’ beliefs and opinions on the relevant subject. These statements are based upon information available to such party as of the date of this proxy statement/prospectus, and while such party believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that either HSAC2 or Orchestra has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should not place undue reliance on these forward-looking statements in deciding how to grant your proxy or instruct how your vote should be cast or vote your shares on the proposals set forth in this proxy statement/prospectus. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause New Orchestra’s actual results to differ from those expressed or implied by forward-looking statements include:

•        the occurrence of any event, change or other circumstances that could result in the failure to consummate the Business Combination;

•        the outcome of any legal proceedings that may be instituted against HSAC2, Domesticated Parent, Orchestra and New Orchestra regarding the Business Combination;

•        the inability to complete the Business Combination due to the failure to obtain approval of the shareholders of HSAC2, to obtain financing to complete the Business Combination or to satisfy other conditions to closing in the definitive agreements with respect to the Business Combination;

•        changes to the proposed structure of the Business Combination that may be required or appropriate as a result of applicable laws or regulations or as a condition to obtaining regulatory approval of the Business Combination;

•        the ability to meet and maintain Nasdaq’s listing standards following the consummation of the Business Combination;

•        the risk that the Business Combination disrupts Orchestra’s current plans and operations as a result of its announcement and consummation;

•        costs related to the Business Combination;

•        changes in applicable laws or regulations;

•        the possibility that Orchestra or New Orchestra may be adversely affected by other economic, business, and/or competitive factors;

•        the risk that we may not be able to raise financing in the future;

•        the risk that we may not be able to retain or recruit necessary officers, key employees or directors following the Business Combination;

•        the risk that our public securities will be illiquid;

•        the risk that we will not be able to obtain the required shareholder approval for the Domestication;

•        the risks related to the changes in shareholders’ rights as a result of the Domestication;

•        the risk that shareholders may experience adverse tax consequences with respect to their shares at the effective time of the Domestication;

•        the risk that operating under the laws of the State of Delaware will affect the conduct of our business; and

•        factors relating to the business, operations and financial performance of Orchestra, including:

•        Orchestra’s ability and/or the ability of third-party vendors and partners to manufacture its product candidates;

•        Orchestra’s ability to source critical components or materials for the manufacture of its product candidates;

•        Orchestra’s ability to achieve and sustain profitability;

•        Orchestra’s ability to achieve its projected development and commercialization goals;

•        the rate of progress, costs and results of Orchestra’s clinical studies and research and development activities;

•        market acceptance of Orchestra’s product candidates, if approved;

•        Orchestra’s ability to compete successfully with larger companies in a highly competitive industry;

•        changes in Orchestra’s operating results which make future operations results difficult to predict;

•        existing loan and security agreement covenants that may restrict business and financing activities;

•        the impact of the COVID 19 pandemic and other similar disruptions in the future;

•        serious adverse events, undesirable side effects that could halt the clinical development, regulatory approval or certification, of Orchestra’s product candidates;

•        Orchestra’s ability to manage growth or control costs related to growth;

•        economic conditions that may adversely affect Orchestra’s business, financial condition and stock price;

•        Orchestra’s reliance on third parties to drive successful marketing and sale of its initial product candidates;

•        Orchestra’s reliance on third parties to manufacture and provide important materials and components for its products and product candidates;

•        Orchestra and its competitor’s abilities to obtain necessary regulatory approvals and certifications for its product candidates in an uncomplicated and inexpensive manner;

•        Orchestra’s ability to maintain compliance with regulatory and post-marketing requirements;

•        adverse medical events, failure or malfunctions in connection with Orchestra’s product candidates and possible subjection to regulatory sanctions;

•        healthcare costs containment pressures and legislative or administrative reforms which affect coverage and reimbursement practices of third-party payors;

•        Orchestra’s ability to protect or enforce its intellectual property, unpatented trade secrets, know-how and other proprietary technology;

•        Orchestra’s ability to obtain necessary intellectual property rights from third parties; and

•        Orchestra’s ability to protect its trademarks, trade names and build its names recognition.

•        other risks and uncertainties indicated from time to time in filings made with the SEC, including those risk factors described under “Item 1A. Risk Factors” of HSAC2’s Annual Report on Form 10-K filed with the SEC on March 31, 2022.

ENFORCEABILITY OF CIVIL LIABILITIES

We are a company incorporated under the laws of the Cayman Islands and administered from outside the United States. Our U.S. agent for service of process is Roderick Wong, MD. However, it may be difficult for investors to effect service of process on us or our officers or directors within the United States in a way that will permit a U.S. court to have jurisdiction over us.

Our corporate affairs will be governed by our Existing Charter, the Companies Act, and the common law of the Cayman Islands prior to the Domestication. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the Companies Act and the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands, as well as from English common law, the decisions of whose courts are considered persuasive authority but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws as compared to the United States, and some states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.

The Cayman Islands courts are also unlikely:

•        to recognize or enforce against us judgments of U.S. courts based on certain civil liability provisions of U.S. securities laws; and

•        to impose liabilities against us, in original actions brought in the Cayman Islands, based on certain civil liability provisions of U.S. securities laws that are penal in nature.

We have been advised by Maples and Calder (Cayman) LLP, our Cayman Islands legal counsel, that there is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will in certain circumstances recognize and enforce a non-penal judgment of a foreign court and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no retrial of the issues would be necessary, provided that: (i) the U.S. court issuing the judgment had jurisdiction in the matter and the company either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process; (ii) the judgment given by the U.S. court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company; (iii) in obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the court; (iv) recognition or enforcement of the judgment would not be contrary to public policy in the Cayman Islands; and (v) the proceedings pursuant to which judgment was obtained were not contrary to natural justice. In appropriate circumstances, a Cayman Islands court may give effect in the Cayman Islands to other kinds of final foreign judgments such as declaratory orders, orders for performance of contracts and injunctions.

As a result of all of the above, Public Shareholders may have more difficulty in protecting their interests in the face of actions taken by HSAC2 management, members of the board of directors or controlling shareholders than they would as public shareholders of a U.S. company.

FREQUENTLY USED TERMS

Unless the context otherwise requires, in this proxy statement/prospectus:

•        “2022 Plan” refers to the Orchestra BioMed Holdings, Inc. 2022 Equity Incentive Plan, a copy of which is attached to this proxy statement/prospectus as Annex D;

•        “Adjournment Proposal” refers to an ordinary resolution to approve the adjournment of the Shareholder Meeting by the chairman thereof to a later date, if necessary, under certain circumstances, including for the purpose of soliciting additional proxies in favor of the Proposals, in the event HSAC2 does not receive the requisite shareholder vote to approve the Proposals;

•        “Advisory Governance Proposals” refers to an ordinary resolution to approve, on a non-binding advisory basis, certain differences between HSAC2’s Existing Charter and the Proposed Charter, which are being presented to HSAC2 shareholders as separate sub-proposals;

•        “Amended and Restated Registration Rights Agreement” refers to an Amended and Restated Registration Rights and Lock-Up Agreement to be entered into at the Closing by and among HSAC2, the RTW Funds and certain existing shareholders of HSAC2 and stockholders of Orchestra;

•        “Backstop Purchases” refers to the purchase by the RTW Funds of up to 5,000,000 HSAC2 Ordinary Shares pursuant to the Backstop Agreement;

•        “BMS” refers to Bare Metal Stent (a metallic stent without a coating or drug);

•        “Board” refers to: (i) prior to the Domestication, the Board of Directors of HSAC2, (ii) following the Domestication, but before the Merger, the Board of Directors of Domesticated Parent, and (iii) following the Merger, the Board of Directors of New Orchestra;

•        “BTK” refers to Below-the-Knee peripheral disease;

•        “Business Combination” refers to the Domestication, the Merger, and the transactions contemplated by the Merger Agreement and described in this proxy statement/prospectus;

•        “Business Combination Proposal” refers to an ordinary resolution to approve the Business Combination submitted to HSAC2 shareholders;

•        “BVS” refers to Bioabsorbable Vascular Scaffold (a stent made out of biodegradable plastic with drug embedded, which typically degrades in 1 - 3 years);

•        “Bylaws Approval Proposal” refers to a special resolution to approve and adopt the Proposed Bylaws, effective upon consummation of the Domestication;

•        “Companies Act” refers to the Companies Act (2022 Revision) (As Revised) of the Cayman Islands;

•        “Charter Approval Proposal” refers to a special resolution to approve and adopt the Proposed Charter, effective upon the consummation of the Domestication;

•        “Closing” refers to the closing of the Business Combination;

•        “Closing Date” refers to the date of the Closing;

•        “CNT” refers to Cardiac Neuromodulation Therapy;

•        “Code” refers to the Internal Revenue Code of 1986, as amended;

•        “Condition Precedent Proposals” refers to the Business Combination Proposal, the Domestication Proposal, the Charter Approval Proposal, the Bylaws Approval Proposal, the Nasdaq Proposal, the Director Election Proposal and the Equity Incentive Plan Proposal;

•        “Exchange Ratio” refers to 0.465 shares for each whole share of Orchestra Common Stock;

•        “DES” refers to Drug-Eluting Stent (a metallic stent combined with a drug coating, drug is embedded in either permanent or degradable polymers);

•        “DGCL” refers to the Delaware General Corporation Law, as amended;

•        “Director Election Proposal” refers to an ordinary resolution to elect Eric A. Rose, M.D., Jason Aryeh, Pamela Y. Connealy, Geoffrey W. Smith, David P. Hochman, Darren R. Sherman and Eric S. Fain, M.D. to serve staggered terms on New Orchestra’s board of directors until the 2023, 2024 and 2025 annual meetings of stockholders, as applicable, and until their respective successors are duly elected and qualified or until their earlier death, resignation or removal;

•        “Domesticated Parent” refers to HSAC2 after giving effect to the Domestication but before the consummation of the Merger;

•        “Domestication” refers to the de-registration of HSAC2 and the continuation of HSAC2 by way of domestication of HSAC2 into a Delaware corporation, with the HSAC2 Ordinary Shares becoming shares of common stock of the Delaware corporation under the applicable provisions of the Companies Act and the DGCL; the term includes all matters and necessary or ancillary changes in order to effect such Domestication, including the adoption of the certificate of incorporation consistent with the DGCL and changing the name and registered office of HSAC2;

•        “Domestication Proposal” refers to a special resolution to approve the Domestication;

•        “Earnout Consideration” refers to additional contingent consideration consisting of up to 8,000,000 shares of New Orchestra Common Stock in the aggregate;

•        “Earnout Shares” refers to, in the aggregate, the Initial Earnout Shares and the Final Earnout Shares;

•        “Effective Time” refers to the time immediately prior to the time that the Merger becomes effective;

•        “Equity Incentive Plan Proposal” refers to an ordinary resolution to approve the 2022 Plan, to be effective after the closing of the Business Combination;

•        “Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

•        “Existing Charter” refers to HSAC2’s current amended and restated memorandum and articles of association;

•        “Extension Date” refers to November 6, 2022, or February 6, 2023 if HSAC2 elects to extend the date to consummate a business combination for up to three monthly extensions after November 6, 2022;

•        “Extension Proposal” refers to the proposal, approved by the HSAC2 shareholders at the Extraordinary General Meeting of HSAC2 on July 26, 2022, to: (a) extend from August 6, 2022 to November 6, 2022, the date by which, if the Company has not consummated a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination involving one or more businesses or entities, the Company must: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares; and (iii) as promptly as reasonably possible following such redemption, liquidate and dissolve, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law, and (b) allow the Company, without another shareholder vote, to elect to extend the date to consummate a business combination on a monthly basis for up to three times by an additional one month each time after November 6, 2022, upon five days’ advance notice prior to the applicable deadlines, until February 6, 2023 or a total of up to six months after August 6, 2022, unless the closing of the Company’s initial business combination shall have occurred;

•        “Final Earnout Shares” refers to 4,000,000 shares of the Earnout Consideration, in the aggregate, to be issued in the event that the Final Milestone Event occurs during the Earnout Period;

•        “Final Milestone Event” refers to the event that, during the Earnout Period, over any 20-Trading Days within any 30-Trading Day period during the Earnout Period the VWAP of the New Orchestra Common Stock is greater than or equal to $20.00 per share;

•        “Forward Purchase” refers to the purchase by the RTW Funds or Medtronic (as defined below), as applicable, of 1,000,000 Public Shares at $10.00 per share pursuant to the Forward Purchase Agreements and “Forward Purchases” refers to both such purchases;

•        “Forward Purchase Agreements” refers to the RTW Forward Purchase Agreement and the Medtronic Forward Purchase Agreement;

•        “U.S. GAAP” refers to U.S. generally accepted accounting principles;

•        “HSAC2,” “we,” “us,” “our company” or the “Company” refers to Health Sciences Acquisitions Corporation 2, an exempted company incorporated under the laws of the Cayman Islands;

•        “HSAC2 Common Stock” refers to shares of the common stock, par value $0.0001 per share, of HSAC2 after giving effect to the Domestication but before the consummation of the Merger;

•        “HSAC2 Ordinary Shares” refers to the Ordinary Shares of HSAC2, par value $0.0001 per share;

•        “Initial Earnout Shares” refers to 4,000,000 shares of the Earnout Consideration, in the aggregate, to be issued in the event that the Initial Milestone Event occurs during the Earnout Period;

•        “Initial Milestone Event” refers to the event that, during the Earnout Period, over any 20 Trading Days within any 30-Trading Day period the VWAP of the New Orchestra Common Stock is greater than or equal to $15.00 per share;

•        “Initial Shareholders” refers to our shareholders as of immediately prior to our IPO, comprised of the Sponsor, Pedro Granadillo, Stuart Peltz, Carsten Boess, and Michael Brophy;

•        “Insider Shares” refers to the 4,000,000 HSAC2 Ordinary Shares held or controlled by our Initial Shareholders prior to the IPO and, following the Domestication, to the shares to be received in exchange therefor;

•        “Investment Company Act” refers to the Investment Company Act of 1940, as amended.

•        “IPO” refers to HSAC2’s initial public offering of HSAC2 Ordinary Shares;

•        “ISR” refers to In-Stent Restenosis (an indication whereby a previously stented artery requires a repeat intervention);

•        “LLL” refers to Late Lumen Loss;

•        “Lock-Up Period” refers to the period from the Closing until the earlier of: (1)(a)12 months after the Closing with respect to the (i) 4,000,000 shares of New Orchestra Common Stock to be issued in the Domestication in exchange for the 4,000,000 Insider Shares, (ii) 450,000 shares of New Orchestra Common Stock to be issued in the Domestication in exchange for the 450,000 Private Shares, and (iii) any shares of New Orchestra Common Stock or any security convertible into or exchangeable for New Orchestra Common Stock beneficially owned or owned of record by RTW Investments, LP and its affiliates as of the date of the Closing, and (b) six (6) months after the Closing with respect to all other holders and New Orchestra Common Stock signatory to the Amended and Restated Registration Rights Agreement and (2) the date on which New Orchestra completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the New Orchestra stockholders having the right to exchange their shares of New Orchestra Common Stock for cash, securities or other property;

•        “Lock-up Shares” refers to any shares of New Orchestra Common Stock or any security convertible into or exercisable or exchanged for New Orchestra Common Stock beneficially owned or owned of record by the applicable securityholder;

•        “MACE” refers to Major Adverse Cardiac Events;

•        “Medtronic” refers to Medtronic, Inc. and/or Covidien Group S.à.r.l., each an affiliate of Medtronic plc;

•        “Medtronic Agreement” refers to the Exclusive License and Collaboration Agreement, dated as of June 30, 2022, by and among, Orchestra BioMed, Inc., BackBeat Medical, LLC and Medtronic, Inc.;

•        “Medtronic Forward Purchase Agreement” refers to the forward purchase agreement entered into by HSAC2 and Orchestra with Medtronic, pursuant to which Medtronic agreed to purchase $10 million of HSAC2 Ordinary Shares, less the dollar amount of HSAC2 Ordinary Shares holding redemption rights that Medtronic acquires and holds until immediately prior to the Domestication;

•        “Merger” refers to the merger, pursuant to the Merger Agreement, evidenced by a certificate of merger between Merger Sub and Orchestra pursuant to which, following the Domestication, Orchestra will merge with and into Merger Sub, whereupon the separate corporate existence of Merger Sub will cease with Orchestra surviving as a wholly owned subsidiary of Domesticated Parent;

•        “Merger Agreement” refers to the Agreement and Plan of Merger dated as of July 4, 2022, as amended by Amendment No. 1 thereto dated as of July 21, 2022 and Amendment No. 2 thereto dated as of November 21, 2022, and as further amended or modified from time to time, by and among HSAC2, Merger Sub and Orchestra;

•        “Merger Sub” refers to HSAC Olympus Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of HSAC2;

•        “Nasdaq” refers to the Nasdaq Capital Market;

•        “Nasdaq Proposal” refers to an ordinary resolution to approve, for purposes of complying with applicable Nasdaq listing rules, the issuance by HSAC2 of shares of HSAC2 Common Stock to equity holders of Orchestra;

•        “New Orchestra” refers to HSAC2 and its consolidated subsidiaries after giving effect to the Business Combination;

•        “New Orchestra Board” refers to the board of directors of New Orchestra following the Business Combination;

•        “New Orchestra Common Stock” refers to the shares of common stock of New Orchestra, par value $0.0001 per share;

•        “Orchestra” refers to Orchestra BioMed, Inc., a Delaware Corporation, prior to the Business Combination;

•        “Orchestra Board” refers to Orchestra’s board of directors;

•        “Orchestra Common Stock” refers to Orchestra common stock, par value $0.0001 per share;

•        “Orchestra Equityholders” refers to the holders of equity interests in Orchestra as of the time immediately before the Business Combination;

•        “Orchestra Support Agreement” refers to the support agreement dated as of July 4, 2022 by and among HSAC2, Orchestra and Medtronic;

•        “PAD” refers to Peripheral Artery Disease;

•        “Parent Support Agreement” refers to the amended and restated parent support agreement dated as of November 21, 2022 by and among HSAC2, Orchestra and the Initial Shareholders, Alice Lee, and Stephanie A. Sirota;

•        “Private Placement” refers to the private placement with the Sponsor of the 450,000 Private Shares and 1,500,000 Private Warrants upon consummation of the IPO;

•        “Private Shares” refers to the 450,000 HSAC2 Ordinary Shares we sold to our Sponsor in the Private Placement and, following the Domestication, to the shares to be received in exchange therefor;

•        “Private Warrants” refers to the 1,500,000 warrants sold to our Sponsor upon consummation of the IPO and, following the Domestication, to the warrants to be received in exchange therefor;

•        “Proposals” refers, collectively, to the Business Combination Proposal, the Domestication Proposal, the Charter Approval Proposal, the Bylaws Approval Proposal, the Advisory Governance Proposals, the Nasdaq Proposal, the Director Election Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal;

•        “Proposed Bylaws” refers to the proposed new bylaws of Orchestra BioMed Holdings, Inc., a copy of which is attached to this proxy statement/prospectus as Annex C;

•        “Proposed Charter” refers to the proposed new certificate of incorporation of Orchestra BioMed Holdings, Inc., a copy of which is attached to this proxy statement/prospectus as Annex B;

•         “Public Shareholders” refers to the holders of our Public Shares, including our Initial Shareholders to the extent our Initial Shareholders purchase Public Shares, provided that their status as “Public Shareholders” shall exist only with respect to such Public Shares;

•        “Public Shares” refers to the HSAC2 Ordinary Shares issued in our IPO (whether they were purchased in our IPO or thereafter in the open market);

•        “Record Date” refers to            , 2022;

•        “RTW Forward Purchase Agreement” refers to the forward purchase agreement entered into by HSAC2 and Orchestra with the RTW Funds, as amended on October 21, 2022, pursuant to which the RTW Funds agreed (1) to purchase $10 million of HSAC2 Ordinary Shares, less the dollar amount of HSAC2 Ordinary Shares holding redemption rights that the RTW Funds acquire and hold until immediately prior to the Domestication at a per share price not exceeding the redemption price available to HSAC2 shareholders exercising redemption rights at the Shareholder Meeting, (2) that any shares purchased pursuant to the agreement, or otherwise acquired by the RTW Funds outside of the existing redemption offer, will not be voted in favor of approving the Business Combination, and (3) that the RTW Funds will waive redemption rights with respect to such purchases in the vote to approve the Business Combination;

•        “RTW Funds” refers to certain funds managed by RTW Investments, LP;

•        “Securities Act” refers to the Securities Act of 1933, as amended;

•        “SEC” refers to the U.S. Securities and Exchange Commission;

•        “Shareholder Meeting” refers to the extraordinary general meeting of the shareholders of HSAC2 to be held in connection with the Business Combination and to consider and vote upon the Proposals;

•        “Sponsor” refers to HSAC 2 Holdings, LLC, our sponsor, the three directors of which are Roderick Wong, MD, our Chief Executive Officer and President, Naveen Yalamanchi, MD, our Chief Financial Officer and Executive Vice President, and Alice Lee, JD, our Vice President of Operations and Secretary & Treasurer;

•        “Sponsor and related parties” refers to the Sponsor, the directors and officers of HSAC2 and the RTW Funds.

•        “TLF” refers to Target Lesion Failure;

•        “Trading Day” refers to: (a) for so long as shares of HSAC2 Common Stock are listed or admitted for trading on Nasdaq or any other national securities exchange, days on which such securities exchange is open for business; (b) when and if the shares of HSAC2 Common Stock are quoted on a system of automated dissemination of quotations of securities prices, days on which trades may be made on such system; or (c) if the shares of HSAC2 Common Stock are not listed or admitted to trading on any national securities exchange or quoted on a system of automated dissemination of quotations of securities prices, days on which shares of HSAC2 Common Stock are traded regular way in the over-the- counter market and for which a closing bid and a closing asked price for shares of HSAC2 Common Stock are available;

•        “Transfer Agent” refers to Continental Stock Transfer & Trust Company, as transfer agent;

•        “Trust Account” refers to HSAC2’s trust account established pursuant to our IPO, being a United States-based trust account at Morgan Stanley Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee;

•        “US$” and “$” refers to the legal currency of the United States;

•        “Virtue SAB” refers to Orchestra’s Virtue Sirolimus AngioInfusion Balloon product; and

•        “VWAP” refers, for any security as of any date(s), to the dollar volume-weighted average price for a security on the principal securities exchange or securities market on which such security is then traded during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported by OTC Markets Group Inc., except that if the VWAP cannot be calculated for such security on such date(s) on any of the foregoing bases, the VWAP of such security on such date(s) shall be the fair market value per share on such date(s) as reasonably determined by HSAC2.

All references in this proxy statement/prospectus to shares of the company being forfeited shall take effect as surrenders for no consideration of such shares as a matter of the Cayman Islands law. Any share dividends described in this proxy statement/prospectus will take effect as a share capitalization as a matter of Cayman Islands law.

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

The following are answers to some questions that you, as a shareholder of HSAC2, may have regarding the Proposals being considered at the Shareholder Meeting. We urge you to read carefully the remainder of this proxy statement/prospectus because the information in this section does not provide all the information that might be important to you with respect to the Proposals and the other matters being considered at the Shareholder Meeting. Additional important information is also contained in the annexes to and the documents incorporated by reference into this proxy statement/prospectus

Q:     Why am I receiving this proxy statement/prospectus?

A:     HSAC2, Merger Sub and Orchestra have agreed to the Business Combination under the terms of the Merger Agreement, which is attached to this proxy statement/prospectus as Annex A-1, Annex A-2 and Annex A-3 and is incorporated into this proxy statement/prospectus by reference. You are encouraged to read the Merger Agreement in its entirety. The Board (which refers to the Board of Directors of HSAC2 prior to the Domestication, to the Board of Directors of Domesticated Parent following the Domestication, but before the Merger, and to the Board of Directors of New Orchestra following the Merger (the “Board”)) is soliciting your proxy to vote for the Business Combination and other Proposals at the Shareholder Meeting because you owned HSAC2 Ordinary Shares at the close of business on the Record Date and are therefore entitled to vote at the Shareholder Meeting. This proxy statement/prospectus summarizes the information that you need to know in order to cast your vote.

Q:     What is being voted on?

A:     Below are proposals that HSAC2 shareholders are being asked to vote on:

Proposal 1:    The Business Combination Proposal — an ordinary resolution to approve the Business Combination.

Proposal 2:    The Domestication Proposal — a special resolution to approve the Domestication.

Proposal 3:    The Charter Approval Proposal — a special resolution to approve and adopt the Proposed Charter, a copy of which is attached to this proxy statement/prospectus as Annex B.

Proposal 4:    The Bylaws Approval Proposal — a special resolution to approve and adopt the Proposed Bylaws, a copy of which is attached to this proxy statement/prospectus as Annex C.

Proposal 5:    The Advisory Governance Proposals — an ordinary resolution, on a non-binding advisory basis, to approve and adopt certain differences between HSAC2’s Existing Charter and the Proposed Charter, which are being presented as separate sub-proposals.

Proposal 6:    The Nasdaq Proposal — an ordinary resolution to approve, for purposes of complying with applicable Nasdaq listing rules, the issuance by HSAC2 of shares of common stock, par value $0.0001 per share, to equity holders of Orchestra.

Proposal 7:    The Director Election Proposal — an ordinary resolution to elect Eric A. Rose, M.D., Jason Aryeh, Pamela Y. Connealy, Geoffrey W. Smith, David P. Hochman, Darren R. Sherman and Eric S. Fain, M.D. to serve staggered terms on New Orchestra’s board of directors until the 2023, 2024 and 2025 annual meetings of stockholders, as applicable, and until their respective successors are duly elected and qualified or until their earlier death, resignation or removal.

Proposal 8:    The Equity Incentive Plan Proposal — an ordinary resolution to approve the 2022 Plan to be effective after the closing of the Business Combination; and

Proposal 9:    The Adjournment Proposal — an ordinary resolution to approve the adjournment of the Shareholder Meeting by the chairman thereof to a later date, if necessary, under certain circumstances, including for the purpose of soliciting additional proxies in favor of the foregoing Proposals, in the event HSAC2 does not receive the requisite shareholder vote to approve the Proposals.

For more information, please see “Proposal 1 — The Business Combination Proposal,” “Proposal 2 — The Domestication Proposal,” “Proposal 3 — The Charter Approval Proposal,” “Proposal 4 — The Bylaws Approval Proposal,” “Proposal 5 — The Advisory Governance Proposals,” “Proposal 6 — The Nasdaq Proposal,” “Proposal 7 — The Director Election Proposal,” “Proposal 8 — The Equity Incentive Plan Proposal” and “Proposal 9 — The Adjournment Proposal.”

Under the Merger Agreement, the approval of the Condition Precedent Proposals is a condition to the consummation of the Business Combination. If the HSAC2 shareholders do not approve each of the Condition Precedent Proposals, then the Business Combination may not be consummated.

In addition, as required by applicable SEC guidance to give shareholders the opportunity to present their separate views on important corporate governance provisions, HSAC2 is requesting that our shareholders vote upon, on a non-binding advisory basis, a proposal to approve certain amendments contained in the Proposed Charter that materially affect shareholder rights, which are amendments that will be made to the Existing Charter as reflected in the Proposed Charter if the Advisory Governance Proposals are approved. See “Proposal 5 — The Advisory Governance Proposals.” This separate vote is not otherwise required by Cayman Islands law (separate and apart from the Charter Approval Proposal and the Bylaws Approval Proposal), but, pursuant to SEC guidance, HSAC2 is required to submit these provisions to our shareholders separately for approval. However, the shareholder votes regarding these proposals are advisory votes, and are not binding on HSAC2 or the HSAC2 Board (separate and apart from the approval of the Charter Approval Proposal and the Bylaws Approval Proposal). Furthermore, the Business Combination is not conditioned on the separate approval of the Advisory Governance Proposals (separate and apart from approval of the Charter Approval Proposal and the Bylaws Approval Proposal).

Q:     Are the proposals conditioned on one another?

A:     Each of the Condition Precedent Proposals (including the Business Combination Proposal, the Domestication Proposal, the Charter Approval Proposal, the Bylaws Approval Proposal, the Nasdaq Proposal, the Director Election Proposal and the Equity Incentive Plan Proposal) is conditioned on the approval and adoption of the other Condition Precedent Proposals. The Advisory Governance Proposals and the Adjournment Proposal are not conditioned upon the approval of any other proposal.

It is important for you to note that in the event that the Business Combination Proposal is not approved, HSAC2 will not consummate the Business Combination. If HSAC2 does not consummate the Business Combination and fails to complete an initial business combination by November 6, 2022, or February 6, 2023 if HSAC2 elects to extend the date to consummate a business combination for up to three monthly extensions after November 6, 2022 (the “Extension Date”), HSAC2 will be required to dissolve and liquidate, unless we obtain shareholder approval to amend our Existing Charter to further extend the date by which the Business Combination may be consummated.

Q:     What will happen in the Business Combination?

A:     Before the Closing, HSAC2 will domesticate as a Delaware corporation. At the Closing, Merger Sub will merge with and into Orchestra, with Orchestra surviving such merger as the surviving entity. Upon consummation of the Business Combination, Orchestra will become a wholly owned subsidiary of HSAC2. HSAC2 will then change its name to “Orchestra BioMed Holdings, Inc.” In connection with the Business Combination, the cash held in the Trust Account after giving effect to any redemption of shares by HSAC2’s Public Shareholders and the proceeds from the sale of shares under the Forward Purchase Agreements (if any) and Backstop Agreement will be used to pay certain fees and expenses in connection with the Business Combination, and for working capital and general corporate purposes.

Q:     Why is HSAC2 proposing the Business Combination Proposal?

A:     HSAC2 is a blank check company incorporated on May 25, 2020 as a Cayman Islands exempted company. We were incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses, which we refer to as our initial business combination.

HSAC2 received $160 million from the IPO (including net proceeds from the exercise by the underwriters of their over-allotment option) and sale of the Private Warrants, which was placed into the Trust Account immediately following the IPO. In accordance with HSAC2’s Existing Charter, the funds held in the Trust Account will be released upon the consummation of the Business Combination. See the question entitled “What happens to the funds held in the Trust Account upon consummation of the Business Combination?”

There currently are 11,212,117 HSAC2 Ordinary Shares issued and outstanding, consisting of 6,762,117 Public Shares, 450,000 Private Shares and 4,000,000 Insider Shares. In addition, there currently are 1,500,000 Private Warrants issued and outstanding held by our Sponsor. Each Private Warrant entitles the holder thereof

to purchase one HSAC2 Ordinary Share at a price of $11.50 per share. The Private Warrants are not currently exercisable, but will become exercisable 30 days after the completion of our initial business combination and will expire five years after the completion of our initial business combination.

Q:     Did the HSAC2 Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

A:     The HSAC2 Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. The HSAC2 Board believes that, based upon the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its shareholders. The Board also determined, without seeking a valuation from a financial advisor, that Orchestra’s fair market value was at least 80% of HSAC2’s net assets, excluding any taxes payable on interest earned. Accordingly, investors will be relying on the HSAC2 Board’s judgment as described above in valuing Orchestra’s business and assuming the risk that the HSAC2 Board may not have properly valued such business.

Q:     What is the consideration being paid to Orchestra Equityholders?

A:     Under the Merger Agreement, the consideration to be paid at the Closing by HSAC2 to holders of equity interests in Orchestra as of the time immediately before the Business Combination (“Orchestra Equityholders”) will be payable in shares of HSAC2 Common Stock at an exchange ratio of 0.465 shares of HSAC2 Common Stock for each whole share of Orchestra Common Stock. Orchestra stockholders will also have the opportunity to elect to participate in an earnout pursuant to which each such electing stockholder may receive a portion of additional contingent consideration of up to 8,000,000 shares of New Orchestra Common Stock in the aggregate, if certain share price targets are met.

Q:     How was Orchestra’s enterprise value determined?

A:     HSAC2 arrived at the enterprise value for Orchestra through diligence of the company’s two flagship programs BackBeat Cardiac Neuromodulation Therapy for the treatment of hypertension (“HTN”) and Virtue Sirolimus AngioInfusion Balloon for the treatment of atherosclerotic artery disease and the associated anticipated market performance as well as comparison to the enterprise values of a basket of pre-revenue medical technology peers. In addition, the equity value was benchmarked against an equity value to net cash ratio of 2.0x and reflected that no additional near-term fundraising is needed for the business. The pro forma fully diluted enterprise valuation was $158 million and market capitalization is $317 million assuming $169 million of pro forma cash at Orchestra’s March 31, 2022 balance sheet and $10 million of debt.

Q:     What equity stake will current shareholders of HSAC2 and Orchestra Equityholders hold in New Orchestra after the Closing?

A:     We anticipate that, immediately after consummation of the Business Combination, including the Domestication, the Merger, the purchases made under the Forward Purchase Agreements, and assuming no additional redemptions, the Sponsor, the RTW Funds and HSAC2’s directors and officers will collectively own approximately 25.3% of the issued New Orchestra Common Stock and Medtronic will own approximately 15.8% of the issued New Orchestra Common Stock, while the other Public Shareholders of HSAC2 will own approximately 15.0% of the issued New Orchestra Common Stock and the current stockholders of Orchestra (other than Medtronic) will own approximately 43.9% of the issued New Orchestra Common Stock. If the RTW Funds make the maximum purchases under the Backstop Agreement and assuming maximum redemptions, these percentages would be 40.3%, 15.8%, 0% and 43.9%, respectively. These relative percentages do not reflect the Earnout Consideration, which will not be issued unless and until the Initial Milestone Event and/or the Final Milestone Event occur and assume that (i) none or all of HSAC2’s existing Public Shareholders, as indicated above, seek to convert their shares into the right to receive cash from the Trust Account, (ii) no HSAC2 warrants are exercised, and (iii) no existing Orchestra stock options or warrants are exercised and no additional Orchestra stock options or warrants are granted prior to the Closing. If any of these assumptions are incorrect, the anticipated percentage ownership of New Orchestra will be different. You should read Summary of the Proxy Statement/Prospectus — Ownership of the Post-Business Combination Company After the Closing” and “Unaudited Pro Forma Condensed Consolidated Combined Financial Statements” for further information.

Q.     What conditions must be satisfied to complete the Business Combination?

A:     The consummation of the Business Combination is conditioned upon, among other things: (i) completion of the Domestication, (ii) approval by HSAC2’s shareholders and Orchestra’s stockholders of the Merger and related transactions, (iii) each Orchestra warrant having been amended in accordance with its terms to permit the conversion thereof into a New Orchestra warrant and any Orchestra warrant not so amended being canceled by Orchestra, (iv) HSAC2 having at least $5,000,001 of net tangible assets upon consummation of the Merger, and (v) HSAC2 having at least $60 million in cash remaining in its working capital and Trust Account, after satisfaction of redemption payments to Public Shareholders and indebtedness (not including expenses in connection with the IPO and Merger), including the Sponsor Commitment but not the proceeds of the forward purchase agreement entered into by HSAC2 and Orchestra with Medtronic, pursuant to which Medtronic agreed to purchase $10 million of HSAC2 Ordinary Shares, less the dollar amount of HSAC2 Ordinary Shares holding redemption rights that Medtronic acquires and holds until immediately prior to the Domestication (the “Medtronic Forward Purchase Agreement”) (such remaining cash in the working capital and Trust Account, the “Parent Closing Cash”). Therefore, unless these conditions are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated. For a summary of the conditions that must be satisfied or waived prior to the consummation of the Business Combination, see the section entitled “Proposal 1 — The Business Combination Proposal — The Business Combination and the Merger Agreement — Conditions to Closing.”

Q.     Are Orchestra’s stockholders required to approve the Business Combination?

A:     Yes. The Orchestra stockholders are required to approve the Business Combination.

Certain Orchestra stockholders entered into a support agreement dated July 4, 2022, with HSAC2 and Orchestra, pursuant to which such stockholders agreed to vote all Orchestra Common Stock beneficially owned by them, including any additional shares of Orchestra they acquire ownership of or the power to vote, in favor of the Business Combination and related transactions. As of            , 2022, such stockholders own            % of the issued and outstanding shares of Orchestra Common Stock.

Q:     Are there risks associated with the Business Combination that I should consider in deciding how to vote?

A:     Yes. There are several risks related to the Business Combination and other transactions contemplated by the Merger Agreement, as discussed elsewhere in this proxy statement/prospectus. Please read with particular care the detailed description of the risks described in “Risk Factors” beginning on page 47 of this proxy statement/prospectus.

Q:     Why is HSAC2 proposing the Domestication?

A:     The HSAC2 Board believes that it would be in the best interests of HSAC2 to effect the Domestication to enable the Company to avoid certain taxes that would be imposed on the Company if the Company were to conduct an operating business in the United States as a foreign corporation after the Business Combination. In addition, the Board believes Delaware provides a recognized body of corporate law that will facilitate corporate governance by the Company’s officers and directors following the Closing. Delaware maintains a favorable legal and regulatory environment in which to operate. For many years, Delaware has followed a policy of encouraging companies to incorporate there and, in furtherance of that policy, has adopted comprehensive, modern and flexible corporate laws that are regularly updated and revised to meet changing business needs. As a result, many major corporations have initially chosen Delaware as their domicile or have subsequently reincorporated in Delaware in a manner similar to the procedures HSAC2 is proposing. Due to Delaware’s longstanding policy of encouraging incorporation in that state and consequently its prevalence as the state of incorporation, the Delaware courts have developed considerable expertise in dealing with corporate issues and a substantial body of case law has developed construing the Delaware General Corporation Law, as amended (the “DGCL”) and establishing public policies with respect to Delaware corporations. It is anticipated that the DGCL will continue to be interpreted and explained in a number of significant court decisions that may provide greater predictability with respect to the Company’s corporate legal affairs.

The Domestication will not occur unless the HSAC2 shareholders have approved the Domestication Proposal, the Business Combination Proposal, the Charter Approval Proposal, the Bylaws Approval Proposal, the Equity Incentive Plan Proposal and the Nasdaq Proposal and upon the Merger Agreement being in full force and effect prior to the Domestication. The Domestication will occur immediately prior to the Closing.

Q:     What is involved with the Domestication?

A.     The Domestication will require HSAC2 to file certain documents in both the Cayman Islands and the State of Delaware. At the effective time of the Domestication, which will be the Closing Date, HSAC2 will cease to be a company incorporated under the laws of the Cayman Islands and in connection with the Business Combination, HSAC2 will continue as a Delaware corporation and, simultaneously with the Business Combination, will change its corporate name to “Orchestra BioMed Holdings, Inc.” The Existing Charter will be replaced by the Proposed Charter and the Proposed Bylaws and your rights as a shareholder will cease to be governed by the laws of the Cayman Islands and will be governed by Delaware law.

Q:     When will the Domestication be effective?

A:     The Domestication is expected to become effective immediately prior to the completion of the Business Combination.

Q:     How will the Domestication affect my HSAC2 securities?

A:     Pursuant to the Domestication and the Business Combination and without further action on the part of HSAC2 shareholders, each outstanding HSAC2 Ordinary Share will convert to one outstanding share of HSAC2 Common Stock. Although it will not be necessary for you to exchange your certificates representing HSAC2 Ordinary Shares after the Domestication, the Company will, upon request, exchange your HSAC2 share certificates for the applicable number of shares of HSAC2 Common Stock, and all certificates for securities issued after the Domestication will be certificates representing securities of HSAC2 as a Delaware corporation.

Q:     How many votes do I have at the Shareholder Meeting?

A:     HSAC2 shareholders are entitled to one vote at the Shareholder Meeting for each HSAC2 Ordinary Share for which they are entered in the register of members of HSAC2 as of the Record Date. As of the close of business on the Record Date, there were 11,212,117 outstanding HSAC2 Ordinary Shares.

Q:     What vote is required to approve the Proposals presented at the Shareholder Meeting?

A:     The Business Combination Proposal, the Advisory Governance Proposals, the Nasdaq Proposal, the Director Election Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal require the approval of an ordinary resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of the HSAC2 Ordinary Shares who, being present in person (including virtually) or represented by proxy and entitled to vote at the Shareholder Meeting, vote at the Shareholder Meeting. The Advisory Governance Proposals are voted upon on a non-binding advisory basis only. The Domestication Proposal, the Charter Approval Proposal, and the Bylaws Approval Proposal require the approval of a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds of the HSAC2 Ordinary Shares who, being present in person (including virtually) or represented by proxy and entitled to vote at the Shareholder Meeting, vote at the Shareholder Meeting.

Q:     What constitutes a quorum at the Shareholder Meeting?

A:     Holders of a majority of the issued shares entitled to vote at the Shareholder Meeting, present in person (including virtually) or represented by proxy, constitute a quorum. In the absence of a quorum, the chairman of the meeting has the power to adjourn the Shareholder Meeting. As of the Record Date, 5,606,060 HSAC2 Ordinary Shares, in the aggregate, would be required to achieve a quorum.

Q:     How will the Initial Shareholders vote?

A:     Pursuant to letter agreements dated August 3, 2020, the Initial Shareholders, who own the Insider Shares and Private Shares, representing approximately 39.96% of the outstanding HSAC2 Ordinary Shares, agreed to vote such shares and any other HSAC2 Ordinary Shares purchased by them in the open market in or after the HSAC2 IPO in favor of the Business Combination Proposal. However, any HSAC Ordinary Shares acquired outside of the redemption offer set forth in this proxy statement/prospectus, including the 1,000,000 Forward Purchase Shares and any purchase by the RTW Funds pursuant to the Backstop Agreement (“Backstop Purchases”), will not be voted in favor of approving the Business Combination Proposal and, further, will not carry redemption rights. Therefore, while the Insider Shares, Private Shares and 30,000 Public Shares held by our officers will

be voted in favor of the Business Combination, the 1,000,000 Forward Purchase Shares and any Backstop Purchases will not. See the section titled “Proposal 1 — The Business Combination Proposal — The Business Combination and the Merger Agreement — The General Structure of the Business Combination.”

Q:     What interests do HSAC2’s current executive officers and directors have in the Business Combination?

A:     In considering the recommendation of the Board to approve the Merger Agreement, HSAC2 shareholders should be aware that certain HSAC2 executive officers and directors may be deemed to have interests in the Business Combination that are different from, or in addition to, those of HSAC2 shareholders generally. These interests, which may create actual or potential conflicts of interest, are, to the extent material, described in the section titled “Proposal 1 — The Business Combination Proposal — Interests of HSAC2’s Directors and Officers and Others in the Business Combination” beginning on page 140.

Q:     Who will manage New Orchestra after the Business Combination?

A:     As a condition to the Closing of the Business Combination, all of the officers and directors of HSAC2 will resign. For information on the anticipated management of New Orchestra, see the section titled “Management After the Business Combination.”

Q:     When is the Business Combination expected to occur?

A:     The Merger Agreement provides that the Closing will take place three business days after satisfaction or waiver of the conditions described below under the section titled “Proposal 1 — The Business Combination Proposal — Structure of the Business Combination — Conditions to Closing of the Business Combination”; or such other date as agreed to by the parties to the Merger Agreement in writing, in each case, subject to the satisfaction or waiver of the Closing conditions and after the Domestication. The Merger Agreement may be terminated by either HSAC2 or Orchestra if the Closing has not occurred by February 6, 2023, subject to certain exceptions. The parties expect the Closing to occur late in the fourth quarter of 2022 or early in the first quarter of 2023.

For a description of the conditions to the completion of the Business Combination, see the section titled “Proposal 1 — The Business Combination Proposal — The Business Combination and the Merger Agreement — Conditions to Closing.”

Q:     What happens if I sell my HSAC2 Ordinary Shares before the Shareholder Meeting?

A:     The Record Date is earlier than the date of the Shareholder Meeting. If you transfer your HSAC2 Ordinary Shares after the Record Date, but before the Shareholder Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Shareholder Meeting. However, you will not be able to seek redemption of your shares because you will no longer be able to tender them for cancellation upon consummation of the Business Combination. If you transfer your HSAC2 Ordinary Shares prior to the Record Date, you will have no right to vote those shares at the Shareholder Meeting or redeem those shares for a pro rata portion of the proceeds held in our Trust Account.

Q:     What happens if I vote against the Business Combination Proposal?

A:     Pursuant to the Existing Charter, if the Business Combination Proposal is not approved and HSAC2 does not otherwise consummate an alternative business combination by the Extension Date, HSAC2 will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to the Public Shareholders.

Q:     Do I have redemption rights?

A:     Pursuant to the Existing Charter, holders of Public Shares may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with the Existing Charter. As of         , 2022, based on funds in the Trust Account of approximately $            , this would have amounted to approximately $             per share (exclusive of         ). If a holder exercises its redemption rights, then such holder will be exchanging its HSAC2 Ordinary Shares for cash. Such a holder will be entitled to receive cash for its Public Shares only if it properly demands redemption and tenders or delivers its shares (either physically or electronically, including share certificates (if any) and other redemption forms) to HSAC2’s transfer agent prior to the Shareholder Meeting. Additionally, in no event will HSAC2 redeem Public Shares in an amount that

would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement. See the section titled “Extraordinary General Meeting of HSAC2 Shareholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

Q:     Will how I vote affect my ability to exercise redemption rights?

A:     No. You may exercise your redemption rights whether you vote your HSAC2 Ordinary Shares “FOR” or “AGAINST” the Business Combination Proposal or any other proposal described in this proxy statement/prospectus. As a result, the Merger Agreement can be approved by shareholders who will redeem their shares and no longer remain shareholders, leaving shareholders who choose not to redeem their shares holding shares in a company with a potentially less liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet the Nasdaq listing standards.

Q:     What are the U.S. federal income tax consequences of exercising my redemption rights?

A:     In the event that a U.S. Holder (as defined in “Material U.S. Federal Income Tax Consequences”) elects to redeem its HSAC2 Ordinary Shares for cash, the treatment of the transaction for U.S. federal income tax purposes will depend on whether the redemption qualifies as a sale or exchange of the HSAC2 Common Stock under Section 302 of the Internal Revenue Code of 1986, as amended (the “Code”), or is treated as a distribution under Section 301 of the Code and whether HSAC2 would be characterized as a passive foreign investment company (“PFIC”).

Additionally, because the Domestication will occur prior to the redemption by U.S. Holders that exercise redemption rights with respect to HSAC2 Ordinary Shares, U.S. Holders exercising such redemption rights will be subject to the potential tax consequences of section 367(b) of the Code and the PFIC rules. The tax consequences of the exercise of redemption rights, including pursuant to Section 367(b) of the Code and the PFIC rules, are discussed more fully below under “Material U.S. Federal Income Tax Consequences.” In addition, non-U.S. Holders exercising redemption rights may be subject to U.S. withholding tax on the proceeds of the redemption, unless an exemption is established. All holders of HSAC2 Ordinary Shares considering exercising their redemption rights are urged to consult their tax advisor on the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws.

Q:     What are the U.S. federal income tax consequences of the Domestication Proposal?

A:     As discussed more fully under “Material U.S. Federal Income Tax Consequences,” the Domestication should qualify as a “reorganization” within the meaning of Section 368 of the Code. However, the provisions of the Code that govern reorganizations are complex, and due to the absence of direct guidance on the application of Section 368 to a domestication of a corporation holding only investment-type assets such as HSAC2, the qualification of the Domestication as a “reorganization” within the meaning of Section 368 of the Code is not entirely clear. If the Domestication so qualifies, then a U.S. Holder (as defined below) will be subject to Section 367(b) of the Code and, as a result:

•        a U.S. Holder whose HSAC2 Ordinary Shares have a fair market value of less than $50,000 on the date of the Domestication and who on the date of the Domestication owns (actually and constructively) less than 10% of the total combined voting power of all classes of HSAC2 stock entitled to vote and less than 10% of the total value of all classes of HSAC2 stock will generally not recognize any gain or loss and will generally not be required to include any part of HSAC2’s earnings in income pursuant to the Domestication;

•        a U.S. Holder whose HSAC2 Ordinary Shares have a fair market value of $50,000 or more on the date of the Domestication, but who on the date of the Domestication owns (actually and constructively) less than 10% of the total combined voting power of all classes of HSAC2 stock entitled to vote and less than 10% of the total value of all classes of HSAC2 stock will generally recognize gain (but not loss) on the exchange of HSAC2 Ordinary Shares for HSCA2 Common Stock pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holders may file an election to include in income as a dividend the “all earnings and profits amounts,” (as defined in Treasury Regulation Section 1.367(b)-2(d)) attributable to their HSAC2 Ordinary Shares, provided certain other requirements are satisfied. HSAC2 does not expect to have significant cumulative earnings and profits on the date of the Domestication; and

•        a U.S. Holder who on the date of the Domestication owns (actually and constructively) 10% or more of the total combined voting power of all classes of HSAC2 stock entitled to vote or 10% or more of the total value of all classes of HSAC2 stock will generally be required to include in income as a dividend the “all earnings and profits amount,” (as defined in Treasury Regulation Section 1.367(b)-2(d)) attributable to its HSAC2 Ordinary Shares, provided certain other requirements are satisfied. Any such U.S. Holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code. HSAC2 does not expect to have significant cumulative earnings and profits on the date of the Domestication.

Furthermore, even if the Domestication qualifies as a “reorganization” within the meaning of Section 368 of the Code, a U.S. Holder of HSAC2 Ordinary Shares may, in certain circumstances, still recognize gain (but not loss) upon the exchange of its HSAC2 Ordinary Shares for HSAC2 Common Stock pursuant to the Domestication under the PFIC rules of the Code equal to the excess, if any, of the fair market value of HSAC2 Common Stock received in the Domestication and the U.S. Holder’s adjusted tax basis in the corresponding HSAC2 Ordinary Shares surrendered in exchange therefor. The tax on any such gain so recognized would be imposed at the rate applicable to ordinary income and an interest charge would apply. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Domestication, see the discussion in the section titled “Material U.S. Federal Income Tax Consequences — U.S. Holders — U.S. Federal Income Tax Consequences of the Domestication to U.S. Holders of HSAC2 Ordinary Shares — Passive Foreign Investment Company Status.”

If the Domestication does not qualify as a reorganization, then a U.S. Holder that exchanges its HSAC2 Ordinary Shares for HSAC2 Common Stock will recognize gain or loss equal to the difference between (i) the sum of the fair market value of the HSAC2 Common Stock received and (ii) the U.S. Holder’s adjusted tax basis in the HSAC2 Ordinary Shares exchanged.

Additionally, the Domestication may cause Non-U.S. Holders (as defined in “Material U.S. Federal Income Tax Consequences”) to become subject to U.S. federal income withholding taxes on any dividends paid in respect of such Non-U.S. Holder’s shares of HSAC2 Common Stock after the Domestication.

For a more detailed discussion of certain U.S. federal income tax consequences of the Domestication, see “Material U.S. Federal Income Tax Consequences” in this proxy statement/prospectus. Holders should consult their own tax advisors to determine the tax consequences to them (including the application and effect of any state, local or other income and other tax laws) of the Domestication and the Business Combination.

Q:     How do I exercise my redemption rights?

A:     In order to exercise your redemption rights, you must (i) affirmatively vote either “FOR” or “AGAINST” the Business Combination Proposal and (ii) prior to 5 PM, Eastern time, on               , 2023 (two (2) business days before the Shareholder Meeting), tender your shares physically or electronically and submit a request in writing that we redeem your Public Shares for cash to Continental Stock Transfer & Trust Company, our transfer agent (the “Transfer Agent”), at the following address:

Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, New York 10004
Attention: Mark Zimkind
Email: mzimkind@continentalstock.com

Please check the box on the enclosed proxy card marked “Shareholder Certification” if you are not acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other shareholder with respect to HSAC2 Ordinary Shares. Notwithstanding the foregoing, a holder of the Public Shares, together with any affiliate of it, his or hers, or any other person with whom it, he or she is acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) will be restricted from seeking redemption rights with respect to more than 20% of the HSAC2 Ordinary Shares sold in the HSAC2 IPO (the “20% threshold”). Accordingly, all Public Shares in excess of the 20% threshold beneficially owned by a Public Shareholder or group will not be redeemed for cash.

Shareholders seeking to exercise their redemption rights and opting to tender or deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. It is HSAC2’s understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, HSAC2 does not have any control over this process and it may take longer than two weeks. Shareholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or tendered electronically.

Any request for redemption, once made by a holder of Public Shares, may not be withdrawn once submitted to HSAC2 unless the Board of Directors of HSAC2 determines (in its sole discretion) to permit the withdrawal of such redemption request (which they may do in whole or in part). If you tendered your shares for redemption to HSAC2’s transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that HSAC2’s transfer agent return the shares (physically or electronically). You may make such request by contacting HSAC2’s transfer agent at the phone number or address listed under the question “Who can help answer my questions?” below.

Q:     Do I have dissenters’ rights or appraisal rights in connection with the proposed Business Combination or the Domestication Proposal?

A:     No. There are no appraisal rights available to holders of HSAC2 Ordinary Shares or the Private Warrants in connection with the Domestication Proposal under the DGCL.

As a matter of Cayman Islands law, dissenters’ rights only apply to statutory mergers where the Cayman Islands company is a constituent party thereto.

Q:     What happens to the funds held in the Trust Account upon consummation of the Business Combination?

A:     If the Business Combination is consummated, the funds held in the Trust Account will be released to pay:

•        HSAC2 shareholders who properly exercise their redemption rights;

•        certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees, and other professional fees) that were incurred by HSAC2 and Orchestra in connection with the transactions contemplated by the Business Combination and pursuant to the terms of the Merger Agreement;

•        unpaid franchise and income taxes of HSAC2; and

•        the balance shall be released to New Orchestra to fund its working capital needs.

Q:     What happens if a substantial number of the Public Shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?

A:     Our Public Shareholders are not required to vote “FOR” the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Shareholders is reduced as a result of redemptions by Public Shareholders. However, a condition to the consummation of the Business Combination is that Parent Closing Cash is equal to or greater than $60,000,000. This $60,000,000 figure does not take into account the $10 million in Forward Purchase Shares to be purchased by Medtronic pursuant to the Medtronic Forward Purchase Agreement. In no event will HSAC2 redeem Public Shares in an amount that would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement.

Additionally, as a result of redemptions, the trading market for New Orchestra’s common stock may be less liquid than the market for the Public Shares was prior to consummation of the Business Combination and we may not be able to meet the Nasdaq listing standards or those of another national securities exchange.

Q:     What happens if the Business Combination is not consummated?

A:     There are certain circumstances under which the Merger Agreement may be terminated. See the section titled “Proposal 1 — The Business Combination Proposal — The Business Combination and the Merger Agreement — Termination” for information regarding the parties’ specific termination rights.

If, as a result of the termination of the Merger Agreement or otherwise, HSAC2 is unable to complete the Business Combination or another initial business combination transaction by the Extension Date, it will trigger our automatic winding up, liquidation and dissolution pursuant to the terms of our Existing Charter. As a result, this has the same effect as if we had formally gone through a voluntary liquidation procedure under the Companies Act.

The amount in the Trust Account (less $1,250 representing the aggregate nominal par value of our Public Shares, but including the deferred underwriting compensation) under the Companies Act will be available for distribution under the Companies Act provided that immediately following the date on which the proposed distribution is to be made, we are able to pay our debts as they fall due in the ordinary course of business, and the value of our assets exceed our liabilities. If we are forced to liquidate, we anticipate that we would distribute to our Public Shareholders the amount in the Trust Account calculated as of the date that is two days prior to the distribution date (including any accrued interest).

The proceeds deposited in the Trust Account could, however, become subject to claims of our creditors that are in preference to the claims of our shareholders. We may not have funds sufficient to pay or provide for all creditors’ claims. Although we will seek to have all vendors, service providers (excluding our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our Public Shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if our management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by our management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where our management is unable to find a service provider willing to execute a waiver. The underwriters of our IPO did not execute agreements with us waiving such claims to the monies held in the Trust Account. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. In order to protect the amounts held in the Trust Account, our Sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts 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 HSAC2 Ordinary Share due to reductions in the value of the assets held in the Trust Account, in each case less income and franchise taxes payable, provided that such liability will not apply to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such third-party claims. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our Sponsor’s only assets are securities of our company and cash received from us pursuant to the Administrative Services Agreement with our Sponsor pursuant to which we agreed to pay the Sponsor a total of $10,000 per month for office space and certain office and secretarial services. Since inception, we have paid $230,000 to the Sponsor for these services. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties, including, without limitation, claims by vendors and prospective target businesses.

In the event that the proceeds in the Trust Account are reduced 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 HSAC2 Ordinary Share due to reductions in the value of the assets in the

Trust Account, in each case less income and franchise taxes payable, and our Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per HSAC2 Ordinary Share.

If we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy or insolvency law and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the Trust Account, we cannot assure you we will be able to return $10.00 per HSAC2 Ordinary Share to our Public Shareholders. Additionally, if we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

The holders of the Insider Shares, Private Shares and Private Warrants (and underlying securities) will not participate in any redemption distribution with respect to their Insider Shares, Private Shares or Private Warrants (and underlying securities), but may have any Public Shares redeemed upon liquidation.

If we are unable to conclude our initial business combination and we expend all of the net proceeds of our IPO not deposited in the Trust Account, without taking into account any interest earned on the Trust Account, we expect that the initial per-share redemption price will be approximately $10.00. However, if there are claims of creditors that take priority over the claims of our Public Shareholders that are not indemnified by our Sponsor, the amount we distribute could be less than $10.00 per HSAC2 Ordinary Share.

We will pay the costs of any liquidation following the redemptions from our remaining assets outside of the Trust Account. If such funds are insufficient, our Initial Shareholders have agreed to pay the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and have agreed not to seek repayment for such expenses.

The underwriters of our IPO have agreed to waive their rights to the deferred underwriting commissions held in the Trust Account in the event we do not consummate a business combination by the Extension Date and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of our Public Shares.

Q:     What do I need to do now?

A:     You are urged to read carefully and consider the information contained in this proxy statement/prospectus, including the annexes, and to consider how the Business Combination will affect you as a shareholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

Q:     How do I vote?

A:      If you are a shareholder entered in the register of members of HSAC2 on the Record Date, you may vote online at the Shareholder Meeting or vote by proxy using the enclosed proxy card, the Internet or telephone. Whether or not you plan to participate in the Shareholder Meeting, we urge you to vote by proxy to ensure your vote is counted. Even if you have already voted by proxy, you may still attend the Shareholder Meeting and vote online, if you choose.

To vote online at the Shareholder Meeting, follow the instructions below under “How may I participate in the Shareholder Meeting?”

To vote using the proxy card, please complete, sign and date the proxy card and return it in the prepaid envelope. If you return your signed proxy card before the Shareholder Meeting, we will vote your shares as you direct.

To vote via the telephone, you can vote by calling the telephone number on your proxy card. Please have your proxy card handy when you call. Easy-to-follow voice prompts will allow you to vote your shares and confirm that your instructions have been properly recorded.

To vote via the Internet, please go to https://                 and follow the instructions. Please have your proxy card handy when you go to the website. As with telephone voting, you can confirm that your instructions have been properly recorded.

Telephone and Internet voting facilities for shareholders entered in the register of members of HSAC2 on the Record Date will be available 24 hours a day until 11:59 p.m. Eastern Time on             , 2023. After that, telephone and Internet voting will be closed, and if you want to vote your shares, you will either need to ensure that your proxy card is received before the date of the Shareholder Meeting or attend the Shareholder Meeting to vote your shares online.

If your shares are registered in the name of your broker, bank or other agent, you are the “beneficial owner” of those shares and those shares are considered as held in “street name.” If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than directly from us. Simply complete and mail the proxy card to ensure that your vote is counted. You may be eligible to vote your shares electronically over the Internet or by telephone. A large number of banks and brokerage firms offer Internet and telephone voting. If your bank or brokerage firm does not offer Internet or telephone voting information, please complete and return your proxy card in the self-addressed, postage-paid envelope provided.

If you are a beneficial owner and you plan to vote at the Shareholder Meeting, you will need to contact the Transfer Agent at the phone number or email below to receive a control number and you must obtain a legal proxy from your broker, bank or other nominee reflecting the number of HSAC2 Ordinary Shares you held as of the Record Date, your name and email address. You must contact the Transfer Agent for specific instructions on how to receive the control number. Please allow up to 48 hours prior to the meeting for processing your control number.

After obtaining a valid legal proxy from your broker, bank or other agent, to then register to attend the Shareholder Meeting, you must submit proof of your legal proxy reflecting the number of your shares along with your name and email address to the Transfer Agent. Requests for registration should be directed to 917-262-2373 or email proxy@continentalstock.com. Requests for registration must be received no later than 5:00 p.m., Eastern Time, on         , 2023.

You will receive a confirmation of your registration by email after we receive your registration materials. We encourage you to access the Shareholder Meeting prior to the start time leaving ample time for the check-in.

Q:     How may I participate in the Shareholder Meeting?

A:     If you are an HSAC2 shareholder in the register of HSAC2 on the Record Date for the Shareholder Meeting, you should receive a proxy card from the Transfer Agent, containing instructions on how to attend the Shareholder Meeting including the URL address, along with your control number. You will need your control number for access. If you do not have your control number, contact the Transfer Agent at 917-262-2373 or email proxy@continentalstock.com.

You can pre-register to attend the Shareholder Meeting starting on             , 2023. Go to https://              , enter the control number found on your proxy card you previously received, as well as your name and email address. Once you pre-register you can vote. At the start of the Shareholder Meeting you will need to re-log into https://               using your control number.

If your shares are held in street name, and you would like to join and not vote, the Transfer Agent will issue you a guest control number. Either way, you must contact the Transfer Agent for specific instructions on how to receive the control number. Please allow up to 48 hours prior to the meeting for processing your control number.

Q:     What impact will the COVID-19 pandemic have on the Business Combination?

A.     Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the coronavirus outbreak on the business of HSAC2 and Orchestra, and there is no guarantee that efforts by HSAC2 and Orchestra to address the adverse impacts of the coronavirus will be effective. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and actions taken to contain the coronavirus or its impact, among others. If HSAC2 or Orchestra are unable to recover from a business disruption on a timely basis, the Business Combination and New Orchestra’s business, financial condition and results of operations following the completion of the Business Combination would be adversely affected. The Business Combination may also be delayed and adversely affected by the coronavirus outbreak and become more costly. Each of HSAC2 and Orchestra may also incur additional costs to remedy damages caused by any such disruptions, which could adversely affect its financial condition and results of operations.

Q:     Who can help answer any other questions I might have about the Shareholder Meeting?

A.     If you have any questions concerning the Shareholder Meeting (including accessing the meeting by virtual means) or need help voting your HSAC2 Ordinary Shares, please contact Morrow Sodali LLC (“Morrow Sodali”), the Company’s proxy solicitor, at 333 Ludlow Street, 5th Floor, South Tower, Stamford CT 06902, Toll-Free (800) 662-5200 or Collect (203) 658-9400, Email: HSAQ.info@investor.morrowsodali.com prior to the Shareholder Meeting.

The Notice of Shareholder Meeting, Proxy Statement and form of Proxy Card are available at: https://            .

Q:     If my shares are held in “street name” by my bank, brokerage firm or nominee, will they automatically vote my shares for me?

A:     No. If you are a beneficial owner and you do not provide voting instructions to your broker, bank or other registered holder holding shares for you, your shares will not be voted with respect to any Proposal for which your broker does not have discretionary authority to vote. If a Proposal is determined to be discretionary, your broker, bank or other registered holder is permitted to vote on the Proposal without receiving voting instructions from you. If a Proposal is determined to be non-discretionary, your broker, bank or other registered holder is not permitted to vote on the Proposal without receiving voting instructions from you. A “broker non-vote” occurs when a bank, broker or other registered holder holding shares for a beneficial owner does not vote on a non-discretionary Proposal because the registered holder has not received voting instructions from the beneficial owner.

Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not treated as votes cast and will have no effect on the Proposals. As a result, if you abstain from voting on any of the Proposals, your shares will be counted as present for purposes of establishing a quorum (if so present in accordance with the terms of the Existing Charter), but the abstention will have no effect on the outcome of such proposal.

Q:     What will happen if I abstain from voting or fail to vote at the Shareholder Meeting?

A:     At the Shareholder Meeting, HSAC2 will count a properly executed proxy marked “ABSTAIN” with respect to a particular Proposal as present for purposes of determining whether a quorum is present. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not treated as votes cast and will have no effect on the Proposals.

If a shareholder who holds share in “street name” does not give the broker voting instructions, the broker is not permitted under applicable self-regulatory organization rules to vote the shares on “non-routine” proposals, such as the Business Combination Proposal and the Domestication Proposal. These “broker non-votes” will also count as present for purposes of determining whether a quorum is present and will have no effect on the outcome of the vote on any of the Proposals.

RISK FACTORS

The following risk factors will apply to our business and operations following the completion of the Business Combination. These risk factors are not exhaustive and investors are encouraged to perform their own investigation with respect to the business, prospects, financial condition and operating results of Orchestra and our business, prospects, financial condition and operating results following the completion of the Business Combination. You should carefully consider the following risk factors in addition to the other information included in this proxy statement/prospectus, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements,” before deciding how to vote your HSAC2 Ordinary Shares at the Shareholder Meeting. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, and may have a material adverse effect on the business, cash flow, financial condition and results of operations of New Orchestra following the Business Combination. HSAC2 and Orchestra may face additional risks and uncertainties that are not presently known to such entity, or that are currently deemed immaterial, which may also impair our business, prospects, financial condition or operating results. The following discussion should be read in conjunction with our financial statements and the financial statements of Orchestra and notes to the financial statements included herein.

Risks Related to Orchestra’s Business and New Orchestra Following the Business Combination

Throughout this subsection, references to “we,” “us” and “our” are intended to refer to Orchestra before the Closing and New Orchestra following the Closing, unless the context clearly indicates otherwise.

Risks Related to Our Business and Products

We have a history of net losses, and we expect to continue to incur losses for the foreseeable future. If we ever achieve profitability, we may not be able to sustain it

We have incurred losses since our inception and expect to continue to incur losses for the foreseeable future. We have reported net losses of approximately $23.9 million for the nine months ended September 30, 2022 and $23.0 million and $21.4 million for the years ended December 31, 2021 and 2020, respectively. As a result of these losses, as of September 30, 2022, we had an accumulated deficit of approximately $190.0 million. We expect to continue to incur net losses for the foreseeable future.

We will continue to incur substantial expenses without corresponding revenues unless and until we are able to obtain regulatory approval or certification and successfully commercialize some of our product candidates. To date, we have generated only limited revenue from our products, and we expect to incur significant expenses to complete our clinical program for our product candidates in the United States and elsewhere. We may never be able to obtain regulatory approval or certification for the marketing of our product candidates in the United States or internationally. Even if we are able to commercialize some of our products or product candidates, there can be no assurance that we will generate significant revenues or ever achieve profitability. We expect to continue to incur significant sales and marketing, research and development, regulatory and other expenses as we expand our marketing efforts to increase adoption of our products, expand existing relationships with our customers, obtain regulatory approvals or certifications for our product candidates, conduct clinical studies on our existing and planned product candidates and develop new product candidates or add new features to our existing products. In addition, we expect our selling, general and administrative expenses to increase following the Business Combination due to the additional costs associated with being a public company. The net losses that we incur may fluctuate significantly from period to period. As a result of these increased expenditures, we will need to generate significant additional revenue in order to offset our operating expenses and achieve and sustain profitability. Accordingly, we may not achieve or maintain profitability, and we may continue to incur significant losses in the future. Even if we achieve profitability, we cannot be sure that we will remain profitable for any substantial period of time. If we do not achieve or sustain profitability, it will be more difficult for us to finance our business and accomplish our strategic objectives, either of which would have a material adverse effect on our business, financial condition, results of operations and prospects and may cause the market price of our common stock to decline.

We currently have a limited operating history and limited sources of revenue and may never become profitable

We commenced substantive operations in 2018. Our wholly-owned subsidiary Caliber Therapeutics, LLC (“Caliber”) commenced operations in 2008, our wholly-owned subsidiary BackBeat Medical, LLC (“BackBeat”) commenced operations in 2010 and our wholly-owned subsidiary FreeHold Surgical, LLC (“FreeHold”) commenced operations in 2010. Our limited operating history makes it difficult to evaluate our current business and predict our future results, prospects or viability. To date, we have not generated significant revenue. Our ability to generate substantial revenue and ultimately become profitable depends primarily upon our ability, alone or with our partners, to successfully obtain regulatory approval and certification for and successfully commercialize our product candidates. Our ability to generate future revenue from our products or any existing or future product candidates also depends on a number of additional factors, including our or our partners’ ability to:

•        successfully complete clinical development of our product candidates, including necessary clinical studies;

•        successfully develop the manufacturing processes for our product candidates;

•        establish and maintain supply and manufacturing relationships with third parties that ensure adequate and legally-compliant production of our product candidates;

•        complete and submit necessary applications for regulatory approvals and certifications for our product candidates in the United States and elsewhere;

•        obtain and maintain requisite regulatory approvals and certifications for our product candidates in the United States and elsewhere;

•        comply with regulations enforced by the United States Food and Drug Administration (the “FDA”), and other comparable regulatory authorities with respect to our marketing of products and product candidates or modified products or product candidates;

•        obtain necessary FDA or foreign regulatory approvals or certifications, for our product candidates or for future product modifications or indication expansions for any of our product candidates that receives regulatory approval or certification;

•        obtain coverage and adequate reimbursement from third-party payors, including government and private payors, for our product candidates;

•        find distribution partners to help us sell, market and distribute our products globally;

•        achieve market acceptance for our products;

•        establish, maintain and protect our intellectual property rights; and

•        attract, hire and retain qualified personnel.

In addition, because of the numerous risks and uncertainties associated with drug/device and software/device combination product development, including that our product candidates may not advance through development or achieve the endpoints of applicable clinical studies, we are unable to predict the timing or amount of our expenses, or if or when we will achieve or maintain revenues or profitability. In addition, our expenses could increase beyond expectations if we decide to or are required by the FDA or foreign regulatory authorities or notified bodies to perform studies or trials for our product candidates in addition to those that we currently anticipate. If we complete the development and regulatory processes of our product candidates, we or our partners anticipate incurring significant costs associated with launching and commercializing our product candidates. Even if we generate revenues from the sale of our products (or through the sale of products by our partners), we may not be profitable and may need to obtain additional funding to continue operations. If we fail to achieve profitability or do not sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations.

If we do not achieve our projected development and commercialization goals, our business may be harmed

For planning purposes, we estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product development and commercialization goals, which we sometimes refer to as milestones. These milestones include the commencement or completion of scientific studies and clinical studies and the submission of regulatory applications. We base these milestones on a variety of assumptions, which are subject to numerous risks and uncertainties. Further, our collaboration agreement with Terumo Medical Corporation (“Terumo”), as further described herein, includes payments tied to the achievement of certain milestones, and we expect that future collaboration agreements may have similar provisions. There is a risk we will not achieve these milestones on a timely basis or at all. Even if we achieve these milestones, the actual timing of the achievement of these milestones can vary dramatically compared to our estimates, often for reasons beyond our control, depending on numerous factors, including:

•        our ability and/or the ability of third-party vendors and partners to manufacture our product candidates;

•        our ability to source critical components or materials for the manufacture of our product candidates;

•        the rate of progress, costs and results of our clinical studies and research and development activities;

•        our ability to identify and enroll patients who meet clinical study eligibility criteria;

•        the extent of scheduling conflicts with participating physicians and clinical institutions;

•        adverse reactions reported during clinical studies or commercialization;

•        the ability of our product candidates to meet the standards for regulatory approval or certification;

•        the receipt of marketing approvals, clearances or certifications by our competitors and by us from the FDA and other regulatory agencies or notified bodies; and

•        other actions by regulators, including actions related to a class of products.

If we do not meet these milestones for our products or if we are delayed in achieving these milestones, the development and commercialization of new product candidates, modifications of existing products or sales of existing products for new indications may be prevented or delayed, which could damage our reputation or materially adversely affect our business. Further, we may not receive milestone-based payments from partners on a timely basis or at all. In addition, Terumo has the right to terminate, and other partners may have the right to terminate or renegotiate, agreements if certain milestones are not achieved at all or on a timely basis. Even if we achieve a milestone for a product or product candidate, market acceptance for the product or product candidate is not assured. See “— Risks Related to Our Reliance on Third Parties — We did not meet the target achievement dates relating to certain milestone payments, and we may not meet other target achievement dates relating to additional milestone payments, under our manufacturing and distribution agreement with Terumo, which may have an adverse effect on our relationship with Terumo and our results of operations.”

The clinical study process required to obtain regulatory approvals or certifications carries substantial risks and is lengthy and expensive with uncertain outcomes. If our clinical studies are unsuccessful or significantly delayed, or if we do not complete our clinical studies, our business may be harmed

In order to obtain approval of a Pre-Market Approval application (a “PMA”) from the FDA for a device, such as our Virtue SAB drug/device combination product candidate, BackBeat CNT or CNT-HF which is designed to be integrated with the collaboration of device manufacturers into their existing medical devices such as pacemakers, as well as other future product candidates, or marketing approval for a new drug, such as our extended release formulation of sirolimus called SirolimusEFR as a standalone product candidate, we must conduct well-controlled clinical studies designed to assess the safety and efficacy of the product candidate. Clinical development is a long, expensive and uncertain process and is subject to delays and to the risk that products may ultimately prove unsafe or ineffective in treating the indications for which they are designed. Completion of the clinical studies required to support a marketing authorization (inclusive of any application or approval for clinical use or commercial sale in a given market) usually takes several years or more. We cannot assure you that we will successfully complete clinical testing of our products within the periods we have planned, or at all. Even if we achieve positive interim or preliminary results in clinical studies, these results do not necessarily predict final results, and positive results in early trials do not necessarily

indicate success in later trials. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies have suffered significant setbacks in advanced clinical studies, even after receiving positive results in earlier trials. Any of our products may malfunction or may produce undesirable adverse effects that could cause us or regulatory authorities to interrupt, delay or halt clinical studies. We, the FDA, or another regulatory authority may suspend or terminate clinical studies at any time to avoid exposing trial participants to unacceptable health risks.

Additionally, the FDA or other regulatory authorities or notified bodies may disagree with our interpretation of the data from our preclinical studies and clinical studies, or may find the clinical study design, conduct or results inadequate to prove safety or efficacy, and may require us to pursue additional preclinical studies or clinical studies, which could further delay or prevent the approval or certification of our products. The data we collect from our preclinical studies and clinical studies may not be sufficient to support potential FDA or foreign approval or certification, and if we are unable to demonstrate the safety and efficacy of our product candidates in our clinical studies, we will be unable to obtain regulatory approval or certification to market our products.

We may experience numerous unforeseen events during, or because of, the clinical study process that could delay or prevent us from receiving regulatory approval or certification for new products, modification of existing products, or approval or certification of new indications for existing products including:

•        we may be unable to generate sufficient preclinical toxicology or other in vivo or in vitro data to support the initiation or continuation of clinical studies;

•        the FDA or similar foreign regulatory authorities may find the product candidates are not sufficiently safe for investigational use in humans;

•        officials at the FDA or similar foreign regulatory authorities may interpret data from preclinical testing and clinical studies in less favorable ways than we do;

•        there may be delays or failures in obtaining regulatory authorization from the FDA or other regulatory authorities to commence a clinical study;

•        there may be delays in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical study sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical study sites;

•        there may be delays in identifying, recruiting and training suitable investigators;

•        there may be delays in obtaining institutional review board (“IRB”) or ethics committee (“EC”) approvals or governmental approvals, authorizations or allowances to conduct clinical studies at prospective sites;

•        enrollment in our clinical studies may be slower than we anticipate, or we may experience high drop-out rates of subjects from our clinical studies, resulting in significant delays;

•        delays in recruiting, screening and enrolling patients and delays caused by patients withdrawing from clinical studies or failing to return for post-treatment follow-up;

•        failure by our CROs, other third parties or us to adhere to clinical study protocols, failure to perform in accordance with the FDA’s or any other regulatory authority’s good clinical practice requirements (“GCPs”), or applicable regulatory guidelines in other countries, or occurrence of adverse events in trials of comparable products conducted by other companies;

•        the occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits;

•        we may have to amend clinical study protocols or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to submit to an IRB or EC and/or regulatory authorities for re-examination;

•        the cost of clinical studies may be greater than we anticipate;

•        we may have trouble in managing multiple clinical sites;

•        our clinical studies may produce negative or inconclusive results, or may not meet the level of statistical significance required by the FDA or other regulatory authorities, and we may decide, or regulators may require us, to conduct additional clinical or preclinical testing or to abandon programs;

•        the FDA or similar foreign regulatory authorities may find our or our suppliers’ manufacturing processes or facilities unsatisfactory;

•        the FDA or similar foreign regulatory authorities may change their approval policies or adopt new regulations that may negatively affect or delay our ability to bring a product candidate to market or receive approvals or certification to treat new indications;

•        we may be required to transfer manufacturing processes to larger-scale facilities operated by a contract manufacturing organization (“CMO”), and could be adversely affected by delays or failures by our CMOs or us to make any necessary changes to such manufacturing process; and

•        third parties may be unwilling or unable to satisfy their contractual obligations to us.

Patient enrollment in clinical studies and completion of patient follow-up depend on many factors, including the size of the patient population, the nature of the trial protocol, the proximity of patients to clinical sites, the eligibility criteria for the clinical study, patient compliance, competing clinical studies and clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new treatments that may be approved for the indications we are investigating. In addition, patients participating in our clinical studies may drop out before completion of the trial or experience adverse medical events unrelated to our product candidates. Delays in patient enrollment or failure of patients to continue to participate in a clinical study may delay commencement or completion of the clinical study, cause an increase in the costs of the clinical study and delays, or result in the failure of the clinical study. In addition, disruptions caused by the COVID-19 pandemic, including any strains or variants of the virus, may increase the likelihood that we encounter such difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing clinical studies.

We could also encounter delays if a clinical study is suspended or terminated by us, by the IRBs of the institutions at which such studies are being conducted, by the Data Safety Monitoring Board for such trial or by the FDA or other regulatory authorities. Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical study in accordance with regulatory requirements or our clinical protocols, inspection of the clinical study operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using the investigational product, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical study. If we experience delays in the completion of, or termination of, any clinical study, the approval, certification and commercial prospects of our device will be harmed, and our ability to generate product revenues from any of these product candidates will be delayed. In addition, any delays in completing our clinical studies will increase our costs, slow down the approval or certification process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may harm our business, financial condition and prospects significantly. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical studies may also ultimately lead to the denial of regulatory approval of our product candidates.

Failures or perceived failures in our clinical studies will delay and may prevent our product candidate development and regulatory approval or certification process, damage our business prospects and negatively affect our reputation and competitive position

Failure can occur at any stage of clinical testing. Our clinical studies may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical and non-clinical testing in addition to those we have planned. Our failure to adequately demonstrate the safety and efficacy of our system or any product we may develop in the future would prevent receipt of regulatory approval or certification and, ultimately, the commercialization of that product or indication for use. Further, regulators may determine that our financial relationships with certain principal investigators who provide us with consulting services from time to time for which we separately compensate them resulted in a perceived or actual conflict of interest that may have affected the interpretation of a study, the integrity of the data generated at the applicable clinical study site or the utility of the clinical study itself. Even if our future products are approved in the United States, commercialization of our product

candidates in foreign countries would require approval by regulatory authorities or certification by notified bodies in those countries. Approval and certification procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical studies. Any of these occurrences could have an adverse effect on our business, financial condition and results of operations.

Clinical studies must be conducted in accordance with the laws and regulations of the FDA and other applicable regulatory authorities’ legal requirements, regulations or guidelines, and are subject to oversight by these governmental agencies and IRBs at the medical institutions where the clinical studies are conducted. In addition, clinical studies must be conducted with supplies of our product candidates produced under current good manufacturing practice (“cGMP”), requirements and other regulations. Furthermore, we rely on CROs and clinical study sites to ensure the proper and timely conduct of our clinical studies and while we have agreements governing their committed activities, we have limited influence over their actual performance. We depend on our collaborators and on medical institutions and CROs to conduct our clinical studies in compliance with GCP requirements. To the extent our collaborators or the CROs fail to enroll participants for our clinical studies, fail to conduct the study to GCP standards or are delayed for a significant time in the execution of trials, including achieving full enrollment, we may be affected by increased costs, program delays or both. In addition, clinical studies that are conducted in countries outside the United States may subject us to further delays and expenses as a result of increased shipment costs, additional regulatory requirements and the engagement of non-U.S. CROs, as well as expose us to risks associated with clinical investigators who are unknown to the FDA, and different standards of diagnosis, screening and medical care.

Even if we obtain all necessary FDA approvals, our product candidates may not achieve or maintain market acceptance

Even if we obtain FDA approval of our product candidates, or new indications for our products, market acceptance of our products in the healthcare community, including physicians, patients and third-party payors, will depend on many factors, including:

•        our ability to provide incremental clinical and economic data that shows the safety and clinical efficacy and cost-effectiveness of, and patient benefits from, our products;

•        the availability of alternative treatments;

•        whether our products are included on insurance company formularies or coverage plans;

•        the willingness and ability of patients and the healthcare community to adopt new technologies;

•        customer demand;

•        liability risks generally associated with the use of new product candidates;

•        the training required to use a new product candidate;

•        perceived inadequacy of evidence supporting clinical benefits or cost-effectiveness over existing alternatives;

•        the convenience and ease of use of our products relative to other treatment methods;

•        the pricing and reimbursement of our products relative to other treatment methods; and

•        the marketing and distribution support for our products.

Even if we obtain all necessary FDA approvals, our products may fail to achieve market acceptance. If our products achieve market acceptance, they may not maintain that market acceptance over time if competing products or technologies are introduced that are received more favorably or are more cost-effective. Failure to achieve or maintain market acceptance would limit our ability to generate revenue and would have a material adverse effect on our business, financial condition, results of operations and prospects.

We may be unable to compete successfully with larger companies in our highly competitive industry

The medical technology and pharmaceutical industries are highly competitive and the medical device industry is characterized by rapid and significant change. Many of our current and potential competitors have substantially greater financial, manufacturing, marketing and technical resources than we do. Larger competitors may have substantially larger sales and marketing operations than we or our partners have or plan to have and may have greater name recognition. This may allow those competitors to spend more time with potential customers and to focus on a larger number of potential customers, which would give them a significant advantage over the sales and marketing team we would use and our international distributors in making sales.

Larger competitors may also have broader product lines, which enable them to offer customers bundled purchase contracts and quantity discounts. These competitors may have more experience than we have in research and development, marketing, manufacturing, preclinical testing, conducting clinical studies, obtaining FDA and foreign regulatory approvals or certifications and marketing approved or certified products. Our competitors may discover technologies and techniques, or enter into partnerships and collaborations, to develop competing products that are more effective or less costly than our products or the products we may develop. There can be no assurance that other companies will not succeed in developing or marketing devices and products that are more effective than our technology or products or that would render our technology or products obsolete or noncompetitive. Academic institutions, government agencies, and other public and private research organizations may seek patent protection regarding potentially competitive products or technologies and may establish exclusive collaborative or licensing relationships with our competitors. Our competitors may be better equipped than we are to respond to competitive pressures. Competition will likely intensify.

Additionally, many companies in the healthcare industry, including healthcare provider systems, are consolidating to create new companies with greater market power, and we expect that to continue. As the healthcare industry consolidates, competition to provide goods and services to industry participants will become more intense. These industry participants may try to use their market power to negotiate price concessions or reductions for medical devices including those produced by us. If we reduce our prices because of consolidation in the healthcare industry, our revenue would decrease and our consolidated earnings, financial condition, or cash flows would suffer.

Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide

Our quarterly and annual operating results may fluctuate significantly, which makes it difficult for us to predict our future operating results. These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to:

•        the level of demand for our products and any approved or certified products, which may vary significantly;

•        expenditures that we may incur to acquire, develop or commercialize additional products and technologies;

•        the ability to obtain, and timing and cost of obtaining regulatory approvals or certifications for planned or future products or indications;

•        the degree of competition in our industry and any change in the competitive landscape of our industry, including consolidation among our competitors or future partners;

•        coverage and reimbursement policies with respect to our products, if approved or certified, and potential future products that compete with our products;

•        the timing and success or failure of preclinical studies or clinical studies for our products or any future products we develop or competing products;

•        the timing of customer orders or medical procedures using our products and the number of available selling days in any quarterly period, which can be impacted by holidays, the mix of products sold and the geographic mix of where products are sold;

•        the timing and cost of, and level of investment in, research, development, regulatory approval or certification and commercialization activities relating to our products, which may change from time to time;

•        the cost of manufacturing our products, which may vary depending on the quantity of production and the terms of our agreements with third-party suppliers and manufacturers; and

•        future accounting pronouncements or changes in our accounting policies.

The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Investors should not rely on our past results as an indication of our future performance.

This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period. If our revenue or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, it could have a material adverse effect on our business, financial condition, results of operations or prospects.

Our loan and security agreement contains operating covenants and restrictions that may restrict our business and financing activities

We are party to a loan and security agreement with affiliates of Avenue Venture Capital Fund, L.P. (“Avenue Capital”), pursuant to which the lenders are granted a security interest over all of our assets, including intellectual property. This agreement restricts our ability to, among other things:

•        incur certain additional indebtedness;

•        create liens on our assets;

•        pay or declare dividends, or repurchase our stock;

•        liquidate or dissolve;

•        enter into a “change of control” (as defined therein);

•        sell certain assets;

•        make certain investments;

•        enter into transactions with affiliates;

•        engage in any business other than our current business;

•        prepay any indebtedness;

•        make any payment on subordinated indebtedness; or

•        create or incur certain leases for personal property.

The operating covenants and restrictions in the loan and security agreement, as well as covenants and restrictions in any future financing agreements that we may enter into, may restrict our ability to finance our operations, engage in business activities or expand or fully pursue our business strategies. Our ability to comply with these covenants may be affected by events beyond our control, and we may not be able to meet those covenants. A breach of any of these covenants could result in a default under the loan and security agreement or any future financing agreement, which could cause all of the outstanding indebtedness under the facility to become immediately due and payable and terminate all commitments to extend further credit.

We cannot assure you that we will continue to maintain sufficient cash reserves or that our business will ever generate cash flow from operations at levels sufficient to permit us to pay principal, premium, if any, and interest on our indebtedness, or that our cash needs will not increase. If we are unable to generate sufficient cash flow or otherwise obtain funds necessary to make required payments, or if we fail to comply with the various requirements of our loan and security agreement with Avenue Capital, or any indebtedness which we may incur in the future, we would be in default under our agreement with Avenue Capital or other indebtedness we may incur in the future. Any default under our agreement with Avenue Capital, or any indebtedness that we may incur in the future, could have a material adverse effect on our business, results of operations and financial condition.

The sizes of the markets for product candidates have not been established with precision, and may be smaller than we estimate

Our estimates of the annual total addressable markets for our product candidates are based on a number of internal and third-party estimates, including, without limitation, the number of patients with specified diseases and the assumed prices at which we will be able to sell any products we develop in various markets. While we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors. In addition, our estimates of the sizes of the peripheral artery disease (“PAD”) and coronary artery disease (“CAD”) patient population may include patients who are asymptomatic or in the early stages of disease; these patients might never progress to more advanced disease stages and, accordingly, might never be likely candidates for treatment with our products. As a result, our estimates of the annual total addressable market for our current or future products may prove to be incorrect. If the actual number of patients who would benefit from our products, the price at which we will be able to sell future products, or the annual total addressable market for our products is smaller than we have estimated, it may impair future sales of any product we develop and have an adverse impact on our business.

The COVID-19 pandemic, including any strains or variants of the virus, could adversely impact our business, including our clinical studies and financial condition

In December 2019, a novel strain of coronavirus, COVID-19, was reported to have surfaced in Wuhan, China. Since then, COVID-19 has spread across the globe, including to countries in which we have planned clinical study sites. The pandemic and government measures taken in response have had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred, supply chains have been disrupted, facilities and production have been suspended, and demand for certain goods and services, such as medical services and supplies, has spiked, while demand for other goods and services, such as travel, has fallen. We have experienced delays with respect to regulatory approvals or certifications for clinical studies, the initiation of clinical studies and the coordination of follow-up with respect to clinical studies. We have also experienced delays in receiving supplies and third-party testing results from vendors. Although some preventative or protective actions have been eased or lifted in varying degrees by different governments of various countries, states and municipalities, COVID-19, including new and highly contagious variants of the virus, continues to spread quickly throughout the world. Notwithstanding widespread vaccine availability within the United States and other countries, the emergence of COVID-19 variants and slowing vaccination rates in certain localities have resulted in increased infection rates and has caused, and may continue to cause, several jurisdictions to reinstitute certain COVID-19 restrictions. If COVID-19 continues to spread around the globe, including additional waves of increased COVID-19 infections and COVID-19 related restrictions imposed by various governmental authorities, we will likely experience additional disruptions that could severely impact our business and clinical studies, including:

•        delays or difficulties in enrolling patients in our clinical studies;

•        delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

•        diversion of healthcare resources away from the conduct of clinical studies, including the diversion of hospitals serving as our clinical study sites and hospital staff supporting the conduct of our clinical trials;

•        interruption of key clinical study activities, such as clinical study site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical study subject visits and study procedures, the occurrence of which could affect the integrity of clinical study data;

•        risk that participants enrolled in our clinical studies will contract COVID-19 while the clinical study is ongoing, which could impact the results of the clinical study, including by increasing the number of observed adverse events;

•        limitations in employee resources that would otherwise be focused on the conduct of our clinical studies, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people;

•        delays in receiving authorizations, allowances or approvals from local regulatory authorities to initiate our planned clinical studies;

•        delays in clinical sites receiving the supplies and materials needed to conduct our clinical studies, including interruption in global shipping that may affect the transport of clinical study materials, such as investigational materials used in our clinical studies;

•        changes in local regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical studies are conducted, which may result in unexpected costs, or the discontinuation of such clinical studies altogether;

•        interruptions or delays in preclinical studies due to restricted or limited operations at research and development laboratory facilities;

•        delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and

•        refusal of the FDA to accept data from clinical studies in affected geographies.

The global COVID-19 pandemic continues to evolve. The extent to which the COVID-19 pandemic impacts our business, including our clinical studies, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, the emergence of new strains and variants, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease. In addition to the COVID-19 pandemic adversely impacting our business and financial results, it may also have the effect of heightening many of the other risks described in “Risk Factors.”

Interim, ‘‘top-line’’ and preliminary data from our clinical studies that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data

From time to time, we may publicly disclose preliminary or top-line data from our preclinical studies and clinical studies, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the top-line or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Top-line data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, top-line data should be viewed with caution until the final data are available.

From time to time, we may also disclose interim data from our preclinical studies and clinical studies. Interim data from clinical studies that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available or as patients from our clinical studies continue other treatments for their disease. Adverse differences between preliminary or interim data and final data could significantly harm our business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our common stock after this transaction.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical study is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure. If the interim, top-line, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval or certification for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.

Our product candidates have in the past and may in the future be associated with serious adverse events, undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval or certification, limit their commercial potential or result in significant negative consequences

Adverse events or other undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical studies and could result in a more restrictive label or the delay or denial of regulatory approval or certification by the FDA or other comparable foreign regulatory authorities or notified bodies.

During the conduct of clinical studies, patients report changes in their health, including illnesses, injuries, and discomforts, to their study doctor. Often, it is not possible to determine whether or not the product candidate being studied caused these conditions. It is possible that as we test our product candidates in larger, longer and more extensive clinical studies, or as use of these product candidates becomes more widespread if they receive regulatory approval or certification, illnesses, injuries, discomforts and other adverse events that were observed in previous trials, as well as conditions that did not occur or went undetected in previous trials, will be reported by patients. Many times, side effects are only detectable after investigational products are tested in large-scale clinical studies or, in some cases, after they are made available to patients on a commercial scale following approval or certification.

For example, during the initial study period for MODERATO I, there were eleven serious adverse events (“SAEs”) in seven of the 27 study patients. One event was adjudicated as probably related to the implant procedure for the Moderato device. Four events in four patients were adjudicated as possibly related to the Moderato device (atrial fibrillation, myocardial infarction with symptoms of heart failure, cardiac asthma, and arythmia due to ventricular oversensing).

During the extended 21-month follow-up period, that included 24 patients who continued with BackBeat CNT, there were 25 SAEs in twelve patients. Five events in three patients were adjudicated as possibly device related. These included two events of atrial fibrillation the same patient, pneumonia with cardiac decompensation and dyspnea with cardiac decompensation in one patient, and cardiac decompensation in one patient.

For the MODERATO II study, there were no major adverse cardiac events (“MACE”) in the BackBeat CNT group and three MACE in two patients in the control group (one death from cancer and two cardiac events) at six months. During the randomized phase of the study, there were eight SAEs in four patients in the control group (n=21) and none in the treatment group (n=26). During the extended 18-month follow-up period that included treatment patients (n=26) and crossover-to-treatment patients (n=14), there were 26 SAEs in 16 patients. For further information regarding these events, please see the section entitled “Business of Orchestra — BIOELECTRONIC PRODUCT CANDIDATES — BackBeat CNT for Hypertension and CNT-HF for Heart Failure — Clinical Results — Chronic Clinical Studies.”

Over the entire three-year period of the SABRE study, a total of 66 SAEs occurred in 32 of the 50 study patients. For further information regarding these events, please see the section entitled “Business of Orchestra — FOCAL THERAPIES — Virtue SAB for Artery Disease and SirolimusEFR for Local Inflammation in Multiple Indications — Clinical Results — Revised Per-Protocol Population.”

If any serious adverse events occur, clinical studies or commercial distribution of any product candidates or products we develop could be suspended or terminated, and our business could be seriously harmed. Treatment-related side effects could also affect patient recruitment and the ability of enrolled patients to complete the trial or result in potential liability claims. Regulatory authorities could order us to cease further development of, deny approval of, or require us to cease selling any product candidates or products for any or all targeted indications. If we are required to delay, suspend or terminate any clinical study or commercialization efforts, the commercial prospects of such product candidates or products may be harmed, and our ability to generate product revenues from them or other product candidates that we develop may be delayed or eliminated. Additionally, if one or more of our product candidates receives marketing approval or certification and we or others later identify undesirable side effects or adverse events caused by such products, a number of potentially significant negative consequences could result, including but not limited to:

•        regulatory authorities may suspend, limit or withdraw approvals or certifications of such product, or seek an injunction against its manufacture or distribution;

•        regulatory authorities may require additional warnings on the label, including ‘‘boxed’’ warnings, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product;

•        we may be required to change the way the product is administered or conduct additional clinical studies or post-approval studies;

•        we may be required to create a risk evaluation and mitigation strategy (“REMS”) or similar risk management measures, which could include a medication guide outlining the risks of such side effects for distribution to patients;

•        we may be subject to fines, injunctions or the imposition of criminal penalties;

•        we could be sued and held liable for harm caused to patients; and

•        our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved or certified, and could seriously harm our business.

We depend on attracting, retaining and developing key management, clinical, scientific, regulatory, quality, marketing and other expert personnel, and losing these personnel could impair the development and sales of our products or product candidates

We are highly dependent on our senior management and other key personnel. Our success depends on our continued ability to attract, retain, develop and motivate highly qualified management, clinical, scientific and sales and marketing personnel. Our employees are employed ‘‘at will,’’ and each employee can terminate his or her employment with us at any time. We also do not maintain ‘‘key person’’ insurance policies on any of our officers or our other employees. The competition for qualified personnel in the medical innovation industry is intense, and we may incur significant costs to attract and retain them. We will need to hire additional personnel as we continue to expand our development activities and drive sales of our products or product candidates. We may not attract, retain and develop quality personnel on acceptable terms due to the competition for such personnel. If we are not able to attract and retain necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.

If we make acquisitions, we could incur significant costs and encounter difficulties that harm our business

In the ordinary course of our business, we expect to from time to time evaluate the acquisition of, investment in or in-license of complementary products, technologies or businesses, although we do not currently have any agreements, arrangements or commitments with respect to any potential acquisition, investment or license. If we engage in such acquisitions, investments or in-licenses, we may incur significant transaction and integration costs and have difficulty integrating the acquired personnel, operations, products or technologies or otherwise realizing synergies or other benefits from the acquisitions, investments or in-licenses. The integration process could result in the loss of key employees, loss of key customers, loss of key vendors, decreases in revenue and increases in operating costs, as well as the disruption of our business. Acquisitions may disrupt our ongoing business, divert the time of our management and employees, increase our expenses, subject us to liabilities and increase our risk of litigation, all of which could harm our business. If we use cash to acquire companies, products or technologies, it may divert resources otherwise available for other purposes or increase our debt. If we use our capital stock to acquire companies, products or technologies, we may experience a change of control or our stockholders may experience substantial dilution or both. In addition, anticipated benefits of any future acquisitions may not materialize. Any of these risks, if realized, could materially and adversely affect our business, financial condition, results of operation and prospects.

If we do not manage our growth or control costs related to growth, our results of operations will suffer

We intend to grow our business by commercializing our product candidates with partners when approved and, expanding our product development pipeline, possibly through acquisitions or other business combinations. Growth could place significant strain on our management, employees, operations, operating and financial systems, and other resources. To accommodate significant growth, we could be required to open additional facilities, expand and improve our information systems and procedures and hire, train, motivate and manage a growing workforce, all of which would increase our costs. Our systems, facilities, procedures and personnel may not be adequate to support our future operations. Further, we may not maintain or accelerate our current growth, manage our expanding operations or achieve planned growth on a timely and profitable basis.

Litigation and other legal proceedings may adversely affect our business

From time to time we may be involved in various litigation matters, which could have an adverse impact on our reputation, business and financial condition and divert the attention of our management from the operation of our business. Claims arising out of actual or alleged violations of law could be asserted against us by individuals, either individually or through class actions, by governmental entities in civil or criminal investigations and proceedings by other entities. These claims could be asserted under a variety of laws, including but not limited to patent, trade secret and other intellectual property matters, product liability claims, employee claims, tort or contract claims, and federal regulatory investigations. These actions could expose us to adverse publicity and to substantial monetary damages and legal defense costs, injunctive relief and criminal and civil fines and penalties. See ‘‘Business — Legal Proceedings.’’

Product liability and other claims against us may reduce demand for our products or result in substantial damages

Our business exposes us to potential liability for risks that may arise from the clinical testing of our product candidates, the use of our products by physicians, and the manufacture and sale of any approved products. An individual may bring a product liability claim against us, including frivolous lawsuits, if one of our products causes, or merely appears to have caused, an injury.

We currently have product liability insurance for $6.0 million per occurrence with an annual aggregate maximum of $6.0 million.

We cannot assure, however, that product liability claims will not exceed our insurance coverage limits or that such insurance coverage limits will continue to be available on acceptable terms, or at all. Our insurers may also claim that certain claims are not within the scope of our product liability insurance. A product liability claim, recall, or other claim regarding uninsured liabilities or for amounts over insured liabilities could have a material adverse effect on our business, financial condition, results of operations and prospects. Any product liability claim or series of claims or class actions brought against us, with or without merit, could result in:

•        liabilities that substantially exceed our insurance levels, which we would then be required to pay from other sources, if available;

•        an increase in our product liability insurance rates or the inability to renew or obtain product liability insurance coverage in the future on acceptable terms, or at all;

•        withdrawal of clinical study volunteers or subjects;

•        damage to our reputation and the reputation of our products;

•        regulatory investigations that could require costly recalls or product modifications;

•        litigation costs; and

•        diversion of our management’s attention from managing our business.

The misuse or off-label use of our products may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business

Any products that we market will be subject to the limitations on indicated uses as specified in their respective approvals or certifications. Uses outside of the approved or certified indications for use are known as ‘‘off-label uses.’’ We cannot prevent a physician from using our products off-label, when, in the physician’s independent professional medical judgment, he or she deems it appropriate. There may be increased risk of injury to patients if physicians attempt to use our products off-label. Furthermore, the use of our products for indications, other than those approved or certified by the FDA or by any foreign regulatory authority or notified body, may not effectively treat such conditions, which could harm our reputation in the marketplace among physicians and patients.

The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products, such as our product candidates, if approved or certified. In particular, a product may not be promoted for off-label uses. If the FDA or any foreign regulatory body determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition of an untitled letter, which is

used for violators that do not necessitate a warning letter, injunction, seizure, civil fine or criminal penalties. It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as false claims laws, if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations.

In addition, physicians may misuse our products, or use improper techniques if they are not adequately trained, potentially leading to injury and an increased risk of product liability. If so, we may become subject to costly litigation by our customers or their patients. Product liability claims could divert management’s attention from our core business, be expensive to defend and result in sizable damage awards against us that may not be covered by insurance.

Our information technology systems, or those of any of our CROs, manufacturers, other contractors, consultants, collaborators or potential future collaborators, may fail or suffer security or data privacy breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data, or personal data, which could result in additional costs, loss of revenue, significant liabilities, harm to our brand and material disruption of our operations

Despite the implementation of security measures, our information technology systems and those of our current and any future CROs and other contractors, consultants, collaborators and third-party service providers, are vulnerable to attack and damage from computer viruses and malware (e.g., ransomware), malicious code, hacking, cyberattacks, phishing attacks and other social engineering schemes, cybersecurity threats, unauthorized access, natural disasters, terrorism, war, telecommunication and electrical failure, employee theft or misuse, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized access or use by persons inside our organization, or persons with access to systems inside our organization. Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. As a result of the COVID-19 pandemic, we may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.

We and certain of our service providers are, from time to time, subject to cyberattacks and security incidents. While we do not believe that we have experienced any significant system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations or result in the unauthorized acquisition of, or access to, personally identifiable information or individually identifiable health information, it could result in a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other similar disruptions. Some of the federal, state and foreign government requirements include obligations of companies to notify individuals of security breaches involving particular personally identifiable information, which could result from breaches experienced by us or by our vendors, contractors or organizations with which we have formed strategic relationships. Notifications and follow-up actions related to a security breach could impact our reputation, cause us to incur significant costs, including legal expenses and remediation costs. For example, the loss of clinical study data from completed or future clinical studies could result in delays in our regulatory approval or certification efforts and significantly increase our costs to recover or reproduce the lost data. We also rely on third parties to manufacture our product candidates, and similar events relating to their computer systems could also have a material adverse effect on our business. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data, or inappropriate disclosure of confidential or proprietary information, we could be exposed to litigation and governmental investigations, the further development and commercialization of our product candidates could be delayed, and we could be subject to significant fines or penalties for any noncompliance with certain state, federal and/or international privacy and security laws.

Our insurance policies may not be adequate to compensate us for the potential losses arising from any such disruption, failure or security breach. In addition, such insurance may not be available to us in the future on economically reasonable terms, or at all. Further, our insurance may not cover all claims made against us and could have high deductibles in any event, and defending a suit, regardless of its merit, could be costly and divert management attention.

We must successfully maintain and upgrade our information technology systems, and our failure to do so could have a material adverse effect on our business, financial condition and results of operations

As we expand, and in order to remain competitive, we will need to significantly expand and improve our information technology systems and personnel to support historical and expected future growth. As such, we will continue to invest in and implement, significant modifications and upgrades to our information technology systems and procedures, including replacing legacy systems with successor systems, making changes to legacy systems or acquiring new systems with new functionality, hiring employees with information technology expertise and building new policies, procedures, training programs and monitoring tools. These types of activities subject us to inherent costs and risks associated with replacing and changing these systems, fulfill customer orders, potential disruption of our internal control structure, substantial capital expenditures, additional administration and operating expenses, acquisition and retention of sufficiently skilled personnel to implement and operate the new systems, demands on management time and other risks and costs of delays or difficulties in transitioning to or integrating new systems into our current systems. These implementations, modifications and upgrades may not result in productivity improvements at a level that outweighs the costs of implementation, or at all. In addition, difficulties with implementing new technology systems, delays in our timeline for planned improvements, significant system failures, or our inability to successfully modify our information systems to respond to changes in our business needs may cause disruptions in our business operations and have a material adverse effect on our business, financial condition and results of operations.

Economic conditions may adversely affect our business, financial condition and share price

Adverse worldwide economic conditions may negatively impact our business. A significant change in the liquidity or financial condition of our customers could cause unfavorable trends in their purchases and also in our receivable collections, and additional allowances may be required, which could adversely affect our business, financial condition and results of operations. Adverse worldwide economic conditions may also adversely impact our suppliers’ ability to provide us with materials and components, which could have a material adverse effect on our business, financial condition and results of operations.

The global credit and financial markets have recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, inflation, declines in economic growth, wage inflation because of labor shortages and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the conflict between Russia and Ukraine, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also adversely impact the financial markets and the global economy, and any economic countermeasures by affected countries and others could exacerbate market and economic instability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. These developments, or the perception that any of them could occur, may restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital. For example, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive an economic downturn, which could directly affect our ability to attain our operating goals on schedule and on budget. Any of these factors could have a material adverse effect on our business, financial condition and results of operations and reduce the price of our common stock.

Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses

Our operations could be subject to power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, health epidemics or pandemics or other contagious outbreaks, such as the recent global pandemic of COVID-19, and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured. We rely on third-party manufacturers to produce our products and/or components thereof. Our ability to obtain clinical supplies of our products and/or components thereof could be disrupted if the operations of these suppliers were affected by a man-made or natural disaster or other business interruption. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.

Disruptions at the FDA, other government agencies and notified bodies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved, certified or commercialized in a timely manner or at all, or otherwise prevent those agencies and bodies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business

The ability of the FDA, other government agencies and notified bodies to review and approve or certify new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory and policy changes, the FDA’s or other government agencies’ ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s, other government agencies’ and notified bodies’ ability to perform routine functions. Average review times at the FDA, other government agencies and notified bodies have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA, other agencies and notified bodies may also slow the time necessary for new drugs and medical devices or modifications to approved drugs or approved or certified medical devices to be reviewed and/or approved or certified by necessary government agencies or notified bodies, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.

Separately, in response to the COVID-19 pandemic, in March of 2020, the FDA began postponing most inspections of foreign manufacturing and domestic facilities. Subsequently, in July 2020, the FDA resumed certain on-site inspections of domestic manufacturing facilities subject to a risk-based prioritization system. The FDA utilized this risk-based assessment system to assist in determining when and where it was safest to conduct prioritized domestic inspections In May 2021, the FDA outlined a detailed plan to move toward a more consistent state of inspectional operations, and in July 2021, the FDA resumed standard inspectional operations of domestic facilities. Since that time, the FDA has continued to monitor and implement changes to its inspectional activities to ensure the safety of its employees and those of the firms it regulates as it adapts to the evolving COVID-19 pandemic. Regulatory authorities and notified bodies outside the United States have adopted similar restrictions or other policy measures in response to the COVID-19 pandemic or future pandemics. If a prolonged government shutdown occurs, or if global health concerns prevent the FDA, other regulatory authorities or notified bodies from conducting their regular inspections, audits, reviews, or other regulatory activities, it could significantly impact the ability of the FDA, other regulatory authorities or notified bodies to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

In the European Union (the “EU”), notified bodies must be officially designated to certify products and services in accordance with the EU Medical Devices Regulation. Several notified bodies have been designated under the EU Medical Devices Regulation. However, the COVID-19 pandemic has significantly slowed down their designation process, and the current designated notified bodies are facing a large amount of requests with the new regulation as a consequence of which review times may have lengthened. This situation may impact the ability of our notified body(ies) to timely review and process our regulatory submissions.

We, in conjunction with our partners, intend to expand sales of our products internationally in the future, but we and our partners may experience difficulties in obtaining regulatory approval or certification or in successfully marketing and distributing our products internationally even if approved or certified. A variety of risks associated with marketing and distributing our products internationally could materially adversely affect our business

Our future growth may depend, in part, on our and our partners’ ability to develop and commercialize our planned and future products in foreign markets. Sales of our products outside of the United States are and will be subject to foreign regulatory requirements governing clinical studies and marketing approval or certification, as well as FDA regulation of the export of drugs and medical devices from the United States. To obtain separate regulatory approval or certification in many other countries we must comply with numerous and varying regulatory requirements regarding safety and efficacy and governing, among other things, clinical studies, commercial sales, pricing and distribution of our planned or future products. We and/or our partners will incur substantial expenses in connection with our expected international expansion. Additional risks related to operating in foreign countries include:

•        differing reimbursement regimes in foreign countries, including price controls;

•        unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements;

•        economic weakness, including inflation, or political instability in particular foreign economies and markets;

•        compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

•        foreign taxes, including withholding of payroll taxes;

•        unexpected changes in tariffs, trade barriers and regulatory requirements;

•        foreign currency fluctuations, which could result in increased operating expenses, reduced revenue and other obligations incidental to doing business in another country;

•        difficulties staffing and managing foreign operations;

•        workforce uncertainty in countries where labor unrest is more common than in the United States;

•        potential liability under the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), or comparable foreign regulations;

•        the existence of additional third-party patent rights of potential relevance to our business;

•        economic weakness, including inflation or political instability in particular foreign economies and markets;

•        challenges protecting and enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States;

•        product shortages resulting from any events affecting raw material or finished good supply or distribution or manufacturing capabilities abroad;

•        compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; and

•        business interruptions resulting from geopolitical actions, including war and terrorism (including the ongoing invasion of Ukraine by Russia), natural disasters, including earthquakes, typhoons, floods and fires, or health epidemics or pandemics or other contagious outbreaks, such as the recent COVID-19 pandemic.

These and other risks associated with our international operations may materially adversely affect our ability to attain or maintain profitable operations, which would have a material adverse effect on our business, financial condition and results of operations.

In addition, there can be no guarantee that we will receive approval or certification to sell our product candidates in any international market we target, nor can there be any guarantee that any sales would result, even if such approval or certification is received. Even if the FDA grants marketing approval for a product candidate, comparable regulatory authorities or notified bodies of foreign countries must also approve or certify the manufacturing or marketing of the product candidate in those countries. Approval in the United States, or in any other jurisdiction, does not ensure approval or certification in other jurisdictions. Obtaining foreign approvals or certifications could result in significant delays, difficulties and costs for us and require additional trials and additional expenses. Regulatory requirements can vary widely from country to country and could delay the introduction of our products or product candidates in those countries. Marketing authorization by the FDA does not ensure registration, certification, clearance or approval by regulatory authorities or notified bodies in other countries, and registration, certification, clearance or approval by one or more foreign regulatory authorities or notified bodies does not ensure registration, clearance, certification or approval by regulatory authorities or notified bodies in other foreign countries or by the FDA. However, a failure or delay in obtaining registration or regulatory clearance, certification or approval in one country may have a negative effect on the regulatory process in others. Clinical studies conducted in one country may not be accepted by other countries. If we fail to comply with these regulatory requirements or to obtain and maintain required approvals or certifications, our target market will be reduced and our ability to generate revenue will be diminished. Our inability to successfully enter all our desired international markets and manage business on a global scale could negatively affect our business, financial results and results of operation.

We may in the future bring certain cGMP product release testing, stability testing and cGMP pharmaceutical manufacturing capabilities in-house, and we may not be able to do so successfully or in compliance with FDA regulations

We have brought certain activities that we previously outsourced to third parties, in-house, and we may bring certain additional activities in-house in the future. For example, we have brought certain cGMP product release testing related to SirolimusEFR in-house. In addition, we may eventually bring the manufacture of pharmaceutical drug products, such as SirolimusEFR, in-house. To the extent we do bring these functions in-house, we will be directly subject to FDA and other regulations with respect to these activities, such as the FDA’s good laboratory practice requirements, cGMP regulations and similar foreign requirements. We cannot provide assurance that we will be able to perform these functions effectively or comply with applicable regulations if we bring these functions in-house.

We may expend our limited resources to pursue a particular product or indication and fail to capitalize on products or indications that may be more profitable or for which there is a greater likelihood of success

Because we have limited financial and managerial resources, we focus on specific products and product candidates, indications and discovery programs. As a result, we may forgo or delay pursuit of other opportunities with others that could have had greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs for specific indications may not yield any commercially viable products. If we do not accurately anticipate physician and patient needs, as well as evaluate the commercial potential or target market for a particular potential product, we may miss valuable product development opportunities or we may relinquish valuable rights to that potential product through future collaborations, licenses and other similar arrangements in cases in which it would have been more advantageous for us to further advance development or to retain sole development and commercialization rights to such potential product.

Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited

As of December 31, 2021, we had gross net operating loss (“NOL”) carryforwards of approximately $94.9 million for federal income tax purposes, and $77.0 million for state income tax purposes after applying limitations under Section 382 and Section 383 of the Code. Utilization of these NOLs depends on many factors, including our future income, which cannot be assured. Some of these NOLs could expire unused and be unavailable to offset our future income tax liabilities. In addition, under Section 382 of the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership by 5% stockholders over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes to offset its post-change income may be limited. We have experienced Section 382 ownership changes in the past, and the federal NOL disclosed above reflects the impact of the calculated Section 382 limitation. In addition, we may experience additional ownership changes in the future as a result of subsequent changes in our stock ownership, including this transaction, some of which may be outside of our control. If we determine that an ownership change has occurred and our ability to use our historical NOLs is materially limited, it could harm our future operating results by effectively increasing our future tax obligations. In addition, under the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), future tax losses may be utilized to offset no more than 80% of the taxable income annually. Under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), signed into law in March 2020, the limitation on the deduction of NOLs to 80% of current year taxable income does not apply to taxable years beginning before January 1, 2021. Federal NOLs arising in taxable years beginning after December 31, 2017 and before January 1, 2021 are required to be carried back to each of the five taxable years preceding the tax year of such loss unless the taxpayer elects to waive or reduce such carryback period, but NOLs arising in taxable years beginning after December 31, 2020 generally may not be carried back. Notwithstanding the CARES Act, we may be required to pay federal income taxes in future years despite generating a loss for federal income tax purposes. There is also a risk that due to statutory or regulatory changes or other unforeseen reasons, our future NOLs could expire or otherwise be unavailable to offset future income tax liabilities. For these reasons, we may not be able to realize a tax benefit from the use of any future NOLs we generate, whether or not we attain profitability. As of December 31, 2021, we recorded a full valuation allowance on our deferred tax assets.

Changes in tax laws could adversely affect the taxes we pay and, as a result, adversely affect our financial condition and results of operations

Tax laws, regulations, and administrative practices may be subject to significant change, with or without notice, due to economic, political and other conditions, and significant judgment is required in applying the relevant provisions of tax law. If such changes were to be adopted or if the tax authorities were to challenge our application of relevant provisions of applicable tax laws, our financial condition and results of operations could be adversely affected.

In particular, the U.S. government may enact significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate, the imposition of minimum taxes or surtaxes on certain types of income, significant changes to the taxation of income derived from international operations, and an addition of further limitations on the deductibility of business interest. For example, the Inflation Reduction Act of 2022 enacted on August 16, 2022, among other provisions, imposes a 15% minimum tax on the adjusted financial statement income of certain large corporations, as well as a 1% excise tax on corporate stock repurchases by publicly traded companies. This act, as well as any other changes to tax laws that are enacted, could adversely affect our tax liability. While certain other draft legislation has been publicly released and is under development in Congress at this time, the likelihood of these changes being enacted or implemented is unclear. We are currently unable to predict whether such changes will occur. If such changes are enacted or implemented, we are currently unable to predict the ultimate impact on our business and therefore there can be no assurance our business will not be adversely affected.

Risks Related to Our Reliance on Third Parties

We are and expect to continue to be highly dependent on partners to drive the successful marketing and sale of our initial product candidates. There is no assurance that we will be able to form and properly manage partnerships. There is no assurance that partnerships will be successful

We intend to primarily pursue licensing and distribution arrangements with strategic partners to commercialize and sell our product candidates. As such, licensing and collaboration payments, including upfront and milestone payments, as well as royalties and revenue sharing arrangements related to our products and product candidates, will account for substantially all of our revenue for the foreseeable future. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders or disrupt our management and business. In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex. We have limited experience in negotiating, establishing and managing such collaborations and we may be unable to successfully form and maintain such arrangements. Without commercialization partners, we may not have adequate financial or other resources to successfully commercialize our product candidates. In addition, any potential future collaborations may be terminable by our strategic partners, and we may not be able to adequately protect our rights under these agreements. Furthermore, strategic partners may negotiate for exclusive rights to commercialize our products or certain rights to control decisions regarding the development and commercialization of our products, if approved, and may not conduct those activities in the same manner as we do. Any termination of collaborations we have entered into or may enter into in the future, or any delay in entering into collaborations related to our products or product candidates, could delay the development and commercialization of our products or product candidates and reduce their competitiveness if they reach the market, which could have a material adverse effect on our business, financial condition and results of operations.

Successfully commercializing medical device combinations such as ours is a complex and uncertain process, dependent on the efforts of management, distributors, outside consultants, physicians and general economic conditions, among other factors. Any factors that adversely impact the commercialization of our product candidates will have a negative impact on our business, results of operations and financial condition. We cannot assure you that we or our partners will be successful in developing or commercializing any of our product candidates or any other new product candidates. Our inability to successfully commercialize our product candidates through partnerships and/or successfully develop and commercialize additional products or any enhancements to our products which we may develop would have a material adverse effect on our business, results of operations and financial condition.

We did not meet the target achievement dates relating to certain milestone payments, and we may not meet other target achievement dates relating to additional milestone payments, under our manufacturing and distribution agreement with Terumo, which may have an adverse effect on our relationship with Terumo and our results of operations

In June 2019, we entered into a strategic partnership with Terumo (the “Terumo Partnership”) for the manufacture and distribution of our product Virtue SAB. Under the agreement with Terumo, we were initially eligible for certain milestone payments in the amount of $65 million from Terumo upon completion of certain minimum enrollments in clinical studies, making certain filings and submissions, and obtaining certain regulatory approvals and certifications. Of these milestone payments, $35 million relate to achieving certain milestones by specified target achievement dates, and as of the date of this filing we have already passed the target achievement dates for two $5 million milestone payments, in each case, without achieving the related milestones. In addition, due to delays in our Virtue SAB program resulting from the COVID-19 pandemic, supply chain issues and unexpected regulatory delays and requirements, we are unlikely to be able to complete the remaining time-based milestones by the specified target achievement dates to earn the remaining $25 million in time-based milestone payments pursuant to our agreement with Terumo.

Further, Terumo has the right to terminate the agreement, or certain of its obligations thereunder, if certain milestones are not achieved. If Terumo elects to terminate the agreement, our development and commercialization plans for Virtue SAB could be adversely impacted, and this could have a material adverse effect on our business, financial condition, results of operations and prospects.

The Company and Terumo signed a letter agreement in June 2022 whereby the parties agreed to negotiate in good faith over 12 months mutually agreeable adjustments to certain target achievement dates to reflect the regulatory and pandemic-related delays. There is no assurance as to the outcome of these negotiations with respect to any potential modifications to the milestone target achievement dates. If we are unable to complete such milestone negotiations to our satisfaction or to the satisfaction of Terumo, our development and commercialization plans for Virtue SAB and/or our relationship with Terumo could be adversely impacted. In addition, our failure to earn milestone payments under our agreement with Terumo will have an adverse effect on our results of operations.

We expect to be highly dependent on partners and third-party vendors to manufacture and provide important materials and components for our products and product candidates. There is no assurance that we will be able properly manage our supply chain. Further, we currently do not have redundancy built into our supply chain

We utilize and intend to continue to utilize partners and third-party vendors to assist in the manufacture and assembly of our products and product candidates, as well as to provide materials and components essential to the manufacture of our products and product candidates, in particular Virtue SAB. For example, for our Virtue SAB product candidate, we currently source sirolimus from a single manufacturer in China and we source angioplasty balloons from a single manufacturer in Singapore. Disruptions in those countries or with respect to those suppliers for any reason, including, without limitation, further outbreaks of COVID-19, including any strains or variants of the virus, could cause us to seek new or additional suppliers for these products and could have a material adverse effect on our business.

We expect to continue to rely on third-party manufacturers for the commercial supply of any of our product candidates for which we obtain marketing approval, if any. We may be unable to maintain or establish required agreements with third-party manufacturers or to do so on acceptable terms. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

•        the failure of the third party to manufacture our product candidates according to our schedule, or at all, including if our third-party contractors give greater priority to the supply of other products over our product candidates or otherwise do not satisfactorily perform according to the terms of the agreements between us and them;

•        the reduction or termination of production or deliveries by suppliers, or the raising of prices or renegotiation of terms;

•        the termination or nonrenewal of arrangements or agreements by our third-party contractors at a time that is costly or inconvenient for us;

•        the breach by the third-party contractors of our agreements with them;

•        the failure of third-party contractors to comply with applicable regulatory requirements;

•        the failure of the third party to manufacture our product candidates according to our specifications;

•        the mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or active drug or placebo not being properly identified;

•        clinical supplies not being delivered to clinical sites on time, leading to clinical study interruptions, or of drug or medical device supplies not being distributed to commercial vendors in a timely manner, resulting in lost sales; and

•        the misappropriation of our proprietary information, including our trade secrets and know-how.

In addition, successfully manufacturing a medical device combination product or product candidate such as our Virtue SAB is a complex and uncertain process, dependent on the efforts of management, suppliers, manufacturing companies, packaging vendors, testing companies, outside consultants and general economic conditions, among other factors. Our ability to supply our products commercially and to develop any future products depends, in part, on our ability to obtain these materials, components and products in accordance with regulatory requirements and in sufficient quantities for commercialization and clinical testing. Any factors that adversely impact the manufacturing of our products or product candidates will have a negative impact on our business, results of operations and financial condition. We cannot assure you that we or our partners will be successful in manufacturing our current products or product candidates or any potential enhancements to our products or any other new products. Our inability to successfully manufacture our products through partnerships and/or successfully develop and manufacture additional products or any enhancements to our products which we may develop would have a material adverse effect on our business, results of operations and financial condition.

We and our partners may be unable to sustain revenue growth

We expect our ability to increase our revenue in future periods to primarily depend on the ability of commercial partners to successfully penetrate our target markets and increase sales of our products or product candidates, which will, in turn, depend in part on our partners’ success in growing their customer base and obtaining reorders from those customers. New products will also need to be developed and approved, or certified or otherwise authorized by the FDA and foreign regulatory agencies or notified bodies to sustain revenue growth in our markets. Additional clinical data and new products may be necessary to grow revenue.

The failure of our manufacturing partners and component suppliers to meet regulatory quality standards applicable to their manufacturing processes could have an adverse effect on our business, financial condition and results of operations

Our medical device and component manufacturers must register with the FDA and are subject to periodic inspection by the FDA for compliance with the FDA’s Quality System Regulation (“QSR”), requirements, which require manufacturers of medical devices to adhere to certain manufacturing practices, including design controls, product validation and verification, in process testing, quality control and documentation procedures. Similar requirements apply in foreign jurisdictions. Compliance with applicable regulatory requirements is subject to continual review and is rigorously monitored through periodic inspections or audits by the FDA and other regulatory agencies or notified bodies. Our component, polymer and drug suppliers are also required to meet certain standards applicable to their manufacturing processes.

We cannot assure you that we, our manufacturing partners, or component suppliers comply or can continue to comply with all regulatory requirements. The inability of one of these parties to achieve or maintain compliance with these requirements or quality standards may disrupt our ability to supply products sufficient to meet demand until compliance is achieved, or until a new supplier or manufacturer has been identified and evaluated. Our or these parties’ failure to comply with applicable regulations could cause sanctions to be imposed on us, including warning letters, fines, injunctions, civil penalties, failure of regulatory authorities to grant marketing approval of our product candidates, delays, suspension or withdrawal of approvals, certifications, license revocation, seizures or recalls of products or product candidates, operating restrictions and criminal prosecutions, which could harm our business. We cannot assure you that if we need to engage new suppliers, manufacturers or testing resources to satisfy our business requirements that we can locate new ones in compliance with regulatory requirements. Our failure to do so could have a material adverse effect on our business, financial condition, results of operations and prospects.

From time to time, we engage outside parties to perform services related to certain of our clinical studies and trials, and any failure of those parties to fulfill their obligations could cause costs and delays

From time to time, we engage consultants and CROs to help design, monitor and analyze the results of certain of our clinical studies and trials. The consultants and CROs we engage interact with clinical investigators to enroll patients in our clinical studies. We depend on these consultants, CROs and clinical investigators to perform the clinical studies and trials and monitor and analyze data from these studies and trials under the investigational plan and protocol for the study or trial and in compliance with regulations and requirements, commonly referred to as GCP, for conducting, recording and reporting results of clinical studies or trials to assure that the data and results are credible and accurate and the trial participants are adequately protected, as required by the FDA and foreign regulatory authorities. The consultants and CROs also are responsible for protecting confidential patient data and complying with U.S. and foreign laws and regulations related to data privacy. We may face delays in our regulatory approval process if these parties do not perform their obligations in a timely or competent fashion or if we must change service providers. This risk is greater for our clinical studies and trials conducted outside of the United States, where it may be more difficult to ensure our studies and trials are conducted in compliance with FDA requirements. Any third parties we hire to design or monitor and analyze results of our clinical studies and trials may also provide services to our competitors, which could compromise the performance of their obligations to us. If these third parties do not successfully carry out their duties or meet expected deadlines, or if the quality, completeness or accuracy of the data they obtain is compromised due to the failure to adhere to our clinical study protocols or for other reasons, our clinical studies or trials may be extended, delayed or terminated or may otherwise prove to be unsuccessful, and our development costs will increase. We may not establish or maintain relationships with these third parties on favorable terms, or at all. If we need to enter into replacement arrangements because a third-party is not performing in accordance with our expectations, we may not be able to do so without undue delays or considerable expenditures, or at all.

The FDA and similar regulatory bodies may hold us responsible for any failure of our third-party consultants or CROs. Our monitoring of our third-party consultants or CROs may fail to detect, remedy or report their failures.

The continuing development of many of our products and product candidates depends upon our maintaining strong working relationships with physicians

The research, development, marketing and sale of many of our new and improved products or product candidates depend upon our maintaining working relationships with physicians. We rely on these professionals to provide us with considerable knowledge and experience regarding the development, marketing and sale of our products or product candidates. Physicians assist us as researchers, marketing and product consultants, inventors and public speakers. If we cannot maintain our strong working relationships with these professionals and continue to receive their advice and input, the development and marketing of our products or product candidates could suffer, which could have a material adverse effect on our business, financial condition, results of operations and prospects. At the same time, the medical device industry’s relationship with physicians is under increasing scrutiny by the Office of Inspector General (the “OIG”), and the U.S. Department of Justice (the “DOJ”). Our failure to comply with requirements governing the industry’s relationships with physicians, including the reporting of certain payments to physicians under the National Physician Payment Transparency Program or an investigation into our compliance by the OIG or the DOJ, could have a material adverse effect on our business, financial condition, results of operations and prospects.

We have limited pharmaceutical manufacturing experience and our CMOs may experience development or manufacturing problems or delays in producing our products and planned or future products that could limit the potential growth of our revenue or increase our losses

We are responsible for the manufacture of the proprietary SirolimusEFR used in our Virtue SAB product candidate. We have already experienced substantial delays and other challenges in the manufacture of SirolimusEFR as a result of supply chain and personnel issues experienced by the single source CMO that produces SirolimusEFR for us. Some of these issues are related to the ongoing COVID-19 pandemic and are likely to impact SirolimusEFR production through the next 12 months and potentially longer. Many of the processes, ingredients and components required for manufacture of SirolimusEFR are also required for manufacture of COVID-19 vaccines and tests. In the event that we do not have sufficient SirolimusEFR to complete our planned clinical studies, it could delay such trials. Further delays in our trial timelines will result in additional expenses to us and potentially risk or damage our partnership with Terumo and the future competitiveness of our Virtue SAB solution.

If approved for use in connection with our medical device product candidates or as a stand-alone product, we currently expect to remain responsible for the manufacture and supply of SirolimusEFR, at commercial scale, for our partner, Terumo. We have limited experience in commercially manufacturing pharmaceutical products and no experience manufacturing SirolimusEFR in the volume that we anticipate will be required if we achieve planned levels of commercial sales. We do not currently have nor do we currently have plans to acquire the infrastructure or capability internally to manufacture SirolimusEFR on a commercial scale. Instead, we rely on contract manufacturers for current production of SirolimusEFR for clinical study supplies and currently plan to continue to use contract manufacturers for commercial supply. Our reliance on third-party suppliers and manufacturers, including certain single-source suppliers, could harm our ability to fulfill our supply obligations to Terumo. If our third-party suppliers fail to deliver the required quantities of materials on a timely basis and at commercially reasonable prices, and we are unable to find one or more replacement suppliers capable of production at a substantially equivalent cost in substantially equivalent volumes and quality on a timely basis, the supply of our products or product candidates to customers and the development of any future products will be delayed, limited or prevented, which could have material adverse effect on our business, financial condition and results of operations.

The facilities used by our CMOs to manufacture our product candidates must be authorized by the applicable regulatory authorities, including the FDA, pursuant to inspections that will be conducted after a PMA, New Drug Application (“NDA”) or comparable foreign regulatory marketing application is submitted. We do not control the manufacturing process of our product candidates and are completely dependent on our contract manufacturing partners for compliance with the FDA’s cGMP or similar foreign requirements for manufacture of both the active drug substances and finished drug product. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the FDA’s or foreign regulatory authorities’ strict regulatory requirements, they will not be able to secure or maintain FDA or foreign approval for use of their manufacturing facilities with respect to our product candidates. In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or any other applicable regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, or if our suppliers or contract manufacturers decide they no longer want to supply or manufacture for us, we may need to find alternative manufacturing facilities, in which case we might not be able to identify manufacturers for clinical or commercial supply on acceptable terms, without delay, or at all, which would significantly impact our ability to fulfill our supply obligations for SirolimusEFR for Virtue SAB, as well as sales of SirolimusEFR for other potential clinical applications.

In addition, the manufacture of pharmaceutical products is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of pharmaceutical products often encounter difficulties in production, particularly in scaling up and validating initial production and absence of contamination. These problems include difficulties with production costs and yields, quality control, including stability of the product, quality assurance testing, operator error, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations. Furthermore, if contaminants are discovered in our supply or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination, and could require that affected supplies be withdrawn or withheld from the market. Any stability or other issues relating to the manufacture of our product candidates may occur in the future. Additionally, our manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments. If our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide SirolimusEFR to Terumo would be jeopardized, which would result in a material adverse effect on our business, financial condition, results of operations and prospects.

Reduction or interruption in supply and an inability to develop alternative sources for supply may adversely affect our partners’ manufacturing operations and related product sales

We purchase many of the components and raw materials used in manufacturing our products from numerous suppliers in various countries. Generally, we have been able to obtain adequate supplies of such raw materials and components. However, for reasons of quality assurance, cost-effectiveness or availability, we may procure certain components and raw materials from a sole supplier. For example, for our Virtue SAB product candidate, we source sirolimus from a single manufacturer in China, we source angioplasty balloons from a single manufacturer based in Ireland that uses a production facility based in Singapore to manufacture balloons for us, and we source custom polymers from a single manufacturer in the United States. We work closely with our suppliers to try to ensure continuity

of supply while maintaining high quality and reliability. However, we cannot guarantee that these efforts will be successful. In addition, due to the stringent regulations and requirements of the FDA, comparable regulatory bodies in countries in the EU and similar regulatory bodies elsewhere around the world regarding the manufacture of our products or product candidates, we may not be able to quickly establish additional or replacement sources for certain components or materials. A reduction in or an interruption to supply, and an inability to develop alternative sources for such supply, could adversely affect our ability to manufacture our products in a timely or cost-effective manner and to make our related product sales. Manufacturing facilities used to make our balloons or other components may be shut down, sold or otherwise become unavailable and it will take time and money for us to identify and requalify new facilities.

In addition, assuming our BackBeat CNT product candidate is approved, we will be reliant on Medtronic and its ability to obtain supplies for and to produce its BackBeat CNT-enabled pacemaker systems. If Medtronic is unable to obtain such supplies or is otherwise unable to produce its BackBeat CNT-enabled pacemaker systems, it could adversely affect our results of operations.

We source certain products from foreign suppliers, making us vulnerable to supply problems or price fluctuations caused by trade conflicts and other geopolitical events

Geopolitical risks and other global events could negatively affect our ability to rely on foreign suppliers. Ongoing uncertainty in the trade relationship between China and the United States could cause delays in the manufacturing supply chain for sirolimus, which we currently source from China. Likewise, export restrictions enacted in foreign countries as a result of the COVID-19 pandemic, including those imposed in China, could limit our ability to obtain products from foreign suppliers or make foreign-made products more costly than anticipated. Any disruptions or delays in our supply chain could negatively impact our ability to operate our business or increase our costs. Further, any tariffs imposed on products we or our partners import from China, Singapore or any other foreign supplier, as a result of global trade conflict, could cause us to increase prices for our future products or reduce our margins.

In February 2022, following Russia’s invasion of Ukraine, the United States and the EU imposed various economic sanctions against Russia. If Russia responds with retaliatory measures such as restrictions on the sale of oil or other energy resources from Russia to other countries in the region, that could result in an increase in our global shipping expenses, reduce our sales or otherwise have an adverse effect on our European operations. Additionally, escalation by Russia beyond Ukraine and into other countries within the region could also reduce our sales and have a negative effect on our European operations.

Risks Related to Government Regulation and Our Industry

Healthcare reform initiatives and other administrative and legislative proposals may adversely affect our business

There have been, and continue to be, proposals by the federal government, state governments, regulators and third-party payors to control or manage the increased costs of healthcare and, more generally, to reform the U.S. healthcare system. Certain of these proposals could limit the prices we are able to charge for our products or the coverage and reimbursement available for our products and could limit the acceptance and availability of our products. The adoption of proposals to control prices could have a material adverse effect on our business, financial condition, results of operations and prospects.

In the United States, there have been, and continue to be a, number of legislative initiatives to contain healthcare costs. For example, in March 2010, the Affordable Care Act (the “ACA”) was enacted in the United States, which made a number of substantial changes in the way healthcare is financed by both governmental and private insurers. Among other ways in which it may affect our business, the ACA established a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research, implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other healthcare providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models, and expanded the eligibility criteria for Medicaid programs.

Since its enactment, there have been judicial, U.S. Congressional and executive branch challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Prior to the Supreme

Court’s decision, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA. It is unclear how other healthcare reform measures of the Biden administration or other efforts, if any, will impact our business.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, reduced Medicare payments to providers, effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2031, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. The Medicare Access and CHIP Reauthorization Act of 2015 (the “MACRA”), enacted on April 16, 2015, repealed the formula by which Medicare made annual payment adjustments to physicians and implemented fixed annual updates and a new system of incentive payments that began in 2019 that are based on various performance measures and physicians’ participation in alternative payment models such as accountable care organizations. It is unclear what effect new quality and payment programs, such as MACRA, may have on our business, financial condition, results of operations or cash flows.

In addition to continuing pressure on prices and cost-containment measures in the United States, legislative developments at the EU or member state level may result in significant additional requirements or obstacles. The delivery of healthcare in the EU, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy. National governments and health service providers have different priorities and approaches to the delivery of healthcare and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary constraints in most EU member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing EU and national regulatory burdens on those wishing to develop and market products, this could restrict or regulate post-approval activities and affect the ability of pharmaceutical companies to commercialize their products. In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies.

We expect additional state, federal and foreign healthcare policies and reform measures to be adopted in the future, any of which could limit reimbursement for healthcare products and services or otherwise result in reduced demand for our products or other products we may commercialize in the future or additional pricing pressure and have a material adverse effect on our industry generally and on our customers. Any changes in, or uncertainty with respect to, future coverage or reimbursement rates could affect demand for our products or other products we may commercialize in the future, which, in turn, could impact our ability to successfully commercialize our products or other products we may commercialize in the future and could have a material adverse effect on our business, financial condition and results of operations.

For instance, in December 2021, the EU Regulation No 2021/2282 on Health Technology Assessment (the “HTA”), amending Directive 2011/24/EU, was adopted. This regulation, which entered into force in January 2022, intends to boost cooperation among EU member states in assessing health technologies, including some medical devices, and providing the basis for cooperation at the EU level for joint clinical assessments in these areas. The regulation foresees a three-year transitional period and will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas. Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing and reimbursement.

Regulatory compliance is expensive, complex and uncertain, and approvals or certifications can often be denied or significantly delayed. We may not obtain the necessary approvals or certifications and failure to obtain timely regulatory approval or certification, if at all, would adversely affect our business

We are not permitted to commercialize, market, promote or sell any of our product candidates in the United States without obtaining approval from the FDA. Foreign regulatory authorities impose similar requirements. The time required to obtain approval or certification by the FDA, comparable foreign regulatory authorities and notified bodies is unpredictable, typically takes many years following the commencement of clinical studies and depends upon numerous factors, including the type, complexity and novelty of the product candidates involved. In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the approval, certification or the decision not to approve an application. Regulatory authorities and notified bodies have substantial discretion in the approval or certification process and may refuse to accept any application or may decide that our data are insufficient for approval or certification and require additional preclinical, clinical or other studies. We have not submitted for or obtained regulatory approval for any product candidate, except for CE mark certification of our first-generation BackBeat CNT on the Moderato implantable pulse generator (IPG) device.

In the United States, before we can market a new medical device, or a new use of, new claim for or significant modification to an existing device, we must first receive either clearance under Section 510(k) of the Federal Food, Drug, and Cosmetic Act (the “FDCA”), or approval of a PMA application from the FDA, unless an exemption applies. Under the FDCA, medical devices are classified into one of three classes, Class I, Class II or Class III, depending on the degree of risk associated with each medical device and the extent of manufacturer and regulatory control needed to ensure its safety and effectiveness. Certain Class I and Class II devices are exempt from premarket notification (510(k)) requirements as well as the Medical Device cGMPs, also referred to as the QSR. A Class I or Class II device that is exempt from 510(k) requirements must still comply with other requirements unless the device is explicitly exempt from those requirements as indicated in the regulation for that device type. We do not believe Virtue SAB or BackBeat CNT or other of our current product candidates will be exempt from, or eligible for, clearance under Section 510(k) of the FDCA. We expect our product candidates will require submission and FDA approval of a PMA to be marketed in the United States. In the process of obtaining PMA approval, the FDA must determine that a proposed device is safe and effective for its intended use(s) based, in part, on extensive data, including, but not limited to, technical, preclinical, clinical study, manufacturing and labeling data. The PMA process is typically required for devices that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices. Modifications to products that are approved through a PMA application generally require FDA approval. The PMA process can be expensive, lengthy and uncertain. The process of obtaining a PMA is much more costly and uncertain than the 510(k) clearance process and generally takes from one to three years, or even longer, from the time the application is submitted to the FDA.

In the United States, before we can market a new drug product, or market an approved drug for a new indication, we must receive approval of an NDA. In the process of obtaining NDA approval, the FDA must determine that the drug product candidate is safe and effective for its intended uses. The NDA is a comprehensive, multivolume application that includes, among other things, the results of preclinical and clinical studies, information about the drug’s composition, and plans for manufacturing, packaging and labeling the drug. The time required to obtain NDA approval by the FDA is unpredictable and typically takes many years following the commencement of clinical studies.

We expect that obtaining regulatory approvals for our product candidates will require us to conduct human clinical studies. For our medical device product candidates and combination drug/device product candidates regulated as medical devices, we will need to obtain approval of an investigational device exemption (“IDE”), prior to beginning a clinical study in the United States. For our drug product candidates, we will need to submit an IND that the FDA authorizes prior to beginning clinical studies in the United States. Preclinical studies, submissions related to chemistry, manufacturing and controls (“CMC”) of our product candidates, and safety data such as biocompatibility will be required in connection with any IDE or IND applications. It is possible that unforeseen failure of one or more of these tests could cause delays in the application process.

Despite the time, effort and cost involved in conducting clinical studies and seeking regulatory approvals or certifications, a product candidate may not be approved or certified by the FDA or comparable regulatory authorities or notified bodies. Any delay or failure to obtain necessary regulatory approvals or certifications could harm our business. Furthermore, even if we are granted regulatory approvals or certifications, they may include significant limitations on the indicated uses for the device, which may limit the market for the product.

The FDA, comparable regulatory authorities (or notified bodies) can delay, limit or deny approval of a drug or approval or certification of a medical device for many reasons, including:

•        our inability to demonstrate to the satisfaction of the FDA or the applicable regulatory entity or notified body that our products are safe or effective for their intended uses;

•        inability to satisfy regulators on the biocompatibility of our novel materials or to gain agreement with regulators on the methods or results of biocompatibility testing;

•        the disagreement of the FDA or the applicable foreign regulatory authority or notified body with the design or implementation of our clinical studies or the interpretation of data from preclinical studies or clinical studies;

•        serious and unexpected adverse effects experienced by participants in our clinical studies;

•        the data from our preclinical studies and clinical studies may be insufficient to support approval;

•        our inability to demonstrate that the clinical and other benefits of the product candidate outweigh the risks;

•        the manufacturing process or facilities we use may not meet applicable requirements; and

•        the potential for approval policies or regulations of the FDA or applicable foreign regulatory bodies to change significantly in a manner rendering our clinical data or regulatory filings insufficient for approval or certification.

The regulations to which we are subject are complex and have tended to become more stringent over time. Regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales. The FDA and foreign regulatory authorities enforce these regulatory requirements through various mechanisms, including periodic unannounced inspections. We do not know whether we or any CMOs we may utilize will pass any future FDA, foreign regulatory authorities or notified bodies inspections or audits. Failure to comply with applicable regulations could jeopardize our ability to sell our products and result in enforcement actions such as: warning letters; fines; injunctions; civil penalties; termination of distribution; recalls or seizures of products; delays in the introduction of products into the market; total or partial suspension of production; refusal to grant future approvals or certifications; withdrawals or suspensions of current approvals or certifications, resulting in prohibitions on sales of our products; and, in the most serious cases, criminal penalties.

Subject to the transitional provisions provided in the EU Medical Devices Regulation, and in order to sell our products in EU member states, our products must comply with the general safety and performance requirements of the EU Medical Devices Regulation, which repeals and replaces the Medical Devices Directive and the Active Implantable Medical Devices Directive. Compliance with these requirements is a prerequisite to be able to affix the European Conformity (“CE”) mark to our products, without which they cannot be sold or marketed in the EU. All medical devices (including active implantable medical devices) placed on the market in the EU must meet the general safety and performance requirements laid down in Annex I to the EU Medical Devices Regulation, including the requirement that a medical device must be designed and manufactured in such a way that, during normal conditions of use, it is suitable for its intended purpose. Medical devices must be safe and effective and must not compromise the clinical condition or safety of patients, or the safety and health of users and — where applicable — other persons, provided that any risks which may be associated with their use constitute acceptable risks when weighed against the benefits to the patient and are compatible with a high level of protection of health and safety, taking into account the generally acknowledged state of the art. To demonstrate compliance with the general safety and performance requirements, we must undergo a conformity assessment procedure, which varies according to the type of medical device and its (risk) classification. A conformity assessment procedure generally requires the intervention of a notified body. The notified body would typically audit and examine the technical file and the quality system for the manufacture, design and final inspection of our devices. If satisfied that the relevant product conforms to the relevant general safety and performance requirements, the notified body issues a certificate of conformity, which the manufacturer uses as a basis for its own declaration of conformity. The manufacturer may then apply the CE mark to the device, which allows the device to be placed on the market throughout the EU. If we fail to comply with applicable laws and regulations, we would be unable to affix the CE mark to our products, which would prevent us from selling them within the EU.

The aforementioned EU rules are generally applicable in the European Economic Area (the “EEA”) (which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland). Non-compliance with the above requirements would also prevent us from selling our products in these three countries.

International regulatory approval or certification processes may take longer than the FDA approval process. If we fail to comply with applicable FDA and foreign regulatory requirements, we may not receive regulatory approvals or certifications or may be subject to FDA or foreign enforcement actions. We may be unable to obtain future regulatory approval or certification in a timely manner, or at all, especially if existing regulations are changed or new regulations are adopted. A failure or delay in obtaining necessary regulatory approvals or certifications would materially adversely affect our business. For more information regarding the regulation of our products, see “Business of Orchestra — Government Regulation.”

In the EU, we must inform the notified body that carried out the conformity assessment of the medical devices that we market or sell in the EU and the EEA of any planned substantial changes to our quality system or substantial changes to our medical devices that could affect compliance with the general safety and performance requirements laid down in Annex I to the EU Medical Devices Regulation or cause a substantial change to the intended use for which the device has been CE marked. The notified body will then assess the planned changes and verify whether they affect the products’ ongoing conformity with the EU Medical Devices Regulation. If the assessment is favorable, the notified body will issue a new certificate of conformity or an addendum to the existing certificate attesting compliance with the general safety and performance requirements and quality system requirements laid down in the Annexes to the EU Medical Devices Regulation. The notified body may disagree with our proposed changes and product introductions or modifications could be delayed or canceled, which could adversely affect our ability to grow our business.

Our medical device products must be manufactured in accordance with federal, state and foreign regulations, and we or any of our suppliers or third-party manufacturers could be forced to recall our installed systems or terminate production if we fail to comply with these regulations

The methods used in, and the facilities used for, the manufacture of our medical device products must comply with the FDA’s QSR which is a complex regulatory scheme that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, servicing and shipping of medical devices. Furthermore, we are required to verify that our suppliers maintain facilities, procedures and operations that comply with our quality standards and applicable regulatory requirements. The FDA enforce the QSR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include the facilities of subcontractors. Our products are also subject to similar state regulations and various laws and regulations of foreign countries governing manufacturing. Our third-party manufacturers may not take the necessary steps to comply with applicable regulations, which could cause delays in the delivery of our products. In addition, failure to comply with applicable FDA or foreign regulatory requirements or later discovery of previously unknown problems with our products or manufacturing processes could result in, among other things: warning letters or untitled letters; fines, injunctions or civil penalties; suspension or withdrawal of approvals; seizures or recalls of our products; total or partial suspension of production or distribution; administrative or judicially imposed sanctions; the FDA’s, foreign regulatory authorities’ or notified bodies’ refusal to grant pending or future approvals or certifications for our product candidates; clinical holds; refusal to permit the import or export of our product candidates; and criminal prosecution of us or our employees.

Any of these actions could significantly and negatively affect supply of our products. If any of these events occurs, our reputation could be harmed, we could be exposed to product liability claims and we could lose customers and experience reduced sales and increased costs.

Even if we obtain regulatory approval or certification for a product candidate, our products will remain subject to regulatory scrutiny and post-marketing requirements. Failure to comply with post-marketing regulatory requirements could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the market

Any regulatory approvals or certifications that we may receive for our product candidates will require the submission of reports to regulatory authorities and surveillance to monitor the safety and efficacy of the product candidate, may contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management requirements. For example,

the FDA may require a REMS in order to approve our drug product candidates, which could entail requirements for a medication guide, physician training and communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. In addition, if one of our product candidates is approved or certified, it will be subject to ongoing and pervasive regulatory requirements governing, among other things, the manufacture, marketing, labeling, advertising, adverse event reporting, recordkeeping, sale, promotion, sampling, testing, conduct of post-marketing studies, registration, and listing of drugs and medical devices. For example, we must submit periodic reports to the FDA as a condition of approval. These reports include safety and effectiveness information about the drug or device after its approval. Failure to submit such reports, or failure to submit the reports in a timely manner, could result in enforcement action by the FDA. Following its review of the periodic reports, the FDA might ask for additional information or initiate further investigation.

The regulations to which we are subject are complex and have become more stringent over time. Regulatory changes could result in restrictions on our ability to continue or expand our operations, higher than anticipated costs or lower than anticipated sales. Even after we have obtained the proper regulatory approval or certification to market a device, we have ongoing responsibilities under FDA regulations and applicable foreign laws and regulations. The FDA, state and foreign regulatory authorities have broad enforcement powers. Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA, state or foreign regulatory authorities, which may include any of the following sanctions:

•        untitled letters or warning letters;

•        fines, injunctions, consent decrees and civil penalties;

•        recalls, termination of distribution, administrative detention or seizure of our products;

•        customer notifications or repair, replacement or refunds;

•        operating restrictions or partial suspension or total shutdown of production;

•        delays in or refusal to grant our requests for future PMA approvals or foreign regulatory approvals or certifications of new products, new intended uses or modifications to existing products;

•        withdrawals or suspensions of our current PMA or foreign regulatory approvals or certifications, resulting in prohibitions on sales of our products;

•        FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and

•        criminal prosecution.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may adversely affect our ability to commercialize and generate revenue from our products. If regulatory sanctions are applied or if regulatory approval or certification is withdrawn, our business will be seriously harmed.

Moreover, the policies of the FDA and of other regulatory authorities may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval or certification of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval or certification that we may have obtained and we may not achieve or sustain profitability.

Modifications to any approved or certified device products may require us to obtain new PMA approvals or approvals of a PMA supplement or foreign certification, and if we market modified products without obtaining necessary approvals or certifications, we may be required to cease marketing or recall the modified products until required approvals or certifications are obtained

Certain modifications to any device product for which we receive PMA approval may require approval of a new PMA or a PMA supplement, or alternatively a notification or other submission to the FDA. The FDA requires device manufacturers to make and document a determination of whether a modification requires an approval, supplement

or clearance; however, the FDA can review a manufacturer’s decision. The FDA may not agree with our decisions regarding whether approval of a modification is necessary. We may make modifications to approved devices in the future that we believe do not require approval of a new PMA or PMA supplement. If the FDA disagrees with our determination and requires us to submit a new PMA or PMA supplement for modifications to our previously approved device products, we may be required to cease marketing or to recall the modified product until we obtain approval, and we may be subject to significant regulatory fines or penalties. In addition, the FDA may not approve our products for the indications that are necessary or desirable for successful commercialization or could require clinical trials to support any modifications. Any delay or failure in obtaining required approvals would adversely affect our ability to introduce new or enhanced products in a timely manner, which, in turn, would harm our future growth.

In the EU, we must inform the notified body that carried out the conformity assessment of the medical devices that we market or sell in the EU and the EEA of any planned substantial changes to our quality system or substantial changes to our medical devices that could affect compliance with the general safety and performance requirements laid down in Annex I to the EU Medical Devices Regulation or cause a substantial change to the intended use for which the device has been CE marked. The notified body will then assess the planned changes and verify whether they affect the products’ ongoing conformity with the EU Medical Devices Regulation. If the assessment is favorable, the notified body will issue a new certificate of conformity or an addendum to the existing certificate attesting compliance with the general safety and performance requirements and quality system requirements laid down in the Annexes to the EU Medical Devices Regulation. The notified body may disagree with our proposed changes and product introductions or modifications could be delayed or canceled, which could adversely affect our ability to grow our business.

Our medical device products, if approved or certified, may cause or contribute to adverse medical events or be subject to failures or malfunctions that we are required to report to the FDA or similar foreign regulatory authorities, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, financial condition and results of operations. The discovery of serious safety issues with our products, or a recall of our products either voluntarily or at the direction of the FDA or another governmental authority, could have a negative impact on us

We are subject to the FDA’s medical device reporting regulations and similar foreign regulations, which require us to report to the FDA when we receive or become aware of information that reasonably suggests that one or more of our products may have caused or contributed to a death or serious injury or malfunctioned in a way that, if the malfunction were to recur, it could cause or contribute to a death or serious injury. The timing of our obligation to report is triggered by the date we become aware of the adverse event, as well as the nature of the event. We may fail to report adverse events of which we become aware within the prescribed timeframe. We may also fail to recognize that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of the product. If we fail to comply with our reporting obligations, the FDA or foreign regulatory authorities could take action, including warning letters, untitled letters, administrative actions, criminal prosecution, imposition of civil monetary penalties, revocation of our device approval, seizure of our products or delay in approval or certification of future products.

The FDA and foreign regulatory bodies have the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture of a product or in the event that a product poses an unacceptable risk to health. The FDA’s authority to require a recall must be based on a finding that there is reasonable probability that the device could cause serious injury or death. We may also choose to voluntarily recall a product if any material deficiency is found. A government-mandated or voluntary recall by us could occur as a result of an unacceptable risk to health, component failures, malfunctions, manufacturing defects, labeling or design deficiencies, packaging defects or other deficiencies or failures to comply with applicable regulations. Product defects or other errors may occur in the future.

Depending on the corrective action we take to redress a product’s deficiencies or defects, the FDA, foreign regulatory authorities or notified bodies may require, or we may decide, that we will need to obtain new approvals or certifications for the device before we may market or distribute the corrected device. Seeking such approvals or certifications may delay our ability to replace the recalled devices in a timely manner. Moreover, if we do not adequately address problems associated with our devices, we may face additional regulatory enforcement action, including FDA and similar foreign regulatory authorities warning letters, product seizure, injunctions, administrative penalties or civil or criminal fines.

Companies are required to maintain certain records of recalls and corrections, even if they are not reportable to the FDA. We may initiate voluntary withdrawals or corrections for our products in the future that we determine do not require notification of the FDA or foreign regulatory authorities. If the FDA or foreign regulatory authorities disagree with our determinations, it could require us to report those actions as recalls and we may be subject to enforcement action. A future recall announcement could harm our reputation with customers, potentially lead to product liability claims against us and negatively affect our sales. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and financial results.

Virtue SAB is a drug/device combination, which may result in additional regulatory and other risks

We believe our Virtue SAB product candidate may be subject to regulation in the United States as a drug/device combination product. If marketed individually, each component of Virtue SAB would be subject to different regulatory pathways and would require approval of independent marketing applications by the FDA. A combination product, however, is assigned to an FDA center that will have primary jurisdiction over its regulation based on a determination of the combination product’s primary mode of action, which is the single mode of action that provides the most important therapeutic effect. In the case of Virtue SAB, we believe that the primary mode of action is attributable to the device component of the product. Accordingly, we believe that the FDA’s Center for Devices and Radiological Health (“CDRH”) will have primary jurisdiction over pre-market development and review of Virtue SAB, and expect to seek initial approval of Virtue SAB through submission of a single PMA reviewed by CDRH. The determination of whether a combination product requires a single marketing application or two separate marketing applications for each component is made by the FDA on a case-by-case basis. Although we believe a single marketing application for the approval of a combination product would be successful, there can be no assurance that the FDA will not determine that separate marketing applications are necessary. If the FDA were to make that determination, it could significantly increase the resources and time required to bring a particular combination product to market.

The EU regulates medical devices and medicinal products separately, through different legislative instruments, and the applicable requirements will vary depending on the type of drug-device combination product. For instance, drug-delivery products intended to administer a medicinal product where the medicinal product and the device form a single integral product are regulated as medicinal products in the EU. In such a case, the marketing authorization application must include — where available — the results of the assessment of the conformity of the device part with the EU Medical Devices Regulation contained in the manufacturer’s EU declaration of conformity of the device or the relevant certificate issued by a notified body. If the marketing authorization application does not include the results of the conformity assessment and where for the conformity assessment of the device, if used separately, the involvement of a notified body is required, the EMA or the EU member state competent authority must require the applicant to provide a notified body opinion on the conformity of the device. By contrast, in case of drug-delivery products intended to administer a medicinal product where the device and the medicinal product do not form a single integral product (but are, e.g., co-packaged), the medicinal product is regulated in accordance with the rules for medicinal products described above while the device part is regulated as a medical device and will have to comply with all the requirements set forth by the EU Medical Devices Regulation.

Although the FDA and similar foreign regulatory agencies have or may have systems in place for the review and approval or certification of combination products such as ours, we may experience delays in the development and commercialization of our product candidates due to regulatory timing constraints and uncertainties in the product development and approval process, as well as coordination between two different centers within FDA responsible for review of the different components of the combination product.

If the FDA does not conclude that SirolimusEFR as a standalone product candidate satisfies the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for SirolimusEFR under Section 505(b)(2) are not as we expect, the approval pathway for SirolimusEFR may likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful

We may seek FDA approvals for our SirolimusEFR as both a standalone drug product candidate and as part of our Virtue SAB product candidate as well as, potentially, other device/drug combination product candidates for other clinical applications. For the standalone drug product candidate development program, we may seek approval for SirolimusEFR to treat conditions such as ophthalmic inflammatory disease (uveitis) and acute or chronic joint

inflammation (osteoarthritis), through the Section 505(b)(2) regulatory pathway. The Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Amendments, added Section 505(b)(2) to the FDCA. Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from trials that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference. Section 505(b)(2), if we are eligible to pursue such a marketing application, would allow an NDA we submit to the FDA to rely in part on data in the public domain or the FDA’s prior conclusions regarding the safety and effectiveness of approved drugs, which could expedite the development program for our product candidates by potentially decreasing the amount of clinical data that we would need to generate in order to obtain FDA approval. If the FDA does not allow us to pursue the Section 505(b)(2) regulatory pathway as we anticipate, we may need to conduct additional clinical studies, provide additional data and information and meet additional standards to obtain regulatory approval, if ever. If this were to occur, the time and financial resources required to obtain FDA approval for SirolimusEFR, and complications and risks associated with the development of certain of our product candidates, would likely substantially increase. Moreover, inability to pursue the Section 505(b)(2) regulatory pathway could result in competitive products reaching the market before our product candidates, which could impact our competitive position and prospects. Even if we are allowed to pursue the Section 505(b)(2) regulatory pathway, we cannot assure you that our product candidates will receive the requisite approvals for commercialization, or that a competitor would not obtain approval first along with subsequent market exclusivity from the FDA, thereby delaying potential approval of our product.

In addition, the pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to special requirements designed to protect the patent rights of sponsors of previously approved drugs that are referenced in a Section 505(b)(2) NDA. These requirements may give rise to patent litigation and mandatory delays in approval of our NDAs for up to 30 months or longer depending on the outcome of any litigation. It is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking to delay approval of, or impose additional approval requirements for, pending competing products. If successful, such petitions can significantly delay, or even prevent, the approval of the new product. However, even if the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition. In addition, even if we are able to utilize the Section 505(b)(2) regulatory pathway, there is no guarantee this would ultimately lead to expedited product development or earlier approval.

Moreover, even if our product candidates are approved under Section 505(b)(2), the approval may be subject to limitations on the indicated uses for which the products may be marketed or to other conditions of approval, or may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the products.

The EU regulates medical devices and medicinal products separately, through different legislative instruments, and the applicable requirements will vary depending on the type of drug-device combination product. For instance, drug-delivery products intended to administer a medicinal product where the medicinal product and the device form a single integral product are regulated as medicinal products in the EU. In such a case, the marketing authorization application must include — where available — the results of the assessment of the conformity of the device part with the EU Medical Devices Regulation contained in the manufacturer’s EU declaration of conformity of the device or the relevant certificate issued by a notified body. If the marketing authorization application does not include the results of the conformity assessment and where for the conformity assessment of the device, if used separately, the involvement of a notified body is required, the EMA or the EU member state competent authority must require the applicant to provide a notified body opinion on the conformity of the device. By contrast, in case of drug-delivery products intended to administer a medicinal product where the device and the medicinal product do not form a single integral product (but are, e.g., co-packaged), the medicinal product is regulated in accordance with the rules for medicinal products described above while the device part is regulated as a medical device and will have to comply with all the requirements set forth by the EU Medical Devices Regulation. Should SirolimusEFR be considered a drug product, it would be subject to various other EMA regulatory requirements and timelines.

Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay

As product candidates proceed through preclinical studies to late-stage clinical studies towards potential approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause our product candidates to

perform differently and affect the results of planned clinical studies or other future clinical studies conducted with the altered materials. Such changes may also require additional testing and/or FDA or foreign regulatory authority approval or notified body certification. This could delay completion of clinical studies, require the conduct of bridging clinical studies or the repetition of one or more clinical studies, increase clinical study costs, delay approval of our product candidates and jeopardize our ability to commence sales and generate revenue.

Our relationships with physicians, patients and payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency, and other healthcare laws and regulations

Our current and future operations with respect to the commercialization of our products are subject to various U.S. federal, state and foreign healthcare laws and regulations. These laws will affect our operations, sales and marketing activities, support and education programs and our relationships with physicians and other customers and third-party payors. The laws that may affect our ability to operate include:

•        the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation;

•        the federal False Claims Act, which imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; in addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act;

•        the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 1996 (“HIPAA”), which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;

•        the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments or other ‘‘transfers of value’’ made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiology assistants and certified nurse midwives) and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to the government ownership and investment interests held by the physicians described above and their immediate family members and payments or other ‘‘transfers of value’’ to such physician owners (manufacturers are required to submit reports to the government by the 90th day of each calendar year); and

•        analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; and state and foreign laws that require drug and medical device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information.

Ensuring that our internal operations and business arrangements with third parties comply with applicable healthcare laws and regulations could involve substantial costs. Certain physicians who may be in a position to influence the ordering or use of our products in procedures they perform have ownership interests in us and/or receive compensation for consulting and advisory services provided to us. It is possible that governmental authorities will conclude that our business practices do not comply with applicable fraud and abuse or other healthcare laws and regulations or guidance. If our operations are found to be in violation of such laws or any other governmental laws and regulations that may apply to us, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, exclusion from U.S. government funded healthcare programs, such as Medicare and Medicaid, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations.

Healthcare cost-containment pressures and legislative or administrative reforms resulting in restrictive coverage and reimbursement practices of third-party payors could decrease the demand for our products, the prices that customers are willing to pay for those products and the number of procedures performed using our devices, which could have an adverse effect on our business

Our products are, and our future products are expected to be, purchased principally by hospitals and ambulatory medical facilities, which typically bill various third-party payors, including governmental programs, such as Medicare and Medicaid, private insurance plans and managed care plans, for the healthcare services provided to their patients. Because there is often no separate reimbursement for products used in surgical procedures, the additional cost associated with the use of some of our products can impact the profit margin of the hospital or surgery center where the procedure is performed. Some of our target customers may be unwilling to adopt our products in light of the additional associated cost. Further, any decline in the amount payors are willing to reimburse our customers for the procedures using our products may make it difficult for customers to adopt our products and could create additional pricing pressure for us. We may be unable to sell our products on a profitable basis if third-party payors deny coverage or reduce their current levels of reimbursement. The ability of our customers to obtain appropriate coverage and reimbursement for our products or procedures using our products from government and private third-party payors is critical to our success.

Reimbursement varies from country to country, state to state and plan to plan, and can significantly influence the acceptance of new products and services. Certain private third-party payors may view some procedures using our products as experimental and may not provide coverage. Third-party payors may not cover and reimburse the procedures using our products in whole or in part in the future, or payment rates may not be adequate, or both. For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used may not be available, which may impact physician utilization. Further, the adequacy of coverage and reimbursement by third-party payors is also related to billing codes to describe procedures performed using our products. Hospitals and physicians use several billing codes to bill for such procedures. Third-party payors may not continue to recognize the billing codes available for use by our customers.

Reimbursement rates are unpredictable, and we cannot project how our business may be affected by future legislative and regulatory developments. Future legislation or regulation, or changing payment methodologies, may have a material adverse effect on our business, and reimbursement may not be adequate for all customers. From time to time, typically on an annual basis, payment amounts are updated and revised by third-party payors. Because the cost of our products generally is recovered by the healthcare provider as part of the payment for performing a procedure and not separately reimbursed, these updates could directly impact the demand for our products. We cannot predict how pending and future healthcare legislation will impact our business and any changes in coverage and reimbursement that further restricts coverage of our products or lowers reimbursement for procedures using our devices could materially affect our business.

After we develop new products or seek to market our products for new indications, once approved (or certified), we may find limited demand for the product unless government and private third-party payors provide adequate coverage and reimbursement. Even with reimbursement approval and coverage by government and private payors, providers submitting reimbursement claims may face delays in payment if there is confusion by providers regarding the appropriate codes to use in seeking reimbursement. Such delays may create an unfavorable impression within the marketplace regarding the level of reimbursement or coverage available for our products.

Demand for our products or new approved (or certified) indications for our existing products may fluctuate over time if federal, state and foreign legislative or administrative policy changes affect coverage or reimbursement levels for our products, or the services related to our products. In the United States, there have been, and we expect there will continue to be, legislative and regulatory proposals to change the healthcare system, some of which could significantly affect our business. Legislative or administrative reforms to the U.S. or international reimbursement systems in a manner that significantly reduces reimbursement for procedures using our medical devices or denies coverage for those procedures could have a material adverse effect on our business, financial condition, results of operations and prospects.

Actual or perceived failures to comply with U.S. and foreign privacy and data protection laws, regulations and standards may adversely affect our business, operations and financial performance

We are subject to or affected by numerous federal, state and foreign laws and regulations, as well as regulatory guidance, governing the collection, use, disclosure, retention and security of personal data, such as information that we collect about patients and healthcare providers in connection with clinical studies in the United States and abroad. The global data protection landscape is rapidly evolving, and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. This evolution may create uncertainty in our business, affect our or our collaborators’, service providers’ and contractors’ ability to operate in certain jurisdictions or to collect, store, transfer use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us. The cost of compliance with these laws, regulations and standards is high and is likely to increase in the future. Any failure or perceived failure by us or our collaborators, service providers and contractors to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing processing of personal information could result in negative publicity, diversion of management time and effort and proceedings against us by governmental entities or others. In many jurisdictions, enforcement actions and consequences for noncompliance are rising.

In the United States, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, imposes privacy, security and breach notification obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services that involve creating, receiving, maintaining or transmitting individually identifiable health information for or on behalf of such covered entities, and their covered subcontractors. HIPAA establishes privacy and security standards that limit the use and disclosure of individually identifiable health information and protected health information (“PHI”) and requires the implementation of administrative, physical and technological safeguards to protect the privacy of PHI and ensure the confidentiality, integrity and availability of electronic PHI. Most healthcare providers, including research institutions from which we obtain patient health information, are subject to privacy and security regulations promulgated under HIPAA. Covered entities are those that electronically transmit health information in connection with transactions susceptible to standards set by the U.S. Department of Health and Human Services (“HHS”) and may concern billing and payment for services or insurance coverage. Business associates may perform or assist in performance of a function or activity involving the use or disclosure of individually identifiable health information, or other activities that may involve disclosure of individually identifiable health information by the covered entity. While we do not believe that we are currently acting as a covered entity or business associate under HIPAA and, thus, are not directly regulated under HIPAA, federal and state regulators may disagree and bring an enforcement action under HIPAA against us.

In addition, certain state laws govern the privacy and security of health-related and other personal information, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. By way of example, the California Consumer Privacy Act (the “CCPA”), which went into effect on January 1, 2020, gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase our compliance costs and potential liability. Further, the California Privacy Rights Act (the “CPRA”) recently passed in California. The CPRA significantly amends the CCPA and will impose additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data and opt outs for certain uses of sensitive data. It will also create a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement. The majority of the provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes

may be required. Similar laws have passed in Virginia, Colorado, Connecticut and Utah, and have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging. In the event that we are subject to or affected by HIPAA, the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

Our operations abroad may also be subject to increased scrutiny or attention from data protection authorities. For example, the EU and the UK General Data Protection Regulations (respectively, the “EU GDPR” and the “UK GDPR,” together, the “GDPR”) each impose strict requirements for processing the personal data of individuals within the EEA, and/or the UK and to processing that occurs in the context of an establishment in, respectively, the EEA and/or UK. The EU GDPR which went into effect in May 2018 and introduces strict requirements for processing the personal information of EU subjects, including clinical study data. The GDPR has and will continue to increase compliance burdens on us, including by mandating potentially burdensome documentation requirements and granting certain rights to individuals to control how we collect, use, disclose, retain and process information about them. The processing of sensitive personal data, such as physical health condition, may impose heightened compliance burdens under the GDPR and is a topic of active interest among foreign regulators. Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million under the EU GDPR and £17.5 million under the UK GDPR or 4% of the annual global revenues of the noncompliant company, whichever is greater. In addition to these fines, supervisory authorities have extensive audit and inspection rights, and powers to order temporary or permanent bans on all or some processing of personal data carried out by noncompliant actors; the GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints, seek judicial remedies and obtain compensation for damages resulting from violations of the GDPR.

The existence of parallel regimes under the EU GDPR and UK GDPR, and divergence in respect of implementing or supplementary laws across the EEA and UK in certain areas, means that we could be subject to potentially overlapping or divergent enforcement actions for certain actual or perceived violations. Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States; in July 2020, the Court of Justice of the EU, (the “CJEU”), limited how organizations could lawfully transfer personal data from the EEA and UK to the United States by invalidating the Privacy Shield for purposes of international transfers and imposing further restrictions on the use of standard contractual clauses (“SCCs”). The European Commission issued revised SCCs on June 4, 2021 to account for the decision of the CJEU and recommendations made by the European Data Protection Board. The revised SCCs must be used for relevant new data transfers from September 27, 2021; existing standard contractual clauses arrangements must be migrated to the revised clauses by December 27, 2022. The revised SCCs cannot be used for transfers to non-EEA entities whose processing is already subject to the GDPR; however, no equivalent standard data protection clauses have been issued and approved by the European Commission and, therefore, current market practice is largely to use the SCCs notwithstanding this issue. The new SCCs apply only to the transfer of personal data outside of the EEA and not the UK. The UK’s Information Commissioner’s Office has published new data transfer standard contracts for transfers from the UK under the UK GDPR. This new documentation will be mandatory for relevant data transfers from September 21, 2022; existing standard contractual clauses arrangements must be migrated to the new documentation by March 21, 2024. The relationship between the UK and the EU in relation to certain aspects of data protection law remains unclear, and the European Commission has adopted an adequacy decision in favor of the UK, enabling data transfers from EU member states to the UK without additional safeguards. However, the UK adequacy decision will automatically expire in June 2025 unless the European Commission re-assesses and renews or extends that decision. In September 2021, the UK government launched a consultation on its proposals for wide-ranging reform of UK data protection laws following Brexit and the response to this consultation was published in June 2022. There is a risk that any material changes which are made to the UK data protection regime could result in the European Commission reviewing the UK adequacy decision and the UK losing its adequacy decision if the European Commission deems the UK no longer provides adequate protection of personal data.

As supervisory authorities issue further guidance on personal data export mechanisms, including the aforementioned ‘supplementary measures,’ and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services,

the geographical location or segregation of our relevant systems and operations. The GDPR may impose additional responsibility and liability in relation to personal data that we process and we may be required to put in place additional mechanisms, at significant cost and diversion of management attention, to ensure compliance with the new data protection rules. This may be onerous and may adversely affect our business, operations and financial performance.

The EU has also proposed a Regulation on Privacy and Electronic Communications, or ePrivacy Regulation, which, if adopted, would impose new obligations on the use of personal data in the context of electronic communications, particularly with respect to online tracking technologies and direct marketing. Additionally, the EU adopted the EU Clinical Trials Regulation, which came into effect on January 31, 2022. This regulation imposes new obligations on the use of data generated from clinical trials and enables European patients to have the opportunity to access information about clinical trials. Failure or perceived failure to comply with the GDPR, the EU Clinical Trials Regulations or other countries’ privacy or data security-related laws, rules or regulations could result in significant regulatory penalties and fines, affect our compliance with contracts entered into with our partners, collaborators and other third-party payors, and could have an adverse effect on our reputation, business and financial condition.

Environmental and health safety laws may result in liabilities, expenses and restrictions on our operations

Federal, state, local and foreign laws regarding environmental protection, hazardous substances and human health and safety may adversely affect our business. Using hazardous substances in our operations exposes us to the risk of accidental injury, contamination or other liability from the use, storage, importation, handling or disposal of hazardous materials. If our or our suppliers’ operations result in the contamination of the environment or expose individuals to hazardous substances, we could be liable for damages and fines, and any liability could significantly exceed our insurance coverage and have a material adverse effect on our business, financial condition, results of operations and prospects. We maintain insurance for certain environmental risks, subject to substantial deductibles; however, we cannot assure you we can continue to maintain this insurance in the future at an acceptable cost, or at all. Future changes to environmental and health and safety laws could cause us to incur additional expenses or restrict our operations.

We are subject to anti-bribery, anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act, in which violations of these laws could result in substantial penalties and prosecution

We are exposed to trade and economic sanctions and other restrictions imposed by the United States and other governments and organizations. The U.S. Departments of Justice, Commerce, State and Treasury and other federal agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against corporations and individuals for violations of economic sanctions laws, export control laws, and other federal statutes and regulations, including sanctions administered by the Office of Foreign Assets Control and other U.S. governmental agencies. Governmental regulation of the import or export of our products, or our failure to obtain any required import or export authorization for our products under the laws of the United States or other countries, could harm our ability to engage in international trade and adversely affect our revenue. Moreover, any new export or import restrictions, new legislation or shifting approaches in the enforcement or scope of existing regulations, or in the countries, persons or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export our products to existing or potential customers or to conduct business with foreign parties.

The U.S. Foreign Corrupt Practices Act (the “FCPA”), the UK Bribery Act of 2010 (the “Bribery Act”), and similar laws around the world generally prohibit U.S. companies and their employees and intermediaries from offering, promising, authorizing or making improper payments to foreign government officials for the purpose of obtaining or retaining business or gaining any advantage. We face significant risks if we, which includes our third party business partners and intermediaries, fail to comply with the FCPA or other anti-corruption and anti-bribery laws. In addition, the Bribery Act prohibits both domestic and international bribery, as well as bribery across both private and public sectors. An organization that “fails to prevent bribery” by anyone associated with the organization can be charged under the Bribery Act unless the organization can establish the defense of having implemented ‘‘adequate procedures’’ to prevent bribery. We are in the process of implementing policies and procedures intended to help ensure compliance with these laws, though such compliance measures ultimately may not be effective in prohibiting our employees, contractors, business partners, intermediaries or agents from violating or circumventing our policies and/or the law.

Under these laws and regulations, as well as other anti-corruption laws, anti-money laundering laws, export control laws, customs laws, sanctions laws and other laws governing our operations, various government agencies may require export licenses, may seek to impose modifications to business practices, including cessation of business activities in sanctioned countries or with sanctioned persons or entities and modifications to compliance programs, which may increase compliance costs, and may subject us to fines, penalties and other sanctions. An actual or alleged violation of these laws or regulations would negatively affect our business, financial condition and results of operations.

Risks Related to Our Intellectual Property

We may not effectively be able to protect or enforce our intellectual property, which could have a material adverse effect on our business, financial condition, results of operations and prospects

The medical innovation market in which we participate is largely technology driven. Physicians historically have moved quickly to new products and new technologies. As a result, intellectual property rights, particularly patents and trade secrets, play a significant role in product development and differentiation. Patents enable us to stop unauthorized third parties from making, using, selling, offering for sale or importing products that are covered under valid and enforceable patents. Trade secrets enable us to protect information that we do not wish to divulge to the public. Trademarks also play a role in product differentiation. If we are unable to adequately protect our intellectual property and proprietary technology, competitors may be able to use our technologies or the goodwill we have acquired in the marketplace, and erode or negate any competitive advantage we may have, which could ultimately harm our business and ability to achieve profitability. In order to protect our intellectual property, we may be involved in intellectual property litigation, which is inherently complex, expensive and unpredictable.

We hold patents and pending patent applications. Our patents cover inventions, which include features of our technologies or products. However, our competitors may seek to produce products that include our technologies that are not subject to patent protection, which may negatively affect our business.

The patents we own may not be sufficiently broad to protect our technology or to give us any competitive advantage. We are unable to provide any assurances that any of our patents, or patents to which we have rights through licensing agreements, have, or that any of our pending patent applications that mature into issued patents will include, claims with a scope sufficient to protect our technology or products, any additional features we develop with respect to our technology or products, or any new technology or products that we seek to develop in the future. Our patents could be challenged as invalid or unenforceable, or circumvented by competitors. Medical device patents involve complex legal, scientific and factual questions, and therefore, the issuance, scope, validity and enforceability of any patent claims that we may obtain cannot be predicted with certainty. Any patents for which we have applied may not be granted. Third parties own numerous U.S. and foreign issued patents and pending patent applications in the fields in which we have developed our technology or manufacture and sell our products. Third party-owned patents can be an obstacle to our ability to obtain patent protection for our technology.

Because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to file any patent application related to our products. Furthermore, for United States applications in which all claims are entitled to a priority date before March 16, 2013 (the date when United States patent law changed from granting rights to the first-to-invent to the first-to-file), an interference proceeding can be provoked by a third-party or instituted by the United States Patent and Trademark Office (the “USPTO”), to determine who was the first to invent any of the subject matter covered by the patent claims of our applications. We cannot be certain that we are the first to invent the inventions covered by pending patent applications entitled to a priority date before March 16, 2013, and, if we are not, we may be subject to priority disputes.

We may be required to disclaim part or all of the term of certain patents or all of the term of certain patent applications. There may be prior art of which we are not aware that may affect the validity or enforceability of a patent claim, and we may be subject to a third-party preissuance submission of prior art to the USPTO. There also may be prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim, which may, nonetheless, ultimately be found to affect the validity or enforceability of a claim through a post-issuance proceeding or in litigation. No assurance can be given that if challenged, our patents would be declared by a court to be valid or enforceable, or that even if found valid and enforceable, a competitor’s technology or product would be found by a court to infringe our patents.

We may analyze patents or patent applications of our competitors that we believe are relevant to our activities, and consider that we are free to operate in relation to our products, but our competitors may obtain issued claims, including in patents we considered to be unrelated, which block our efforts or may potentially result in our technology or products or our activities infringing such claims. The possibility exists that others will develop technology or products which have the same effect as our technology or products on an independent basis which do not infringe our patents or other intellectual property rights, or will design around the claims of patents that we have had issued that cover our technology or products.

Challenges raised in patent infringement litigation may cause determinations that our patents or licensed patents are invalid, unenforceable, or otherwise subject to limitations. In such events, third parties may use the discoveries or technologies without paying damages, licensing fees or royalties to us, which could significantly diminish the value of our intellectual property. We could also be adversely affected if our licensors terminate licenses granted to us to use their patented technology. Thus, any patents that we may own, or to which we have rights through licensing agreements, may not provide sufficient protection against competitors. Furthermore, an adverse decision in a judicial or administrative proceeding can result in a third party receiving the patent right sought by us, which, in turn, could affect our ability to commercialize our technology or products.

We hold trademark applications or registrations relating to our products. Our trademarks may also be challenged as invalid or not distinctive by competitors or third parties. Registration of a trademark is not conclusive as to its validity or the right to use such trademark. Third parties own numerous U.S. and foreign trademark registrations and trademark applications in the fields in which we manufacture and sell our products.

We may be unable to enforce our intellectual property rights throughout the world

Filing, prosecuting and defending patents covering our products in all countries throughout the world would be prohibitively expensive, and the laws of some foreign countries do not protect our intellectual property rights to the same extent as the laws of the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. This could make it difficult for us to stop infringement of our foreign patents, if obtained, or the misappropriation of our other intellectual property rights. For example, some foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, some countries limit the enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit.

Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. Hence, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in those countries. Our competitors or other third parties might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets.

Additionally, in the event that our trademarks are successfully challenged in the United States and in jurisdictions outside of the United States, we could be forced to rebrand our products, which could result in loss of brand recognition and could require us to devote resources to advertising and marketing new brands. Our competitors may infringe our trademarks, and we may not have adequate resources to enforce our trademarks.

The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents or marketing of competing products against third parties in violation of our intellectual property rights generally. The initiation of proceedings by third parties to challenge the scope or validity of our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business. Proceedings to enforce our patent rights in the United States and in jurisdictions outside of the United States could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Further, we may not always detect infringement of our intellectual property rights, and defending our intellectual property rights, even if successfully detected, prosecuted, enjoined, or remedied, could result in the expenditure of significant financial and managerial resources. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

If we cannot protect and control unpatented trade secrets, know-how and other proprietary technology, we may suffer competitive harm

Besides patented intellectual property, we also rely on trade secrets, unpatented proprietary technology, confidential information and know-how to protect our technology and maintain our competitive position, particularly when patent protection is not appropriate or obtainable. These include, but may not be limited to, with respect to Virtue SAB and other product candidates our Focal Therapies group intends to develop, the chemical and physical aspects of the polymers and excipients in our formulation and the process by which our formulation is mixed, purified, concentrated, diluted, stored, filled into vials, freeze dried, sterilized, inspected, labeled and packaged, as well as physical and engineering aspects of our catheter, detailed specifications of our porous balloon, and physical and engineering aspects of our dose unit, recon unit, and pre-filled syringe. With respect to BackBeat CNT, this may include, but may not be limited to, certain aspects of our proprietary algorithms. However, trade secrets and unpatented proprietary technology are difficult to protect. To protect proprietary technology and processes, we rely in part on confidentiality and intellectual property assignment agreements with our employees, consultants and others. These agreements may not prevent disclosure of confidential information nor result in the effective assignment to us of intellectual property and may not provide an adequate remedy if unauthorized disclosure of confidential information or other breaches of the agreements occur. Others may independently discover or reverse engineer our trade secrets and proprietary information licensed to us or that we own in a manner that could prevent legal recourse by us. Enforcing a claim that a party illegally obtained and is using trade secrets licensed to us or that we own is difficult, expensive and time consuming, and the outcome is unpredictable. In the United States, trade secret violations are both a matter of federal law and state law, and the criteria for protection of trade secrets under state law can vary among different jurisdictions. Courts outside the United States may be less willing to protect trade secrets or unpatented proprietary technology. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets

We employ individuals who previously worked with other companies, including our competitors. Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third party. Litigation may be necessary to defend against these claims. If we fail in defending any such claims or settling those claims, in addition to paying monetary damages or a settlement payment, we may be subject to an injunction and lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

We may be involved in litigation or other proceedings relating to patent, trade secret and other intellectual property rights, which could cause substantial costs and liability

There may be patents and patent applications owned by our competitors, which, if determined to be valid and enforceable, may be infringed by us. We do not always conduct independent reviews of patents issued to third parties. Holders of certain patents may contact us and request we enter into license agreements for the underlying technology and pay them royalties, which could be substantial. If we need to obtain a license to use any intellectual property, we may be unable to obtain these licenses on favorable terms or at all or we may be required to make substantial royalty or other payments to use this intellectual property. Litigation concerning patents, trade secret and proprietary rights is time-consuming, expensive and unpredictable, and could divert the attention of our management from our business operations. Patent applications in the United States and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived, so there may be applications of others now pending or recently revived patents of which we are unaware. Patent applications in the United States, Europe and elsewhere are published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. These applications that later result in issued patents, or the revival of previously abandoned patents, may prevent, limit or otherwise interfere with our ability to develop and market our products. Third parties may assert claims that we are employing their proprietary technology without authorization, including claims from competitors or from non-practicing entities that have no relevant product revenue and against whom our own patent portfolio may have no deterrent effect.

As we continue to commercialize our technology and products in their current or updated forms, launch new technologies and products and enter new markets, we expect competitors may claim that one or more of our technology or products infringe their intellectual property rights as a strategy to impede our commercialization and entry into new markets. The large number of patent issuances, the rapid rate of new patent application filings, the complexities of the technologies involved, and the uncertainty of litigation may increase the risk to our business and result in business resources and management’s attention being diverted to patent litigation. An adverse ruling in a patent litigation could subject us to significant liability, require us to seek licenses, and restrict our ability to commercialize our technology or manufacture and sell our products. Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources.

Additionally, we may become party to adversarial proceedings regarding our or third-party patent portfolios. Such proceedings could include supplemental examination or contested post-grant proceedings such as post-grant review, reexamination, inter partes review, interference or derivation proceedings before the USPTO, and challenges in U.S. District Courts. Patents may be subjected to opposition, post-grant review or comparable proceedings lodged in various foreign, both national and regional, patent offices. The legal threshold for initiating litigation or contested proceedings may be low, so that even lawsuits or proceedings with a low probability of success might be initiated. Litigation and contested proceedings can also be expensive and time-consuming, and our adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we can. We may also occasionally use these proceedings to challenge the patent rights of others. We cannot be certain that any particular challenge will be successful in limiting or eliminating the challenged patent rights of the third party.

An unfavorable outcome in abovementioned lawsuits and proceedings could require us to pay substantial damages, to lose our patent protection, to cease using the technology or to license rights, potentially at a substantial cost, from prevailing third parties. There is no guarantee that any prevailing party would offer us a license or that we could acquire any license on commercially acceptable terms. Even if we can obtain rights to a third-party’s intellectual property, those rights may be non-exclusive, and therefore our competitors may obtain access to the same intellectual property. Ultimately, we may have to cease some of our business operations because of infringement claims, which could severely harm our business. To the extent we are found to be infringing on the intellectual property rights of others, we may not develop or otherwise obtain alternative technology. If we need to redesign our products to avoid third-party intellectual property rights, we may suffer significant regulatory delays associated with conducting additional studies or submitting technical, manufacturing or other information related to any redesigned product and, ultimately, in obtaining regulatory approval. Further, any such redesigns may result in less effective or less commercially desirable products or both.

Even if we were ultimately to prevail, any of these events could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business. Intellectual property litigation, regardless of its outcome, may cause negative publicity, adversely impact prospective customers, cause product shipment delays, or prohibit us from manufacturing, importing, marketing or otherwise commercializing our products and technology. In addition, if the breadth or strength of protection provided by the patents and patent applications we own or in-license is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future technology or products. In addition, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors view these announcements in a negative light, the price of our common stock could be adversely affected.

Lastly, we may need to indemnify our customers, licensees, commercialization partners, and distributors with respect to infringement by our technology or products of the intellectual property rights of third parties. Third parties may assert infringement claims against our customers, licensees, commercialization partners, or distributors based on our technology or products. These claims may require us to initiate or defend protracted and costly litigation on behalf of our customers, licensees, commercialization partners, or distributors, regardless of the merits of these claims. If any of these claims succeed or settle, we may be forced to pay damages or settlement payments on behalf of our customers, licensees, commercialization partners, or distributors or may be required to obtain licenses for the technology or products they use. If we cannot obtain all necessary licenses on commercially reasonable terms, our customers, licensees, commercialization partners, or distributors may be forced to stop using or selling our products or technology.

Patents covering our technology or products could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts or patent offices in the United States and abroad. We may be subject to a third-party preissuance submission of prior art to the USPTO, or become involved in opposition, derivation, revocation, reexamination, post-grant and inter partes review, or interference proceedings or other similar proceedings challenging our patent rights. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate or render unenforceable, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights if patent rights are awarded to third parties instead of to us. Moreover, we may have to participate in interference proceedings declared by the USPTO to determine priority of invention or in post-grant challenge proceedings, such as oppositions in a foreign patent office, that challenge our priority of invention or other features of patentability with respect to our patents and patent applications. Such challenges may result in loss of patent rights, in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology or products. Such proceedings also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

In addition, if we initiate legal proceedings against a third party to enforce a patent we own covering the third party’s competing products, the defendant could counterclaim that such patent is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO or made a misleading statement during prosecution. Third parties may also raise claims challenging the validity or enforceability of our patents before administrative bodies in the United States or abroad, even outside the context of litigation, including through re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in the revocation of, cancellation of or amendment to our patents in such a way that they no longer cover our products. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a third party were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on the applicable product(s). Such a loss of patent protection would have a material adverse effect on our business, financial condition and results of operations.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements

Obtaining and maintaining our patent protection depends on compliance with various procedural measures, document submissions, fee payments and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees, renewal fees, annuity fees and various other government fees on patents and applications will be due to be paid to the USPTO and various government patent agencies outside of the United States over the lifetime of our patents and applications. The USPTO and various non-U.S. government agencies require compliance with several procedural, documentary, fee payment and other similar provisions during the patent application process. In some cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. There are situations, however, in which non-compliance can result in the abandonment or lapse of the patent or patent application, resulting in a partial or complete loss of patent rights in the relevant jurisdiction. In such an event, potential competitors might be able to enter the market with similar or identical products or technology, which could have a material adverse effect on our business, financial condition and results of operations.

Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products

Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. Assuming that other requirements for patentability are met, prior to March 2013, in the United States, the first to invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to the patent. After March 2013, under the Leahy-Smith America Invents Act (the “America Invents Act”), enacted in September 2011, the United States transitioned to a first inventor to file system in which, assuming that other requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. A third party that files a patent application in the USPTO after March 2013, but before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third party. This will require us to be cognizant of the time from invention to filing of a patent application. Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we were the first to file any patent application related to our products or invent any of the inventions claimed in our patents or patent applications.

The America Invents Act also includes a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation. These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review and derivation proceedings. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S. federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action. Therefore, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. Future actions by the U.S. Congress, the federal courts and the USPTO could cause the laws and regulations governing patents to change in unpredictable ways. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

We may be subject to claims challenging the ownership or inventorship of our patents and other intellectual property and, if unsuccessful in any of these proceedings, we may be required to obtain licenses from third parties, which may not be available on commercially reasonable terms, or at all, or to cease the development, manufacture and commercialization of one or more of our products

We may be subject to claims that current or former employees, collaborators or other third parties have an interest in our patents, trade secrets or other intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of employees, consultants or others who are involved in developing our products. Litigation may be necessary to defend against these and other claims challenging inventorship of our patents, trade secrets or other intellectual property. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property that is important to our products. If we were to jointly own such intellectual property with other owners, other owners may be able to license their rights to other third parties, including our competitors. We also may be required to obtain and maintain licenses from third parties, including parties involved in any such disputes. Such licenses may not be available on commercially reasonable terms, or at all, or may be non-exclusive. If we are in breach of any license agreements granted to us, such licenses may terminate. If we are unable to obtain and maintain such licenses, we may need to cease the development, manufacture and commercialization of one or more of our products.

Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time

The term of any individual patent depends on applicable law in the country where the patent is granted. In the United States, provided all maintenance fees are timely paid, a patent generally has a term of 20 years from its application filing date or earliest claimed non-provisional filing date. Extensions may be available under certain

circumstances, but the life of a patent and, correspondingly, the protection it affords is limited. Even if we or our licensors obtain patents covering our products, when the terms of all patents covering a product expire, our business may become subject to competition from products identical or similar to ours which can be sold without infringing our patents. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

We may be unable to acquire patent term extension in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation

In the United States, a patent that covers a medical device approved by the FDA may be eligible for a term extension designed to restore the period of the patent term that is lost during the pre-market regulatory review process conducted by the FDA. Depending upon the timing, duration and conditions of FDA marketing approval of our products, one or more of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”), which permits a patent term extension of up to five years for a patent covering an approved product as compensation for effective patent term lost during product development and the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, and only claims covering such approved drug product, a method for using it or a method for manufacturing it may be extended. In the EU, our product candidates may be eligible for term extensions based on similar legislation. In either jurisdiction, however, we may not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Even if we are granted such extension, the duration of such extension may be less than our request. If we are unable to obtain a patent term extension, or if the term of any such extension is less than our request, the period during which we can enforce our patent rights for that product will be in effect shortened and our competitors may obtain approval to market competing products sooner. The resulting reduction of years of revenue from applicable products could be substantial.

We may need to obtain intellectual property rights from third parties, and may not be successful in obtaining necessary rights to develop any future product through acquisitions and in-licenses

We may find it necessary or prudent to obtain licenses from third-party intellectual property holders to advance our research or to allow commercialization of our products, and we cannot provide any assurances that third-party intellectual property rights do not exist which might be enforced against our products in the absence of such a license. In addition, with respect to any patents we may in the future co-own with third parties, we may wish to acquire exclusive licenses to such co-owners’ interest to such patents. However, we may be unable to secure such licenses or otherwise acquire or in-license any intellectual property rights from third parties that we identify as necessary for planned or future products. The licensing or acquisition of third-party intellectual property rights is a competitive area, and more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all. If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property licenses we have, we may have to abandon development of the relevant products, which could have a material adverse effect on our business, financial condition and results of operations.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected

Our trademarks or trade names may be challenged, infringed, circumvented, declared generic or determined to be violating or infringing other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential partners and customers in our markets of interest. At times, competitors or other third parties may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement or dilution claims brought by owners of other trademarks. Over the long term, if we are

unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, domain names or other similar intellectual property may be ineffective, could result in substantial costs and diversion of resources and could adversely affect our business, financial condition and results of operations.

Risks Related to HSAC2 and the Business Combination

Unless the context otherwise requires, all references in this “Risks Related to HSAC2 and the Business Combination” section to “we,” “us,” “our,” or the “Company” refer to Health Sciences Acquisitions Corporation 2 prior to the consummation of the Business Combination.

We have no operating history and are subject to a mandatory liquidation and subsequent dissolution requirement. If we cannot consummate the Business Combination or an alternative initial business combination by the Extension Date, we must redeem our shares and wind up our affairs

We are a development stage blank check company, and we have no operating history. We have until the Extension Date to complete the Business Combination or an alternative initial business combination. If we are unable to consummate our initial business combination within the required time period, we must distribute the amount on deposit in the Trust Account, pro rata to our Public Shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, unless we amend our Existing Charter and other agreements to extend our life.

On July 26, 2022, HSAC2’s shareholders approved the Extension Proposal and the amended and restated memorandum and articles of association were amended to: (a) extend from August 6, 2022 to November 6, 2022, the date by which, if the Company has not consummated a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination involving one or more businesses or entities, the Company must: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares; and (iii) as promptly as reasonably possible following such redemption liquidate and dissolve, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law, and (b) allow the Company, without another shareholder vote, to elect to extend the date to consummate a business combination on a monthly basis for up to three times by an additional one month each time after November 6, 2022, upon five days’ advance notice prior to the applicable deadlines, until February 6, 2023 or a total of up to six months after August 6, 2022, unless the closing of the Company’s initial business combination shall have occurred.

Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, or if we otherwise enter compulsory or court supervised liquidation, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in the Company’s bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of the Company’s stockholders.

If we are required to liquidate and dissolve, our Public Shareholders may be forced to wait more than three months before receiving distributions from the Trust Account

If we cannot complete the Business Combination or an alternative initial business combination by the Extension Date, we must redeem our shares and liquidate. We have no obligation to return funds to investors prior to such time unless we consummate a business combination, or further amend our Existing Charter prior to consummation of a business combination, and only then in cases where investors have sought to have us redeem their shares. Only after the expiration of this full-time period and if we are unable to complete a business combination will Public Shareholders be entitled to distributions from the Trust Account. Accordingly, investors’ funds may be unavailable to them until after such date and Public Shareholders may be forced to sell shares, potentially at a loss.

Our Sponsor, Initial Shareholders, officers and directors and their affiliates have interests in the Business Combination which may be different from or in addition to (and which may conflict with) the interests of our shareholders

Our Sponsor, Initial Shareholder, officers and directors and their affiliates have interests in and benefits arising from the completion of the Business Combination that may be different from or in addition to (and which may conflict with) the interests of our Public Shareholders, which may result in a conflict of interest. These interests and benefits include:

•        If we cannot complete the Business Combination or an alternative initial business combination by the Extension Date, we will be required to liquidate. However, each of our Initial Shareholders, which include our Sponsor, which is affiliated with our officers, and certain of our directors, agreed, at the time of the IPO, in order to induce the underwriters of the IPO to enter into the underwriting agreement and for no additional separate consideration, to waive their right to have us redeem any of their shares, or to sell their shares to us in any tender offer, in connection with the Business Combination, or to receive distributions with respect to their Insider Shares upon our liquidation if we are unable to consummate the Business Combination or an alternative business combination. Accordingly, the Insider Shares and any Public Shares held by our officers and directors will be worthless if we do not consummate the Business Combination or an alternative initial business combination. Their Insider Shares, which were purchased prior to the closing of the HSAC2 IPO were purchased for $28,750, their Private Shares were purchased concurrently with the IPO for $4,500,000 and their Public Shares were purchased after the IPO for $300,000. Based on the closing price of the HSAC2 Ordinary Shares of $             on Nasdaq as of             , 2022, these shares had an aggregate market value of approximately $            .

•        If we cannot complete the Business Combination or an alternative initial business combination by the Extension Date, we will be required to liquidate and the Private Warrants purchased by our Sponsor at a price of $1,500,000 will expire worthless. Based on the closing price of the HSAC2 Ordinary Shares of $             on Nasdaq as of             , 2022, the Private Warrants had an aggregate market value of approximately $            .

•        Our Initial Shareholders paid an aggregate of $28,750 or approximately $0.007 per share for their Insider Shares, which shares, if unrestricted and freely-tradable, would be valued at approximately $             based on the closing price of the HSAC2 Ordinary Shares of $             on Nasdaq as of             , 2022; accordingly, our Initial Shareholders can earn a positive rate of return on their Insider Shares even if Public Shareholders experience a negative return following the consummation of the Business Combination.

•        The RTW Funds, entities affiliated with our Chief Executive Officer, have purchased 1 million HSAC2 Ordinary Shares pursuant to the RTW Forward Purchase Agreement and have agreed to purchase up to an additional $50 million of HSAC2 Ordinary Shares pursuant to the Backstop Agreement. The per share purchase prices under each of the RTW Forward Purchase Agreement and the Backstop Agreement will not exceed the redemption price available to HSAC2 shareholders exercising redemption rights at the Shareholder Meeting and the RTW Funds have agreed not to vote any shares purchased pursuant to the RTW Forward Purchase Agreement or the Backstop Agreement, or otherwise acquired by the RTW Funds outside of the existing redemption offer, in the proposal to approve the Business Combination, and to waive redemption rights with respect to such purchases in the vote to approve the Business Combination.

•        It is anticipated that, upon the Closing, the Sponsor and related parties (including the directors and officers of HSAC2 before the Business Combination and the RTW Funds) will retain an ownership interest ranging from approximately 25.3% to 40.3% of New Orchestra, depending on the amount of HSAC2 Ordinary Shares purchased pursuant to the Backstop Agreement and the degree to which holders of Public Shares exercise redemption rights with respect to their Public Shares and the number of shares the RTW Funds purchase pursuant to the Backstop Agreement, but excluding 750,000 Private Warrants held by the Sponsor. If all potential sources of dilution were exercised and converted into HSAC2 Ordinary Shares, the Sponsor and related parties would retain an ownership interest ranging from approximately 17.6% to 27.1%. See the section titled “Summary of the Proxy Statement/Prospectus — Ownership of the Post-Business Combination Company After the Closing.”

•        We pay $10,000 per month to our Sponsor for office space and related services, but only out of funds not held in the Trust Account. We may delay payment of such monthly fee upon a determination by our audit committee that we lack sufficient funds held outside the Trust Account to pay actual or anticipated expenses in connection with our initial business combination. Any such unpaid amount will be due and payable no later than the date of the consummation of the Business Combination, or an alternative initial business combination. So, the Sponsor may forfeit repayment if we do not consummate the Business Combination or an alternative initial business combination.

•        Our Initial Shareholders and management team are entitled to receive reimbursement for any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses, performing business due diligence on suitable target businesses and business combinations as well as traveling to and from the offices, plants or similar locations of prospective target businesses to examine their operations (with no cap or ceiling on such reimbursement), but will not receive reimbursement for any out-of-pocket expenses to the extent such expenses exceed the amount not required to be retained in the Trust Account, unless the Business Combination, or an alternative initial business combination, is consummated. As of             , 2022, the date of this proxy statement/prospectus, there were no unreimbursed out-of-pocket expenses.

•        In order to meet our working capital needs, our Initial Shareholders, officers and directors may, but are not obligated to, loan us funds (the “Working Capital Loans”). The loans would either be paid upon consummation of our initial business combination, without interest, or, at the lender’s discretion, up to $500,000 of the notes may be converted upon consummation of our business combination into additional Private Warrants at a price of $1.00 per warrant. If we require additional working capital and the Sponsor extends Working Capital Loans to us, such loans will not be repaid if we do not consummate the Business Combination, or an alternative initial business combination by the Extension Date. As of             , 2022, the date of this proxy statement/prospectus, there were no amounts outstanding under any Working Capital Loans.

•        Our Initial Shareholders and the RTW Funds have agreed that, subject to certain limited exceptions, any shares of New Orchestra Common Stock or any security convertible into or exercisable or exchanged for New Orchestra Common Stock beneficially owned or owned of record by such holders will not be transferred, assigned, sold or assigned until the earlier of 12 months after the Closing and the date on which New Orchestra completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the New Orchestra stockholders having the right to exchange their shares of New Orchestra Common Stock for cash, securities or other property.

•        Our current directors and officers have the right to be indemnified by contract and our Existing Charter against liabilities asserted against them in their capacities as our directors and officers and certain other capacities undertaken at our request. New Orchestra will continue such indemnification and maintain directors’ and officers’ liability insurance to provide such indemnification. If we do not complete the Business Combination, or an alternative initial business combination by the Extension Date, it will trigger our automatic winding up, liquidation and dissolution and such indemnification rights will become worthless.

•        The exercise of HSAC2’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the transaction may result in a conflict of interest when determining whether such changes or waivers are appropriate and in our shareholders’ best interest.

Although our board of directors was aware of and considered these interests, among other matters, in evaluating and unanimously approving the Business Combination and in recommending to the Public Shareholders that they approve the Business Combination and each of the Proposals, these personal and financial interests may influence our directors’ and officers’ motivation in timely identifying and selecting a target business and completing a business combination, supporting the Business Combination and in determining whether the terms, conditions and timing of the Business Combination are appropriate and in our shareholders’ best interest, which would be in breach of their fiduciary duties to us as a matter of Cayman Islands law. Although we might have a claim against such individuals, we might not ultimately be successful in any such claim we may make against them. RTW Investments, LP, which is affiliated with our Sponsor and manages the RTW Funds, is an investment adviser registered with the SEC, and as such, RTW Investments, LP and its affiliates are subject to examinations, inquiries and investigations by various U.S. governmental and regulatory agencies. The SEC staff has publicly indicated that it is focused on conflicts of interest

and disclosures relating to SPACs. Recently, RTW Investments, LP received requests for certain information from the SEC staff in connection with an investigation captioned In the Matter of Certain Private Fund Advisors Involved in SPACs. RTW Investments, LP is responding to the requests for information.

Our Initial Shareholders, officers and their affiliates control a substantial interest in us and thus may influence certain actions requiring a shareholder vote, potentially in a manner that you do not support

Our Initial Shareholders and officers collectively own approximately 48.88% of the issued and outstanding HSAC2 Ordinary Shares. If our officers, directors, Initial Shareholders or their affiliates determine in the future to purchase the HSAC2 Ordinary Shares in the open market or in private transactions, to the extent permitted by law, in order to assist us in consummating the Business Combination, this would increase their control. Factors that would be considered in making such additional purchases would include consideration of the current trading price of the HSAC2 Ordinary Shares. In connection with any vote for a proposed business combination, including the Business Combination, all of our Initial Shareholders, as well as all of our officers and directors, have agreed to vote the HSAC2 Ordinary Shares owned by them in favor of such proposed business combination, provided that any additional equity securities acquired in the future, including the 1,000,000 Forward Purchase Shares and any Backstop Purchases, will not be voted in favor of approving the Business Combination. Additionally, the RTW Funds, which are managed by RTW Investments, LP, where our Chief Executive Officer serves as Managing Partner and Chief Investment Officer, have further agreed, pursuant to the Backstop Agreement, to purchase before the Closing, up to 5 million additional Ordinary Shares which, if purchased, is expected to result in our Initial Shareholders, officers, and their affiliates holding approximately 39.15% of the issued and outstanding New Orchestra Common Stock. Accordingly, our Initial Shareholders, officers and their affiliates may exert a substantial or controlling influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association. The ownership percentages of New Orchestra immediately following the Business Combination are subject to multiple assumptions. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by HSAC2’s existing shareholders in New Orchestra will be different. See the section titled “Summary of the Proxy Statement/Prospectus — Ownership of the Post-Business Combination Company After the Closing.”

Our Initial Shareholders and officers and directors have agreed to vote in favor of the Business Combination regardless of how our Public Shareholders vote. Accordingly, we could need as little as 1.12% of our unaffiliated Public Shares to attend the Shareholder Meeting, none of which needs to be voted in favor of the Business Combination in order to have such transaction approved

Our Initial Shareholders and our officers and directors hold 5,480,000 Ordinary Shares and have agreed (1) to vote any HSAC2 Ordinary Shares owned by them in favor of the Business Combination, and (2) not to convert any HSAC2 Ordinary Shares in connection with the shareholder vote to approve the Business Combination. As a result, we could need as little as 126,060 of our Public Shares (or approximately 1.12% of our unaffiliated Public Shares) to attend the Shareholder Meeting in order to form a quorum, none of which needs to be voted in favor of the Business Combination or any of the Proposals in order to have such transaction, and each of the Proposals, approved.

Our Initial Shareholders, officers, directors or their affiliates may elect to purchase shares from Public Shareholders, in which case they may influence a vote in favor of the Business Combination

Our Initial Shareholders, officers, directors or their affiliates may purchase shares in privately negotiated transactions either prior to or following the consummation of the Business Combination. Such purchases could include a contractual acknowledgement that the selling holder, although still the registered holder of our shares, is no longer the beneficial owner and therefore agrees not to exercise redemption rights. In the event that our Initial Shareholders, officers, directors or their affiliates purchase shares in privately negotiated transactions from Public Shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. It is intended that Rule 10b-18 would govern any such purchases by our Initial Shareholders, officers, directors or their affiliates, to the extent Rule 10b-18 applies. Rule 10b-18 provides a safe harbor from liability for market manipulation for purchases made under conditions set out in the Rule, including with respect to timing, pricing and volume of purchases. On July 22, 2022, the RTW Funds, which are managed by RTW Investments, LP, where our Chief Executive Officer serves as Managing Partner and Chief Investment Officer, purchased 1 million Public Shares or 8.92% of the issued and outstanding HSAC2 Ordinary Shares pursuant to the RTW Forward Purchase Agreement and have further agreed, pursuant to the Backstop Agreement, to purchase before the Closing, up to 5 million

additional Ordinary Shares. The per share purchase prices under each of the RTW Forward Purchase Agreement and the Backstop Agreement will not exceed the redemption price available to HSAC2 shareholders exercising redemption rights at the Shareholder Meeting and the RTW Funds have agreed not to vote any shares purchased pursuant to the RTW Forward Purchase Agreement or the Backstop Agreement, or otherwise acquired by the RTW Funds outside of the existing redemption offer, in the proposal to approve the Business Combination, and to waive redemption rights with respect to such purchases in the vote to approve the Business Combination. The purpose of such purchases by the RTW Funds and any future such purchases by our Initial Shareholders, officers, directors or their affiliates would be to (1) fulfill their obligations under the RTW Forward Purchase Agreement or Backstop Agreement, (2) increase the likelihood of obtaining approval of the Business Combination, or (3) reduce our redemption expenses in order to satisfy the Closing condition in the Merger Agreement that we have cash of at least $60 million. This may result in the consummation of the Business Combination when it may not otherwise have been possible.

If our Initial Shareholders, officers, directors or their affiliates elect to purchase HSAC2 Ordinary Shares from Public Shareholders, such purchases may affect the market price of our securities

The Forward Purchases, purchases under the Backstop Agreement, and any purchases of Ordinary Shares by our Initial Shareholders, officers, directors or their affiliates in public or privately negotiated transactions as described above may increase the market price of our securities. Further, although none of our Initial Shareholders, officers, directors or their affiliates currently anticipate paying a premium to the market price for such shares, in the event they do pay a premium, such amount will not be more than $            (the redemption price available to HSAC2 Shareholders based on funds in the Trust Account of approximately $            million as of            ) and such payment may not be in the best interest of those holders who have not sold their shares in such transaction or who have not received such premium. There is no other limit on the number of shares that our Initial Shareholders, officers, directors or their affiliates could acquire or the price such parties may pay. Any such securities purchased by our Initial Shareholders, officers, directors or their affiliates would not be voted in favor of approving the Business Combination and they will waive redemption rights with respect to such securities.

If the market does not view the Business Combination positively, purchases of Public Shares, including the Forward Purchases and any Backstop Purchases may have the effect of counteracting the market’s view, which otherwise would have been reflected in a decline in the market price of our securities. In addition, once such purchases end, the termination of the price support they provide may materially adversely affect the market price of our securities.

As of the date of this proxy statement/prospectus, no agreements with respect to the private purchase of Public Shares by us or the persons described above have been entered into with any Public Shareholder, except for the July 22, 2022 Forward Purchase by the RTW Funds at $10.01 per share. If we become aware of any private arrangements entered into or significant private purchases made by any of the persons described above that would affect the vote on the Business Combination or other proposals, we will file a Current Report on Form 8-K to disclose (i) the amount of such securities purchased; (ii) the purpose of the purchases; (iii) the impact, if any, of the purchases on the likelihood that the Business Combination will be approved; (iv) the identities of security holders who sold the securities (if not purchased on the open market) or the nature of security holders who sold to our Initial Shareholders, officers, directors or their affiliates; and (v) the number of securities for which HSAC2 has received redemption requests pursuant to the vote to approve the Business Combination.

Our ability to consummate the Business Combination may be negatively impacted because neither our Board nor any committee of our Board obtained a valuation or fairness opinion in determining whether or not to pursue the Business Combination, and as a result, the terms may not be fair from a financial point of view to the Public Shareholders

Neither the HSAC2 Board nor any committee of the HSAC2 Board is required to obtain an opinion from an independent investment banking or accounting firm regarding the value of Orchestra or that the price that HSAC2 is paying for Orchestra in the Business Combination is fair to HSAC2 or its shareholders from a financial point of view. In analyzing the Business Combination, the HSAC2 Board conducted due diligence on Orchestra. It also consulted with HSAC2’s management and legal counsel, financial advisors and other advisors and considered a number of factors, uncertainties and risks, including, but not limited to, those discussed under The Business Combination Proposal — The Board’s Reasons for the Approval of the Business Combination, and concluded that the Business Combination was in the best interest of HSAC2 shareholders. The HSAC2 Board believes that because of the skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its shareholders and that Orchestra’s fair market value was at least 80% of the balance of the funds in the Trust Account

(excluding any taxes payable). Accordingly, investors will be relying solely on the judgment of the HSAC2 Board in valuing Orchestra, and the HSAC2 Board may not have properly valued Orchestra. As a result, the terms may not be fair from a financial point of view to the Public Shareholders. The lack of a valuation or fairness opinion may also lead an increased number of our shareholders to vote against the Business Combination or demand redemption of their HSAC2 shares, which could potentially impact our ability to consummate the Business Combination.

Neither we nor our stockholders will have the protection of any indemnification, escrow, price adjustment or other provisions that allow for a post-closing adjustment to be made to the total merger consideration in the event that any of the representations and warranties made by Orchestra in the Merger Agreement ultimately prove to be inaccurate or incorrect

The representations and warranties made by Orchestra and HSAC2 to each other in the Merger Agreement will not survive the consummation of the Business Combination. As a result, neither we, nor our shareholders will have the protection of any indemnification, escrow, price adjustment or other provisions that allow for a post-Closing adjustment to be made to the total merger consideration if any representation or warranty made by Orchestra in the Merger Agreement proves to be inaccurate or incorrect. Accordingly, to the extent such representations or warranties are incorrect, we would have no indemnification claim and our financial condition or results of operations could be adversely affected.

The Business Combination is subject to conditions, including certain conditions that may not be satisfied on a timely basis, if at all

The consummation of the Business Combination is subject to a number of conditions. The consummation of the Business Combination is not assured and is subject to risks, including the risk that our shareholders do not approve the Business Combination or that there are not sufficient funds in the Trust Account, in each case subject to certain terms specified in the Merger Agreement (as described under “Proposal 1 — The Business Combination Proposal — The Business Combination and the Merger Agreement — Conditions to Closing), or that other Closing conditions are not satisfied. If we do not consummate the Business Combination, we could be subject to several risks, including:

•        we and Orchestra may be liable for damages to one another under the Merger Agreement;

•        negative reactions from the financial markets, including declines in the price of our securities due to the fact that current prices may reflect a market assumption that the Business Combination will be consummated; and

•        our management’s attention will have been diverted to the Business Combination rather than the pursuit of other possible initial business combinations.

We may waive one or more of the conditions to the Business Combination without resoliciting shareholder approval for the Business Combination

To the extent permitted by applicable laws, we may agree to waive some of the conditions to our obligations to complete the Business Combination, in whole or in part. Our Board will evaluate the materiality of any such waiver when deciding whether an amendment of this proxy statement/prospectus and resolicitation of proxies is warranted. In some instances, if our Board determines that a waiver is not sufficiently material to warrant resolicitation of shareholders, we have the discretion to complete the Business Combination without seeking further shareholder approval. For example, we are not required to consummate the Business Combination if doing so would conflict with a governmental order applicable to Orchestra. However, if such an order exists, depending upon the nature of the order, our Board may determine that it is not material to Orchestra’s business and then elect to waive that condition without shareholder approval and close the Business Combination. Accordingly, we may consummate the Business Combination on terms that are less favorable than presented in this proxy statement/prospectus.

Shareholders may not know immediately after the Shareholder Meeting whether we have satisfied the Closing condition that Parent Closing Cash is at least $60 million

Pursuant to the Backstop Agreement, the RTW Funds, jointly and severally, agreed to purchase such number of HSAC2 Ordinary Shares at a price of $10.00 per share to the extent that the amount of Parent Closing Cash as of immediately prior to the closing of the Merger is less than $60 million (excluding amounts received pursuant to the Medtronic Forward Purchase Agreement or are otherwise held in the Trust Account in respect of Medtronic’s

Forward Purchase Shares, but including amounts received pursuant to the RTW Forward Purchase Agreement and otherwise held in the Trust Account in respect of the RTW Funds’ Forward Purchase Shares. However, there can be no assurance that the RTW Funds will not breach the Backstop Agreement or delay the required Backstop Purchases. If we receive valid redemption requests from holders of Public Shares prior to the redemption deadline, we may, at our sole discretion, following the redemption deadline and until the Closing Date, seek and permit one or more shareholders to withdraw their redemption requests. We may select which shareholders to seek such withdrawals based on any factors we deem relevant. The purpose of seeking such withdrawals may be to reduce our redemption expenses and thereby increase the funds held in the Trust Account, including where we otherwise would not satisfy the Closing condition that the amount of Parent Closing Cash as of immediately prior to the closing of the Merger is at least $60 million. This process could take a number of days, and there may be a period of time after the Shareholder Meeting and before the Closing when shareholders do not know whether we have satisfied this Closing condition.

We will incur significant transaction costs

We have incurred and expect to continue to incur significant, non-recurring costs in connection with consummating the Business Combination. All expenses incurred in connection with the Business Combination, including all legal, and other fees, expenses and costs, will be for the account of the party incurring such fees, expenses and costs. HSAC2’s transaction expenses as a result of the Business Combination are currently estimated to be $7,795,000, including $5,600,000 in accompanying deferred underwriting commissions, which are contingent upon the Closing.

If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption price received by shareholders may be less than approximately $10.00

Our placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we have sought to have Orchestra and all vendors, service providers (excluding our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our Public Shareholders, they may still seek recourse against the Trust Account even if they execute such agreements, and they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.

Upon redemption of our Public Shares, if we do not consummate an initial business combination by the Extension Date, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by Public Shareholders could be less than the $10.00 per Public Share initially held in the Trust Account, due to claims of such creditors.

Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (excluding our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per HSAC2 Ordinary Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per HSAC2 Ordinary Share due to reductions in the value of the assets held in the Trust Account, in each case less income and franchise taxes payable, provided that such liability will not apply to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act.

Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such third-party claims. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations, and we believe that our Sponsor’s only assets are securities of our

company. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties, including, without limitation, claims by vendors and prospective target businesses.

Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them

Our Existing Charter provides that we will continue in existence only until the Extension Date if a business combination has not been consummated by such time. If we do not complete an initial business combination during such time period, it will trigger our automatic winding up, liquidation and dissolution. As such, our shareholders could potentially be liable for any claims to the extent of distributions received by them pursuant to such process and any liability of our shareholders may extend beyond the date of such distribution. Accordingly, we cannot assure you that third parties, or we under the control of an official liquidator, will not seek to recover from our shareholders amounts owed to them by us.

If we do not consummate a business combination within the required time period, upon notice from us, the trustee of the Trust Account will distribute the amount in our Trust Account to our Public Shareholders. Concurrently, we shall pay, or reserve for payment, from funds not held in trust, our liabilities and obligations, although we cannot assure you that there will be sufficient funds for such purpose. If there are insufficient funds held outside the Trust Account for such purpose, our Sponsor, HSAC 2 Holdings, LLC, has agreed that it will be liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us and which have not executed a waiver agreement. However, we cannot assure you that the liquidator will not determine that he or she requires additional time to evaluate creditors’ claims (particularly if there is uncertainty over the validity or extent of the claims of any creditors). We also cannot assure you that a creditor or shareholder will not file a petition with the Cayman Islands Court which, if successful, may result in our liquidation being subject to the supervision of that court. Such events might delay distribution of some or all of our assets to our Public Shareholders.

If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company to claims, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offense and may be liable to pay a fine of 18,292.68 United States Dollars (“US$”) and subject to imprisonment for five years in the Cayman Islands.

If, after we distribute the proceeds in the Trust Account to our Public Shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages

If, after we distribute the proceeds in the Trust Account to our Public Shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors.

If, before distributing the proceeds in the Trust Account to our Public Shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced

If, before distributing the proceeds in the Trust Account to our Public Shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy or insolvency law and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the Trust Account, the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

Stockholder litigation and regulatory inquiries and investigations are expensive and could harm our business, financial condition and operating results and could divert management attention

In the past, securities class action litigation and/or stockholder derivative litigation and inquiries or investigations by regulatory authorities have often followed significant business transactions, such as the sale of a company or announcement of any other strategic transaction, such as the Business Combination. Any stockholder litigation and/or regulatory investigations against HSAC2, Orchestra or New Orchestra, whether or not resolved favorably, could result in substantial costs and divert management’s attention from other business concerns, which could adversely affect the business and cash resources of HSAC2, Orchestra, or New Orchestra, which would also likely adversely affect the ultimate value that stockholders receive as a result of the Business Combination.

Following the consummation of the Business Combination, New Orchestra’s only significant asset will be ownership of 100% of Orchestra and such ownership may not be sufficient for New Orchestra to pay dividends or make distributions or loans to enable it to pay any dividends on its common stock

Following the consummation of the Business Combination, New Orchestra will have no direct operations and no significant assets other than the ownership of 100% of Orchestra. New Orchestra will have no independent means of generating revenue or cash and will depend on Orchestra for distributions, loans and other payments to generate the funds necessary to meet financial obligations, including expenses as a publicly-traded company, the obligation to pay any dividends on New Orchestra Common Stock. There can be no assurance that the earnings from, or other available assets of New Orchestra, will be sufficient to pay dividends or make distributions or loans to enable New Orchestra to pay any dividends on its common stock or satisfy other financial obligations or that applicable state law and contractual obligations will permit such distributions. Moreover, New Orchestra does not intend to pay dividends or make distributions for the foreseeable future.

The unaudited pro forma condensed consolidated combined financial information included in this proxy statement/prospectus may not be indicative of what our actual financial position or results of operations would have been

The unaudited pro forma condensed consolidated combined financial information in this proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the Business Combination been consummated on the dates indicated. See the section titled “Summary Unaudited Pro Forma Condensed Consolidated Combined Financial Information” for more information.

Our directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our Public Shareholders

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per HSAC2 Ordinary Share and (ii) the actual amount per HSAC2 Ordinary Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per HSAC2 Ordinary Share due to reductions in the value of the assets held in the Trust Account, in each case less income and franchise taxes payable, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to

enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our Public Shareholders may be reduced below $10.00 per HSAC2 Ordinary Share.

Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal courts may be limited

We are a company incorporated under the laws of the Cayman Islands and certain of our officers and directors are residents of jurisdictions outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or executive officers, or enforce judgments obtained in the United States courts against our directors or officers.

Our corporate affairs are governed by our Amended and Restated Memorandum and Articles of Association, the Companies Act (as the same may be supplemented or amended from time to time) or the common law of the Cayman Islands prior to the Domestication

The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the Companies Act and common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, and whilst the decisions of the English courts are of persuasive authority, they are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from statutes or judicial precedent in some jurisdictions in the United States. In addition, while Cayman Islands law permits derivative actions to be brought in certain circumstances, shareholders in Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstances in which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights of shareholders of a Cayman Islands exempted company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred.

We have been advised by Maples and Calder (Cayman) LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely:

•        to recognize or enforce against us judgments of courts of the United States based on certain civil liability provisions of U.S. securities laws where that liability is in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company; and

•        There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will in certain circumstances recognize such a foreign judgment and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no retrial of the issues would be necessary provided that:

•        the U.S. court issuing the judgment had jurisdiction in the matter and the company either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process;

•        the U.S. judgment is final and for a liquidated sum;

•        the judgment given by the U.S. court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company;

•        in obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the court;

•        recognition or enforcement of the judgment would not be contrary to public policy in the Cayman Islands; and

•        the proceedings pursuant to which judgment was obtained were not contrary to natural justice.

In appropriate circumstances, a Cayman Islands court may give effect in the Cayman Islands to other kinds of final foreign judgments such as declaratory orders, orders for performance of contracts and injunctions.

As a result of all of the above, Public Shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as Public Shareholders of a United States company.

Future changes to U.S. and non-U.S. tax laws could adversely affect New Orchestra

The U.S. Congress and other government agencies in jurisdictions where New Orchestra and its affiliates will do business have had an extended focus on issues related to the taxation of multinational corporations. One example is in the area of “base erosion and profit shifting,” including situations in which payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates. As a result, the tax laws in the countries in which New Orchestra and its affiliates do business could change on a prospective or retroactive basis, and any such changes could adversely affect New Orchestra and its affiliates.

We may be subject to the Excise Tax included in the Inflation Reduction Act of 2022 in the event of a liquidation or in connection with redemptions of our common stock after December 31, 2022.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, which, among other things, imposes a 1% excise tax on any publicly traded domestic corporation that repurchases its stock after December 31, 2022 (the “Excise Tax”). The Excise Tax is imposed on the fair market value of the repurchased stock, with certain exceptions. Because we will be a Delaware corporation as a result of the Domestication, and because our securities are trading on Nasdaq, we will be a “covered corporation” within the meaning of the Inflation Reduction Act. While not free from doubt, absent any further guidance from Congress, the Excise Tax may apply to any redemptions of our common stock after December 31, 2022, including redemptions in connection with an initial business combination, unless an exemption is available. Issuances of securities in connection with our initial business combination transaction (including any PIPE transaction at the time of our initial business combination) are expected to reduce the amount of the Excise Tax in connection with redemptions occurring in the same calendar year. However, because the Excise Tax would be payable by us, and not by the redeeming holder, the mechanics of any required payment of the Excise Tax have not been determined. Further, the application of the Excise Tax in the event of a liquidation is uncertain. Consequently, the Excise Tax may make a transaction with us less appealing to potential business combination targets.

The Domestication may be a taxable event for U.S. Holders of HSAC2 Ordinary Shares.

Subject to the limitations and qualifications described in “Material U.S. Federal Income Tax Consequences,” including the application of the PFIC rules and Section 367(b) of the Code, it is the opinion of Loeb & Loeb LLP, counsel to HSAC2 (“Loeb & Loeb”) that the Domestication should qualify as a “reorganization” within the meaning of Section 368 of the Code, and, as a result, a U.S. Holder (as defined below) should not recognize gain or loss on the exchange of HSAC2 Ordinary Shares for HSAC2 Common Stock, as applicable, pursuant to the Domestication. However, the provisions of the Code that govern reorganizations are complex, and due to the absence of direct guidance on the application of Section 368 to a domestication of a corporation holding only investment-type assets such as HSAC2, the qualification of the Domestication as a reorganization is not entirely clear. Accordingly Loeb & Loeb is unable to provide a “will” opinion regarding the qualification of the Domestication as a “reorganization” within the meaning of Section 368 of the Code. Loeb & Loeb is instead providing a “should” opinion regarding the qualification of the Domestication as a “reorganization” within the meaning of Section 368.

Alternatively, if the Domestication does not qualify as a “reorganization” within the meaning of Section 368 of the Code, then a U.S. Holder that exchanges its HSAC2 Ordinary Shares for HSAC2 Common Stock in the Domestication will recognize gain or loss equal to the difference between (i) the sum of the fair market value of the HSAC2 Common Stock received and (ii) the U.S. Holder’s adjusted tax basis in the HSAC2 Ordinary Shares exchanged therefor.

In addition, U.S. Holders of HSAC2 Ordinary Shares may be subject to adverse U.S. federal income tax consequences under the PFIC regime. Please see “Material U.S. Federal Income Tax Consequences — U.S. Holders — U.S. Federal Income Tax Consequences of the Domestication to U.S. Holders of HSAC2 Ordinary Shares — Passive Foreign Investment Company Status” for a more detailed discussion with respect to HSAC2’s potential PFIC status and certain tax implications thereof.

Further, because the Domestication will occur immediately prior to the redemption of HSAC2 Ordinary Shares, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of the Domestication. All U.S. Holders considering exercising redemption rights with respect to their HSAC2 Ordinary Shares are urged to consult with their tax advisors with respect to the potential tax consequences to them of the Domestication and exercise of redemption rights.

HSAC2 is likely a PFIC, which could result in adverse U.S. federal income tax consequences to U.S. Holders

HSAC2 believes that it is likely a PFIC, which may have adverse U.S. federal income tax consequences to U.S. Holders of HSAC2 Ordinary Shares. If HSAC2 has been a PFIC for any taxable year during the holding period of a U.S. Holder (and a U.S. Holder of HSAC2 Ordinary Shares has not made certain elections with respect to its HSAC2 Ordinary Shares), such U.S. Holder would likely recognize gain (but not loss if the Domestication qualifies as a “reorganization” within the meaning of Section 368 of the Code) upon the exchange of HSAC2 Ordinary Shares for HSAC2 Common Stock pursuant to the Domestication. Please see “Material U.S. Federal Income Tax Consequences — U.S. Holders — U.S. Federal Income Tax Consequences of the Domestication to U.S. Holders of HSAC2 Ordinary Shares — Passive Foreign Investment Company Status” for a more detailed discussion with respect to HSAC2’s potential PFIC status and certain tax implications thereof.

Upon consummation of the Business Combination, the rights of holders of New Orchestra Common Stock arising under the DGCL and the Proposed Charter will differ from and may be less favorable to the rights of holders of HSAC2 Ordinary Shares arising under the Companies Act and our Existing Charter

Upon consummation of the Business Combination, the rights of holders of New Orchestra Common Stock will arise under the Proposed Charter as well as the DGCL. Those new organizational documents and the DGCL contain provisions that differ in some respects from those in our Existing Charter and the Companies Act and, therefore, some rights of holders of New Orchestra Common Stock will differ from the rights that holders of HSAC2 Ordinary Shares currently possess. For instance, while class actions are generally not available to shareholders under the Companies Act, such actions are generally available under the DGCL. This change could increase the likelihood that New Orchestra becomes involved in costly litigation, which could have a material adverse effect on New Orchestra and the market price of New Orchestra’s securities.

For a more detailed description of the rights of holders of New Orchestra Common Stock and how they may differ from the rights of holders of HSAC2 Ordinary Shares, see the section titled “Proposal 2 — The Domestication Proposal — Comparison of Shareholder Rights under Applicable Corporate Law Before and After the Domestication.”

Anti-takeover provisions contained in the Proposed Charter could impair a takeover attempt

The Proposed Charter will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions may make it more difficult to remove management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for New Orchestra securities. These provisions are described in the section titled “Proposal 3 — The Charter Approval Proposal.”

The Proposed Charter will provide that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for certain disputes between New Orchestra and its stockholders, which could make New Orchestra securities less attractive and impose legal costs on New Orchestra if such limitations are challenged

The Proposed Charter provides that, unless New Orchestra otherwise consents in writing, the Court of Chancery of the State of Delaware (or, in the event that the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, another state or federal court located within the State of Delaware) is, to the fullest extent permitted by law, the sole and exclusive forum for any:

•        derivative action or proceeding brought on behalf of New Orchestra,

•        action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any director, officer or stockholder of New Orchestra to New Orchestra or to the stockholders of New Orchestra,

•        action, suit or proceeding arising pursuant to any provision of the DGCL, the Proposed Charter or the Proposed Bylaws, and

•        action, suit or proceeding asserting a claim against New Orchestra governed by the internal affairs doctrine.

This exclusive forum provision would not apply to suits brought to enforce a duty or liability vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, such as those created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction, or the Securities Act. In addition, to prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, the Proposed Charter provides that, unless New Orchestra consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. However, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, both state and federal courts have jurisdiction to entertain such claims. As noted above, the Proposed Charter provides that the federal district courts of the United States will be the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act. Due to the concurrent jurisdiction for federal and state courts created by Section 22 of the Securities Act over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder, there is uncertainty as to whether a court would enforce the exclusive form provision. The Proposed Charter further provides that any person or entity purchasing or otherwise acquiring any interest in any New Orchestra securities shall be deemed to have notice of and to have consented to these provisions. Investors also cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with New Orchestra or its directors, officers, or other employees and this limitation may make New Orchestra securities less attractive to investors. Further, while the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring such a claim arising under the Securities Act against New Orchestra its directors, officers, or other employees in a venue other than in the federal district courts of the United States of America. In such instance, New Orchestra would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of the Proposed Charter. This may require significant additional costs associated with resolving such action in other jurisdictions and New Orchestra cannot assure you that the provisions will be enforced by a court in those other jurisdictions. If a court were to find either exclusive-forum provision in New Orchestra’s amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, it may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could harm New Orchestra’s business.

We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a Business Combination with which a substantial majority of our stockholders do not agree

Our Existing Charter does not provide a specified maximum redemption threshold, except that we will not redeem our Public Shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of the Business Combination. Falling below $5,000,001 in net tangible assets would subject us to the SEC’s “penny stock” rules. However, the Merger Agreement provides that Orchestra’s obligation to consummate the Business Combination is conditioned on HSAC2 having Parent Closing Cash equal to or exceeding $60 million. As a result, we may be able to complete our Business Combination even though a substantial portion of our Public Shareholders do not agree with the transaction and have redeemed their shares or have entered into privately negotiated agreements to sell their shares to our Initial Shareholders, directors or officers or their affiliates such as the RTW Funds. Based on the amount of approximately $           in the Trust Account as of           , 2022, approximately            HSAC2 Ordinary Shares may be redeemed and still enable us to have sufficient cash to satisfy the cash Closing conditions in the Merger Agreement.

As of the date of this proxy statement/prospectus, no agreements with respect to the private purchase of Public Shares by us or the persons described above have been entered into with any Public Shareholder, except for the July 22, 2022 Forward Purchase by the RTW Funds at $10.01 per share. If we become aware of any private arrangements entered into or significant private purchases made by any of the persons described above that would affect the vote on the Business Combination or other proposals, we will file a Current Report on Form 8-K to disclose the information we have.

If the aggregate cash consideration we would be required to pay for all HSAC2 Ordinary Shares that are validly submitted for redemption plus any amount required to satisfy cash Closing conditions in the Merger Agreement exceeds the aggregate amount of cash available to us, we may not complete the Business Combination or redeem any HSAC2 Ordinary Shares and all HSAC2 Ordinary Shares submitted for redemption will be returned to the holders, and we instead may search for an alternate business combination or liquidate the Trust Account.

Public Shareholders, together with any affiliates of theirs or any other person with whom they are acting in concert or as a “group,” will be restricted from seeking conversion rights with respect to more than 20% of the HSAC2 Ordinary Shares

A Public Shareholder that singly, or together with any affiliates or any other person with whom the Public Shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), holds more than 20% of the Public Shares (or 1,352,423 Public Shares) will not be able to exercise conversion rights as to all such shares. We refer to the shares above this amount as “Unredeemable Shares.” In order to determine whether a shareholder is acting in concert or as a group with another shareholder, we will require each Public Shareholder seeking to exercise conversion rights to certify to us whether such shareholder is acting in concert or as a group with any other shareholder. Such certifications, together with other public information relating to share ownership available to us at that time, such as Schedule 13D, Schedule 13G and Section 16 filings under the Exchange Act, will be the sole basis on which we make our determination. Shareholders may nevertheless challenge our determination of whether a shareholder is acting in concert or as a group with another shareholder in a court of competent jurisdiction.

If you cannot exercise conversion rights as to all of your shares, your influence on our ability to consummate the Business Combination would be reduced and you may also be forced to sell Unredeemable Shares in open market transactions. This could cause you to suffer a material loss on your investment in us. Additionally, you will not receive conversion rights if we consummate the Business Combination.

A Public Shareholder who fails to tender or deliver physical share certificates in a timely manner will not be able to have their shares redeemed

Public Shareholders who wish to exercise conversion rights with respect to their shares must, among other things as fully described in the section titled “Extraordinary General Meeting of HSAC2 — Redemption Rights,” tender their certificates to Continental Stock Transfer & Trust Company our transfer agent or tender or deliver their shares to the Transfer Agent electronically through the DTC at least two business days prior to the Shareholder Meeting. In order to obtain a physical share certificate, a shareholder’s broker and/or clearing broker, DTC and our Transfer Agent will need to act to facilitate this request. It is our understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, because we do not have any control over this process or over the brokers, it may take significantly longer than two weeks to obtain a physical certificates. If it takes longer than anticipated to obtain a physical certificate, shareholders who wish to redeem their shares may be unable to obtain physical certificates by the deadline for exercising their conversion rights and thus would be unable to have their shares redeemed.

Public Shareholders who wish to convert their HSAC2 Ordinary Shares may be unable to sell their securities when they wish to in the event that the Business Combination is not approved

If the Business Combination is not consummated, we will promptly return physical certificates tendered in accordance with the delivery requirements discussed above. However, Public Shareholders who tendered or delivered shares will be unable to sell their shares after the failed Business Combination until they receive their shares. The market price for the HSAC2 Ordinary Shares may decline during this time and you may not be able to sell your shares when you wish, even while other shareholders that did not seek conversion may be able to sell their shares.

There is no guarantee that a decision whether to have shares redeemed for a pro rata portion of the Trust Account will put the stockholder in a better future economic position

We can give no assurance as to the price at which a stockholder may be able to sell its Public Shares in the future following the consummation of the Business Combination or any alternative business combination. Events following the consummation of any initial business combination, including the Business Combination, may cause an increase in New Orchestra’s share price, and may result in a lower value realized now for a stockholder redeeming their shares than a stockholder might realize in the future. Similarly, if a stockholder does not redeem their shares, the stockholder will bear the risk of ownership of the Public Shares after the consummation of the Business Combination, and there can be no assurance that a stockholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement/prospectus. A stockholder should consult the stockholder’s own tax and/or financial advisor for assistance on how this may affect their individual situation.

Deferred underwriting fees in connection with the HSAC2 IPO that are payable at the consummation of our initial business combination will not be adjusted to account for redemptions by our Public Shareholders; if our Public Shareholders exercise their redemption rights, the amount of effective total underwriting commissions as a percentage of the aggregate proceeds from the HSAC2 IPO will increase

The underwriters in the HSAC2 IPO are entitled to deferred underwriting commissions totaling approximately $5,600,000 upon the consummation of the Business Combination or any alternative initial business combination. This amount is held in the Trust Account until the consummation of our initial business combination. Such amounts will not be adjusted to account for redemptions of Public Shares by our Public Shareholders. Accordingly, the amount of effective total underwriting commissions as a percentage of the aggregate proceeds from the HSAC2 IPO will increase as the number of Public Shares redeemed increases. If no Public Shareholders exercise redemption rights with respect to their Public Shares, the amount of effective total underwriting commissions due to the underwriters upon the consummation of our initial business combination will represent approximately 13% (inclusive of the approximately $3.2 million of underwriting commissions previously paid) of the aggregate proceeds from the HSAC2 IPO retained by New Orchestra. If Public Shareholders exercise redemption rights with respect to the maximum 6,732,117 Public Shares, the amount of effective total underwriting commissions due to the underwriters upon the consummation of the Business Combination will represent approximately 43.3% (inclusive of the approximately $3.2 million of underwriting commissions previously paid) of the aggregate proceeds from the HSAC2 IPO retained by New Orchestra, taking into account such redemptions but excluding the effect of the Backstop Agreement.

The price of New Orchestra’s securities could be volatile following the Business Combination

Following the Business Combination, fluctuations in the price of New Orchestra securities could contribute to the loss of all or part of your investment. Prior to the Business Combination, there has not been a public market for Orchestra’s stock and trading in the shares of its common stock has not been active. Accordingly, the valuation ascribed to Orchestra and its common stock in the Business Combination may not be indicative of the price that will prevail in the trading market following the Business Combination. If an active market for New Orchestra’s securities develops and continues, the trading price of New Orchestra securities following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of which will be beyond New Orchestra’s control. Any of such factors, including the factors listed below, could have a material adverse effect on your investment in New Orchestra securities and New Orchestra securities may trade at prices significantly below the price you paid for the HSAC2 Ordinary Shares. In such circumstances, the trading price of New Orchestra securities may not recover and may experience a further decline.

Factors affecting the trading price of New Orchestra securities following the Business Combination may include:

•        actual or anticipated fluctuations in New Orchestra’s quarterly financial results or the quarterly financial results of companies perceived to be similar to New Orchestra;

•        changes in the market’s expectations about New Orchestra’s operating results;

•        the impact of the COVID-19 pandemic on New Orchestra’s business;

•        the inability to maintain New Orchestra’s listing on Nasdaq;

•        New Orchestra’s operating results failing to meet the expectation of securities analysts or investors in a particular period;

•        changes in financial estimates and recommendations by securities analysts concerning New Orchestra or the market in general;

•        operating and stock price performance of other companies that investors deem comparable to New Orchestra;

•        New Orchestra’s ability to develop product candidates;

•        changes in laws and regulations affecting New Orchestra’s business;

•        litigation involving New Orchestra;

•        changes in New Orchestra’s capital structure, such as future issuances of securities or the incurrence of additional debt;

•        the volume of New Orchestra’s securities available for public sale;

•        any major change in New Orchestra’s Board or management;

•        sales of New Orchestra securities by directors, executive officers or significant stockholders of New Orchestra, or the perception that such sales could occur; and

•        general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of New Orchestra’s securities irrespective of its operating performance. The stock market in general and Nasdaq in particular have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of New Orchestra’s securities, may not be predictable. A loss of investor confidence in the market for medical device company stocks or the stocks of other companies which investors perceive to be similar to New Orchestra could depress New Orchestra’s stock price regardless of New Orchestra’s business, prospects, financial conditions or results of operations. A decline in the market price of New Orchestra’s securities also could adversely affect New Orchestra’s ability to issue additional securities and New Orchestra’s ability to obtain additional financing in the future.

Volatility in New Orchestra’s share price could subject New Orchestra to securities class action litigation

In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. If New Orchestra faces such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm its business.

New Orchestra’s ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all. The failure to raise capital when needed could harm New Orchestra’s business, operating results and financial condition. Debt or equity issued to raise additional capital may reduce the value of New Orchestra’s common stock

We and Orchestra cannot be certain when or if New Orchestra’s operations will generate sufficient cash to fund its ongoing operations or the growth of its business. New Orchestra intends to make investments to support Orchestra’s current business and may require additional funds to respond to business challenges. Additional financing may not be available on favorable terms, if at all. If adequate funds are not available on acceptable terms, New Orchestra may be unable to invest in its future growth opportunities, which could harm its business, operating results and financial condition. If New Orchestra incurs debt, the debt holders could have rights senior to holders of New Orchestra Common Stock to make claims on New Orchestra’s assets. The terms of any debt could restrict New Orchestra’s operations, including its ability to pay dividends on New Orchestra Common Stock. If New Orchestra issues additional equity securities following the Closing, stockholders will experience dilution, and the new equity securities could have rights senior to those of New Orchestra Common Stock. Because the decision to issue securities in the future will depend on numerous considerations, including factors beyond New Orchestra’s control, New Orchestra cannot predict or estimate

the amount, timing or nature of any future issuances of debt or equity securities. As a result, stockholders will bear the risk of future issuances of debt or equity securities reducing the value of their New Orchestra Common Stock and diluting their interest.

A market for New Orchestra securities may not continue, which would adversely affect the liquidity and price of its securities

Following the Business Combination, the price of New Orchestra securities may fluctuate significantly due to the market’s reaction to the Business Combination and general market and economic conditions. An active trading market for New Orchestra securities following the Business Combination may never develop or, if developed, it may not be sustained. In addition, the price of New Orchestra securities after the Business Combination can vary due to general economic conditions and forecasts, New Orchestra’s general business condition and the release of New Orchestra’s financial reports. Additionally, if New Orchestra securities are not listed on, or become delisted from Nasdaq for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of New Orchestra securities may be more limited than if New Orchestra were quoted or listed on Nasdaq or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

Because New Orchestra will become a public reporting company by means other than a traditional underwritten initial public offering, New Orchestra’s stockholders may face additional risks and uncertainties

Because there is no independent third-party underwriter involved in the Business Combination, investors will not receive the benefit of any outside independent review of Orchestra’s finances and operations. Underwritten public offerings of securities conducted by a licensed broker-dealer are subjected to a due diligence review by the underwriter or dealer manager to satisfy statutory duties under the Securities Act, the rules of Financial Industry Regulatory Authority, Inc. (“FINRA”) and the national securities exchange where such securities are listed. Additionally, subject to limited exceptions, underwriters or dealer-managers conducting such public offerings are subject to liability for any material misstatements or omissions in a registration statement filed in connection with the public offering. As no such review will be conducted in connection with the Business Combination, shareholders must rely on the information in this proxy statement/prospectus and will not have the benefit of an independent review and investigation of the type normally performed by an independent underwriter in a public securities offering. Although HSAC2 performed a due diligence review and investigation of Orchestra in connection with the Business Combination, Orchestra has different incentives and objectives in the Business Combination than an underwriter would in a traditional initial public offering. The lack of an independent due diligence review and investigation may increase the risk of an investment in New Orchestra because it may not have uncovered facts that would be important to a potential investor.

In addition, because New Orchestra will not become a public reporting company by means of a traditional underwritten initial public offering, securities or industry analysts may not provide, or may be less likely to provide, coverage of New Orchestra. Investment banks may also be less likely to agree to underwrite securities offerings on behalf of New Orchestra than they might if New Orchestra became a public reporting company by means of a traditional underwritten initial public offering, because they may be less familiar with New Orchestra as a result of more limited coverage by analysts and the media. The failure to receive research coverage or support in the market for New Orchestra Common Stock could have an adverse effect on New Orchestra’s ability to develop a liquid market for New Orchestra Common Stock.

HSAC2’s Public Shareholders may experience dilution as a consequence of, among other transactions, the issuance of common stock pursuant to the Covidien Forward Purchase Agreement, the Backstop Agreement, and as consideration in the Business Combination. Having a minority share position may reduce the influence that current shareholders have on the management of New Orchestra

It is anticipated that, upon the Closing, HSAC2’s Public Shareholders (exclusive of any Public Shares held by Medtronic, the RTW Funds, the Sponsor and HSAC2 directors and officers) will retain an ownership interest of from approximately 0% to 15.0% of New Orchestra, Sponsor and related parties will retain an ownership interest of from approximately 25.3% to 40.3% of New Orchestra, Medtronic will own approximately 15.8% of New Orchestra and the Orchestra equityholders (excluding Medtronic and the RTW Funds) will own approximately 43.9% of New Orchestra, depending on the amount of HSAC2 Ordinary Shares purchased pursuant to the Backstop Agreement and the degree to which holders of Public Shares exercise redemption rights with respect to their Public Shares and the

number of shares the RTW Funds purchase pursuant to the Backstop Agreement. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by HSAC2’s existing shareholders in New Orchestra will be different. See the section titled “Summary of the Proxy Statement/Prospectus — Ownership of the Post-Business Combination Company After the Closing.”

The above issuances of additional common stock will significantly dilute the equity interests of existing holders of HSAC2 securities and may adversely affect prevailing market prices for HSAC2’s, Public Shares. Having a minority share position may also reduce the influence that HSAC2’s current shareholders have on the management of New Orchestra.

Resales of common stock included in the Merger Consideration could depress the market price of New Orchestra’s common stock

New Orchestra will have approximately 31,637,180 shares of common stock outstanding immediately following the Business Combination, and there may be a large number of shares of New Orchestra Common Stock sold in the market following the consummation of the Business Combination or shortly thereafter. Shares held by the Public Shareholders (other than Public Shares held by the Sponsor and related parties, and Medtronic) will be freely tradable. In addition, New Orchestra will be obligated to register the resale of              shares of common stock issued as merger consideration, Insider Shares, Private Shares and any Public Shares purchased by certain stockholders of New Orchestra, and shares underlying the Private Warrants, and all these shares will become available for resale following the expiration of any applicable lock-up period. We also expect that shares of our Common Stock that are not registered for resale will become available for resale under Rule 144 once one year has elapsed from the date that we file the Current Report on Form 8-K following the Closing that includes the required Form 10 information reflecting that HSAC2 is no longer a shell company. Such sales of common stock, or the perception of such sales, may depress the market price of New Orchestra’s common stock.

Private Warrants will become exercisable for New Orchestra Common Stock, which will increase the number of shares eligible for future resale in the public market and result in dilution to HSAC2 shareholders

As part of the HSAC2 IPO, the Sponsor purchased 1,500,000 Private Warrants to purchase 1,500,000 HSAC2 Ordinary Shares. Each Private Warrant entitles the holder to purchase one HSAC2 Ordinary Share at a price of $11.50 per whole share. To the extent such warrants are exercised, additional shares of New Orchestra Common Stock will be issued, which will result in dilution to the then existing holders of New Orchestra Common Stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of New Orchestra Common Stock. The Private Warrants are not currently exercisable, but will become exercisable 30 days after the completion of the Business Combination, and will expire five years after the completion of an initial business combination such as the Business Combination, as described in this proxy statement/prospectus.

The future sales of shares by existing stockholders and future exercise of registration rights may adversely affect the market price of New Orchestra’s common stock

Sales of a substantial number of shares of New Orchestra’s common stock in the public market could occur at any time. If New Orchestra’s stockholders sell substantial amounts of New Orchestra’s common stock in the public market, or the market perceives that they intend to do so, the market price of New Orchestra Common Stock could decline.

The holders of our Insider Shares, as well as the holders of the Private Shares and Private Warrants (and underlying securities) and any shares our Initial Shareholders or their affiliates may be issued in payment of Working Capital Loans made to HSAC2, are entitled to registration rights. The holders of a majority of these securities are entitled to demand that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our consummation of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. New Orchestra will grant the same registration rights to certain Orchestra stockholders. The presence of these additional shares trading in the public market may have an adverse effect on the market price of HSAC2’s and, if the Business Combination is consummated, New Orchestra’s securities. See the section entitled “Proposal 1 — The Business Combination Proposal — Certain Related Agreements — Amended and Restated Registration Rights and Lock-Up Agreement.”

There can be no assurance that New Orchestra Common Stock issued in connection with the Business Combination will be approved for listing on Nasdaq following the Closing, or that New Orchestra will be able to comply with the Nasdaq listing standards

The New Orchestra Common Stock is expected to be listed on Nasdaq following the Business Combination. New Orchestra’s continued eligibility for listing may depend on the number of our shares that are redeemed in connection with the Business Combination. If, after the Business Combination, Nasdaq delists New Orchestra Common Stock from trading on its exchange for failure to meet its listing standards, New Orchestra and its stockholders could face significant material adverse consequences including:

•        a limited availability of market quotations for New Orchestra Common Stock;

•        a determination that New Orchestra Common Stock is a “penny stock,” which will require brokers trading in New Orchestra Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for New Orchestra Common Stock;

•        a limited amount of analyst coverage; and

•        a decreased ability to issue additional securities or obtain additional financing in the future.

Purchases in the open market or in privately negotiated transactions by HSAC2’s Initial Shareholders and officers and directors, advisors or their affiliates may make it difficult for New Orchestra to maintain the listing of New Orchestra shares on a national securities exchange following the consummation of the Business Combination

If our Initial Shareholders and officers and directors, advisors or their affiliates purchase shares in the open market or in privately negotiated transactions, the public “float” of HSAC2 Ordinary Shares and the number of beneficial holders of HSAC2 securities would both be reduced, possibly making it difficult for New Orchestra to maintain the listing or trading of New Orchestra securities on a national securities exchange following consummation of the Business Combination.

Following the Business Combination, if securities or industry analysts do not publish or cease publishing research or reports about New Orchestra, its business, or its market, or if they change their recommendations regarding New Orchestra’s securities adversely, the price and trading volume of New Orchestra securities could decline

The trading market for New Orchestra securities will be influenced by the research and reports that industry or securities analysts may publish about New Orchestra, its business, its market, or its competitors. Securities and industry analysts do not currently publish research on us, and may never publish research on New Orchestra. If no securities or industry analysts commence coverage of New Orchestra, the price of New Orchestra stock and trading volume would likely be negatively impacted. If any of the analysts who cover New Orchestra change their recommendation regarding New Orchestra stock adversely, or provide more favorable relative recommendations about New Orchestra’s competitors, the price of New Orchestra securities would likely decline. If any analyst who may cover New Orchestra were to cease coverage of New Orchestra or fail to regularly publish reports on it, New Orchestra could lose visibility in the financial markets, which could cause its stock price or trading volume to decline.

Subsequent to the consummation of the Business Combination, New Orchestra may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and stock price, which could cause you to lose some or all of your investment

Although HSAC2 has conducted due diligence on Orchestra, HSAC2 cannot assure you that this diligence revealed all material issues that may be present in Orchestra’s business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of HSAC2’s and Orchestra’s control will not later arise. As a result, New Orchestra may be forced to later write-down or write-off assets, restructure its operations, or incur impairment or other charges that could result in losses. Even if HSAC2’s due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with HSAC2’s risk analysis. Even though these charges may be non-cash items and may not have an immediate impact on liquidity, the fact that New Orchestra reports charges of this nature could contribute to negative market perceptions about New Orchestra securities. In addition, charges of this nature may cause New Orchestra to be unable to obtain future financing on favorable terms or at all.

Because New Orchestra does not anticipate paying any cash dividends in the foreseeable future, capital appreciation, if any, would be your sole source of gain

New Orchestra currently anticipates that it will retain future earnings for the development, operation and expansion of its business and does not anticipate declaring or paying any cash dividends for the foreseeable future. Any future determination to pay dividends will be made at the discretion of New Orchestra’s board of directors, subject to applicable laws. It will depend on a number of factors, including New Orchestra’s financial condition, results of operations, capital requirements, contractual, legal, tax and regulatory restrictions, general business conditions, and other factors that the board of directors may deem relevant. In addition, the ability to pay cash dividends may be restricted by the terms of debt financing arrangements, as any future debt financing arrangement likely will contain terms restricting or limiting the amount of dividends that may be declared or paid on New Orchestra’s securities. As a result, capital appreciation, if any, of New Orchestra’s securities would be your sole source of gain on an investment in such securities for the foreseeable future.

If the Business Combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of New Orchestra securities may decline

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of New Orchestra securities may decline. The market values of New Orchestra Common Stock at the time of the consummation of the Business Combination and thereafter may vary significantly from the prices of HSAC2 Ordinary Shares on the date the Merger Agreement was executed, the date of this proxy statement/prospectus, or the date on which HSAC2’s shareholders and Orchestra’s stockholders vote on the Business Combination.

It may be more difficult to compare New Orchestra’s performance to that of other public companies and New Orchestra’s securities may be less attractive to investors if New Orchestra takes advantage of exemptions from disclosure requirements that are available to an “emerging growth company”

New Orchestra will qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, New Orchestra will be eligible for certain exemptions available to emerging growth companies from various reporting requirements applicable to other public companies that are not emerging growth companies. New Orchestra intends to take advantage of those exemptions for as long as it continues to be an emerging growth company. New Orchestra will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of New Orchestra Common Stock that is held by non-affiliates exceeds $700 million as of June 30 of that fiscal year, (ii) the last day of the fiscal year in which it has total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which it has issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) the last day of the fiscal year following the fifth anniversary of the date of the first sale of HSAC2 Ordinary Shares in the IPO.

The exemptions available to emerging growth companies include: (a) exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, (b) exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (c) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as New Orchestra is an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. HSAC2 has elected not to opt out of such extended transition period and, therefore, New Orchestra may not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. This may make it more difficult to compare New Orchestra’s performance to that of other public companies which could make New Orchestra’s securities less attractive, which may result in a less active and more volatile trading market for New Orchestra securities.

New Orchestra may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002, which could have a material adverse effect on its business

Orchestra is currently not subject to Section 404 of the Sarbanes-Oxley Act. However, following the consummation of the Business Combination, New Orchestra will be required to provide management’s attestation on its internal control over financial reporting. The standards required for a public company under Section 404 of the Sarbanes-Oxley Act

are significantly more stringent than those required of Orchestra as a privately-held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to New Orchestra after the Business Combination. If New Orchestra is not able to implement the additional requirements of Section 404 in a timely manner or with adequate compliance, New Orchestra may not be able to assess whether its internal control over financial reporting are effective, which may subject it to adverse regulatory consequences and could harm investor confidence and lead to a decrease in the market price of its securities. New Orchestra could become subject to investigations by Nasdaq, the SEC or other regulatory authorities, which could require additional financial and management resources.

Following the consummation of the Business Combination, New Orchestra will incur significant increased expenses and administrative burdens as a public company, which could negatively impact its business, financial condition and results of operations

Following the consummation of the Business Combination, New Orchestra will face increased legal, accounting, administrative and other costs and expenses as a public company that Orchestra does not incur as a private company. These increased costs will require New Orchestra to divert a significant amount of money and management attention that could otherwise be used to expand the business and achieve strategic objectives.

There are significant financial costs and expenses for complying with the Sarbanes-Oxley Act, including the requirements of Section 404, as well as rules and regulations of the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations thereunder, rules and regulations of the Public Company Accounting Oversight Board (“PCAOB”) and the securities exchanges. Compliance with public company requirements will increase costs and make regulated activities more time-consuming. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs and administrative burdens. In order to comply with these requirements, New Orchestra will need to carry out activities that Orchestra has not done previously. For example, New Orchestra will create and adopt new internal controls and disclosure controls and procedures, all of which will increase expenses and administrative burdens. In addition, New Orchestra will have new expenses associated with SEC reporting requirements.

Furthermore, if any issues in complying with those requirements are identified (for example, if the auditors identify another material weakness or significant deficiency in the internal control over financial reporting), New Orchestra could incur further additional costs to rectify those issues. It may also be more expensive to obtain director and officer liability insurance. Risks associated with New Orchestra’s status as a public company may make it more difficult to attract and retain qualified persons to serve on New Orchestra’s board of directors or as executive officers. The additional reporting and other obligations imposed by these rules and regulations will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs will require New Orchestra to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic objectives.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect New Orchestra’s business, investments and results of operations

New Orchestra will be subject to laws and regulations enacted by national, regional and local governments. In particular, New Orchestra will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on New Orchestra’s business and results of operations.

EXTRAORDINARY GENERAL MEETING OF HSAC2 SHAREHOLDERS

General

HSAC2 is furnishing this proxy statement/prospectus to its shareholders as part of the solicitation of proxies by the HSAC2 Board for use at the Shareholder Meeting to be held on            , 2023, and at any adjournment or postponement thereof. This proxy statement/prospectus provides HSAC2’s shareholders with information they need to know to be able to vote or direct their vote to be cast at the Shareholder Meeting.

Date, Time and Place

The Shareholder Meeting will be held on            , 2023, at             Eastern Time, at the offices of            at            , and via live webcast at the following address: https://          , or such other date, time and place to which such meeting may be adjourned or postponed, for the purposes set forth in the accompanying notice.

Voting Power; Record Date

You will be entitled to vote or direct votes to be cast at the Shareholder Meeting if you owned HSAC2 Ordinary Shares at the close of business on             , 2022, which is the Record Date. You are entitled to one vote for each HSAC2 Ordinary Share that you owned as of the close of business on the Record Date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the Record Date, there were 11,212,117 HSAC2 Ordinary Shares outstanding, of which 6,762,117 are Public Shares (including 30,000 shares held by our officers), 4,000,000 are Insider Shares and 450,000 are Private Shares held by the Initial Shareholders.

Vote of the Sponsor, Directors and Officers

In connection with the HSAC2 IPO, HSAC2 entered into agreements with each of its Sponsor, directors and officers pursuant to which each agreed to vote any HSAC2 Ordinary Shares they owned in favor of the Business Combination Proposal and for all other proposals presented at the Shareholder Meeting. However, any HSAC Ordinary Shares acquired outside of the redemption offer set forth in this proxy statement/prospectus, including the 1,000,000 Forward Purchase Shares purchased by the RTW Funds and any Backstop Purchases, will not be voted in favor of approving the Business Combination Proposal and, further, will not carry redemption rights. Therefore, while the Insider Shares, Private Shares and 30,000 Public Shares held by our officers will be voted in favor of the Business Combination, the 1,000,000 Forward Purchase Shares purchased by the RTW Funds and any Backstop Purchases will not. These agreements apply to the Insider Shares, Private Shares and 30,000 Public Shares held by our officers. Any additional HSAC2 Ordinary Shares that they acquire, including the 1,000,000 Forward Purchase Shares and any Backstop Purchases, will not be voted in favor of approving the Business Combination and will not carry redemption rights. See the section titled “Proposal 1 — The Business Combination Proposal — The Business Combination and the Merger Agreement — The General Structure of the Business Combination.”

HSAC2’s Sponsor, directors and officers agreed, at the time of the IPO, in order to induce the underwriters of the IPO to enter into the underwriting agreement and for no additional separate consideration, to waive any redemption rights, including with respect to HSAC2 Ordinary Shares issued or purchased in the HSAC2 IPO or in the aftermarket, in connection with the Business Combination. The Insider Shares and the Private Warrants held by the Sponsor have no redemption rights upon HSAC2’s liquidation and will be worthless if no business combination is effected by HSAC2 by the Extension Date.

Quorum and Required Vote for Proposals

A quorum of HSAC2 shareholders is necessary to hold a valid meeting. A quorum will be present at the Shareholder Meeting if the holders a majority of the issued shares entitled to vote at the Shareholder Meeting are represented in person or by proxy. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not treated as votes cast and will have no effect on the Proposals.

The Business Combination Proposal, the Advisory Governance Proposals, the Nasdaq Proposal, the Director Election Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal require the approval of an ordinary resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of the HSAC2 Ordinary Shares

who, being present in person (including virtually) or represented by proxy and entitled to vote at the Shareholder Meeting, vote at the Shareholder Meeting. The Advisory Governance Proposals are voted upon on a non-binding advisory basis only. The Domestication Proposal, the Charter Approval Proposal and the Bylaws Approval Proposal require the approval of a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds of the HSAC2 Ordinary Shares who, being present in person (including virtually) or represented by proxy and entitled to vote at the Shareholder Meeting, vote at the Shareholder Meeting.

The closing is conditioned on the approval of the Proposals (other than the Advisory Governance Proposals and the Adjournment Proposal) at the Shareholder Meeting. Each of the Condition Precedent Proposals is conditioned on the approval and adoption of each of the other Condition Precedent Proposals.

It is important for you to note that, in the event that any of the Condition Precedent Proposals is not approved, HSAC2 will not consummate the Business Combination. If HSAC2 does not consummate the Business Combination and fails to complete an initial business combination by the Extension Date, HSAC2 will be required to dissolve and liquidate, unless we obtain shareholder approval to amend our Existing Charter to further extend the date by which the Business Combination may be consummated.

Abstentions and Broker Non-Votes

Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not treated as votes cast and will have no effect on the Proposals. A shareholder’s failure to vote by proxy or to vote in person at the Shareholder Meeting will not be counted towards the number of HSAC2 Ordinary Shares required to validly establish a quorum, and if a valid quorum is otherwise established, will have no effect on the outcome of any vote on any of the Proposals.

Recommendation of the Board

The Board has unanimously determined that each of the Proposals is fair to and in the best interests of HSAC2 and its shareholders, and has unanimously approved such Proposals. The Board unanimously recommends that shareholders:

•        vote “FOR” the Business Combination Proposal;

•        vote “FOR” the Domestication Proposal;

•        vote “FOR” the Charter Approval Proposal;

•        vote “FOR” the Bylaws Approval Proposal;

•        vote “FOR” the Advisory Governance Proposals;

•        vote “FOR” the Nasdaq Proposal;

•        vote “FOR” each of the nominees set forth in the Director Election Proposal;

•        vote “FOR” the Equity Incentive Plan Proposal; and

•        vote “FOR” the Adjournment Proposal, if it is presented to the meeting.

Voting Your Shares

Each HSAC2 Ordinary Share that you own in your name entitles you to one vote. If you are a registered owner of your shares, there are two ways to vote your HSAC2 Ordinary Shares at the Shareholder Meeting:

•        You Can Vote by Signing and Returning the Enclosed Proxy Card.    If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted as recommended by the Board “FOR” each of the Business Combination Proposal, the Domestication Proposal, the Charter Approval Proposal, the Bylaws Approval Proposal, the Advisory Governance Proposals, the Nasdaq Proposal, each of the nominees set forth in the Director Election Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal (if presented). Votes received after a matter has been voted upon at the Shareholder Meeting will not be counted.

•        You Can Attend the Shareholder Meeting Online and Vote Through the Internet.    You will be able to attend the Shareholder Meeting online and vote during the meeting by visiting https://             and entering the control number included on your proxy card or on the instructions that accompanied your proxy materials, as applicable.

If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. If you wish to attend the Shareholder Meeting and vote in person and your shares are held in “street name,” you must obtain a legal proxy from your broker, bank or nominee. That is the only way HSAC2 can be sure that the broker, bank or nominee has not already voted your shares.

Revoking Your Proxy

If you are a registered owner of your shares and you give a proxy, you may change or revoke it at any time before it is exercised by doing any one of the following:

•        you may send another proxy card with a later date;

•        you may notify HSAC2’s secretary in writing before the Shareholder Meeting that you have revoked your proxy; or

•        you may attend the Shareholder Meeting, revoke your proxy, and vote through the Internet as described above.

If your shares are held in “street name” or are in a margin or similar account, you should contact your broker for information on how to change or revoke your voting instructions.

Who Can Answer Your Questions About Voting Your Shares

If you are a shareholder and have any questions about how to vote or direct a vote in respect of your HSAC2 Ordinary Shares, you may contact Morrow Sodali, HSAC2’s proxy solicitor, at:

Morrow Sodali LLC
Toll-Free (800) 662-5200 or Collect (203) 658-9400
Email: HSAQ.info@investor.morrowsodali.com

No Additional Matters May Be Presented at the Shareholder Meeting

The Shareholder Meeting has been called only to consider the approval of the Business Combination Proposal, the Domestication Proposal, the Charter Approval Proposal, the Bylaws Approval Proposal, the Advisory Governance Proposals, the Nasdaq Proposal, the Director Election Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal. Under the laws of the Cayman Islands, only business stated in the notice of an extraordinary general meeting may be transacted at such meeting.

Redemption Rights

Pursuant to the Existing Charter, holders of Public Shares may elect to have their shares converted into an amount equal to (1) the number of Public Shares being converted by such public holder divided by the total number of Public Shares multiplied by (2) the amount per share then in the Trust Account (initially $10.00 per HSAC2 Ordinary Share), which includes the deferred underwriting discounts and commissions, plus a pro rata portion of any interest earned on the funds held in the Trust Account less any amounts necessary to pay our taxes.

As of            , 2022, based on funds in the Trust Account of approximately $            , this would have amounted to approximately $             per share (exclusive of             ). If a holder exercises its redemption rights, then such holder will be exchanging its HSAC2 Ordinary Shares for cash and will no longer own shares of New Orchestra. Such a holder will be entitled to receive cash for its Public Shares only if it properly demands redemption and tenders its shares (either physically or electronically, including share certificates (if any) and other redemption forms) to HSAC2’s transfer agent prior to the Shareholder Meeting. See the section titled, “Extraordinary General Meeting of HSAC2 Shareholders — Redemption Rights.”

In order to exercise your redemption rights, you must:

•        check the box on the enclosed proxy card to elect redemption;

•        check the box on the enclosed proxy card marked “Shareholder Certification” if you are not acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other shareholder with respect to HSAC2 Ordinary Shares;

•        prior to 5:00 PM Eastern time on           , 2023, tender your shares physically or electronically and submit a request in writing that we redeem your Public Shares for cash to Continental Stock Transfer & Trust Company, HSAC2’s transfer agent, at the following address:

Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, NY 10004
Attn: Mark Zimkind
E-mail: mzimkind@continentalstock.com

•        deliver your Public Shares (either physically or electronically, including share certificates (if any) and other redemption forms) through DTC to HSAC2’s transfer agent before the Shareholder Meeting. Shareholders seeking to exercise their redemption rights and opting to tender or deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect tendering or delivery. It is HSAC2’s understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, HSAC2 does not have any control over this process and it may take longer than two weeks. Shareholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically. If you do not submit a written request and tender or deliver your Public Shares (either physically or electronically, including share certificates (if any) and other redemption forms) as described above, your shares will not be redeemed.

Any request for redemption, once made by a holder of Public Shares, may not be withdrawn once submitted to HSAC2 unless the Board of Directors of HSAC2 determines (in its sole discretion) to permit the withdrawal of such redemption request (which they may do in whole or in part). If you tendered or delivered your shares (either physically or electronically, including share certificates (if any) and other redemption forms) for redemption to HSAC2’s transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that HSAC2’s transfer agent return the shares (physically or electronically). You may make such request by contacting HSAC2’s transfer agent at the phone number or address listed above.

Prior to exercising redemption rights, shareholders should verify the market price of the HSAC2 Ordinary Shares as they may receive higher proceeds from the sale of their HSAC2 Ordinary Shares in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price. We cannot assure you that you will be able to sell your HSAC2 Ordinary Shares in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in the HSAC2 Ordinary Shares when you wish to sell your shares.

If you exercise your redemption rights, your HSAC2 Ordinary Shares will cease to be outstanding immediately prior to the Business Combination and will only represent the right to receive a pro rata share of the aggregate amount on deposit in the Trust Account. You will no longer own those shares and will have no right to participate in, or have any interest in, the future growth of New Orchestra, if any. You will be entitled to receive cash for these shares only if you properly and timely demand redemption.

If the Business Combination is not approved and HSAC2 does not consummate an initial business combination by the Extension Date, HSAC2 will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to the Public Shareholders and the Private Warrants will expire worthless, unless we amend our Existing Charter to extend the date by which the Business Combination may be consummated.

Dissenters’ Rights and Appraisal Rights

There are no appraisal rights available to holders of HSAC2 Ordinary Shares or the Private Warrants in connection with the Domestication Proposal under the DGCL.

As a matter of Cayman Islands law, dissenters’ rights only apply to statutory mergers where the Cayman Islands company is a constituent party thereto.

Proxy Solicitation

HSAC2 is soliciting proxies on behalf of the HSAC2 Board. This solicitation is being made by mail but also may be made by telephone, by facsimile, on the Internet or in person. HSAC2 and its directors, officers and employees may also solicit proxies in person. HSAC2 will file with the SEC all scripts and other electronic communications as proxy soliciting materials. HSAC2 will bear the cost of the solicitation.

HSAC2 has hired Morrow Sodali to assist in the proxy solicitation process. HSAC2 will pay that firm a fee of $22,500, plus disbursements and exclusive of fees for additionally contracted services.

HSAC2 will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. HSAC2 will reimburse them for their reasonable expenses.

Proposals to be Considered by HSAC2 Shareholders

PROPOSAL 1
THE BUSINESS COMBINATION PROPOSAL

General

Holders of HSAC2 Ordinary Shares are being asked to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the Business Combination. HSAC2 shareholders should read carefully this proxy statement/prospectus in its entirety for more detailed information concerning the Merger Agreement, which is attached as Annex A-1, Annex A-2 and Annex A-3 to this proxy statement/prospectus. Please see the section entitled “— The Merger Agreement” below, for additional information and a summary of certain terms of the Merger Agreement. You are urged to read carefully the Merger Agreement in its entirety before voting on this proposal.

HSAC2 may consummate the Business Combination only if all of the Condition Precedent Proposals are approved by the HSAC2 shareholders in person (including virtually) or represented by proxy and entitled to vote thereon and who vote at the Shareholder Meeting or any adjournment or postponement thereof.

Background of the Business Combination

The terms of the Business Combination are the result of arm’s-length negotiations between the representatives of HSAC2 and Orchestra. The following is a brief description of the background of these negotiations and the resulting Business Combination, and does not purport to list every communication among representatives of HSAC2, Orchestra or other parties.

HSAC2 is a blank check company incorporated on May 25, 2020 and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. The Business Combination with Orchestra is the result of an active search for a potential business combination transaction utilizing the network and investing and transaction experience of HSAC2’s management team and the Board. Although HSAC2’s efforts to identify a prospective target business were not to be limited to any particular industry or geographic location, HSAC2 intended to focus on businesses in the healthcare and healthcare-related industries in North America or Europe.

On August 6, 2020, HSAC2 consummated its IPO from which it received gross proceeds of $160.0 million (including full exercise of the underwriters’ over-allotment option, but before underwriting discounts and commissions and offering expenses). Simultaneously with the consummation of the IPO, HSAC2 consummated a private placement (the “Private Placement”) in which it sold (i) the 450,000 Private Shares at $10.00 per Private Share (for a total purchase price of $4.5 million) and (ii) 1,500,000 Private Warrants to the Sponsor at a price of $1.00 per Private Warrant (for a total purchase price of $1.5 million), generating total proceeds of $6.0 million. Prior to the IPO, neither HSAC2 nor anyone on its behalf identified any specific combination or initiated or engaged in any substantive discussions, formal or otherwise, with any business combination target with respect to a business combination with HSAC2.

Following the completion of the IPO, HSAC2’s officers and directors commenced an active, targeted search for an initial set of potential business combination targets by leveraging its officers’ and directors’ and Sponsor affiliates’ networks of investment bankers, private equity firms and hedge funds, as well as numerous other business relationships. In addition, HSAC2 was contacted by a number of individuals and entities with respect to business combination opportunities. HSAC2’s due diligence, evaluation and analysis involved, among other things, diligence with respect to, and evaluating and analyzing, each target’s product candidate pipelines, other potential product or service offerings, technology, market potential and financial information, in each case, based on publicly available information and other market research available to the management team, and the management team’s existing knowledge of the potential targets as a result of existing relationships and networks. In the case of Orchestra, HSAC2 utilized its knowledge of the medical technology industry and Orchestra’s business, technologies and potential product offerings as a result of an approximately 1.6% ownership stake in Orchestra (on a fully diluted basis) held by the RTW Funds, which was purchased in June 2019 in connection with Orchestra’s Series B-1 preferred stock financing. No representatives from RTW were involved with or participated in any meetings, discussions, votes or other actions of the Orchestra board of directors (the “Orchestra Board”) (or any committees thereof) relating to the Business Combination prior to the

IPO. No information regarding the Business Combination was provided to passive investors of Orchestra prior to Orchestra’s private placement memorandum dated January 30, 2022 for its Series D preferred equity financing (the “Series D Financing”).

The focus of HSAC2’s targeted search was for potential business combination targets that possessed under-researched and underappreciated assets poised for significant growth once adequately capitalized. HSAC2’s directors and officers believed, based on their experience, that they should focus on businesses that could satisfy all (or a portion of) certain key acquisition criteria for a business combination target, including:

•        Scientific or other competitive market advantages;

•        Readiness to be a public company, with strong management, corporate governance and reporting policies in place;

•        Likelihood to be well-received by public investors and have good access to public capital markets;

•        Significant embedded and/or underexploited growth opportunities that the HSAC2 management team could uniquely identify and monetize;

•        Unrecognized value or other characteristics misevaluated by the market; and

•        Willingness to offer attractive risk-adjusted equity returns for our shareholders.

During the search process, from August 6, 2020 to January 20, 2022, the date on which HSAC2 entered into a non-binding letter of intent with Orchestra, HSAC2’s management team and representatives of HSAC2:

•        Completed reviews of approximately 38 companies (including Orchestra) that HSAC2’s management team determined met one or more acquisition criteria;

•        Entered into non-disclosure and confidentiality agreements with eleven companies (including Orchestra) that HSAC2’s management team determined to be strong potential acquisition targets, in order to facilitate due diligence review of confidential materials from these companies; and

•        Exchanged draft term sheets concerning a potential business combination with five potential targets (including Orchestra) but executed only one term sheet (with Orchestra).

The four potential targets other than Orchestra with which we exchanged term sheets included:

•        Candidate One: Beginning in August 2020, representatives of HSAC2 held multiple teleconferences with the management of an oncology focused biotechnology company (“Candidate One”), which was seeking private round fundraising before a potential initial public offering. Subsequent to HSAC2’s IPO, Candidate One had emerged as a priority target for a potential business combination. In November 2020, Candidate One and HSAC2’s representatives held a meeting to discuss the terms of a potential business combination and, soon after, HSAC2 delivered an initial term sheet to Candidate One. In late November 2020, Candidate One shared a redacted letter of intent it had received from another SPAC looking for a business combination target that was at a valuation that HSAC2’s management believed was overvalued relative to the status of Candidate One’s clinical risk profile. Based on the disparity in valuation expectations between Candidate One and HSAC2’s management, HSAC2’s management decided to pass on the opportunity.

•        Candidate Two: Beginning in January 2021, representatives of HSAC2 held multiple teleconferences with the management of a company known to the representatives of HSAC2 as an innovative oncology focused biotechnology company (“Candidate Two”). Subsequent to HSAC’s IPO, Candidate Two had emerged as a priority target for a potential business combination. Representatives of HSAC2 held teleconferences with management and representatives of Candidate Two that focused on diligence, valuation, pro forma ownership by Candidate Two’s management team and other structural items. On February 17, 2021 representatives of HSAC2 delivered a preliminary term sheet to Candidate Two. After additional discussions with Candidate Two, HSAC2’s management determined to end its pursuit of Candidate Two as a potential target because Candidate Two’s valuation expectations relative to HSAC2 management’s view of Candidate Two’s business prospects would be too wide to negotiate.

•        Candidate Three: In March 2021 representatives of HSAC2 held a teleconference with the management of an innovative medical technology company (“Candidate Three”) to discuss a potential business combination with HSAC2 and an understanding of Candidate Three. In March and April 2021 representatives of HSAC2 held multiple telephonic calls with Candidate Three to determine Candidate Three’s financing needs. On April 15, 2021, HSAC2 submitted a draft letter of intent to Candidate Three. After further discussions, HSAC2’s management determined that the pro forma ownership structure proposed by HSAC2 was not acceptable to Candidate Three as indicated in its mark-up of the letter of intent. Accordingly, representatives of HSAC2 communicated to Candidate Three that it was no longer interested in a potential business combination with the Candidate Three.

•        Candidate Four: Beginning in October 2021, representatives of HSAC2 held virtual and in-person meetings with management and representatives of a medical device and digital health technology company (“Candidate Four”). Discussions with Candidate Four included due diligence and the potential terms for a business combination. HSAC2 and Candidate Four exchanged multiple drafts of a preliminary term sheet; however, in the meantime, discussions between representatives of HSAC2 and Orchestra accelerated and, as a result, HSAC2 ended substantive discussions with Candidate Four on January 11, 2022.

Negotiations with Orchestra

On November 1, 2021, Dr. Yalamanchi, Executive Vice President and Chief Financial Officer of HSAC2, had a telephonic meeting with David Hochman, Chairman and Chief Executive Officer of Orchestra, to discuss certain matters related to Orchestra’s business unrelated to a business combination with HSAC2. At the meeting, Mr. Hochman introduced that Orchestra was exploring a business partnership with Medtronic relating to Orchestra’s BackBeat CNT technology in combination with a potential private funding round that would include an equity investment by Medtronic. On September 23, 2021, RTW and Orchestra entered into a non-disclosure agreement in connection with the negotiations. As such, discussions regarding Medtronic were confidential. Dr. Yalamanchi indicated to Mr. Hochman that HSAC2 would be interested in exploring a potential business combination between HSAC2 and Orchestra if a collaboration agreement was executed with Medtronic. During this meeting, the parties did not discuss the terms of a potential business combination or resolve to take any subsequent steps with respect to a potential business combination between HSAC2 and Orchestra. Following this meeting, Orchestra continued to explore other potential strategic financings (including an initial public offering and a private preferred stock financing round) and HSAC2 continued to explore other potential business combination targets.

On November 6, 2021, representatives of HSAC2 were provided access to Orchestra’s electronic data room.

On November 8, 2021, representatives of HSAC2, Mr. Hochman, and Orchestra’s Chief Operating Officer, Darren Sherman, attended an introductory meeting where Mr. Hochman and Mr. Sherman presented Orchestra’s history, current business and future vision to HSAC2, and answered questions from HSAC2’s representatives. Following this meeting, the parties agreed to engage in further discussions.

On November 16, 2021, representatives of HSAC2, Mr. Hochman, representatives of Paul Hastings LLP (“Paul Hastings”), counsel to Orchestra, and representatives of Jefferies LLC (“Jefferies”), lead financial and capital markets advisor to Orchestra, held a telephonic meeting and discussed how to avoid the transmittal of material non-public information related to Orchestra’s potential collaboration with Medtronic. At the meeting, it was discussed how a private financing round was most appropriate to fund the development activities and satisfy a potential minimum funding requirement in connection with a potential collaboration between Orchestra and Medtronic (the “Medtronic Collaboration”) that Orchestra was negotiating.

On November 17, 2021, representatives of HSAC2 held a telephonic meeting with Mr. Hochman and Mr. Sherman. At the meeting, representatives of HSAC2 and Orchestra discussed Orchestra’s business, strategic prospects, including the ongoing negotiations with Medtronic regarding the Medtronic Collaboration, as well as certain key aspects of a potential business combination with HSAC2. At the end of the meeting, representatives of both HSAC2 and Orchestra expressed interest in further exploring a potential business combination. Specifically, they discussed the benefits of a potential business combination between HSAC2 and Orchestra, which included: (i) providing Orchestra with capital to continue its research and development (“R&D”) efforts and further develop its platform, (ii) the benefits to being a public company, including having additional sources of capital available through the public equity markets if needed, and (iii) the less dilutive nature of a potential business combination with HSAC2 as compared to potential

combinations with other special purpose acquisition company (“SPAC”) counterparties, given the size of HSAC2’s Trust Account, HSAC2’s not having offered any warrants to public investors in connection with its IPO, and the strength of HSAC2’s investor base.

On November 29, 2021, HSAC2 and Orchestra executed a non-disclosure and confidentiality agreement, which contained, among other provisions, customary non-disclosure and non-use provisions, and a customary trust account waiver pursuant to which Orchestra waived any right, title, interest or claim to the Trust Account and agreed not to seek recourse against the Trust Account for any reason.

On November 29, 2021, Mr. Hochman called Dr. Yalamanchi and informed him that Orchestra and Medtronic had executed a term sheet regarding the Medtronic Collaboration (the “Medtronic Term Sheet”), which related to Orchestra’s BackBeat CNT technology. Additionally, the Medtronic Term Sheet included provisions for a $40 million equity investment in Orchestra by Medtronic (the “Medtronic Investment”) contingent upon a new financing round by Orchestra of $100 million inclusive of the Medtronic Investment. Subsequently, Mr. Hochman emailed a copy of the Medtronic Term Sheet to Dr. Yalamanchi.

On December 2, 2021, representatives of HSAC2 held a telephonic meeting with Mr. Hochman and Mr. Sherman during which Mr. Hochman and Mr. Sherman provided an overview of the terms of the Medtronic Term Sheet and the next steps for Orchestra to consummate the Medtronic Collaboration. At the meeting, the HSAC2 representatives, Mr. Hochman and Mr. Sherman discussed Orchestra’s capital needs in connection with the Medtronic Collaboration. In particular, Orchestra communicated that it would need to conduct a private financing round to raise a total of at least $100 million to enable a closing of the Medtronic Collaboration and the Medtronic Investment and fund development work for the collaboration and other Orchestra operating expenses. Orchestra communicated its intent to seek subscriptions for the Series D Financing during which it would confidentially communicate the execution of the Medtronic Term Sheet to existing and prospective investors. It also communicated its longer-term strategic financing plan, consisting of either an initial public offering or a business combination with a SPAC following the Series D Financing. Mr. Hochman and Mr. Sherman indicated that Orchestra intended to solicit existing Orchestra stockholders, offering an estimated 10% discount to existing investors if they subscribed early to the Series D Financing, and to perform targeted outreach to new investors who did not currently own stock in Orchestra. The valuation of Orchestra was not discussed at this time. The representatives of Orchestra indicated that they planned to initiate the Series D Financing process in January 2022. Representatives of HSAC2 indicated that they were encouraged by the progress of the Medtronic Term Sheet and, if closed, the Medtronic Collaboration would be a compelling catalyst to support a business combination with HSAC2.

On December 6, 2021, representatives of HSAC2 held a preliminary diligence call with Mr. Hochman and Mr. Sherman to discuss the Medtronic Collaboration in greater detail, including the market potential if the BackBeat CNT product candidate were integrated into Medtronic’s cardiac pacemaker device (the “Combined Product”), assuming marketing approval, clinical data on BackBeat CNT generated to date, the Combined Product’s potential impact on patients, the likelihood of physicians’ prescribing the Combined Product, next steps for development of the Combined Product, including clinical and regulatory development strategy, and certain other features of the Medtronic Collaboration.

On December 7, 2021, representatives of HSAC2 provided to Orchestra an initial draft of a non-binding term sheet (the “Business Combination Term Sheet”), which included the following terms:

•        A valuation of Orchestra at $228 million on a fully diluted enterprise value immediately prior to the closing of a business combination with HSAC2 (the “BC Closing”) excluding fees;

•        The issuance of 6 million additional shares of common stock of HSAC2 to former Orchestra stockholders, vesting upon achievement of the following milestones at any time prior to the fifth anniversary of the BC Closing: (i) 50% of such shares vesting upon achievement of a volume-weighted average price for a 20-day trading period of the common stock of the post-combination company of $17.50, and (ii) the remaining 50% vesting upon achievement of a volume-weighted average price for a 20-day trading period of the common stock of the post-combination company of $31.50 (the “Company Earnout”);

•        A right of HSAC2 to appoint at least one person to the New Orchestra Board;

•        HSAC2 having cash of no less than $50 million immediately prior to the BC Closing.

Between December 8, 2021 and December 21, 2021, representatives of HSAC2 and Orchestra held multiple telephonic and teleconference meetings to further discuss and explore a potential business combination between HSAC2 and Orchestra and the terms of such a business combination. As part of these discussions, Mr. Hochman indicated that Orchestra would be unlikely to pursue a business combination with HSAC2 unless the equity valuation in the business combination was attractive relative to the valuation of Orchestra’s previous private financing rounds.

On December 21, 2021, Orchestra delivered a revised draft of the Business Combination Term Sheet to HSAC2, which included the following changes:

•        Enterprise value of $435 million on a fully diluted enterprise value immediately prior to the BC Closing, excluding fees;

•        $5 million investment in Orchestra’s Series D Financing by the RTW Funds;

•        An investment by the Sponsor of $25 million in a private placement, provided that some or all of this amount may be used to purchase shares in HSAC2 in open-market transactions subject to agreement by the parties;

•        A mechanism for increasing Orchestra’s equity valuation by up to $50 million on a dollar-for-dollar basis with funds in excess of $100 million raised in the Series D Financing;

•        Proposed forfeiture by the Sponsor of 50% of its Insider Shares and Private Warrants (the “Sponsor Equity”) if cash remaining in the Trust Account were less than $100 million after the BC Closing and reduced levels of forfeiture, on a linear basis, for amounts between $100 million and $50 million; the remaining 50% of the Sponsor Equity also subject to forfeiture in one-third increments unless New Orchestra’s share price were to exceed 20-day volume-weighted average share prices of $12.50 per share, $15.00 per share and $17.50 per share over a five-year period; and

•        Removal of the Company Earnout provision.

Included with the December 21, 2021 draft of the Business Combination Term Sheet counterproposal was a spreadsheet that included a capitalization model, which contemplated pricing the business combination at $13.75 per share, which represented a 10% premium to the intended Series D Financing.

Between December 23, 2021 and December 28, 2021, representatives of HSAC2 and Orchestra held multiple telephonic meetings to further clarify descriptions in the Business Combination Term Sheet and discuss the terms of the proposed business combination, including valuation of the pro forma combined company, valuation step-up relative to a contemplated Series D Financing, certain concessions by the Sponsor, sizing of the Series D Financing, board seats, earnouts, and restrictions on selling shares in New Orchestra.

On December 29, 2021 and December 30, 2021, representatives of HSAC2 exchanged drafts of the Business Combination Term Sheet with Orchestra, which included the following changes:

•        Enterprise value of $310 million on a fully diluted enterprise value immediately prior to the BC Closing excluding fees;

•        Removal of all adjustments to the Sponsor Equity; and

•        Reinsertion of the Company Earnout provision.

On January 11, 2022, representatives of Orchestra sent a revised draft of the Business Combination Term Sheet to representatives of HSAC2, which included the following changes:

•        An enterprise value of $400 million on a fully diluted basis immediately prior to the BC Closing, using a treasury stock method calculation, excluding fees;

•        A valuation step-up to Orchestra’s Series D Financing of 15% for the contemplated business combination; and

•        $25 million of investment by the Sponsor to be invested in a private placement before or simultaneously with the potential business combination.

Between January 12, 2022 and January 17, 2022 representatives of HSAC2 and Orchestra held multiple telephonic calls and exchanged multiple versions of the capitalization model. During these calls, the parties discussed a number of topics, including Orchestra’s valuation, Orchestra’s capitalization, and how to allocate the Sponsor’s investment between a private placement and a forward purchase arrangement.

On January 17, 2022, Orchestra sent a revised draft of the Business Combination Term Sheet to HSAC2, which included the following changes:

•        An enterprise value of $347 million on a fully diluted enterprise value immediately prior to the BC Closing, using a treasury stock method calculation, excluding fees;

•        A $15 million investment by the Sponsor, to be invested in a private placement before or simultaneously with the proposed business combination and $10 million to be invested either in a private placement or open-market purchases before or after the business combination; and

•        Reinsertion of a modified Company Earnout provision specifying the issuance of 8 million additional shares of New Orchestra Common Stock (the “Proposed Earn-Out Shares”) to former Orchestra shareholders on achievement of a $17.50 volume-weighted average price of New Orchestra Common Stock over a 20-day trading period up to the 5th anniversary of the BC Closing.

Between January 18, 2022 and January 20, 2022, representatives of HSAC2 and Orchestra exchanged multiple drafts of the Business Combination Term Sheet refining legal language and clarifying terms.

On January 20, 2022, after extensive arm’s-length negotiations between representatives and advisors of the respective parties, HSAC2 and Orchestra agreed on, and executed, the non-binding Business Combination Term Sheet, which provided for, among other things:

•        a valuation of Orchestra based on an implied fully diluted enterprise value of $347 million immediately prior to the BC Closing, using a treasury stock method calculation, excluding fees;

•        a $15 million investment by the Sponsor, to be invested in a private placement before or simultaneously with the proposed business combination and $10 million to be invested either in a private placement or open-market purchases before or after the business combination;

•        a $5 million investment in Orchestra’s Series D Financing by the RTW Funds;

•        the modified Company Earnout provision specifying the issuance of 8 million additional shares of New Orchestra Common Stock to former Company shareholders on achievement of a $17.50 volume-weighted average price of New Orchestra Common Stock over a 20-day trading period up to the fifth anniversary of the BC Closing;

•        A 6-month lock-up on HSAC2 Ordinary Shares held by the Sponsor and affiliates;

•        HSAC2 having cash of no less than $50 million immediately prior to the BC Closing; and

•        a right of HSAC2 to appoint at least one person to the New Orchestra Board.

The Business Combination Term Sheet included a binding exclusivity period that, subject to certain customary exceptions, ended on the later of (a) 5:00 p.m. Eastern Time on April 30, 2022, and (b) the time at which either party gave written notice to the other party of termination. This exclusivity period between Orchestra and HSAC2 was subsequently extended by mutual agreement of the parties until June 30, 2022.

After HSAC2 entered into the Business Combination Term Sheet, HSAC2’s management provided HSAC2’s board of directors an update regarding the potential business combination with Orchestra, including the terms of the Business Combination Term Sheet and the expected process and timing for the proposed business combination.

On February 2, 2022, representatives of Orchestra, HSAC2, Loeb & Loeb LLP, Paul Hastings; Chardan Capital Markets, LLC (“Chardan”) and Barclays Capital Inc. (“Barclays”), financial advisors to HSAC2; Jefferies, lead financial and capital markets advisor to Orchestra, and Piper Sandler & Co. (“Piper”), financial advisor to Orchestra;

and other parties, conducted a meeting telephonically during which the parties and their respective representatives and advisors discussed the potential transaction. In particular, it was noted that the potential business combination could not proceed until Orchestra and Medtronic executed a license and collaboration agreement.

Between the initial telephonic meeting on February 2, 2022 and the signing of the Merger Agreement on July 4, 2022, representatives and advisors of HSAC2 and Orchestra conducted weekly telephonic meetings to discuss progress on, and provide updates regarding, key workstreams and other aspects of the potential business combination and, as needed, to further refine the transaction timeline, steps and work plan, including investor commitments in the Series D Financing, the status of the Exclusive License and Collaboration Agreement, dated as of June 30, 2022, by and among, Orchestra BioMed, Inc., BackBeat Medical, LLC and Medtronic, Inc. (the “Medtronic Agreement”) and the terms of the contemplated business combination transaction. During the same period, the management teams of Orchestra and HSAC2 also met on a weekly basis to review the progress of the Series D Financing, the status of the Medtronic Agreement and the terms of the contemplated business combination transaction.

Between the initial telephonic meeting on February 2, 2022 and the signing of the Merger Agreement on July 4, 2022, representatives of HSAC2 conducted further due diligence with respect to Orchestra, including:

•        a review of the materials provided in the online data room;

•        engaging Loeb & Loeb to conduct corporate due diligence on Orchestra;

•        engaging Cooley LLP to conduct intellectual property and regulatory due diligence on Orchestra;

•        meetings with Mr. Hochman, Mr. Sherman and Mr. Kaswan of Orchestra’s management team regarding Orchestra’s business, including Orchestra’s pipeline, operations, intellectual property and technical matters, as well as tax and legal matters, including those related to regulatory matters and clinical operations, corporate matters (including material contracts, capitalization and other customary corporate matters) and labor and employment matters;

•        financial and valuation analysis, including review of information relating to Orchestra’s revised capitalization table based on results from the Series D Financing,

•        teleconferences with Terumo to discuss Orchestra’s relationship with Terumo, including history of the relationship, potential of the collaboration product, Virtue SAB, development and commercialization strategy and the impact of the COVID-19 pandemic, including to the supply chain and the product’s commercialization potential and Terumo’s continued interest in working with Orchestra on the Coronary ISR US clinical program despite potentially having termination or renegotiation rights resulting from the COVID-19 pandemic, supply chain issues and unexpected regulatory delays and requirements; and

•        review of a draft and the final version of the Medtronic Agreement.

On February 23, 2022, on behalf of HSAC2, Loeb & Loeb distributed the first draft of the Merger Agreement to Orchestra and Paul Hastings. Between February 23, 2022 and July 4, 2022, Loeb & Loeb and Paul Hastings, exchanged a number of revised drafts of the Merger Agreement. Over the same period, Loeb & Loeb and Paul Hastings and other representatives and advisors of HSAC2 and Orchestra held a number of conference calls regarding certain terms and conditions of the Merger Agreement, including the representations and warranties addressing, among other matters, Orchestra’s capitalization, intellectual property, compliance with laws, litigation, and contracts.

On April 28, 2022, HSAC2’s representatives at Loeb & Loeb provided to Orchestra’s representatives at Paul Hastings initial drafts of the HSAC2 Shareholder Transaction Support Agreements, pursuant to which certain HSAC2 Shareholders and Orchestra Stockholders would agree to, among other things, (a) vote in favor of the Merger Agreement and the transactions contemplated thereby and (b) be bound by certain other covenants and agreements related to the Business Combination. During this time and in connection with these negotiations, multiple drafts of these agreements were exchanged prior to their execution on July 4, 2022, which occurred simultaneously with the execution of the Merger Agreement. For additional information, see “— Related Agreements — Transaction Support Agreements.”

On June 2, 2022, Orchestra’s representatives at Paul Hastings provided HSAC2 and Loeb & Loeb with the first draft of the Amended and Restated Registration Rights Agreement based on the terms of the Business Combination Term Sheet as updated by subsequent discussions, pursuant to which, among other things, New Orchestra would agree to register for resale certain equity securities held by legacy Orchestra and certain HSAC2 shareholders. Loeb & Loeb and Paul Hastings continued to negotiate the terms of the agreement over the course of the following weeks. During this time and in connection with these negotiations, multiple drafts of the agreement were exchanged prior to finalization of the agreement concurrently with the execution of the Merger Agreement. For further information related to the Amended and Restated Registration Rights Agreement, please see the section entitled “— Related Agreements — Amended and Restated Registration Rights and Lock-Up Agreement.”

On May 4, 2022, representatives of HSAC2 at Loeb & Loeb provided to Orchestra’s representatives at Paul Hastings the initial draft of the proxy statement to be filed by HSAC2 to extend the deadline to consummate a business combination.

Between May 10, 2022 and July 4, 2022, representatives and advisors of HSAC2 and Orchestra exchanged a number of drafts of the investor management presentation, and held various calls and meetings to discuss the investor management presentation, research analyst coverage and outstanding information requests related thereto. At no point were projections or forecasts provided to HSAC2 or investors.

From January 20, 2022 to May 20, 2022, the capital markets experienced a pullback, with the S&P 500 down 13%, amid persistent inflation, rising interest rates, geopolitical instability, and other adverse economic conditions. The market for life sciences technology companies in particular experienced significant price and volume fluctuations with the NASDAQ Biotechnology Index (Nasdaq: NBI) down 11% and the iShares US Medical Devices ETF (Nasdaq: IHI) down 12% during this time period. In addition, since HSAC2’s IPO, the SPAC market experienced a general decline in healthcare investor sentiment, which resulted in increased rates of redemption by SPAC shareholders.

On May 20, 2022, Mr. Hochman, Mr. Kaswan and representatives of HSAC2 held a telephonic call during which Mr. Hochman informed HSAC2 that, due to the recent equity market and sector-specific downturn and future market uncertainty, Medtronic and Orchestra were requiring that a minimum amount of $50 million in the Trust Account would need to be assured in connection with the business combination transaction in order for Medtronic to sign the Medtronic Agreement. Representatives of HSAC2 communicated that they would consider this change and that the Sponsor would likely require a large reduction in the fully diluted enterprise value given the recent market fluctuations and the significant potential for capital loss given recent trading levels of post-combination SPAC share prices. In addition, HSAC2 noted that additional capital participation from Medtronic would also be needed to support the transaction. Representatives of HSAC2 indicated that they would discuss internally and come back to Orchestra with a response.

Between May 21, 2022 and May 31, 2022, representatives of Orchestra and representatives of HSAC2 held multiple telephonic conversations and exchanged draft capitalization models primarily focused on how to ensure that $50 million of capital would be available to New Orchestra from the proposed business combination with HSAC2 while ensuring that the increased risk to the Sponsor and its affiliates would be acceptable to them. The conversations included discussions of numerous structural levers to balance risks, benefits and goals for Orchestra, Medtronic, HSAC2, and the Sponsor, including valuation of the pro forma post-combination company, capital provided to Orchestra, vesting of shares and warrants in HSAC2 owned by the Sponsor, reduction mechanisms for the $50 million backstop commitment by the Sponsor, a valuation step-up from the Series D Financing, Orchestra’s capitalization table, including possible investor and employee anti-dilution provisions, and other structural items.

On May 27, 2022, representatives of Orchestra and representatives of HSAC2 agreed to a revised set of terms that differed from the Business Combination Term Sheet executed on January 20, 2022. The revised terms included several adjustments aimed at providing a minimum amount of cash to New Orchestra upon the closing of the Business Combination. As part of the revised terms, Orchestra agreed to reduce the pre-combination valuation and price of the Series D Financing to $4.65 per share from the $11.25 per share set forth in the Business Combination Term Sheet and the following adjustments, among others:

•        a pro forma valuation of Orchestra of $163 million on a fully diluted enterprise value immediately prior to the closing of the Business Combination, using a treasury stock method calculation, including fees;

•        no valuation step-up from the Series D Financing to the Business Combination;

•        the Sponsor would invest approximately $15 million in Orchestra’s Series D Financing and $10 million pursuant to a forward purchase agreement;

•        the issuance of 8 million additional shares of common stock of Orchestra to former Orchestra stockholders on achievement of the following milestones at any time prior to the fifth anniversary of the Closing:

•        50% of such shares would vest upon achievement of a VWAP for New Orchestra Common Stock of $15.00 over a 20-trading day period; and

•        50% of such shares would vest upon achievement of a VWAP for New Orchestra Common Stock of $20.00 over a 20-trading day period;

•        1,000,000 Insider Shares held by the Sponsor would be subject to the vesting upon the following milestones at any time prior to the fifth anniversary of the Closing:

•        500,000 of such Insider Shares would vest upon achievement of a VWAP for New Orchestra Common Stock of $15.00 over a 20-trading day period; and

•        500,000 of such Insider Shares would vest upon achievement of a VWAP for New Orchestra Common Stock of $20.00 over a 20-trading day period; and

•        the Sponsor would extinguish 1,500,000 Private Warrants.

Simultaneously, the Sponsor and Medtronic agreed to the following provisions to be signed concurrently with the Merger Agreement:

•        a $50 million commitment by the RTW Funds, affiliated with the Sponsor, to backstop potential redemptions by HSAC2 shareholders, to be reduced dollar for dollar for an aggregate amount raised in the Series D Financing in excess of $110 million; and

•        $10 million of additional capital provided to Orchestra by Medtronic in the form of a forward purchase agreement.

On May 31, 2022 and June 2, 2022, representatives of Orchestra, HSAC2 and Medtronic discussed, among other items, the terms of the proposed backstop reduction by the RTW Funds, open market purchases, timeline to close and announcement preferences.

Between May 27, 2022 and June 17, 2022, Orchestra and representatives of HSAC2, with their respective advisers, continued to hold frequent meetings and to discuss updates to the combined entity pro forma capitalization model.

On June 17, 2022, a virtual meeting of the Board was held, with attendance by all members of the Board, HSAC2’s representatives at Loeb & Loeb, HSAC2’s management and advisors to HSAC2. At the meeting, the Board was provided with an overview of the proposed business combination (including the potential benefits and the risks related thereto), the key terms of the related ancillary documents and the due diligence process and findings with respect to Orchestra. During the meeting, the Board considered a set of preliminary deal terms similar to those reflected in the May 27, 2022 pro forma capitalization model shared with Orchestra that were yet to be negotiated with Orchestra. The Board then unanimously adopted and approved the terms of the proposed business combination, subject to a review of the near final transaction documents. The Board did not obtain a third-party valuation or fairness opinion in connection with its resolution to approve the Business Combination. Instead, the Board believed that the experience and background of HSAC2’s management members, the members of the Board and the other representatives and advisors of HSAC2 enabled the Board to make the necessary analyses and determinations regarding the business combination and the other matters for approval.

On June 17, 2022, representatives of HSAC2 held a telephonic call with Mr. Hochman in which the representatives shared that they would need to reduce the extinguishment of the Sponsor’s Private Warrants or reduce Orchestra’s pre-combination valuation as a result of lower than anticipated pro forma cash of the combined entity. In a telephonic conversation later that day, Mr. Hochman agreed that the Sponsor would be required to forfeit 50% of its 1,500,000

Private Warrants, for no consideration, instead of 100% of its Private Warrants, to account for the changes identified by representatives of HSAC2, but HSAC2 would not have the right to appoint any director to the New Orchestra board of directors.

On June 20, 2022, Orchestra and Terumo signed a letter agreement whereby the parties agreed to negotiate in good faith over 12 months mutually agreeable adjustments to certain target achievement dates to reflect the regulatory and pandemic-related delays related to the Coronary ISR US clinical program. We believed based on the signing of this letter and our diligence conversations with Terumo’s executives that Terumo was dedicated to working with Orchestra on the Coronary ISR US clinical program, that Terumo was unlikely to terminate the agreement or step away from its collaboration obligations, and that Terumo was willing to work with Orchestra to adjust the milestones in their collaboration agreement to potentially enable all economic milestone payments to be received by Orchestra.

On June 22, 2022, Paul Hastings provided on behalf of Orchestra an initial draft of the earnout election agreement to Loeb & Loeb. Between June 28, 2022 and June 30, 2022, the parties negotiated the terms of the earnout election contemplated by the Merger Agreement, pursuant to which Orchestra Equityholders would have the option to receive a portion of additional contingent consideration of up to 8,000,000 shares of New Orchestra Common Stock in the aggregate. Orchestra Equityholders, including the RTW Funds, who wish to receive their pro rata share of the Earnout Consideration would have to agree to a 12-month lock-up period following the Closing. For further information related to earnout election agreement, please see the section entitled “— The Business Combination and the Merger Agreement — Merger Consideration” for additional information.

Beginning June 27, 2022, representatives of Chardan and Barclays, held conversations with a select group of wall-crossed HSAC2 shareholders who agreed to customary non-disclosure agreements regarding Orchestra’s business to make them aware of the upcoming public announcement of the proposed business combination.

On June 20, 2022, Orchestra’s Board met via videoconference, with all board members present, to consider and discuss the proposed transaction with HSAC2. Also present were representatives of Paul Hastings. Following a thorough review and discussion, on June 29, 2022, the Merger Agreement and related documents and agreements were approved by unanimous written consent of the Orchestra Board and the Orchestra Board recommended the approval of the Merger Agreement and the transactions contemplated thereby to Orchestra’s stockholders.

On June 29, 2022, members of the Board were provided a final version of the Merger Agreement. On June 30, 2022, after careful consideration and discussion of the terms and conditions of the Merger Agreement, the Board approved the Merger Agreement and determined that the Business Combination and the transactions contemplated thereby were advisable, fair to, and in the best interests of, HSAC2 and its shareholders.

On July 4, 2022, the parties entered into the Merger Agreement and the related ancillary agreements that were filed or furnished in connection with HSAC2’s Current Report on Form 8-K described below.

On July 5, 2022, HSAC2 and Orchestra issued a joint press release announcing the execution and delivery of the Merger Agreement. HSAC2 filed a Current Report on Form 8-K, which filed as exhibits the Merger Agreement, the Medtronic Forward Purchase Agreement, the RTW Forward Purchase Agreement, the HSAC2 shareholder and Orchestra stockholder support agreements, the form of Amended and Restated Registration Rights Agreement, the form of Earnout Election Agreement, the Orchestra investor presentation and the joint press release.

Summary of HSAC2 Financial Analysis

In connection with the revised valuation of Orchestra agreed on May 27, 2022, HSAC2 reviewed certain financial information of various publicly-traded medical technology companies selected by HSAC2’s management team, based on their experience and professional judgment for business similarity to Orchestra. In performing its analysis, HSAC2’s management team made certain assumptions with respect to commercial efforts, industry performance, general business and economic conditions and a number of other matters, many of which are beyond the control of HSAC2 and Orchestra. HSAC2 reviewed the enterprise value, which HSAC2’s management deemed relevant based on its professional judgment and expertise, for a cohort of pre-revenue stage medical technology companies as relative to the pre-revenue, development stage of Orchestra’s two programs — BackBeat CNT and Virtue Sirolimus AngioInfusion Balloon (Virtue SAB) – while acknowledging that none of the selected companies possessed characteristics identical to Orchestra and that the assumptions and estimates used, and the results, would be inherently subject to substantial uncertainty.

The following table summarizes the comparable company analysis prepared by HSAC2’s management team and reviewed by HSAC2 Board:

____________

Note: Market data as of June 16, 2022, per Bloomberg.

Orchestra’s pro forma fully diluted enterprise valuation of $158 million was lower than both the mean and median enterprise values of $219 million and $203 million respectively for similar pre-revenue medical technology companies Quantum-Si, Inc., Vicarious Surgical, Inc., Humacyte, Inc., Nautilus Biotechnology, Inc., and Lyra Therapeutics, Inc., listed above.

The Board’s Reasons for the Approval of the Business Combination

In evaluating the transaction with Orchestra, the Board consulted with legal counsel, financial and accounting advisors and other advisors. In reaching its resolution (i) that the terms and conditions of the Merger Agreement and the transactions contemplated thereby, including the Business Combination, the Domestication and the Merger, are advisable, fair to and in the best interests of HSAC2 and its shareholders and (ii) to recommend that the shareholders adopt the Merger Agreement and approve the Business Combination, the Domestication and the Merger, the Board considered and evaluated a number of factors, including, but not limited to, the factors discussed below.

In light of the number and variety of factors considered in connection with its evaluation of the Business Combination, the Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it considered in reaching its determination and supporting its decision. The Board viewed its decision as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors. This explanation of HSAC2’s reasons for the Business Combination and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under “Cautionary Note Regarding Forward-Looking Statements.”

The members of the Board are well qualified to evaluate the transaction with Orchestra. They have extensive transactional experience, particularly in the healthcare and life sciences industries and considered the following factors in approving the proposed business combination with Orchestra:

A.     BackBeat CNT is a flagship product candidate.    Orchestra aims to be the first bioelectronic treatment for HTN that is designed to be delivered via a standard cardiac rhythm management (“CRM”), device such as a dual-chamber pacemaker without changing the device hardware or typical implant procedure. Double-blind, randomized clinical data: statistically significant 11.1 mmHg reduction in 24-hour ambulatory systolic blood pressure (“aSBP”) at six months, 17.5 mmHg reduction in office systolic blood pressure (“oSBP”) at two years and strong results in isolated systolic hypertension (“ISH”). The Board believes that Orchestra’s randomized and blinded clinical data for BackBeat CNT could drive an immediate, substantial and persistent reduction in blood pressure in a pivotal trial and eventually as a commercial product.

B.      BackBeat CNT Medtronic Collaboration partners Orchestra with the global market leader in pacemakers and device-based hypertension treatment and the BackBeat CNT-enabled device has the potential to be blockbuster product.    Signed exclusive license and collaboration agreement for a premium device with Medtronic, the global pacemaker leader with >50% U.S. market share, combined with a meaningful revenue share by receiving the higher of a fixed dollar amount per BackBeat CNT-enabled device, which varies by geography, and a percentage of the BackBeat CNT generated sales. The revenue generated for Orchestra per sale of BackBeatCNT-enabled device is expected to be between $500 and $1,600, based on information provided by Orchestra and Medtronic and the terms of the Medtronic Agreement, as further described under “Business of Orchestra — Bioelectronic Product Candidates — BackBeat CNT for Hypertension and CNT-HF for Heart Failure — Strategic Collaboration Agreement with Medtronic.” The Board believes that the Medtronic Collaboration has the potential to drive global penetration into a greater than $10 billion annual commercial opportunity and significant profitability for Orchestra, based on potential annual revenue opportunities for pacemaker-indicated patients with HTN and high-risk HTN patients not indicated for a pacemaker of $2 billion and $8 billion, respectively, which is further described under “Business of Orchestra — Company.”

C.     Virtue SAB is a flagship product candidate for treatment of artery disease.    Highly differentiated, non-coated drug/device combination product enables angioplasty with localized delivery of extended release sirolimus while leaving no metal behind. Virtue SAB has positive First in Man clinical data and the potential for differentiated clinical outcomes. The Board believes that there is significant commercial potential for Orchestra with its world-class partner Terumo and future royalties of net sales and per unit payments as sole exclusive supplier of SirolimusEFR to Terumo.

D.     Potential for a strong pipeline and follow-up projects with partners.    Orchestra is currently conducting a European acute feasibility clinical study of BackBeat CNT as a bioelectronic treatment for heart failure based on a modified cardiac neuromodulation algorithm that primarily focuses on sympathetic tone modulation. This product candidate, which Orchestra currently calls CNT-HF, is being developed as a potential active implantable bioelectronic treatment for heart failure, for which there is an estimated global patient population of 64 million people according to the AME Medical Journal. The Board believes that the CNT-HF program represents potential additional upside to the BackBeat CNT program.

E.      Long-term, royalty-driven strategy aims to yield superior profits from therapeutic devices.    The Orchestra platform has been designed to reimagine methods of clinical development and commercialization for innovative medical device technology companies. The Board believes that the Orchestra platform has the potential to be a leading partner of choice for medical technology companies to reduce development barriers for medical device innovation, create opportunity for risk-reward sharing development partnerships, and foster a scalable outsourced R&D business model to drive innovation for patients, physicians, partners and shareholders. The resulting commercial adoption will drive Orchestra’s future growth and meaningful profitability given the limited COGS and sales & marketing expenses borne by Orchestra.

F.      Well-funded development balance sheet and aligned partnership interests.    Medtronic invested $40 million in Orchestra’s Series D Financing, which raised a total of $110 million. In addition, with capital from the Business Combination and the Forward Purchase Agreements, New Orchestra would be expected to have a minimum total pro forma cash of $165 million, after expenses, at the Closing, which is expected to fund New Orchestra’s operations into 2026. The Board believes that New Orchestra will be well-capitalized and well-positioned to bring its BackBeat CNT and Virtue SAB products through development and clinical studies to become commercial products.

G.     Financial and organizational condition.    Orchestra has 2 years of audited financials and had previously prepared investor memoranda and a Form S-1 filing registration statement, which it had confidentially filed with the SEC. The Board believes that Orchestra is prepared to be a public company and will benefit from having publicly-traded securities to enhance its ability to pursue accretive acquisitions, high-return capital projects, and/or strengthen its balance sheet.

H.     Attractive Valuation.    Orchestra has an attractive valuation relative to similar pre-revenue medical technology comparable companies as by Orchestra’s pro forma fully diluted enterprise valuation of $158 million being lower relative to the mean and median enterprise valuations of Quantum-Si, Inc.,

Vicarious Surgical, Inc., Humacyte, Inc., Nautilus Biotechnology, Inc., and Lyra Therapeutics, Inc. In addition, assuming the minimum amount of cash in the company necessary to meet conditions to the Closing, the approximately $317 million market capitalization and $169 million of pro forma cash at Orchestra’s March 31, 2022 balance sheet will result in an equity value to net cash ratio of 2.0x. The Board believes that Orchestra’s valuation is attractive and reasonable relative to a set of comparable companies and offers downside protection with the relatively large cash balance, illustrated by the 2.0x net cash ratio, and that no additional near-term fundraising is needed.

I.       Accomplished leadership team.    The Board believes that Orchestra has a proven and experienced team that is positioned to successfully lead New Orchestra after the Business Combination to execute on the meaningful collaborations it has established with Medtronic and Terumo and to enter into new collaborations in future.

J.       Lock-Up.    The Sponsor, certain other shareholders of HSAC2 and certain current equityholders of Orchestra have agreed to not transfer or otherwise dispose of their New Orchestra Common Stock for 12 months following the Closing (with Orchestra officers and directors, and Medtronic subject to a 24-month lock-up following the Closing and Terumo subject to a lock-up until the commercial launch of Virtue), in each case subject to certain customary exceptions, which will provide important equity ownership stability to assist in the management and governance of New Orchestra.

K.     Other Alternatives.    The Board believes, after a thorough review of other business combination opportunities reasonably available to HSAC2, that the Business Combination represents the best initial business combination for HSAC2 and the most attractive opportunity for HSAC2’s management to accelerate its business plan based upon the process utilized to evaluate and assess other potential acquisition targets and the Board’s belief that such process has not presented a better alternative.

L.      Negotiated Transaction.    The financial and other terms of the Merger Agreement are reasonable and were the product of arm’s-length negotiations between HSAC2 and Orchestra.

The Board also identified and considered the following factors and risks weighing negatively against approving and pursuing the Business Combination, although not weighted or in any order of significance:

A.     Benefits Not Achieved.    The risk that the potential benefits of the Business Combination may not be fully achieved or may not be achieved within the expected timeframe.

B.      Liquidation of HSAC2.    The risks and costs to HSAC2 if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in HSAC2 being unable to effect a business combination within the period of time HSAC2 is afforded under its organizational documents, as the same may be extended from time to time with shareholder approval, and the subsequent liquidation of HSAC2.

C.     Exclusivity.    The fact that the Merger Agreement includes an exclusivity provision that prohibits HSAC2 from soliciting other business combination proposals, which restricts HSAC2’s ability, so long as the Merger Agreement is in effect, to consider other potential business combinations.

D.     Shareholder vote.    The risk that HSAC2’s shareholders may fail to provide the votes necessary to effect the Business Combination.

E.      Post-Business Combination corporate governance; terms of the Amended and Restated Registration Rights Agreement.    The Board considered the corporate governance provisions of the Merger Agreement, the Amended and Restated Registration Rights Agreement and the material provisions of the Proposed Charter. See the sections entitled “Proposal 3 — The Charter Approval Proposal” and “— Certain Related Agreements — Amended and Restated Registration Rights and Lock-Up Agreement” for detailed discussions of the terms and conditions of these documents.

F.      Limitations of review.    The Board considered that it was not obtaining an opinion from any independent investment banking or accounting firm that the consideration to be received by the Orchestra stockholders is fair to HSAC2 or its shareholders from a financial point of view. Accordingly, the Board considered that HSAC2 may not have properly valued Orchestra.

G.     Closing conditions.    The fact that completion of the Business Combination is conditioned upon the satisfaction of certain closing conditions that are not within HSAC2’s control, including approval by HSAC2 shareholders, approval by Orchestra stockholders, and approval by Nasdaq of the listing application in connection with the Business Combination.

H.     Litigation.    The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination.

I.       Fees and expenses.    The fees and expenses associated with completing the Business Combination.

J.       Other risks.    Various other risks associated with the Business Combination, the business of HSAC2 and the business of Orchestra described under the section entitled “Risk Factors.”

In addition to considering the factors described above, the Board also considered that certain of the officers and directors of HSAC2 may have interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of HSAC2’s shareholders. HSAC2’s independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and approving, as members of the Board, the Merger Agreement and the transactions contemplated therein, including the Business Combination.

The Board concluded that the potential benefits that it expected HSAC2 and its shareholders to achieve as a result of the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, the Board determined that the Merger Agreement, the Business Combination and the Merger, were advisable, fair to and in the best interests of HSAC2 and its shareholders.

Parties to the Business Combination

Health Sciences Acquisitions Corporation 2

HSAC2 is a blank check company incorporated on May 25, 2020 as a Cayman Islands exempted company. We were incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses, which we refer to as our “initial business combination.” The Business Combination with Orchestra is the result of an active search for a potential business combination transaction utilizing the network and investing and transaction experience of HSAC2’s management team and the Board. Although HSAC2’s efforts to identify a prospective target business were not to be limited to any particular industry or geographic location, HSAC2 intended to focus on businesses in the healthcare and healthcare-related industries in North America or Europe.

The HSAC2 Ordinary Shares are currently listed on Nasdaq under the symbol “HSAQ.” The HSAC2 Ordinary Shares commenced trading on Nasdaq on August 4, 2020.

The mailing address of our principal executive office is 40 10th Avenue, Floor 7, New York, NY 10014. Our telephone number is (646) 597-6980.

Merger Sub

HSAC Olympus Merger Sub, Inc. is a wholly owned subsidiary of HSAC2, formed on May 4, 2022 to consummate the Business Combination. Following the Business Combination, Orchestra will merge with Merger Sub with Orchestra surviving the merger. As a result, Orchestra will become a wholly owned subsidiary of New Orchestra.

The mailing address of Merger Sub’s principal executive office is 40 10th Avenue, Floor 7, New York, NY 10014. Merger Sub’s telephone number is (646) 597-6980.

Orchestra BioMed, Inc.

Orchestra is a biomedical innovation company accelerating high-impact technologies to patients through risk-reward-sharing partnerships with leading medical device companies. Orchestra’s partnership-enabled business model focuses on forging strategic collaborations with leading medical device companies to drive successful global commercialization of products it develops. Orchestra is led by a highly accomplished, multidisciplinary management