Orchestra BioMed Holdings Inc

Our business involves a high degree of risk. You should consider and read carefully all of the risks and uncertainties described below, as well as other information included in this Annual Report on Form 10-K, including our audited consolidated financial statements and related notes appearing in Item 8 of this Annual Report on Form 10-K. The risks described below are not the only ones facing us. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition or results of operations. In such case, the trading price of our common stock could decline, and you may lose all or part of your investment. This Annual Report on Form 10-K also contains forward-looking statements and estimates that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below.

Risks Related to Our Business and Products

Wehave a history of net losses, andwe expect to continue to incur losses for the foreseeable future. Ifwe ever achieve profitability, wemay 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 a net loss of approximately $49.1 million for the year ended December 31, 2023 and a net loss of approximately $33.6 million for the year ended December 31, 2022. As a result of these losses, as of December 31, 2023, we had an accumulated deficit of approximately $248.9 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 certificationsforour 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 due to the additional costs associated with being a public company. The net losses that we incurmay fluctuate significantly from

period to period. As a result of these increased expenditures, we will need to generate significant additional revenuein order to offset our operating expenses and achieve and sustain profitability. Accordingly, wemaynot achieve or maintain profitability, and wemay continue to incur significant losses in thefuture. Even if we achieve profitability, we cannot be sure that we will remain profitablefor anysubstantial period oftime. If we do not achieve or sustain profitability, it will be more difficultforus to finance our business and accomplish our strategic objectives, either of which would havea material adverse effect on our business, financial condition, results of operations and prospects andmay 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

Wecommenced 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 makesit difficult toevaluateour current business and predict our future results, prospects orviability. Todate, wehavenot generated significant revenue. Our ability to generate substantial revenueand ultimately become profitable depends primarily upon ourability, alone or with our partners, to successfully obtain regulatory approvaland certification for and successfully commercialize our product candidates. Our ability to generate future revenue from our products orany existing or future product candidates also depends on a number of additional factors, including our or our partners’ ability to:

In addition, because of the numerous risks and uncertainties associated with drug/device and software/ device combination product development, including that our product candidatesmaynot 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 revenuesor profitability. In addition, our expenses could increase beyond expectations if we decide to or are required by the FDAor foreign regulatory authorities or notified bodies to perform non-clinical tests or clinical studies or trialsforour 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

Forplanning 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. Webase these milestones on a variety of assumptions, which are subject to numerous risks and uncertainties. Further, our collaboration agreement with Terumo, as further described herein, includes payments tied to the achievement of certain milestones, which in some cases, must be achieved by a specified calendar date. Other future collaboration agreementsmay have similar provisions. There is a risk we will not achieve these milestones on a timely basis orat 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:

If we do not meet these milestonesforour products or if we are delayed in achieving these milestones, the development and commercialization of new product candidates, modifications of existing products orsales of existing products for new indications may be prevented or delayed, which could damage our reputation or materially adversely affect our business. Further, wemaynot receive milestone-based payments from partners on a timely basis orat all, whichmay havean adverse impact on our anticipated financial resources. In addition, Terumohas the right to terminate, and other partnersmay havethe right to terminate or renegotiate, agreements if certain milestones are not achievedat allor on a timely basis. Even if we achieve a milestonefora product or product candidate, market acceptanceforthe product or product candidate is not assured. See “—Risks Related to Our Reliance on ThirdParties—**We did not meet the target achievement dates relating to certain milestone payments, and we do not expect to meet certain other target achievement dates relating to additional milestone payments, under the Terumo Agreement, and we may not be able to restructure the Terumo Agreement in a manner that provides us with a satisfactory amount of additional capital.”

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 approvalof a PMAfrom the FDAfora device-led combination product candidate, such as our Virtue SAB, or for device candidates like BackBeat CNT or CNT-HF which are designed to be integrated with the collaboration of device manufacturers into their existing medical devices such aspacemakers, as well as other future product candidates, or marketing approvalforan NDA, such as our extended release formulation of sirolimus called “SirolimusEFR,” we must conduct well-controlled clinical studies designed to assess the safety and efficacy of the product candidate, in addition to nonclinical and other product development studies. Clinical development is a long, expensive and uncertain process and is

subject to delays and to the risk that productsmay notultimately adequately demonstrate safety or effectivenessin treating the indications forwhich they are designed. Completion of the clinical studies required to support a marketing authorization usually takes several years ormore. Wecannot assureyou 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 ormay produce undesirable adverse effects that could cause us or regulatory authorities to interrupt, delayor 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 FDAor other regulatory authorities or notified bodiesmay disagree with our interpretation of the data from our preclinical studies and clinical studies, ormay find the clinical study design, conduct or results inadequate to demonstrate 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 ourproducts. The data we collect from our preclinical studies and clinical studiesmaynot be sufficient to support potential FDA or foreign approval or certification, and if we are unable to demonstrate the safetyand efficacy of our product candidates in our clinical studies, we will be unable to obtain regulatory approval or certification to market our products.

We have in the past and may in the future experience 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:

with the FDA’s or any other regulatory authority’s GCPs, or applicable regulatory guidelines in other countries, or occurrence of adverse events in trials of comparable products conducted by other companies;

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 criteriaforthe 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, includinganynew treatments thatmaybe approved forthe 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 studymay 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, we may in the future experience disruptions caused bypandemics, which mayincrease the likelihood that we encounter such difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing clinical studies.

Wecould also encounter delays if a clinical study is suspended or terminated byus, by the IRBs of the institutionsat which such studies are being conducted, by the Data Safety Monitoring Boardfor such trial or by the FDAor other regulatory authorities. Such authoritiesmay impose such a suspension orterminationdue to a number of factors, including failure to conduct the clinical study in accordance with regulatory requirements or our clinical protocols, results of regulatory inspection of the clinical study operations or trial site by the FDAor 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 fromanyof these product candidates will be delayed. In addition, anydelays in completing our clinical studies will increase our costs, slow down theapprovalor certification process and jeopardize our ability to commence product sales and generate revenues. Anyof these occurrencesmay harm our business, financial condition and prospects significantly. In addition, many of the factors that cause, or leadto, adelayin the commencement or completion of clinical studiesmay also ultimately lead to the denial of regulatory approvalof our product candidates.

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

Failurecan occurat anystage of clinical testing. Our clinical studiesmay produce negative or inconclusive results, and wemay decide, or regulatorsmay requireus, to conduct additional clinical and non-clinical testing in addition to those wehave planned. Our failure to adequately demonstrate the safety and efficacy of our system orany product wemay develop in the future would prevent receipt of regulatory approvalor certification and, ultimately, the commercialization of that product or indicationfor use. Further, regulatorsmay 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 thatmay have affected the interpretation of astudy, 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 areapprovedin the United States, commercialization of our product candidates in foreign countries would require approvalby regulatory authorities or certification by notified bodies in those countries. Approvaland certification procedures vary among jurisdictions and caninvolve requirements and administrative review periods different from, and greater than, those in the United States, and may necessitate additional preclinical studies or clinical studies. Anyof these occurrences could havean adverse effect on our business, financial condition and results of operations.

Clinical studies must be conducted in accordance with thelawsand regulations of the FDAand 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 under GCPs with supplies of our product candidates produced under cGMP and/or FDA’s QSRand other requirements. Furthermore, werelyon CROs, consultants and clinical study sites to ensure the proper and timely conduct of our clinical studies and while wehave agreements governing their committed activities, wehave limited influence over their actual performance. Wedepend on our collaborators and on medical institutions and CROsto conduct our clinical studies in compliance with GCP requirements. Tothe extent our collaborators or the CROs fail to enroll participantsforour clinical studies, fail to conduct the study to GCP standards or are delayedfora 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 ofnon-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, and sufficient heterogeneity in clinical patient populations to support approval.

Even ifwe obtain all necessary FDAapprovals, our product candidates may not achieve or maintain market acceptance and may be subject to additional regulatory requirements post-approval

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:

Even if we obtainall necessary FDAapprovals, our productsmay fail to achieve market acceptance. If our products achieve market acceptance, theymaynot maintain that market acceptance over time if competing products or technologies are introduced that are received more favorably or are more cost-effective. Failureto achieve or maintain market acceptance would limit our ability to generate revenueand would have a material adverse effect on our business, financial condition, results of operations and prospects. Further, our products are subject to ongoing regulatory oversight and may require additional clinical data to support maintenance of regulatory approvals.

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 overthe sales and marketing team we would use and our international distributors in making sales.

Larger competitorsmay also have broader product lines, which enable them to offer customers bundled purchase contracts and quantity discounts. These competitorsmay have more experience than wehavein research and development, marketing, manufacturing, preclinical testing, conducting clinical studies, obtaining FDAand foreign regulatory approvalsor certifications and marketing approvedor certified products. Our competitorsmay 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 wemay 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 organizationsmay seek patent protection regarding potentially competitive products or technologies andmay establish exclusive collaborative or licensing relationships with our competitors. Our competitorsmaybe 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 wemay provide

Our quarterly andannual operating resultsmay fluctuate significantly, which makesit difficultforus to predict our future operating results. These fluctuationsmay occur due to a variety of factors, many of which are outside of our control, including, but not limited to:

This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investorsfor anyperiod. If ourrevenueor operating results fall below the expectations of analysts or investors or belowany forecasts wemay provide to the market, it could havea material adverse effect on our business, financial condition, results of operations or prospects.

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

Our estimates of theannual total addressable marketsforour 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 arereasonable, these assumptions and estimatesmaynot be correct and the conditions supporting our assumptions or estimatesmay change at any time, thereby reducing the predictive accuracy of these underlying factors. In addition, our estimates of the sizes of the PADand CAD patient populationmay 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 belikely candidatesfor treatment with ourproducts. As a result, our estimates of theannual total addressable marketforour current or future products may prove to be incorrect. If the actual number of patients who would benefit from our products, the priceat which we will beableto sell future products, or theannual total addressable marketforour products is smaller than wehave estimated, itmay impair future sales ofany product we develop andhavean adverse impact on our business.

The long-term macroeconomic effects of the COVID-19 pandemic and any future pandemic or epidemic could adversely impact our business, including our clinical studies and financial condition

Outbreaks of contagious disease, including COVID-19, or other adverse public health developments in the U.S. or worldwide could have a material adverse effect on our business, including our clinical trials and financial condition. While many of the direct impacts of the COVID-19 pandemic have eased, the longer-term macroeconomic effects on global supply chains, inflation, labor shortages and wage increases continue to impact many industries, including ours. Moreover, with the potential for new strains of existing viruses to emerge, or other pandemics or epidemics, governments and businesses may re-impose aggressive measures to help slow the spread of disease in the future.

Long-term macroeconomic effects from a pandemic or epidemic, including from supply and labor shortages andworkforce reductions in response to challenging economic conditions, mayhavean adverse impact on our business. In addition, COVID-19 caused, andany future pandemic or epidemicmay cause, 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, as well as delays in receiving supplies and third-party testing results from vendors. The emergence of a new pandemic or epidemic may also cause us to experience additional disruptions that could severely impact our business and clinical studies, including:

the ways in which our clinical studies are conducted, which may result in unexpected costs, or the discontinuation of such clinical studies altogether;

The full extent of the impact and effects of COVID-19, andany future pandemics or epidemics, will depend on future developments, including, among other factors, how rapidly variants develop, availability, acceptance and effectiveness of vaccines along with related travel advisories, quarantines and restrictions, the recovery time of the disrupted supply chains and industries, the impact of labor market interruptions, the impact of government interventions, and uncertainty with respect to the duration of the global economic slowdown. COVID-19, or any future pandemics or epidemics, and resulting impacts on the financial, economic and capital markets environment, and future developments in these and other areas present uncertainty and risk with respect to our business and financial results.

Interim, “top-line” and preliminary data from our clinical studies thatwe 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 thefinal data

From time to time, wemay publicly disclose preliminary or top-line data from our preclinical studies and clinical studies, which is based on a preliminary analysis ofthen-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. Wealso make assumptions, estimations, calculations and conclusions as part of our analyses of data, and wemaynot have received or had the opportunity to fully and carefully evaluate alldata. As a result, the top-line or preliminary results that we reportmay differ from future results of the same studies, or different conclusions or considerationsmay 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.

Further, others, including regulatory agencies, maynot accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact thevalueof the particular program, theapprovabilityor 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 onwhatis typically extensive information, andyouor othersmaynot agree with whatwe 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 approvalor certificationfor, and commercialize, our product candidatesmaybe 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 the product candidate being studied caused these conditions. It is possible that as we test our product candidates inlarger, longer and more extensive clinical studies, or as use of these product candidates becomes more widespread if they receive regulatory approvalor 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 bypatients. Many times, side effects are only detectable after investigational products are tested in large-scale clinical studiesor, in some cases, after they are made availableto patients on a commercial scale following approvalor certification.

For example, during the initial study period for MODERATO I, there were eleven 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 arrhythmia 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 in the same patient, pneumonia with cardiac decompensation and dyspnea with cardiac decompensation in one patient, and cardiac decompensation in one patient.

Forthe MODERATO IIstudy, there were no major adverse cardiac events (“MACE”) in the BackBeat CNT group and three MACEintwo patients in the control group (one death from cancer andtwo 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. Over the entire three-year period of the SABRE study, a total of 66 SAEs occurred in 32 of the 50 study patients.

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 clinical studies, deny approvalof, or require us to cease sellingany product candidates or productsfor anyorall targeted indications. If we are required todelay, suspend or terminateany clinical study or commercialization efforts, the commercial prospects of such product candidates or productsmaybe harmed, and our ability to generate product revenues from them or other product candidates that we develop maybe delayed or eliminated. Additionally, if one or more of our product candidates receives marketing approvalor 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:

approval studies;

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.

Wedepend on attracting, retaining and developingkey 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. Although we have entered into employment agreements with certain of our executive officers, our employees, including our executive officers, 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. Wemaynot attract, retain and develop quality personnel on acceptable terms due to the competitionfor such personnel. If we are notableto attract and retain necessary personnel to accomplish our business objectives, wemay 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 evaluatethe acquisition of, investment in or in-license of complementary products, technologies or businesses, although we do not currently haveany agreements, arrangements or commitments with respect toany potential acquisition, investment or license. If we engage in such acquisitions, investments or in-licenses, we may incur significant transaction and integration costs andhave 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 ofkey employees, loss ofkey customers, loss of key vendors, decreases in revenue and increases in operating costs, as well as the disruption of our business.

Acquisitionsmay 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, allof which could harm our business. If we use cash to acquire companies, products or technologies, itmay divert resources otherwise availablefor other purposes or increase our debt. If we use our capital stock to acquire companies, products or technologies, wemay experience a change of control or our stockholdersmay experience substantial dilution or both. In addition, anticipated benefits ofany future acquisitionsmaynot materialize. Anyof 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 approvedand, 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 andimproveour information

systems and procedures andhire, train, motivate and manage a growing workforce, allof which would increase ourcosts. Our systems, facilities, procedures and personnelmaynot be adequate to support our future operations. Further, wemaynot maintain or accelerate our current growth, manage our expanding operations or achieve planned growthon a timely and profitable basis.

From time to time wemaybe involvedin various litigation matters, which could havean 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 thelaw 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 oflaws, 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.

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. Individuals may bring a product liability claims 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.

Wecannot 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 insurersmay 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 orfor amounts over insured liabilities could havea material adverse effect on our business, financial condition, results of operations and prospects. Anyproduct liability claim or series of claims or class actions brought againstus, with or without merit, could result in:

The misuse or promotion of off-label uses of our products may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, finesor sanctionsby regulatory bodies, any of which could be costly to our business

Anyproducts that we market will be approved for specific indicated usesand subject to limitations on those usesas specified in their respective approved for certified labeling. Uses outside of theapprovedor certified indicationsforuse are known as “off-label uses.”Wecannot prevent a physician from using our products off-label in thephysician’s independent

professional medical judgment. However, there may be increased risk of injury to patients if physicians attempt to use our products off-label. Furthermore, the use of our productsfor indications, other than those approvedor certified by the FDAor byany foreign regulatory authority or notified body, maynot effectively treat such conditions, which could harm our reputation in the marketplace among physicians and patients.

The FDAand other regulatory agencies strictly regulate the promotional claims thatmaybe made about prescription products, such as our product candidates, ifapprovedor certified. With only limited exceptions, a product generallymaynot be promotedforoff-label uses. If the FDAorany foreign regulatory body determines that our promotional materials or training constitute promotion of an off-labeluse, 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 usedfor violators that do not necessitate awarning letter, injunction, seizure, civil fine or criminal penalties. It isalso 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-labeluse, which could result in significant penalties, including, but not limitedto, 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 andmalware(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 bysophisticated and organized groups and individuals with a wide range of motives and expertise. As a result ofmore people working remotely sincethe COVID-19 pandemic, wemay 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 opportunitiesfor cybercriminals to exploit vulnerabilities. Furthermore, because the techniques used to obtain unauthorized accessto, or tosabotage, systems change frequently and often are not recognized until launched against a target, wemaybe 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, wemaybe unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, toavoid detection, and toremoveor 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 wehave 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. Forexample, the loss of clinical study data from completed or future clinical studies could result in delays in our regulatory approvalor certification efforts and significantly increase our costs to recover or reproduce the lost data. Wealso relyon 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 damageto, 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 penaltiesfor anynoncompliance 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, in order to remain competitive, we will need to significantly expand andimproveour 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 upgradesmaynot result in productivity improvementsata level that outweighs the costs of implementation, orat all. In addition, difficulties with implementing new technology systems, delays in our timelinefor planned improvements, significant system failures, or our inability to successfully modify our information systems to respond to changes in our business needsmay cause disruptions in our business operations andhavea 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 conditionsmay negatively impact our business. A significant change in the liquidity or financial condition of our customers could cause unfavorable trends in their purchases and/or 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 conditionsmay also adversely impact our suppliers’ ability to provide us with materials and components, which could havea 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 economymay alsobe adversely affected by the current or anticipated impact of military conflict, including the conflict between Russiaand Ukraine and the Israeli-Palestinian conflict, 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, andany economic countermeasures by affected countries and others could exacerbate market and economic instability. In addition, the attacks by Hamas on Israel in October 2023, Israel’s response and a potential broader armed conflict in the Middle East are likely to continue impacting the global economy, including that of the United States and have added to concerns of a widening conflict in the Middle

East. In particular, oil prices have become increasingly volatile in the aftermath of the attacks on Israel. Each of the developments described above, or any combination of them, could adversely affect our businesses, financial condition and results of operations. 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 byany such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, itmay makeany necessary debt or equity financing more difficult, more costly and more dilutive. These developments, or the perception that anyof them could occur, mayrestrict the ability ofkey market participants to operate in certain financial markets or restrict our access to capital. Forexample, there is a risk that one or more of our current service providers, manufacturers and other partnersmaynot survive an economic downturn, which could directly affect our ability to attain our operating goals on schedule and on budget. Anyof these factors could havea material adverse effect on our business, financial condition and results of operations and reduce the priceof our common stock.

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 COVID-19 pandemic, and other naturalor man-made disasters or business interruptions, forwhich we are predominantly self-insured. Werelyon third-party manufacturers to produce our products and product candidates 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 ornatural disaster or other business interruption. The occurrence ofanyof 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 causedby 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 mayrely, which could negatively impact our business

The ability of the FDA, other government agencies and notified bodies to review andapproveor certify new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory and policy changes, the FDA’sor other government agencies’ ability to hire and retainkey personnel and accept the payment of user fees, and other events thatmay 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/orapprovedor certified by necessary government agencies or notified bodies, which would adversely affect our business. Forexample, overthe last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, havehad to furlough critical FDAemployees and stop critical activities.

Separately, in response to the COVID-19 pandemic, the FDA had significantly curtailed and limited its inspection of both foreign and domestic facilities. Furthermore, regulatory authorities outside the United States adopted similar restrictions or other policy measures in response to the COVID-19 pandemic. If a prolonged government shutdown occurs, or if new or existing global health concerns continue to hinder or prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, orother regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

In addition, in the EU, notified bodies must be officially designated to certify products and services in accordance with the EU Medical Devices Regulation. While several notified bodies have been designated, current designated notified bodies are facing a large amount of requests with the new regulation as a consequence of which review times have

lengthened. This situationmay impact the ability of our notified body(ies) to timely review and process our regulatory submissions, and our ability togrowour business in the EEA.

We, in conjunction with our partners, intend to expand sales of our products internationally in the future, butwe 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:

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 inany other jurisdiction, does not ensure approvalor 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 delaythe introduction of our products or product candidates in those countries. Marketing authorization by the FDAdoes not ensure registration, certification, clearance orapprovalby regulatory authorities or notified bodies in other countries, and registration, certification, clearance orapprovalby one or more foreign regulatory authorities or notified bodies does not ensure registration, clearance, certification orapprovalby regulatory authorities or notified bodies in other foreign countries or by the FDA. However, a failure ordelayin obtaining registration or regulatory clearance, certification orapprovalin one countrymay have a negative effect on the regulatory process in others. Clinical studies conducted in one country maynot be accepted by other countries. If we fail to comply with these regulatory requirements or to obtain and maintain required approvalsor 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.

Wemay in the future bring certain cGMP product release testing, stability testing and cGMP pharmaceutical manufacturing capabilities in-house, andwemay not be able to do so successfully or in compliance with FDAregulations

Wehave brought certain activities that we previously outsourced to third parties, in-house, and wemay 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, wemay eventually bring the manufacture of pharmaceutical drug products, such as SirolimusEFR, in-house. Tothe extent we do bring these functions in-house, we will be directly subject to FDAand other regulations with respect to these activities, such as the FDA’sgood laboratory practice requirements, cGMP regulations and similar foreign requirements. Wecannot provide assurance that we will be able to perform these functions effectively or comply with applicable regulations if we bring these functions in-house.

Wemay 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 wehave limited financial and managerial resources, we focus on specific products and product candidates, indications and discovery programs. As a result, wemay forgoor delay pursuit of other opportunities with others that could havehad greater commercial potential. Our resource allocation decisionsmay cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programsfor specific indicationsmaynot yieldany commercially viable products. If we do not accurately anticipate physician and patient needs, as well asevaluatethe commercial potential or target marketfora particular potential product, wemay miss valuable product development opportunities or wemay relinquish valuable rights to that potential product through future collaborations, licenses and other similar arrangements in cases in which it would have been more advantageousforus to further advance development or to retain sole development and commercialization rights to such potential product.

As of December 31, 2023, we had gross net operating loss (“NOL”) carryforwards of approximately $135.1 millionfor federal income tax purposes, and $113.5 millionfor state income tax purposes, andapproximately$6.1 million of federal research and development tax credits, after applying limitations under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue 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 beunavailableto offset our future income tax liabilities. In addition, under Section 382 of the Internal Revenue Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50%

change, byvalue, in its equity ownership by 5% stockholders overa three-year period, thecorporation’sability to use its pre-change NOLs and other pre-change tax attributes to offset its post-change incomemaybe limited. Wehave 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, wemay experience additional ownership changes in the future as a result of subsequent changes in our stock ownership, some of whichmaybe outside of our control. If we determine that an ownership change has occurred and our ability touseour 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. There isalsoa 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, 2023 and 2022, 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 practicesmaybe subject to significant change, with or without notice, due to economic, political and/or other conditions, and significant judgment is required in applying the relevant provisions of taxlaw. If such changes were to be adopted or if the tax authorities were to challenge our application of relevant provisions of applicable taxlaws, 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 orsurtaxes 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 asany 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 Congressat 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.

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

Weintend 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 accountfor substantiallyallof ourrevenue forthe foreseeable future. Anyof these relationshipsmay 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 wemaybe unable to successfully form and maintain such arrangements. Without commercialization partners, wemaynot have adequate financial or other resources to successfully commercialize our product candidates. In addition, anypotential future collaborationsmaybe terminable by our strategic partners, and wemaynot beableto adequately protect our rights under these agreements. Furthermore, strategic partnersmay negotiatefor exclusive rights to commercialize our products or certain rights to control decisions regarding the development and commercialization of our products, ifapproved, and may not conduct those activities in the same manner as we do. Any termination of collaborations we have entered into ormay enter into in the future, orany delayin entering into collaborations

related to our products or product candidates, could delaythe development and commercialization of our products or product candidates and reduce their competitiveness if they reach the market, which could havea 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. Anyfactors that adversely impact the commercialization of our product candidates will havea negative impact on our business, results of operations and financial condition. Wecannot assureyou that we or our partners will be successful in developing or commercializinganyof our product candidates orany other new product candidates. Our inability to successfully commercialize our product candidates through partnerships and/or successfully develop and commercialize additional products orany enhancements to our products which wemay develop would havea 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 do not expect to meet certain other target achievement dates relating to additional milestone payments, under the Terumo Agreement, and we may not beable to restructure the Terumo Agreement in a manner that provides us with a satisfactory amount of additional capital

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 Terumo Agreement, 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 Annual Report on Form 10-K, 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. Our failure to earn milestone payments under our agreement with Terumo will have an adverse effect on our results of operations.

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.

As previously disclosed, we have been negotiating with Terumo for mutually agreeable adjustments to the Terumo Agreement with the purposes of restructuring milestone payments as well as making other potential material modifications to that agreement including additional financial commitments by Terumo to us and the Virtue SAB program. We have delayed initiation of our Virtue ISR-US pivotal study, for which we secured conditional IDE approval from the FDA on August 8, 2023, until such time as we and Terumo restructure the Terumo Agreement in a manner that provides us with a satisfactory amount of additional capital, whether from milestone payments or other financial arrangements. In addition, in light of the recent FDA approval of Boston Scientific Corporation’s AGENT™ paclitaxel-coated balloon for the treatment of coronary ISR, we and Terumo are reviewing the design for the Virtue ISR-US pivotal studyand considering alternative clinical study designs with input from our clinical steering committee for Virtue SAB. If negotiations are not completed to our satisfaction or to the satisfaction of Terumo, clinical study, product development, and commercialization plans for Virtue SAB may continue to be adversely impacted.

Weexpect 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 suppliersfor anyreason, including, without limitation, further outbreaks of COVID-19, including any strains or variants of the virus, or any future pandemic, could cause us to seek new or additional suppliers for these products and could have a material adverse effect on our business.

Weexpect to continue torelyon third-party manufacturersforthe commercial supply ofanyof our product candidatesfor which we obtain marketing approval, ifany. Wemaybe unable to maintain or establish required agreements with third-party manufacturers or to do so on acceptable terms. Even if we areableto establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

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

Weexpect our ability to increase ourrevenuein 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 FDAand foreign regulatory agencies or notified bodies to sustain revenue growthin ourmarkets. Additional clinical data and new productsmaybe necessary togrow 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 FDAand are subject to periodic inspection by the FDAfor compliance with the QSR and cGMP, requirements, which require manufacturers of medical devices and drugs, respectively, 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.

Wecannot assureyou thatwe, our manufacturing partners, or component suppliers comply or can continue to comply withall regulatory requirements. The inability of one of these parties to achieve or maintain compliance with these requirements or quality standardsmay disrupt our ability to supply products sufficient to meet demand until compliance is achieved, or until a new supplier or manufacturer has been identified andevaluated. 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 approvalof our product candidates, delays, suspension orwithdrawalof approvals, certifications, license revocation, seizures or recalls of products or product candidates, operating restrictions and criminal prosecutions, which could harm our business. Wecannot assureyou 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 CROsto help design, monitor and analyze the results of certain of our clinical studies andtrials. The consultants and CROswe engage interact with clinical investigators to enroll patients in our clinical studies. Wedepend on these consultants, CROsand 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 forthe study or trial and in compliance with regulations andrequirementsfor 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 FDAand foreign regulatory authorities. The consultants and CROs alsoare responsiblefor protecting confidential patient data and complying with U.S. and foreign laws and regulations related to data privacy. Wemay 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 itmaybe 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 trialsmay also provide services to our competitors, which could compromise the performance of their obligations tous. If these third parties do not successfully carry out their duties or meet expected deadlines, or if thequality, completeness or accuracy of the data they obtain is compromised due to the failure to adhere to our clinical study protocols orfor other reasons, our clinical studies or trialsmaybe extended, delayed or terminated ormay otherwise proveto be unsuccessful, and our development costs will increase. Wemaynot establish or maintain relationships with these third parties onfavorable terms, orat all. If we need to enter into replacement arrangements because a third-party is not performing in accordance with our expectations, wemaynot beableto do so without undue delays or considerable expenditures, orat all.

The FDAand similar regulatory bodiesmay hold us responsiblefor anyfailure 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 andsaleof many of our new andimproved products or product candidates depend upon our maintaining working relationships with physicians. We rely on these professionalsto provide us with considerable knowledge and experience regarding the development, marketing and saleof 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** **or prevent the potential growth of our revenue or increase our losses

Weare responsibleforthe manufacture of the proprietary SirolimusEFR used in our Virtue SAB product candidate. Wehave 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 SirolimusEFRforus. Many of the processes, ingredients and components requiredfor manufacture of SirolimusEFR arealso requiredfor manufacture of COVID-19 vaccines and tests and, as such, supply chains continue to be adversely impacted. Further, the manufacture of SirolimusEFR involves certain novel processes that we continue to develop to achieve consistent reproducibility as well as increase scale to support large clinical studies and future commercialization. In the event that we do not have sufficient SirolimusEFR, our planned clinical studies could be prevented or delayed. Further delays in our trial timelines will result in additional expenses to us and potentially risk or damage our partnership with Terumoand the future competitiveness of our Virtue SAB solution.

Ifapproved foruse in connection with our medical device product candidates or as a stand-alone product, we currently expect to remain responsibleforthe manufacture and supplying of SirolimusEFRat clinical and/or commercial scaleforour partner, Terumo. Wehave limited experience in manufacturing pharmaceutical products and no experience manufacturing SirolimusEFR in the volume that we anticipate will be required if we achieve planned levels neededfor clinical studies and/or commercial sales. Wedo not currently have, nor do we currently have plans to acquire, the infrastructure or capability internally to manufacture or test SirolimusEFR on a clinical and/or commercial scale. Instead, werelyon contract manufacturersfor current production of SirolimusEFRfor clinical study supplies and currently plan to continue to use contract manufacturersfor supply and testing. 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 andat reasonable prices, and we are unable to find one or more replacement suppliers capableof productionata 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 ofany 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, NDAor comparable foreign regulatory marketing application is submitted. Wedepend on our contract manufacturing partnersfor compliance with the FDA’scGMP or similar foreign requirementsfor 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’sor foreign regulatory authorities’ strict regulatory requirements, they will not beableto secure or maintain FDAor foreign approvalforuse of their manufacturing facilities with respect to our product candidates. In addition, if the FDA

orany other applicable regulatory authority does notapprove these facilitiesforthe manufacture of our product candidates or if it withdrawsany such approvalin 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 beableto identify manufacturersfor clinical or commercial supply on acceptable terms, without delay, orat all, which would significantly impact our ability to fulfill our supply obligationsfor SirolimusEFRfor Virtue SAB, as well as sales of SirolimusEFRfor 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. Theymay also encounter equipment breakdowns requiring lengthy repairs or the need to replace equipment. 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 facilitiesmay need to be closedforan extended period of time to investigate and remedy the contamination and could require that affected supplies be withdrawn or withheld from the market. Anystability or other issues relating to the manufacture of our product candidatesmay occur in thefuture. Additionally, our manufacturersmay experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments. If our manufacturers were to encounteranyof 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

Wepurchase many of the components andraw materials used in manufacturing our products from numerous suppliers in various countries. Generally, wehave been ableto obtain adequate supplies of suchraw materials and components. However, for reasons of quality assurance, unique processes, or specialty item availability, wemay procure certain components andraw materials from a sole supplier. Forexample, forour Virtue SAB product candidate, we source sirolimus from a single manufacturer in China, we source porous angioplasty balloons from a single manufacturer in Germany with unique processes and expertise, and we source custom specialty polymers from a single manufacturer in the United States. Wework closely with our suppliers to try to ensure continuity of supply while maintaining high quality andreliability. 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 orproduct 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 tomakeour related product sales. Manufacturing facilities used tomakeour 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, Inc. (an affiliate of Medtronic plc) (“Medtronic”) and its ability to obtain supplies for and to produce its BackBeat CNT-enabled pacemaker systems. If Medtronic is unable or unwilling to obtain such supplies or is otherwise unable or unwilling 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 causedby 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 chainfor sirolimus, which we currently source from China. Likewise, export restrictions enacted in foreign countries,

including those imposed in China, could limit our ability to obtain products from foreign suppliers ormake foreign-made products more costly than anticipated. Anydisruptions or delays in our supply chain could negatively impact our ability to operate our business or increase ourcosts. Further, any import restrictions ortariffs imposed on products we or our partners import from China, Singapore orany other foreign supplier, as a result of global trade conflict, could cause us to increase pricesforour future products or reduce our margins.

In February 2022, following Russia’s invasion of Ukraine, the United States, the EU, and the UK imposed various economic sanctions against Russia. Additional impacts, including 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 particularly our European operations. Furthermore, 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.

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. Forexample, in March 2010, ACAwas enacted in the United States, which made a number of substantial changes in theway 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 aneffortto 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 toimprovethe coordination, quality and efficiency of certain healthcare services through bundled payment models, and expanded the eligibility criteriafor 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’sdecision, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 forpurposes of obtaining health insurance coverage through the ACAmarketplace. 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, ifany, 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 istaken. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments toseveral providers, including hospitals, and increased the statute of limitations periodforthe 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 newsystem 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, mayhaveon 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 developmentsatthe EU or member state levelmay 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 matterfor national, rather than EU, lawand 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 bycountry, and many countries have instituted price ceilings on specific products and therapies.

Weexpect additional state, federal and foreign healthcare policies and reform measures to be adopted in the future, anyof which could limit reimbursementfor 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 andhavea material adverse effect on our industry generally and on our customers. Anychanges in, or uncertainty with respectto, future coverageor reimbursement rates could affect demand forour 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.

Forinstance, in December 2021, the EU Regulation No 2021/2282 on HTA, amending Directive 2011/24/EU, was adopted. This regulation, which entered into forcein January 2022, intends to boost cooperation among EU member states in assessing health technologies, including some medical devices, and providing the basisfor cooperationatthe EU levelfor joint clinical assessments in these areas. The regulation foresees a three-year transitional period and will permit EU member states to use common HTAtools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of theinnovative health technologies with the most potential impactfor patients, joint scientific consultations whereby developers can seek advice from HTAauthorities, 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 responsiblefor 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. Wemay not obtain the necessary approvals or certifications and failure to obtain timely regulatory approval or certification, if at all, would adversely affect our business

Weare not permitted to commercialize, market, promote or sellanyof our product candidates in the United States without obtaining approval from the FDA. Foreign regulatory authorities impose similar requirements. The time required to obtain approvalor certificationbythe 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 development and may vary among jurisdictions, which may cause delays in the approval, certification or the decisionnot to approve an application. Regulatory authorities and notified bodies have substantial discretion in theapproval 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. Wehave not submitted for or obtained marketing approval for any product candidate, except for European Conformity (“CE”) mark certification of our first-generation BackBeat CNT on the Moderato IPG device.

In the United States, before we can market a new medical device, or a new use of, new claimforor significant modification to an existing device, we must first receive either clearance under Section 510(k) of the FDCA, orapprovalof 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 regulationfor that device type. Wedo not believe Virtue SAB or BackBeat CNT or other of our current product candidates will be exempt from, or eligiblefor, clearance under Section 510(k) of the FDCA. Weexpect our product candidates will require submission and FDA approvalof a PMA to be marketed in the United States. In the process of obtaining PMAapproval, the FDAmust determine that a proposed device is safe and effective for its intended use(s) based, in part, on extensive data, including, but not limitedto, technical, preclinical, clinical study, manufacturing and labeling data. The PMA process is typically requiredfor devices that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices. Modifications to products that areapproved 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.

Weexpect that obtaining regulatory approvalsforour product candidates will require us to conduct human clinical studies. Forour medical device product candidates and combination drug/device product candidates regulated as medical devices, we will need to obtain approval of an IDE, prior to beginning a clinical study in the United States. Forour drug product candidates, we will need to submit an IND application that the FDAauthorizes prior to beginning clinical studies in the United States. Preclinical studies, submissions related to 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 approvalsor certifications, a product candidatemaynot beapprovedor certified by the FDAor comparable regulatory authorities or notified bodies. Any delayor failure to obtain necessary regulatory approvalsor certifications could harm our business. Furthermore, even if we are granted regulatory approvalsor certifications, theymay include significant limitations on the indicated usesforthe device, whichmay limit the marketforthe 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:

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. 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 beableto affix the 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 away 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 andsafety, taking into account the generally acknowledged state of the art. Todemonstrate 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 systemforthe 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 basisforits own declaration ofconformity. The manufacturermay then apply the CE mark to the device, which allowsthe device to be placed on the market throughout the EU. Failing to comply with applicable lawsand regulations, would preclude us from being ableto 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 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 countries.

International regulatory approvalor certification processesmay take longer than the FDA approval process. Wemaybe unable to obtain future regulatory approvalor certification in a timely manner, orat all, especially if existing regulations are changed or new regulations are adopted. A failure ordelayin obtaining necessary regulatory approvalsor certifications would materially adversely affect our business.

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 bodymay 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, andweor any of our suppliers or third-party manufacturers could be forced to recall our installed systems or terminate production ifwe 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 arerequired to verify that our suppliers maintain facilities, procedures and operations that comply with our quality standards and applicable regulatory requirements. The FDA enforces 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 ourproducts.

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 ifwe obtain regulatory approval or certification for a product candidate, our products will remain subject to regulatory scrutiny and post-marketing requirements. Failureto 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, andmay 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. Forexample, we must submit periodic reports to the FDAas a condition ofapproval. 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. Followingits review of the periodic reports, the FDAmight askfor additional information or initiate further investigation.

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:

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 toany device productfor which we receive PMAapprovalmay require approvalof a new PMA or a PMA supplement, oralternativelya notification or other submission to the FDA. The FDArequires device manufacturers tomakeand document a determination of whether a modification requires anapproval, supplement or clearance; however, the FDAcan review a manufacturer’s decision. The FDAmaynot agree with our decisions regarding whether approvalof a modification isnecessary. Wemay make modifications toapproved devices in the future that we believe do not require approvalof a new PMA or PMA supplement. If the FDAdisagrees with our determination and requires us to submit a new PMA or PMA supplementfor modifications to our previously approved device products, wemaybe required to cease marketing or to recall the modified product until we obtain approval, and we may be subject to significant regulatory fines orpenalties. In addition, the FDAmaynot approveour productsforthe indications that are necessary or desirablefor successful commercialization or could require clinical trials to supportany modifications.

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 ofany 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 usefor 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 isfavorable, 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 bodymay 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

Weare subject to the FDA’smedical device reporting regulations and similar foreign regulations, which require us to report to the FDAwhen we receive or become awareof 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 away that, if the malfunction were torecur, 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 awareof the adverse event, as well as the nature of the event. Wemay fail to report adverse events of which we become aware within the prescribed timeframe. Wemay 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 FDAor 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 ordelayin approvalor certification of future products.

The FDAand foreign regulatory bodies havethe 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’sauthority to require a recall must be based on a finding that there is reasonable probability that the device could cause serious injury or death. Wemay also choose to voluntarily recall a product ifany 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 thefuture.

Depending on the corrective action wetaketo redress aproduct’sdeficiencies or defects, the FDA, foreign regulatory authorities or notified bodiesmay require, or wemay 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 delayour 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. Wemay initiate voluntary withdrawalsor correctionsforour products in the future that we determine do not require notification of the FDAor foreign regulatory authorities. If the FDAor foreign regulatory authorities disagree with our determinations, it could require us to report those actions as recalls and wemaybe 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 oursales. Anycorrective action, whether voluntary orinvoluntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business and mayharm our reputation and financial results.

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

Our Virtue SAB product candidate is subject to regulation in the United States as a drug/device combination product. If marketed individually, each constituent partof Virtue SAB would be subject to different regulatory pathwaysand would require approvalof an independent marketing applications by the FDA. A combination product, however, is assigned to an FDA center that will have primary jurisdiction overits 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. In this regard, in 2019, the FDA confirmed that Virtue SAB will be regulated as a combination product candidate, with the FDA’s Centerfor Devices and Radiological Health as the lead review center of a marketing application. Although we believe a single marketing applicationforthe approvalof a combination product would beappropriate andsuccessful, 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. Forinstance, 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 whereforthe 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 (butare, e.g., co-packaged), the medicinal product is regulated in accordance with the rulesfor medicinal products described above while the device part is regulated as a medical device and will haveto comply withallthe requirements set forth by the EU Medical Devices Regulation.

Although the FDAand similar foreign regulatory agencies haveormay have systems in placeforthe review andapprovalor certification of combination products such as ours, wehaveandmay continue to experience delays in the development and commercialization of our product candidates due to regulatory timing constraints and uncertainties in the product development andapproval process, as well as coordination betweentwo different centers within FDAresponsiblefor review of the different components of the combination product.

If the FDAdoes 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 aswe expect, the approval pathway for SirolimusEFR may take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful

Wemay seek FDA approvalsforour SirolimusEFR as both a standalone drug product candidate and as part of our Virtue SAB product candidate as wellas, potentially, other device/drug combination product candidatesfor other clinical applications. Forthe standalone drug product candidate development program, wemay seek approvalfor SirolimusEFR to treat conditions such as 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 NDAwhereat least some of the information requiredfor approval comes from trials that were not conducted by orforthe applicant andfor which the applicant has not obtained a right of reference. Section 505(b)(2), 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 thesafety 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 FDAdoes notallowus to pursue the Section 505(b)(2) regulatory pathwayas we anticipate, wemay need to conduct additional clinical studies, provide additional data and information and meet additional standards to obtain regulatory approval, ifever. If this were tooccur, the time and financial resources required to obtain FDA approvalfor 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, thereby delaying potential approval of our product.

In addition, the pharmaceutical industry is highly competitive, and Section 505(b)(2)NDAsare 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 requirementsmay give rise to patent litigation and mandatory delays inapprovalof our NDAs for

up to 30 months or longer depending on the outcome of any litigation. It is not uncommonfora manufacturer of anapproved product to file a citizen petition with the FDAseeking todelay approvalof, or impose additional approval requirementsfor, pending competing products. If successful, such petitions can significantly delay, or even prevent, the approval of the new product. However, even if the FDAultimately denies such a petition, the FDAmay 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 areapproved under Section 505(b)(2), theapprovalmaybe subject to limitations on the indicated usesfor which the productsmaybe marketed or to other conditions ofapprovalormay contain requirementsfor 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. Forinstance, 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 whereforthe conformity assessment of the device, if used separately, the involvement of a notified body is required, the EMAor the EU member state competent authority must require the applicant to provide a notified body opinion on the conformity of thedevice. By contrast, incaseof drug-delivery products intended to administer a medicinal product where the device and the medicinal product do not form a single integral product (butare, e.g., co-packaged), the medicinal product is regulated in accordance with the rulesfor medicinal products described above while the device part is regulated as a medical device and will haveto comply withallthe 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.

As product candidates proceed through preclinical studies to late-stage clinical studies towards potential approvaland commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along thewayin aneffortto optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives. Anyof these changes could cause our product candidates to perform differently and affect the timing, continuation or results of planned clinical studies or other future clinical studies conducted with the altered materials. Such changesmay also require additional testing and/or FDAor foreign regulatory authority approvalor 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 approvalof 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 lawsand 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:

violate it to have committed a violation;

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 andabuseor other healthcare lawsand 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 coverageand 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 productsare, and our future products are expected tobe, 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 reimbursementfor 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 customersmaybe unwilling to adopt our products in light of the additional associated cost. Further, anydecline in the amount payorsare willing to reimburse our customersforthe procedures using our productsmay makeit difficultfor customers to adopt our products and could create additional pricing pressureforus. Wemaybe unable to sell our products on a profitable basis if third-party payors deny coverageor reduce their current levels of reimbursement. The ability of our customers to obtain appropriate coverageand reimbursementforour products or procedures using our products from government and private third-party payorsis criticalto our success.

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

Reimbursement rates are unpredictable, and we cannot project how our businessmaybe affected by future legislative and regulatory developments. Future legislation or regulation, or changing payment methodologies, mayhavea material adverse effect on our business, and reimbursementmaynot be adequatefor allcustomers. From time to time, typically on anannual 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 paymentfor performing a procedure and not separately reimbursed, these updates could directly impact the demandforour products. Wecannot predict how pending and future healthcare legislation will impact our business andany changes incoverageand reimbursement that further restricts coverageof our products or lowers reimbursementfor procedures using our devices could materially affect our business.

After we develop new products or seek to market our productsfornew indications, once approved(or certified), wemay find limited demandforthe product unless government and private third-party payors provide adequate coverageand reimbursement. Even with reimbursement approvaland coverageby government and private payors, providers submitting reimbursement claimsmay face delays in payment if there is confusion by providers regarding the appropriate codes to use in seeking reimbursement. Such delaysmay create anunfavorable impression within the marketplace regarding the level of reimbursement orcoverage availableforour products.

Demandforour products or newapproved(or certified) indicationsforour existing productsmay fluctuate over time if federal, state and foreign legislative or administrative policy changes affect coverage or reimbursement levelsforour products, or the services related to ourproducts. 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 havea material adverse effect on our business.

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

Weare subject to or affected by numerous federal, state and foreign lawsand 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 andabroad. The global data protection landscape is rapidly evolving, and implementation standards and enforcement practices arelikelyto remain uncertainforthe foreseeable future. This evolutionmay 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 onus. The cost of compliance with these laws, regulations and standards is high and islikelyto increase in thefuture. Anyfailure 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 andeffortand proceedings against us by governmental entities or others. In many jurisdictions, enforcement actions and consequencesfor 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 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 waysand often are not preempted by HIPAA, thus complicating compliance efforts. Bywayof 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 providesfor civil penaltiesfor violations, as well as a private right of actionfor data breaches that is expected to increase data breach litigation. The CCPAmay increase our compliance costs and potential liability. Further, the California Privacy Rights Act (the“CPRA”)passed in California in 2020, significantly amending the CCPAand imposing additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirementsfor higher risk data and opt outsfor certain uses of sensitive data. The CPRA also creates 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 went into effect on January 1, 2023, and additional compliance investment and potential business process changesmaybe required. Similar laws have taken effect in Virginia, Colorado, Connecticut and Utah, and been enacted or proposed in other states, reflecting a trend toward more stringent privacy legislation in the United States. Numerous data privacy related legislative proposals remain pending at the federal level as well. 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, anyliability from failure to comply with the requirements of these laws could adversely affect our financial condition.

Our operations abroad may alsobe 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 asphysical health condition, mayimpose 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 forcertain actual or perceived violations. Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that havenot 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 byinvalidatingthe Privacy Shieldfor 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 accountforthe decision of the CJEU and recommendations made by the European Data Protection Board. The revised SCCs must be usedfor relevant new data transfers from September 27, 2021; existing standard contractual clauses arrangements had to be migrated to the revised clauses by December 27, 2022. The revised SCCs cannot be usedfor transfers to non-EEA entities whose processing isalready subject to the GDPR; however, no equivalent standard data protection clauses have been issued andapprovedby 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 contractsfor transfers from the UK under the UK GDPR. This new documentation became mandatoryfor 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 protectionlaw remains unclear, and the European Commission has adopted an adequacy decision infavorof 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 proposalsfor 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 thatany 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 deemsthe 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 weoperate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations. The GDPRmay impose additional responsibility and liability in relation to personal data that we process and wemaybe required to put in place additional mechanisms, atsignificant cost and diversion of management attention, to ensure compliance with the new data protection rules. Thismaybe onerous andmay adversely affect our business, operations and financial performance.

The EU hasalso 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 tohavethe opportunity to access information about clinical trials. Failureor 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 havean 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 safetymay adversely affect our business. Using hazardous substances in our operations exposes us to the risk of accidental

injury, contamination or other liability from theuse, 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 liablefor 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. Future changes to environmental and health and safety laws could cause us to incur additional expenses or restrict our operations.

We are subject to economic sanctions, export control, anti-bribery, anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act, and 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 Treasuryand other federal agencies and authorities havea broad range of civil and criminal penalties theymay seek to impose against corporations and individualsfor violations of economic sanctions laws, export control laws, and other federal statutes and regulations, including sanctions laws 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 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 gainingany advantage. Weface significant risks ifwe, which includes our third party business partners and intermediaries, fail to comply with the FCPAor other anti-corruption and anti-bribery laws. Inaddition, 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. Wehave implemented policies, procedures, and internal controls to help ensure compliance with these laws, though such compliance measures ultimately may not be effective in preventing 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 lawsand 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. An actual or alleged violation of these laws or regulations could result in internal, independent, or government investigations and severe criminal or civil sanctions, fines or penalties, as well as legal expenses, and could negatively affect our reputation, business, financial condition and results of operations.

Risks Related to Our Intellectual Property

Wemay 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, offeringfor saleor importing products that are covered under validand 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, competitorsmaybe ableto use our technologies or the goodwill we have acquired in the marketplace and erode or negate

anycompetitive advantage wemay 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 thatanyof our pending patent applications that mature into issued patents will include, claims with a scope sufficient to protect our technology or products, anyadditional features we develop with respect to our technology or products, oranynew 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 ofany patent claims that wemay obtain cannot be predicted with certainty. Anypatentsfor which wehave appliedmaynot be granted. Third parties own numerous U.S. and foreign issued patents and pending patent applications in the fields in which wehave developed our technology or manufacture and sell ourproducts. Third party-owned patents, as well as other prior art, can be an obstacle to our ability to obtain patent protectionforour technology.

Because patent applications in the United States and most other countries are confidentialfora period of time after filing, we cannot be certain that we were the first to fileany patent application related to ourproducts. Furthermore, for United States applications in whichall claims are entitled to a priority date before March 16, 2013 (the date when United States patentlaw changed from granting rights to the first-to-invent to the first-to-file), an interference proceeding can beprovokedby a third-party or instituted by the USPTO, to determine who was the first to inventanyof the subject matter covered by the patent claims of our applications. Wecannot 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, wemaybe 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 pre-issuance 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.

Wemay 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 competitorsmay obtain issued claims, including in patents we considered to be unrelated, which block our efforts ormay potentially result in our technology or products or our activities infringing such claims. The possibility exists that others will develop technology or products which havethe 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 wehavehad issued that cover our technology or products.

Challenges raised in patent infringement litigationmay cause determinations that our patents or licensed patents areinvalid, unenforceable, or otherwise subject to limitations. In such events, third partiesmay use the discoveries or technologies covered by our patents or licensed patents without paying damages, licensing fees or royalties to us, which could significantly diminish thevalueof ourpatents or licensed patents. Wecould alsobe adversely affected if our licensors terminate licenses granted to us to use their patented technology. Thus, anypatents that wemayown, or to which wehave rights through licensing agreements, maynot 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 byus, 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 opposed, cancelled, or 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 found to infringe a third party’s trademark registrations or common law trademark rights.

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 thelawsof the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. This could makeit difficultforus to stop infringement of our foreign patents, if obtained, or the misappropriation of our other intellectual property rights. Forexample, 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, wemay choose not to seek patent protection in certain countries, and we will nothavethe benefit of patent protection in those countries. Our competitors or other third parties might conduct research and development activities in countries where we do nothave 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 newbrands. Our competitorsmay infringe our trademarks, and wemaynot have adequate resources to enforce our trademarks.

The legal systems of certain countries, particularly certain developing countries, do notfavorthe enforcement of patents, trade secrets and other intellectual property protection, which could makeit difficultforus 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, validity, or enforceability 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 patentsat risk of being invalidatedor interpreted narrowlyand our patent applicationsat risk of not issuing, and could provoke third parties to assert claims againstus. Wemaynot prevail inany lawsuits that we initiate and the damages or other remedies awarded, ifany, maynot be commercially meaningful. Further, wemaynot 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 worldmaybe inadequate to obtain a significant commercial advantage from the intellectual property that we develop and own or license.

Ifwe cannot protect and control unpatented trade secrets, know-how and other proprietary technology, wemay 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 asphysicaland engineering aspects of ourcatheter, detailed specifications of our porous balloon, andphysicaland engineering aspects of our dose unit, recon unit,

and pre-filled syringe. With respect to BackBeat CNT, thismay include, butmaynot be limitedto, certain aspects of our proprietary algorithms. However, trade secrets and unpatented proprietary technology are difficult to protect. Toprotect proprietary technology and processes, werelyin part on confidentiality and intellectual property assignment agreements with our employees, consultants and others. These agreementsmaynot prevent disclosure of confidential information nor result in the effective assignment to us of intellectual property andmaynot 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 federallawand statelaw, and the criteriafor protection of trade secrets under statelawcan vary among different jurisdictions. Courts outside the United Statesmaybe 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.

We employ individualsand retain the services of consultantswho 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-howor intellectual propertyof others in their work forus, wemaybe 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. Litigationmaybe necessary to defend against these claims. If we fail in defendingany such claims or settling those claims, in addition to paying monetary damages or a settlement payment, wemaybe 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.

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

Theremaybe patents and patent applications owned by our competitors, which, if determined to bevalidand enforceable, maybe infringed byus. Wedo notalways conduct independent reviews of patents issued to third parties. Holders of certain patents may contact us and request we enter into license agreementsforthe underlying technology andpay them royalties, which could be substantial. If we need to obtain a license to useany intellectual property owned by a third party, wemaybe unable to obtain such license onfavorable terms orat allor wemaybe required tomake substantial royaltyor 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 pendingfor many years before issuance, or unintentionally abandoned patents or applications can be revived, so theremaybe applications of others now pending or recently revived patents of which we areunaware. Patent applications in the United States, Europe and elsewhere are published approximately 18 months after the earliest filingfor 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 therevivalof previously abandoned patents, mayprevent, limit or otherwise interfere with our ability to develop, manufacture, and market ourproducts. Third partiesmay assert claims thatwe are employing their proprietary technology or intellectual property rights 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 newmarkets, we expect competitorsmay 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 newmarkets. The large number of patent issuances, the rapid rate of new patent application filings, the complexities of the technologies involved, and the uncertainty of litigationmay 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 ourproducts. Some of our competitorsmaybe ableto sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources.

Additionally, wemay become a 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. Patentsmaybe subjected to opposition, post-grant review or comparable proceedings lodged in various foreign, both national and regional, patent offices. The legal thresholdfor initiating litigation or contested proceedingsmaybelow, 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 proceedingsmay havethe ability to dedicate substantially greater resources to prosecuting these legal actions than we can. Wemay also occasionally use these proceedings to challenge the patent rights of others. Wecannot be certain thatany 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, including treble damages, to lose our patent protection, to cease using the technology that is subject matter of the lawsuits or proceedings, and/or to license rights, potentiallyata substantial cost, from prevailing third parties. There is no guarantee thatany prevailing party would offer us a license or that we could acquireany 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 competitorsmay obtain access to the same intellectual property. Ultimately, wemay haveto cease some of our business operations because of infringement claims, which could severely harm our business. Tothe extent we are found to be infringing on the intellectual property rights of others, wemaynot develop or otherwise obtain alternative technology. If we need to redesign our products toavoid third-party intellectual property rights, wemay suffer significant regulatory delays associated with conducting additional studies or submitting technical, manufacturing or other information related toany 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 orproducts. 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 alsobe 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 partiesmay assert infringement claims against our customers, licensees, commercialization partners, or distributors based on our technology orproducts. These claimsmay 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 topay damages or settlement payments on behalf of our customers, licensees, commercialization partners, or distributors ormaybe required to obtain licensesforthe technology or products theyuse. If we cannot obtain all necessary licenses on commercially reasonable terms, our customers, licensees, commercialization partners, or distributorsmaybe 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 orenforceability, and our patentsmaybe challenged in the courts or patent offices in the United States andabroad. Wemaybe subject to a third-party pre-issuance submission of prior art to the USPTO, or become involved in opposition, derivation, revocation, reexamination, post-grant andinter partesreview, or interference proceedings or other similar proceedings challenging our patent rights. An adverse determination inany such submission, proceeding or litigation could reduce the scope of, orinvalidateor render unenforceable, our patent rights, allow third parties to commercialize our technology or products and compete directly withus, without payment tous, or result in our inability to manufacture or commercialize products without infringing third-party patent rights if patent rights areawardedto third parties instead of tous. Moreover, wemay haveto 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 ofinvention or other features of patentability with respect to our patents and patent applications. Such challengesmay result in loss of patent rights, in loss of exclusivity or in patent claims being narrowed, invalidatedor 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 orproducts. Such proceedings also mayresult in substantial cost and require significant time from our scientists and management, even if the eventual outcome isfavorabletous. Anyof the foregoing could havea 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’scompeting products, the defendant could counterclaim that such patent isinvalidor unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidityor unenforceability are commonplace. Groundsfora validity challenge could be an alleged failure to meetanyof several statutory requirements, including lack ofnovelty, obviousness or non-enablement. Groundsforan 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 partiesmay 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 partesreview, 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 away that they no longer cover ourproducts. The outcome following legal assertions ofinvalidityand unenforceability is unpredictable. With respect to the validity question, forexample, we cannot be certain that there is noinvalidating prior art, of which we and the patent examiner were unaware during prosecution. If a third party were to prevail on a legal assertion ofinvalidityor unenforceability, we would loseat least part, and perhapsall, of the patent protection on the applicable product(s). Such a loss of patent protection could havea 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 imposedby 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 overthe lifetime of our patents andapplications. The USPTO and variousnon-U.S. government agencies require compliance with several procedural, documentary, fee payment and other similar provisions during the patent application process. We may intentionally choose not to or inadvertently fails to comply with such requirements. 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 either the patent lawsor interpretation of the patent lawsin 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 requirementsfor 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 at the USPTO after March 2013, but before us could therefore beawardeda 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 confidentialfora period of time after filing or until issuance, we cannot be certain that we were the first to fileany patent application related to our products or inventanyof the inventions claimed in our patents or patent applications.

The America Invents Actalso includes a number of significant changes that affect theway patent applications are prosecuted andalso mayaffect 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**partesreview and derivation proceedings. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S. federal courts necessary toinvalidatea patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficientforthe USPTO to hold a claim invalid even though the same evidence would be insufficient toinvalidatethe claim if first presented in a district court action. Accordingly, a third partymay attempt to use the USPTO procedures toinvalidateour 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.

Wemay 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 havean interest in our patents, trade secrets or other intellectual property as an inventor orco-inventor. Forexample, 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 toour products. If we were to jointly own such intellectual property with other owners, other owners may be able to use the jointly owned intellectual property or license their rights in the jointly owned intellectual property to other third parties, including our competitors. Wealso maybe required to obtain and maintain licenses from third parties, including parties involvedinany such disputes. Such licensesmaynot beavailableon commercially reasonable terms, orat all, ormaybe non-exclusive. If we are in breach ofany license agreements granted tous, such licensesmay terminate. If we are unable to obtain and maintain such licenses, wemay need to cease the development, manufacture and commercialization of one or more of ourproducts.

The term ofany individual patent depends on applicablelawin the country where the patent is granted. In the United States, providedall 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. Extensionsmaybe available under certain circumstances, but the life of a patent and, correspondingly, the protection itaffordsis limited. Even if we or our licensors obtain patents covering our products, when the terms ofall 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 ourpatents. As a result, our owned and licensed patent portfoliodonot provide us with sufficient rights to exclude others from commercializing products similar or identical to ours beyond the patent term.

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 FDAmarketing 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 eligiblefor 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.

Wemay 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 exclusively 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 allowus tomakean appropriate return on our investment orat 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 mayhave to abandon development of the relevant products, which could have a material adverse effect on our business, financial condition and results of operations.

Our trademarks or trade namesmaybe challenged, infringed, circumvented, declared generic or determined to be violating or infringing other marks. Wemaynot beableto 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 partiesmay 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 businessmaybe 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.

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 thesaleof a company or announcement ofany other strategic transaction, such as the Business Combination. Anystockholder litigation and/or regulatory investigations againstus, whether or not resolved favorably, could result in substantial costs and divert management’s attention from other business concerns, which could adversely affect our business and cash resources.

Anti-takeover provisions contained in our Charter and our Bylaws and under Delaware law could impair a takeover attempt

Certain provisions of Delaware law, as well as provisions in our certificate of incorporation (“Charter”) and our bylaws (“Bylaws”), 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 our securities. Among other things, these provisions:

Our Charter provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States will be the exclusive forums for certain disputes between us and our stockholders, which could make our securities less attractive and impose legal costs on us if such limitations are challenged

Our Charter provides that, unless we otherwise consent 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:

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 the Securities Act of 1933, as amended (the “Securities Act”), orany other claim for which the federal courts have exclusive jurisdiction. In addition, to prevent havingto litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our Charter provides that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted bylaw, the federal district courts of the United States will be the exclusive forumfor resolvingany complaint asserting a cause of action arising under the Securities Act. However, Section 22 of the Securities Act creates concurrent jurisdictionfor federal and state courts over allsuits brought to enforceany 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, our Charter provides that the federal district courts of the United States will be the exclusive forumforthe resolution ofany 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 Actover allsuits brought to enforceany duty or liability created by the Securities Act or therules and regulations thereunder, there is uncertainty as to whether a court would enforce the exclusive forum provision. Our Charter further provides thatany person or entity purchasing or otherwise acquiringany interest in our 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 us or our directors, officers, or other employees and this limitation may make our 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 us or our directors, officers, or other employees in a venue other than in the federal district courts of the United States. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our Charter. This may require significant additional costs associated with resolving such action in other jurisdictions and we 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 our Charter to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could harm our business.

Fluctuations in the price of our securities could contribute to the loss ofallor part of your investment. The trading price of our securities has experienced volatility since the closing of the Business Combination. Forexample, from the closing of the Business Combination through March 22, 2024, the closing price of our common stock on the Nasdaq Global Market ranged from a high of $22.18 to a low of $4.42. The price of our common stockmay continue to experience volatility in the future and is subject to wide fluctuations in response to various factors, some of which are beyond our control. Anyof such factors, including the factors listed below, could have a material adverse effect on your investment in

our securities and our securitiesmay tradeat prices significantly below the priceyou paid. In such circumstances, the trading price of our securitiesmaynot recover andmay experience a further decline.

Broad market and industry factors may materially harm the market price of our securities irrespective of our 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 performanceof the particular companies affected. The trading prices and valuations of these stocks, and of our securities, maynot bepredictable. A loss of investor confidence in the marketfor medical device company stocks or the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our abilityto obtain additional financing in the future.

Moreover, 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 we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

Our 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 our business, operating results and financial condition. Debt or equity issued to raise additional capital may reduce the value of our common stock

Wecannot be certain when or if our operations will generate sufficient cash to fund our ongoing operations or the growth of our business. We intend to make investments to support our current business and may require additional funds to respond to business challenges. Additional financing may not be availableon favorable terms, if at all. If adequate funds are not available on acceptable terms, we may be unable to invest in our future growth opportunities, which could harm our business, operating results and financial condition. If we incur debt, the debt holders could have rights senior to holders of our common

stock tomake claims on our assets. The terms ofany debt could restrict our operations, including our ability topay dividends on our common stock. If we issue additional equity securities in the future, our stockholders will experience dilution, and the new equity securities could have rights senior to those of our common stock. Because the decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing or nature ofany future issuances of debt or equity securities. As a result, stockholders will bear the risk of future issuances of debt or equity securities reducing thevalueof their common stock and diluting their interest.

The future sales, or the perception of future sales, of sharesby existing stockholders and future exerciseof registration rights may adversely affect the market price of our common stock

Sales of a substantial number of shares of our common stock in the public market could occur at any time. If our existing stockholders sell substantial amounts of common stock in the public market, or the market perceives that they intend to do so, the market price of our common stock could decline.

The holders of an aggregate of 17,148,494 shares of common stock (not including 1,310,000 shares underlying warrants) or approximately 47.9% of our outstanding common stock as of March 22, 2024, are entitled to registration rights under the Second Amended and Restated Registration Rights Agreement and Lock-Up Agreement, as of November 21, 2023 (the “Amended and Restated Registration Rights Agreement”) entered into in connection with the closing of the Business Combination, and the Company expects to file on the date hereof an amendment to the registration statement that registers, among other things, the resale of those outstanding shares of Common Stock as well as the issuance of shares of Common Stock underlying warrants. In certain circumstances, holders of these securities can demand that we conduct an underwritten offering of their securities or facilitate block trades of their securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements we file. We will bear the expenses incurred in connection with the filing of any such registration statements. The presence of these additional shares trading in the public market may have an adverse effect on the market price of our securities.

Due to the significant number of redemptions of HSAC2’s ordinary shares in connection with the Business Combination, there was a significantly lower number of HSAC2 ordinary shares that converted into shares of our common stock in connection with the Business Combination. As a result, the shares of our common stock being registered for resale (a portion of which may not be resold until the expiration of the applicable lock-up period) are anticipated to constitute a considerable percentage of our public float. Additionally, some of the shares of our common stock being registered for resale were originally purchased by selling securityholders pursuant to investments in Legacy Orchestra at prices considerably below the current market price of our common stock. This discrepancy in purchase prices may have an impact on the market perception of our common stock’s value and could increase the volatility of the market price of our common stock or result in a significant decline in the public trading price of our common stock. The registration of these shares for resale creates the possibility of a significant increase in the supply of our common stock in the market. The increased supply, coupled with the potential disparity in purchase prices, may lead to heightened selling pressure, which could negatively affect the public trading price of our common stock.

Certain of our officers and directors and Medtronic are subject to lock-up agreements covering 6,895,756 shares of common stock (the “Lock-Ups”), including common stock issuable upon exercise of warrants, pursuant to which our officers and directors and Medtronic have agreed that they will not, without our permission and subject to certain exceptions, among other things, sell or transfer any shares of our capital stock held by such person or any of their affiliates (the “Transfer Restrictions”). The Lock-Ups expire upon the earlier of (i) five calendar days following the date of the publication of certain results of the BACKBEAT pivotal study; provided, that in the event the results of the BACKBEAT pivotal study are positive as reasonably determined by Medtronic, the Transfer Restrictions shall continue for an additional five calendar days following the U.S. regulatory approval; provided, further that the Transfer Restrictions shall terminate immediately (A) if the BACKBEAT pivotal study is terminated or (B) if the Medtronic Agreement is terminated and (ii) December 16, 2024. As the restrictions on resale end, the market price of shares of our common stock could drop significantly if the holders of these shares of common stock sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.

Our warrants may not be exercised at all and we may not receive any cash proceeds from the exercise of the warrants.

The exercise prices of our warrants, in certain circumstances, may be higher than the prevailing market price of our underlying common stock and the cash proceeds to us associated with the exercise of our warrants are contingent upon our stock price. The value of our common stock may fluctuate and may not exceed the exercise price of the warrants at any given time. As of the date of this Annual Report on Form 10-K, a significant portion of our warrants are “out of the money,” meaning the exercise price is higher than the market price of our common stock. Holders of such “out of the money” warrants are not likely to exercise such warrants. There can be no assurance that such warrants will be in the money prior to their respective expiration dates, and therefore, we may not receive any cash proceeds from the exercise of such warrants. See “Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” for additional information.

If we fail to satisfy Nasdaq’scontinued listing requirements, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaqmay take steps to delist our common stock. Such a delisting would likely havea negative effect on the price of our common stock and would impair a stockholder’s ability to sell or purchase our common stock when a stockholder wishes to do so. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allowour common stock to become listed again, stabilize the market price orimprovethe liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’slisting requirements.

If securities or industry analysts do not publish or cease publishing research or reports aboutus, our business, or our market, or if they change their recommendations regarding our securities adversely, the price and trading volume of our securities could decline

The trading marketforour securities will be influenced by the research and reports that industry or securities analystsmay publish aboutus, our business, our market, or our competitors. Ifanyof the analysts who cover us change their recommendation regarding our common stock adversely, or provide more favorable relative recommendations about our competitors, the price of our securities would likely decline. If any analyst who covers or may cover us were to cease coverage or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

Because we do not anticipate paying any cash dividends in the foreseeable future, capital appreciation, if any, would be your sole source of gain

We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Anyfuture determination topay dividends will be madeatthe discretion of our Board, subject to applicable laws. It will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual, legal, tax and regulatory restrictions, general business conditions, and other factors that our Board 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 our securities. As a result, capital appreciation, if any, of our securities would be your sole source of gain on an investment in such securitiesforthe foreseeable future.

It may be more difficult to compare our performance to that of other public companies and our securities may be less attractive to investors if we take advantage of exemptions from disclosure requirements that are available to an “emerging growth company”

Wequalify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we are eligiblefor certain exemptions availableto emerging growth companies from various reporting requirements applicable to other public companies that are not emerging growth companies. Weintend totake advantage of those exemptionsforas long as we continue to be an emerging growth company. Wewill remain an emerging growth

company until the earliest of (i) the lastdayof the fiscal year in which the market valueof our common stock that is held by non-affiliates exceeds $700 million as of June 30 of that fiscal year,(ii) the lastdayof the fiscal year in which wehave total annual gross revenueof $1.235 billion or more during such fiscal year (as indexedfor inflation), (iii) the date on which wehave 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 shares by our predecessor in its initial public offering, which will be December 31, 2026.

The exemptions availableto 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 fromsay-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (c) reduced disclosure obligations regarding executive compensation in its periodic reports andproxy statements. In addition, Section 107 of the JOBS Actalso provides that an emerging growth company cantake 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 we are 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. We have elected not to opt out of such extended transition period and, therefore, wemaynot be subject to the same new or revised accounting standards as other public companies that are not emerging growth companiesor that are emerging growth companies that have opted out of the extended transition period. Thismay makeit more difficult tocompareour performance to that of other public companies which could makeour securities less attractive, whichmay result in a less active and more volatile trading marketforour securities.

We may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act, which could have a material adverse effect on our business

Pursuant to Section 404 of the Sarbanes-Oxley Act, and in light of SEC guidance, management is required to report our assessment of internal control over financial reporting beginning with the fiscal year ending December 31, 2023, and, if and when we become an accelerated filer or large accelerated filer who is not eligible to be a smaller reporting company and has annual revenues of at least $100.0 million (and cease to be an emerging growth company), an attestation of the independent registered public accounting firm will also be required. The rules governing the standards that must be met for management to assess internal control over financial reporting are complex and require significant documentation, testing and possible remediation. To comply with the Sarbanes-Oxley Act, the requirements of being a reporting company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and any complex accounting rules in the future, we may need to upgrade our legacy information technology systems, implement additional financial and management controls, reporting systems and procedures, and hire additional accounting and finance staff or retain additional outside consultants.

If we are unable to implement the additional requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, we may not be able to assess whether our internal control over financial reporting is effective, which may subject us to adverse regulatory consequences and could harm investor confidence and lead to a decrease in the market price of our securities. We could become subject to investigations by Nasdaq, the SEC or other regulatory authorities, which could require additional financial and management resources.

We will incur significant increased expenses and administrative burdens as a public company, which could negatively impact our business, financial condition and results of operations

We face increased legal, accounting, administrative and other costs and expenses as a public company. These increased costs require us 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 expensesfor 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 Reformand 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 increase costs andmake regulated activities more time-consuming. Advocacy efforts by stockholders and third partiesmay also prompt

additional changes in governance and reporting requirements, which could further increase costs and administrative burdens. In order to comply with these requirements, we carry out activities that Legacy Orchestra had not done previously. Forexample, we have created and adopted new internal controls and disclosure controls and procedures, all of which will increase expenses and administrative burdens. In addition, wehavenew expenses associated with SEC reporting requirements.

Furthermore, ifany issues in complying with those requirements are identified (for example, if the auditors identify a material weakness or significant deficiency in the internal control over financial reporting), we could incur further additional costs to remediate those issues. Itmay alsobe more expensive to obtain director and officer liability insurance. Risks associated with our status as a public company may make it more difficult to attract and retain qualified persons to serve on our Board or as executive officers. The additional reporting and other obligations imposed by these rules and regulations increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs require us to divert a significant amount of money that could otherwise be used to expand thebusinessand achieve strategic objectives.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC, Nasdaq 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 our business and results of operations.