Orchestra BioMed Holdings, Inc.

Previous wording

Our flagship product candidates are atrioventricular interval modulation (“AVIM”) therapy (formerly referred to as BackBeat Cardiac Neuromodulation Therapy (“BackBeat CNT”)), for the treatment of hypertension (“HTN”), a significant risk factor for death worldwide, and Virtue Sirolimus AngioInfusion Balloon (“Virtue SAB”) for the treatment of artery disease, the leading cause of mortality worldwide. We have an exclusive license and collaboration agreement with Medtronic, Inc. for the development and commercialization of AVIM therapy for the treatment of HTN in patients indicated for a cardiac pacemaker. We are conducting a double-blind, randomized study (“BACKBEAT”) that is expected to enroll a total of 500 patients that have previously been implanted with a Medtronic dual-chamber pacemaker. We currently estimate completion of enrollment of the BACKBEAT study in the first half of 2026; however, there is no assurance that our current operating plan will be achieved. We have a strategic collaboration with Terumo Medical Corporation (“Terumo”) for the development and commercialization of Virtue SAB for the treatment of coronary and peripheral artery disease. We recently received FDA approval for an amended FDA investigational device exemption (“IDE”) to conduct a U.S. pivotal study in coronary ISR randomizing Virtue SAB vs. Boston Scientific Corporation’s

Current wording

Our flagship product candidates are atrioventricular interval modulation (“AVIM”) therapy (formerly referred to as BackBeat Cardiac Neuromodulation Therapy (“BackBeat CNT”)), for the treatment of hypertension (“HTN”), a significant risk factor for death worldwide, and Virtue Sirolimus AngioInfusion Balloon (“Virtue SAB”) for the treatment of atherosclerotic artery disease, the leading cause of mortality worldwide. We have an exclusive license and collaboration agreement with Medtronic, Inc. for the development and commercialization of AVIM therapy for the treatment of HTN in patients indicated for a cardiac pacemaker. We are conducting a double-blind, randomized study (the “BACKBEAT study”) that is expected to enroll a total of 500 patients who have previously received a Medtronic dual-chamber pacemaker. We currently estimate completion of enrollment of the BACKBEAT study in mid-2026; however, there is no assurance that our current operating plan will be achieved. We have a strategic collaboration with Terumo Medical Corporation (“Terumo”) for the development and commercialization of Virtue SAB for the treatment of coronary and peripheral artery disease. We recently received FDA approval for an amended FDA investigational device exemption (“IDE”) to conduct a U.S. pivotal study in coronary ISR randomizing Virtue SAB vs. Boston Scientific Corporation’s

Previous wording

Since Legacy Orchestra’s inception, we have devoted the substantial majority of our resources to performing research and development and clinical activities in support of our product development and collaboration efforts. We have funded our operations primarily through the issuance of convertible preferred stock and proceeds from the Business Combination, as well as through proceeds from our distribution agreement with Terumo (the “Terumo Agreement”), borrowings under debt arrangements and, to a lesser extent, from product revenue from our subsidiary, FreeHold Surgical, LLC. (“FreeHold”). Through March 31, 2025, we have raised a cumulative $252.3 million in gross proceeds through the issuance of convertible preferred stock, proceeds from the Business Combination and other equity sales, and have received $30.0 million from the Terumo Agreement. We have incurred net losses each year since inception. Our net losses were $18.8 million and $13.5 million for the three months ended March 31, 2025 and 2024, respectively. We expect to continue to incur significant losses for the foreseeable future. As of March 31, 2025, we had an accumulated deficit of $328.6 million.

Current wording

Since Legacy Orchestra’s inception, we have devoted the substantial majority of our resources to performing research and development and clinical activities in support of our product development and collaboration efforts. We have funded our operations primarily through the issuance of convertible preferred stock and proceeds from the Business Combination, as well as through proceeds from our distribution agreement with Terumo (the “Terumo Agreement”), borrowings under debt arrangements and, to a lesser extent, from product revenue from our subsidiary, FreeHold Surgical, LLC. (“FreeHold”). Through June 30, 2025, we have raised a cumulative $252.3 million in gross proceeds through the issuance of convertible preferred stock, proceeds from the Business Combination and other equity sales, and have received $30.0 million from the Terumo Agreement. We have incurred net losses each year since inception. Our net losses were $38.1 million and $29.4 million for the six months ended June 30, 2025 and 2024, respectively. We expect to continue to incur significant losses for the foreseeable future. As of June 30, 2025, we had an accumulated deficit of $348.0 million.

Previous wording

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 Company Common Stock in connection with the Business Combination. Pursuant to the Amended and Restated Registration Rights Agreement we entered into in connection with the closing of the Business Combination and certain warrant agreements, we filed a registration statement (the “Registration Statement”), which was declared effective on May 9, 2024, that registers, among other things, the resale of an aggregate of 18,586,201 shares of Company Common Stock, which constitutes approximately 49% of the outstanding Company Common Stock as of May 8, 2025. Additionally, some of the shares of the Company Common Stock being registered for resale were originally purchased by selling stockholders pursuant to investments in Legacy Orchestra or HSAC2 at prices considerably below the current market price of the Company Common Stock. These selling stockholders may realize a positive rate of return on the sale of their shares of Company Common Stock covered by the Registration Statement and therefore will have an incentive to sell their shares. Public shareholders may not experience a similar rate of return on shares of Company Common Stock they purchased. This discrepancy in purchase prices may have an impact on the market perception of the Company Common Stock’s value and could increase the volatility of the market price of the Company Common Stock or result in a significant decline in the public trading price of the Company Common Stock. The registration of these shares of Company Common Stock for resale creates the possibility of a significant increase in the supply of the Company 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 the Company Common Stock.

Current wording

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 Company Common Stock in connection with the Business Combination. Pursuant to the Amended and Restated Registration Rights Agreement we entered into in connection with the closing of the Business Combination and certain warrant agreements, we filed a registration statement (the “Resale Registration Statement”), which was declared effective on May 9, 2024, that registers, among other things, the resale of an aggregate of 18,586,201 shares of Company Common Stock, which constitutes approximately 34% of the outstanding Company Common Stock as of August 8, 2025. Additionally, some of the shares of the Company Common Stock being registered for resale were originally purchased by selling stockholders pursuant to investments in Legacy Orchestra or HSAC2 at prices considerably below the current market price of the Company Common Stock. These selling stockholders may realize a positive rate of return on the sale of their shares of Company Common Stock covered by the Resale Registration Statement and therefore will have an incentive to sell their shares. Public shareholders may not experience a similar rate of return on shares of Company Common Stock they purchased. This discrepancy in purchase prices may have an impact on the market perception of the Company Common Stock’s value and could increase the volatility of the market price of the Company Common Stock or result in a significant decline in the public trading price of the Company Common Stock. The registration of these shares of Company Common Stock for resale creates the possibility of a significant increase in the supply of the Company 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 the Company Common Stock.

Previous wording

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, and are also eligible to earn royalties on future sales by Terumo based on royalty rates ranging from 10 - 15%. Of these milestone payments, $35 million relate to achieving certain milestones by specified target achievement dates. As of the date of this Quarterly Report on Form 10-Q, the target achievement dates for three $5 million milestone payments have already passed, 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 changes to regulatory requirements, including increased testing and other activities related to chemistry, manufacturing, and control, increased nonclinical and good laboratory practice preclinical data requirements, including biocompatibility, as well as a requirement to repeat good laboratory practice preclinical studies already performed based on changes to source of component materials and a change in manufacturing site, that caused us to amend our original project plan, we are unlikely to be able to complete the remaining time-based milestones by the specified target achievement dates to earn the remaining $20 million in time-based milestone payments pursuant to the Terumo Agreement.

Current wording

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, and are also eligible to earn royalties on future sales by Terumo based on royalty rates ranging from 10 - 15%. Of these milestone payments, $35 million relate to achieving certain milestones by specified target achievement dates. As of June 30, 2025, the target achievement dates for three $5 million milestone payments have already passed, 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 changes to regulatory requirements, including increased testing and other activities related to chemistry, manufacturing, and control, increased nonclinical and good laboratory practice preclinical data requirements, including biocompatibility, as well as a requirement to repeat good laboratory practice preclinical studies already performed based on changes to source of component materials and a change in manufacturing site, that caused us to amend our original project plan, we will not be able to complete the remaining time-based milestones by the specified target achievement dates to earn the remaining $20 million in time-based milestone payments pursuant to the Terumo Agreement.

Previous wording

are now in a mediation procedure pursuant to the Terumo Agreement and the International Mediation Rules of the International Centre for Dispute Resolution (“ICDR”). The mediation could assist in potentially resolving disagreements and facilitating the completion of negotiations. The Terumo Agreement provides that matters that are not resolved through mediation are to be resolved by binding arbitration conducted under the auspices of the ICDR in accordance with its International Arbitration Rules. If the mediation does not lead to a timely agreement or resolution, or, if applicable, we do not prevail in arbitration, or if the Terumo Agreement is terminated, our clinical study, product development, and commercialization plans for Virtue SAB may be further adversely impacted. However, any termination of the Terumo Agreement in the context of an arbitration or otherwise would allow us to pursue an alternative strategic collaboration or other transaction with a different partner.

Current wording

through mediation are to be resolved by binding arbitration conducted under the auspices of the ICDR in accordance with its International Arbitration Rules. If the mediation does not lead to a timely agreement or resolution, or, if applicable, we do not prevail in arbitration, or if the Terumo Agreement is terminated, our commercialization plans for Virtue SAB may be adversely impacted. However, any termination of the Terumo Agreement in the context of mediation, an arbitration or otherwise would allow us to pursue an alternative strategic collaboration or other transaction with a different partner. We currently expect the formal mediation to be completed by the end of the third quarter of 2025. Regardless of the mediation process with Terumo, we intend to initiate enrollment of the Virtue SAB trial, our pivotal study of Virtue SAB for coronary in-stent restenosis in the U.S. during the second half of 2025, as well as to continue other product development efforts related to Virtue SAB.

Previous wording

We recorded the $30.0 million upfront payment received in 2019 from Terumo within deferred revenue and are recognizing the upfront payment over time based on a proportional performance model based on the costs incurred to date relative to the total costs expected to be incurred through the completion of the development of the Coronary ISR indication, for which we are primarily responsible. We have recognized $15.3 million in cumulative partnership revenues from 2019 through March 31, 2025. There were no other proceeds received pursuant to the Terumo Agreement from 2019 through March 31, 2025.

Current wording

We recorded the $30.0 million upfront payment received in 2019 from Terumo within deferred revenue and are recognizing the upfront payment over time based on a proportional performance model based on the costs incurred to date relative to the total costs expected to be incurred through the completion of the development of the Coronary ISR indication, for which we are primarily responsible. We have recognized $16.0 million in cumulative partnership revenues from 2019 through June 30, 2025. There were no other proceeds received pursuant to the Terumo Agreement from 2019 through June 30, 2025.

Previous wording

Interest income reflects the income generated from marketable securities during the year. Interest expense is attributable to loan interest.

Current wording

Interest (expense) income, net reflects the income generated from marketable securities during the year. Interest expense is attributable to loan interest.

Previous wording

On November 6, 2024 (the “LSA Closing Date”), we and certain of our subsidiaries entered into a Loan and Security Agreement (the “2024 LSA”), with Hercules Capital IV, L.P. (“Hercules IV”), Hercules SBIC V, L.P. (“Hercules V”), and Hercules Capital, Inc., as administrative agent and collateral agent (collectively with Hercules IV and Hercules V, “Hercules”). The 2024 LSA provides a secured term loan facility of up to $50.0 million available in up to four tranches (collectively, the “Term Loans”), with the first tranche of $15.0 million drawn on the LSA Closing Date, a second and third tranche of up to an aggregate of $15.0 million available upon achievement of certain performance and financing milestones. Additionally, we may have access to a fourth tranche of $20.0 million subject to future approval. The Term Loan has a maturity date of November 6, 2028 and accrues interest at a floating per annum rate equal to the greater of (i) (x) the “prime rate” as reported in The Wall Street Journal plus (y) 2.0%, and (ii) 9.50%. Refer to Note 13 –“Debt Financing” to our Consolidated Financial Statements.

Current wording

On November 6, 2024 (the “LSA Closing Date”), we and certain of our subsidiaries (together, the “Borrower”) entered into a Loan and Security Agreement, by and among the Borrower, the several banks and other financial institutions or entities party thereto, as lenders (collectively, the “Hercules Lenders”), and Hercules Capital, Inc. (“Hercules”), as administrative agent and collateral agent for itself and the Hercules Lenders, as amended by that certain First Amendment to Loan and Security Agreement dated as of December 30, 2024 (as amended, the “2024 LSA”). The 2024 LSA provided a secured term loan facility of up to $50.0 million available in up to four tranches (collectively, the “Term Loans”), with the first tranche of $15.0 million drawn on the LSA Closing Date, and a second and third tranche of up to an aggregate of $15.0 million were available upon achievement of certain performance and financing milestones. Additionally, the Company had access to a fourth tranche of $20.0 million subject to future approval. The Term Loan has a maturity date of November 6, 2028 and accrues interest at a floating per annum rate equal to the greater of (i) (x) the “prime rate” as reported in The Wall Street Journal plus (y) 2.0%, and (ii) 9.50%. Refer to Note 13 –“Debt Financing” to our Consolidated Financial Statements. On July 31, 2025, the Borrower, the Hercules Lenders and Hercules entered into the LSA Amendment, which became effective on August 4, 2025. See “Overview—Amendments to Hercules Loan and Security Agreement and Warrant Agreements” above in this Item 2.

Previous wording

The loss on fair value of strategic investments represents a change in the preferred shares and convertible notes of Vivasure Medical Limited (“Vivasure”), a privately-held company and related party, and fair value of our investment in common stock holdings of a previously publicly-held company. The investments in Vivasure do not have readily determinable fair values and are recorded at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The common stock held represented equity securities with a readily determinable fair value and were required to be measured at fair value at each reporting period using readily determinable pricing available on a securities exchange, in accordance with the provisions of ASU 2016-01.

Current wording

The loss on fair value of strategic investments represents a change in the preferred shares and convertible notes of Vivasure Medical Limited (“Vivasure”), a privately-held company and related party, and fair value of our investment in common stock holdings of a previously publicly-held company. The investments in Vivasure do not have readily determinable fair values and are recorded at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The common stock held represented equity securities with a readily determinable fair value and were required to be measured at fair value at each

Previous wording

Product revenue consisted of the sale of FreeHold Duo and Trio intracorporeal organ retractors and revenue is recognized when product is shipped to customers. The increase in product revenue was due to an increase in the purchase

Current wording

Product revenue primarily consisted of the sale of FreeHold Duo and Trio intracorporeal organ retractors and revenue is recognized when product is shipped to customers. The increase in product revenue was due to an increase in the purchase volume. There were no changes to the per unit sale price between the periods presented.

Previous wording

Research and development expenses increased by $4.4 million, or approximately 48%, to $13.5 million for the three months ended March 31, 2025 from $9.1 million for the three months ended March 31, 2024. This is primarily due to an increase in support of ongoing work to advance the BACKBEAT (BradycArdia paCemaKer with AVIM forBlood prEssure treAtmenT) global pivotal study (“BACKBEAT study”) and to advance Virtue SAB into a planned pivotal study. The increase included an increase of $2.6 million in non-clinical development costs associated with research and development program costs, supplies, and testing, an increase in personnel-related expenses of $1.1 million due to increased headcount and associated expenses, an increase of $507,000 in clinical development costs, and an increase in stock-based compensation of $215,000.

Current wording

Research and development expenses increased by $7.1 million, or approximately 35%, to $27.3 million for the six months ended June 30, 2025 from $20.2 million for the six months ended June 30, 2024. This is primarily due to an increase in support of ongoing work to advance the BACKBEAT study and to advance Virtue SAB into a planned pivotal study. The increase included an increase of $3.0 million in clinical development costs, an increase in personnel-related expenses of $2.2 million due to increased headcount and consulting costs, an increase of $1.1 million in non-clinical development costs associated with research and development program costs, supplies, and testing, and an increase in stock-based compensation of $710,000.

Previous wording

Selling, general and administrative expenses increased by $366,000, or approximately 6%, to $6.3 million for the three months ended March 31, 2025, from $5.9 million of expense for the three months ended March 31, 2024. The increase primarily resulted from an increase in stock-based compensation of $162,000, and an increase of $169,000 of marketing, investor relations and public relations expenses incurred in connection with the overall growth of the business and operating as a public company.

Current wording

Selling, general and administrative expenses increased by $163,000, or approximately 1%, to $12.5 million for the six months ended June 30, 2025, from $12.4 million of expense for the six months ended June 30, 2024. The increase primarily resulted from an increase in stock-based compensation of $157,000.

Previous wording

Interest income, net, decreased by $850,000, or approximately 84%, to $166,000 of income for the three months ended March 31, 2025, from $1.0 million of income for the three months ended March 31, 2024. The net interest income in the 2025 period consisted primarily of interest earned from marketable securities partially offset by monthly interest expense resulting from the 2024 LSA. The net interest income in the 2024 period consisted primarily of interest earned from marketable securities.

Current wording

Interest income, net, decreased by $1.8 million, or approximately 93%, to $130,000 of income for the six months ended June 30, 2025, from $1.9 million of income for the six months ended June 30, 2024. The net interest income in the 2025 period consisted primarily of interest earned from marketable securities partially offset by monthly interest expense resulting from the 2024 LSA. The net interest income in the 2024 period consisted primarily of interest earned from marketable securities. The decrease in net interest income resulted from lower amounts of marketable securities held during the 2025 period.

Previous wording

No gain or loss on fair value of strategic investments was recognized for the three months ended March 31, 2025. The loss of $45,000 for the three months ended March 31, 2024 related to the change in fair value in our common stock holdings of a previously publicly-held company.

Current wording

No gain or loss on fair value of strategic investments was recognized for the six months ended June 30, 2025. The loss of $68,000 for the six months ended June 30, 2024 related to the change in fair value in our common stock holdings of a previously publicly-held company.

Previous wording

Partnership revenue increased by $235,000, or approximately 47%, to $732,000 in the three months ended March 31, 2025 from $497,000 for the three months ended March 31, 2024. Partnership revenue relates to the recognition of the combined performance obligation for the license granted to Terumo and the ongoing research and development services over the estimated performance period for the Virtue SAB coronary ISR indication, using a proportional performance model, based on the costs incurred relative to the total estimated costs of the research and development services. As of each quarterly reporting date, we evaluate our estimates of the total costs expected to be incurred through the completion of the combined performance obligation and update our estimates as necessary.

Current wording

Partnership revenue increased by $39,000, or approximately 6%, to $667,000 in the three months ended June 30, 2025 from $628,000 for the three months ended June 30, 2024. Partnership revenue relates to the recognition of the combined performance obligation for the license granted to Terumo and the ongoing research and development services over the estimated performance period for the Virtue SAB Coronary ISR indication, using a proportional performance model, based on the costs incurred relative to the total estimated costs of the research and development services. As of each quarterly reporting date, we evaluate our estimates of the total costs expected to be incurred through the completion of the combined performance obligation and update our estimates as necessary.

Previous wording

For the three months ended March 31, 2025 and 2024, the expenses incurred related to the Terumo Agreement were approximately $3.5 million and $2.9 million, respectively. The estimated total costs associated with the Terumo Agreement through completion as of March 31, 2025 were approximately similar as compared to the estimates as of December 31, 2024, and increased by approximately 1.2% as of March 31, 2024, as compared to the estimates as of December 31, 2023.

Current wording

For the three months ended June 30, 2025 and 2024, the expenses incurred related to the Terumo Agreement were approximately $3.3 million and $4.0 million, respectively. The estimated total costs associated with the Terumo Agreement through completion were similar as of June 30, 2025 as compared to the estimates as of March 31, 2025, and increased by approximately 1.6% as of June 30, 2024, as compared to the estimates as of March 31, 2024.

Previous wording

Cost of product revenue increased by $10,000, or approximately 29%, to $44,000 in the three months ended March 31, 2025 from $34,000 for the three months ended March 31, 2024. The increase was primarily due to higher production costs per unit of FreeHold Duo and Trio intracorporeal organ retractors.

Current wording

Cost of product revenue increased by $2,000, or approximately 5%, to $46,000 in the three months ended June 30, 2025 from $44,000 for the three months ended June 30, 2024. The increase was primarily due to higher production costs per unit of FreeHold Duo and Trio intracorporeal organ retractors.

Previous wording

The total research and development expenses summarized above include $3.5 million for the three months ended March 31, 2025 and $2.8 million for the three months ended March 31, 2024 related to the Terumo Agreement. The increase of approximately $700,000 is due to increased expense activity related to the Terumo Agreement during the three months ended March 31, 2025 compared to the same period in 2024.

Current wording

The total research and development expenses summarized above include $3.3 million for the three months ended June 30, 2025 and $4.0 million for the three months ended June 30, 2024 related to the Terumo Agreement. The decrease of $724,000 is due to decreased expense activity related to the Terumo Agreement during the three months ended June 30, 2025 compared to the same period in 2024.

Previous wording

From inception through March 31, 2025, we have incurred significant operating losses and negative cash flows from our operations. Our net losses were $18.8 million and $13.5 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $328.6 million. We have funded our operations primarily through the issuance of convertible preferred stock, proceeds from the Business Combination and other equity sales, as well as through proceeds from the Terumo Agreement, borrowings under debt arrangements and, to a lesser extent, from FreeHold product revenue. Through March 31, 2025, we have raised a cumulative $252.3 million in gross proceeds through the issuance of convertible preferred stock, proceeds from the Business Combination and other equity sales, and have received $30.0 million under the Terumo Agreement. We had $18.4 million in cash and cash equivalents at March 31, 2025, which consisted primarily of bank deposits and money market funds. We also had $31.5 million of short-term marketable securities at March 31, 2025, which consisted primarily of our investments in corporate debt securities.

Current wording

From inception through June 30, 2025, we have incurred significant operating losses and negative cash flows from our operations. Our net losses were $38.1 million and $29.4 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had an accumulated deficit of $348.0 million. We have funded our operations primarily through the issuance of convertible preferred stock, proceeds from the Business Combination and other equity sales, as well as through proceeds from the Terumo Agreement, borrowings under debt arrangements and, to a lesser extent, from FreeHold product revenue. Through June 30, 2025, we have raised a cumulative $252.3 million in gross proceeds through the issuance of convertible preferred stock, proceeds from the Business Combination and other equity sales, and have received $30.0 million under the Terumo Agreement. We had $33.9 million in cash and cash equivalents and marketable securities at June 30, 2025, comprised of $18.7 million in cash and cash equivalents and $15.2 million in marketable securities. Cash and cash equivalents consisted primarily of bank deposits and money market funds while short-term marketable securities consisted primarily of our investments in corporate debt securities. On August 4, 2025, we received $76.2 million as a result of concurrent equity offerings and strategic transactions, which included $16.2 million in proceeds from an equity private placement with Medtronic and Ligand, $40.0 million from a public equity offering, and $20.0 million related to entering into the Revenue Purchase and Sale Agreement with Ligand. Future committed cash receipts expected in April 2026 from the same strategic transactions include $20.0 million from the Medtronic Loan Agreement, and an additional $15.0 million from Ligand under the Revenue Purchase and Sale Agreement.

Previous wording

We continue to prioritize our spending on our AVIM therapy program and the execution of our BACKBEAT study. We currently expect operating expenses to increase to support clinical study costs as well as additional research and development expenses in support of future potential regulatory approval and commercialization of AVIM-enabled Medtronic pacemakers. This year, we expect spending related to our Virtue SAB program will be primarily focused on initiating enrollment of our planned Virtue Trial (also known as the Virtue ISR-US pivotal study). As previously disclosed, we recently received FDA approval for an IDE amendment to initiate our planned clinical trial for the treatment of coronary ISR comparing Virtue SAB to Boston Scientific Corporation’s AGENT™ DCB.

Current wording

While we continue to prioritize spending on our AVIM therapy program and the execution of our BACKBEAT study, we are planning to increase spending to support our planned U.S. pivotal clinical trial initiation for our Virtue SAB program. We expect operating expenses to increase to support (1) clinical study costs as well as additional research and development expenses in support of future potential regulatory approval and commercialization of AVIM-enabled Medtronic pacemakers; and (2) our Virtue SAB program, which will be primarily focused on initiating enrollment of our planned Virtue Trial, a U.S. pivotal clinical trial for the treatment of coronary ISR comparing Virtue SAB to Boston Scientific Corporation’s AGENT™ DCB, for which we have received FDA full IDE approval and anticipate launching in the second half of 2025.

Previous wording

The amount and timing of our future funding requirements are dependent on many factors, including the cost and pace of execution of clinical studies and research and development activities, the strength of results from clinical studies and other research, development and manufacturing efforts, as well as the potential receipt of revenues or other payments or investments under a restructured Terumo Agreement, the Medtronic Agreement and/or future collaborations, and the realization of cash from the acquisition of Vivasure by Haemonetics. We may also need to seek additional sources of liquidity to meet our funding requirements, including the issuance of new equity, additional drawdowns under the 2024 LSA to the extent we meet the financing and performance requirements to be eligible for such drawdowns, drawdowns on

Current wording

Based on internally prepared budget estimates that reflect our operating priorities, we anticipate that our cash, cash equivalents, marketable securities, expected future proceeds from contractual financing commitments and other potential future proceeds described below are sufficient to fund our operations into the second half of 2027. The amount and timing of our future funding requirements may change from this current estimate and are dependent on many factors, including the cost and pace of execution of clinical studies and research and development activities, the strength of results from clinical studies and other research, development and manufacturing efforts, as well as the receipt of payments under the Revenue Purchase and Sale Agreement and the Medtronic Loan Agreement, and the realization of cash from the sale of

Previous wording

As noted above, the sale of Company Common Stock pursuant to the Registration Statement may result in a decline in the value of the Company Common Stock, which may make it more difficult and more dilutive to the existing holders of Company Common Stock to raise funds from the sale of our equity securities.

Current wording

As noted above, the sale of Company Common Stock pursuant to the Resale Registration Statement may result in a decline in the value of the Company Common Stock, which may make it more difficult and more dilutive to the existing holders of Company Common Stock to raise funds from the sale of our equity securities.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2025 was $16.6 million and primarily consisted of our net loss of $18.8 million and changes in net operating assets and liabilities of $1.0 million, partially offset by non-cash charges of $3.1 million. Our non-cash charges primarily consisted of stock-based compensation of $3.0 million, partially offset by $112,000 related to accretion and interest of marketable securities. The net change in operating assets and liabilities was primarily due to a decrease in deferred revenue of $732,000, a decrease in accounts payable, accrued expenses and other liabilities of $202,000, and a decrease in operating lease liabilities of $132,000.

Current wording

Net cash used in operating activities for the six months ended June 30, 2025 was $32.1 million and primarily consisted of our net loss of $38.1 million and changes in net operating assets and liabilities of $632,000, partially offset by non-cash charges of $6.6 million. Our non-cash charges primarily consisted of stock-based compensation of $6.2 million, partially offset by $161,000 related to accretion and interest of marketable securities. The net change in operating assets and liabilities was primarily due to a decrease in deferred revenue of $1.4 million offset by a decrease in accounts payable, accrued expenses and other liabilities of $888,000.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2024 was $13.1 million and primarily consisted of our net loss of $13.5 million, and changes in net operating assets and liabilities of $1.8 million, partially offset by non-cash charges of $2.2 million. Our non-cash charges primarily consisted of stock-based compensation of $2.6 million, partially offset by $589,000 related to accretion and interest of marketable securities. The net change in operating assets and liabilities was primarily due to a decrease in accounts payable and accrued expenses of $1.3 million, an increase in prepaid expenses and other assets of $60,000, and a decrease in deferred revenue of $497,000.

Current wording

Net cash used in operating activities for the six months ended June 30, 2024 was $23.3 million and primarily consisted of our net loss of $29.4 million, which was partially offset by changes in net operating assets and liabilities of $1.2 million, and non-cash charges of $4.9 million. Our non-cash charges primarily consisted of stock-based compensation of $5.3 million, partially offset by $914,000 related to accretion and interest of marketable securities. The net change in operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $2.4 million and a decrease in deferred revenue of $1.1 million.

Previous wording

Net cash provided by investing activities for the three months ended March 31, 2025 was $13.0 million, which primarily consisted of the sale of $16.0 million of marketable securities, partially offset by the purchase of $2.9 million of marketable securities.

Current wording

Net cash provided by investing activities for the six months ended June 30, 2025 was $29.4 million, which primarily consisted of the sale of $32.4 million of marketable securities, partially offset by the purchase of $2.9 million of marketable securities.

Previous wording

Net cash provided by investing activities for the three months ended March 31, 2024 was $5.9 million, which primarily consisted of the sale of $29.6 million of marketable securities, partially offset by the purchase of $23.7 million of marketable securities.

Current wording

Net cash provided by investing activities for the six months ended June 30, 2024 was $16.3 million, which primarily consisted of the sale of $58.8 million of marketable securities, partially offset by the purchase of $42.4 million of

Previous wording

Net cash provided by financing activities of $296,000 for the three months ended March 31, 2025 was primarily due to $387,000 used to settle taxes associated with restricted stock vesting, partially offset by proceeds of $91,000 related to the exercise of stock options.

Current wording

Net cash used by financing activities of $724,000 for the six months ended June 30, 2025 was primarily due to $815,000 used to settle taxes associated with restricted stock vesting, partially offset by proceeds of $91,000 related to the exercise of stock options.

Previous wording

Net cash provided by financing activities of $18,000 for the three months ended March 31, 2024 was primarily attributable to exercises of stock options.

Current wording

Net cash provided by financing activities of $189,000 for the six months ended June 30, 2024 was primarily attributable to exercises of stock options.

Previous wording

We believe that the accounting policies described below involve a significant degree of judgment and complexity. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our financial condition and

Current wording

We believe that the accounting policies described below involve a significant degree of judgment and complexity. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our financial condition and results of operations. For further information, see Note 2 to the Consolidated Financial Statements* – “Summary of Significant Accounting Policies.”*

Previous wording

We have determined that intellectual property licensed to Terumo and the research and development services to be provided to support the premarket approval by the FDA for the ISR indication represent a combined performance obligation that is satisfied over time, which is currently estimated to be completed in 2029, and that the appropriate method of measuring progress for purposes of recognizing revenues relates to a proportional performance model that measures the proportional performance based on the costs incurred to date relative to the total costs expected to be incurred through the completion of the performance obligation. We evaluate the measure of progress at each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

Current wording

We have determined that intellectual property licensed to Terumo and the research and development services to be provided to support the premarket approval by the FDA for the ISR indication represent a combined performance obligation that is satisfied over time, which is currently estimated to be completed in 2029, and that the appropriate method of measuring progress for purposes of recognizing revenues relates to a proportional performance model that measures the proportional performance based on the costs incurred to date relative to the total costs expected to be incurred through the

Previous wording

In the three months ended March 31, 2025, we updated our estimates of the total costs expected to be incurred through the completion of the combined performance obligation. The impact of the changes in estimates resulted in a reduction in partnership revenues of $6,000, which resulted in negligible effect on net loss per share, basic and diluted. In the three months ended March 31, 2024, the impact of the changes in estimates resulted in a reduction of partnership revenues of $153,000, which resulted in a de minimis effect on net loss per share, basic and diluted.

Current wording

In the six months ended June 30, 2025, we updated our estimates of the total costs expected to be incurred through the completion of the combined performance obligation. The impact of the changes in estimates resulted in a reduction in partnership revenues of $27,000, which resulted in a de minimis effect on net loss per share, basic and diluted. In the six months ended June 30, 2024, the impact of the changes in estimates resulted in a reduction of partnership revenues of $382,000, which resulted in a $0.01 effect on net loss per share, basic and diluted.

Previous wording

Prior to the Business Combination, due to the absence of an active market for Legacy Orchestra’s common stock, Legacy Orchestra utilized methodologies, approaches, and assumptions consistent with the American Institute of Certified Public Accountants’ Audit and Accounting Practice Guide: Valuation of Privately-Held Company Equity Securities Issued as Compensation to estimate the fair value of its common stock. The fair value of Legacy Orchestra’s common stock was determined based upon a variety of factors, including valuations of Legacy Orchestra’s common stock performed with the assistance of independent third-party valuation specialists; Legacy Orchestra’s stage of development and business strategy, including the status of research and development efforts of its product candidates, and the material risks related to its business and industry; Legacy Orchestra’s business conditions and projections; Legacy Orchestra’s results of operations and financial position, including its levels of available capital resources; the valuation of publicly traded companies in the life sciences and biotechnology sectors, as well as recently completed mergers and acquisitions of peer companies; the lack of marketability of Legacy Orchestra’s common stock as a private company; the prices of Legacy Orchestra’s convertible preferred stock sold to investors in arm’s length transactions and the rights, preferences and privileges of its convertible preferred stock relative to those of its common stock; the likelihood of achieving a liquidity event for the holders of Legacy Orchestra’s common stock, such as an initial public offering or a sale of Legacy Orchestra given prevailing market conditions; trends and developments in its industry; the hiring of key personnel and the experience of management; and external market conditions affecting the life sciences and biotechnology industry sectors. Significant changes to the key assumptions underlying the factors used could result in different fair values of Legacy Orchestra’s common stock at each valuation date. In determining the exercise prices for options granted and fair value of restricted stock, we have considered the fair value of the common stock as of the grant date.

Current wording

Public Accountants’ Audit and Accounting Practice Guide: Valuation of Privately-Held Company Equity Securities Issued as Compensation to estimate the fair value of its common stock. The fair value of Legacy Orchestra’s common stock was determined based upon a variety of factors, including valuations of Legacy Orchestra’s common stock performed with the assistance of independent third-party valuation specialists; Legacy Orchestra’s stage of development and business strategy, including the status of research and development efforts of its product candidates, and the material risks related to its business and industry; Legacy Orchestra’s business conditions and projections; Legacy Orchestra’s results of operations and financial position, including its levels of available capital resources; the valuation of publicly traded companies in the life sciences and biotechnology sectors, as well as recently completed mergers and acquisitions of peer companies; the lack of marketability of Legacy Orchestra’s common stock as a private company; the prices of Legacy Orchestra’s convertible preferred stock sold to investors in arm’s length transactions and the rights, preferences and privileges of its convertible preferred stock relative to those of its common stock; the likelihood of achieving a liquidity event for the holders of Legacy Orchestra’s common stock, such as an initial public offering or a sale of Legacy Orchestra given prevailing market conditions; trends and developments in its industry; the hiring of key personnel and the experience of management; and external market conditions affecting the life sciences and biotechnology industry sectors. Significant changes to the key assumptions underlying the factors used could result in different fair values of Legacy Orchestra’s common stock at each valuation date. In determining the exercise prices for options granted and fair value of restricted stock, we have considered the fair value of the common stock as of the grant date.

Previous wording

During the three months ended March 31, 2025 and 2024, stock-based compensation was $3.0 million and $2.6 million, respectively. As of March 31, 2025, we had approximately $15.5 million of total unrecognized stock-based compensation, which we expect to recognize over a weighted-average period of approximately 2.2 years.

Current wording

During the three months ended June 30, 2025 and 2024, stock-based compensation was $3.2 million and $2.8 million, respectively. During the six months ended June 30, 2025 and 2024, stock-based compensation was $6.2 million and $5.3 million, respectively. As of June 30, 2025, we had approximately $16.8 million of total unrecognized stock-based compensation, which we expect to recognize over a weighted-average period of approximately 2.3 years.

Previous wording

We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year following the fifth anniversary of the closing of the initial public offering of HSAC2, (2) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (3) the last day of the fiscal year in which we are deemed to be a “large

Current wording

We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year following the fifth anniversary of the closing of the initial public offering of HSAC2, (2) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (3) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of the Company Common Stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year, or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

Previous wording

We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) the market value of our voting and non-voting Company Common Stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or (ii)(a) our annual revenue is less than $100.0 million during the most recently completed fiscal year and (b) the market value of our voting and non-voting Company Common Stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

Current wording

We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) the market value of our voting and non-voting Company Common Stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or (ii)(a) our annual revenue is less than