Filing summary: Health Sciences Acquisitions Corporation 2
Important entity context: Although the request identifies Orchestra Biomed Holdings, Inc., this 10-Q is filed by Health Sciences Acquisitions Corporation 2 (HSAC 2), a Cayman Islands blank-check company seeking a business combination with a healthcare-innovation focus. It had not commenced operating activities or generated revenue through September 30, 2021; this filing does not report Orchestra Biomed operating results.
Business context and reporting period
The unaudited report covers the quarter and nine months ended September 30, 2021. HSAC 2 raised $160.0 million in its August 2020 IPO and $6.0 million in a simultaneous sponsor private placement. Its business-combination deadline was August 6, 2022.
Financial results and liquidity
| Metric | Three months ended September 30, 2021 | Nine months ended September 30, 2021 |
|---|---|---|
| Operating revenue | None | None |
| Net loss | $90,411 | $290,742 |
| Interest income from trust investments | $4,034 | $11,969 |
| Net loss per ordinary share | $0.00, rounded | $0.01 |
At September 30, 2021, cash was $1.78 million, working capital was approximately $1.7 million, and trust investments were $160.02 million. Total liabilities were $5.74 million, including $5.6 million of deferred underwriting commissions payable only if a business combination is completed. There were no working-capital loans outstanding. Nine-month operating cash use was $243,527; investing cash flow was zero, and financing cash flow was zero.
Changes versus the comparable periods
Third-quarter net loss increased from $66,214 in 2020 to $90,411 in 2021, principally as the company incurred a $30,000 monthly related-party administrative fee in 2021. The nine-month 2021 loss was $290,742; the 2020 comparison covers only May 25, 2020 (inception) through September 30, 2020 and reported an $81,428 loss, so it is not a comparable full nine-month period. Trust investment income remained small.
The company revised its presentation of redeemable public shares, classifying all 16 million shares as temporary equity rather than permanent equity. The filing says the change did not affect total assets, liabilities, cash flows, or net loss; it recast historical presentation and reduced reported equity by reclassifying amounts. Previously filed reports were not amended.
Outlook, risks, and unusual items
- Management said available working capital and potential borrowing capacity should fund needs through a business combination or one year from the filing. However, mandatory liquidation if no combination is completed by August 6, 2022 raises substantial doubt about the company’s ability to continue as a going concern.
- Management was searching for a target and stated that operating revenue would not arise until after a business combination. There is no assurance a transaction will be completed.
- Public shareholders may redeem shares in connection with a transaction. If no combination is completed by the deadline, the company will liquidate; distributions may be delayed by creditor claims or court proceedings. Warrants may expire worthless.
- The sponsor agreed to purchase 2.5 million shares, or equivalent target-company securities, for $25 million in connection with a transaction, subject to the agreement’s terms. The sponsor may provide working-capital loans but is not obligated to do so.
- Management said COVID-19 could negatively affect the company or its search, but the specific impact was not determinable. The filing reports no legal proceedings and no off-balance-sheet arrangements.
Important facts for investors to verify
- Confirm the registrant: this is HSAC 2’s 2021 10-Q, not an Orchestra Biomed operating-results filing.
- Verify the status and terms of any subsequent business combination, including transaction financing, redemptions, and closing conditions.
- Review the revised redeemable-share accounting and how historical figures are presented in later filings.
- Assess cash available outside the trust, related-party obligations, the deferred underwriting fee, and the liquidation deadline applicable at the time.