Orchestra BioMed Holdings, Inc S-1, filed Jul 17, 2020

Orchestra BioMed Holdings, Inc. (OBIO)

S-1 2020-07-17

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Cayman Islands		6770		N/A
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Large accelerated filer £		Accelerated filer £
Non-accelerated filer S		Smaller reporting company S
		Emerging growth company S

Title of Class of Security being registered		Amount to be Registered		Proposed maximum offering price per share		Proposed Maximum Aggregate Offering Price(1)(2)		Amount of Registration Fee
Ordinary Shares, $0.0001 par value		14,375,000		10.00		143,750,000		18,658.75

	Price to Public		Underwriting Discounts and Commissions(1)			Proceeds, Before Expenses, to us
Per Ordinary Share	$	10.00	$	0.55	(2)	$	9.45
Total	$	125,000,000	$	6,875,000		$	118,125,000

		PAGE
PROSPECTUS SUMMARY		1
SUMMARY FINANCIAL DATA		25
RISK FACTORS		26
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS		47
USE OF PROCEEDS		49
DIVIDEND POLICY		52
DILUTION		53
CAPITALIZATION		55
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		56
PROPOSED BUSINESS		60
MANAGEMENT		81
PRINCIPAL SHAREHOLDERS		89
CERTAIN TRANSACTIONS		92
DESCRIPTION OF SECURITIES		95
SHARES ELIGIBLE FOR FUTURE SALE		104
UNDERWRITING		114
LEGAL MATTERS		120
EXPERTS		120
WHERE YOU CAN FIND ADDITIONAL INFORMATION		120
INDEX TO FINANCIAL STATEMENTS		F-1

Ordinary Shares offered		12,500,000 ordinary shares, at $10.00 per ordinary share.
Proposed Nasdaq symbol		“HSAQ”
Trading commencement		The ordinary shares are expected to begin trading on or promptly after the date of this prospectus. We will file a Current Report on Form 8-K with the U.S. Securities and Exchange Commission, or the SEC, including an audited balance sheet, promptly following the closing of this offering, which is anticipated to take place three business days from the date the shares commence trading. The audited balance sheet will reflect our receipt of the proceeds from the exercise of the over-allotment option if the over-allotment option is exercised on the date of this prospectus. If the over-allotment option is exercised after the date of this prospectus, we will file an amendment to the Form 8-K or a new Form 8-K to provide updated financial information to reflect the exercise of the over-allotment option.
Ordinary Shares:
Number outstanding before this offering		3,593,750(1)
Number of private shares to be sold in a private placement simultaneously with this offering		450,000
Number to be outstanding after this offering		16,075,000(2)
Private Warrants:
Number outstanding before this offering		0
Number of private warrants to be sold in a private placement simultaneously with this offering		1,500,000
Exercisability		Each private warrant is exercisable to purchase one of our ordinary shares.
Exercise price of private warrants		$11.50 per ordinary share, subject to adjustments as described herein.
Exercise Period		The private warrants will become exercisable on the later of:
		• 30 days after the completion of our initial business combination, and
		• 12 months from the closing of this offering.

Offering proceeds to be held in the trust account		$125,000,000 (or $143,750,000 if the over-allotment option is exercised in full), of the net proceeds of this offering and the proceeds we will receive from the sale of the private shares and private warrants, or $10.00 per ordinary share sold to the public in this offering, will be placed in a trust account in the United States at Morgan Stanley Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee pursuant to an agreement to be signed on the date of this prospectus. These proceeds include $4,375,000 (or $5,031,250 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions which will be paid to the underwriters upon the closing of a business combination. The remainder of the net proceeds of this offering will not be held in the trust account.
		Except as set forth below, the proceeds held in the trust account will not be released until the earlier of: (1) the completion of our initial business combination within the required time period and (2) our redemption of 100% of the outstanding public shares if we have not completed a business combination in the required time period. Therefore, unless and until our initial business combination is consummated, the proceeds held in the trust account will not be available for our use for any expenses related to this offering or expenses which we may incur related to the investigation and selection of a target business and the negotiation of an agreement in connection with our initial business combination.
		Notwithstanding the foregoing, there can be released to us from the trust account any interest earned on the funds in the trust account that we need to pay our portion of income and franchise tax obligations. With this exception, expenses incurred by us may be paid prior to a business combination only from the net proceeds of this offering not held in the trust account of approximately $2,595,000 (or $2,220,000 if the over-allotment option is exercised in full); provided, however, that in order to meet our working capital needs following the consummation of this offering, if the funds not held in the trust account are insufficient, our initial shareholders or their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest, or, at the lender’s discretion, up to $500,000 of the notes may be converted upon consummation of our business combination into additional private warrants at a price of $1.00 per warrant. Our shareholders have approved the issuance of the private warrants upon conversion of such notes, to the extent the holder wishes to so convert such notes at the time of the consummation of our initial business combination. If we do not complete a business combination, any other outstanding loans from our initial shareholders or their affiliates will be repaid only from amounts remaining outside our trust account, if any.

Insider Shares		Our initial shareholders purchased an aggregate of 3,593,750 ordinary shares for an aggregate purchase price of $28,750, or $0.008 per ordinary share. The 3,593,750 insider shares held or controlled by our initial shareholders include an aggregate of up to 468,750 ordinary shares subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that our initial shareholders will collectively own or control 20% of our issued and outstanding shares after this offering (not including the private shares or private warrants and assuming our initial shareholders do not purchase any shares in this offering). The purchase price of the insider shares was determined by dividing the amount of cash contributed to the company by the number of insider shares issued. If we increase or decrease the size of the offering pursuant to Rule 462(b) under the Securities Act, we will effect a share dividend or share contribution back to capital, as applicable, immediately prior to the consummation of the offering in such amount as to maintain the ownership of our shareholders prior to this offering at 20% of the number of shares outstanding after this offering. Our initial shareholders will collectively beneficially own approximately 20% of our issued and outstanding shares after this offering (not including the private shares or private warrants and assuming our initial shareholders do not purchase any public shares in this offering). Up to 468,750 insider shares will be subject to forfeiture by our initial shareholders (and/or their permitted transferees) depending on the extent to which the underwriters’ over-allotment option is exercised.
		The insider shares are identical to the ordinary shares in this offering, except that:
		• the insider shares are subject to certain transfer restrictions, as described in more detail below;
		• our initial shareholders have entered into letter agreements with us, pursuant to which they have agreed (i) to waive their conversion rights with respect to their insider shares and any public shares they purchase in connection with the completion of our initial business combination and (ii) to waive their redemption rights with respect to their insider shares if we fail to complete our initial business combination within 24 months from the closing of this offering (although they will be entitled to redemption rights with respect to any public shares they hold if we fail to complete our business combination within the prescribed time frame); and
		• if we submit our initial business combination to our public shareholders for a vote, our initial shareholders have agreed to vote their insider shares, private shares and any public shares purchased during or after this offering in favor of our initial business combination.

Transfer restrictions on insider shares		Our initial shareholders have agreed not to transfer, assign or sell any of the insider shares (except to certain permitted transferees) until, with respect to 50% of the insider shares, the earlier of six months after the date of the consummation of our initial business combination and the date on which the closing price of our ordinary shares equals or exceeds $12.50 per ordinary share for any 20 trading days within a 30-trading day period following the consummation of our initial business combination and, with respect to the remaining 50% of the insider shares, six months after the date of the consummation of our initial business combination, or earlier in each case if, subsequent to our initial business combination, we complete a liquidation, merger, stock exchange or other similar transaction which results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property. The insider shares will be held in escrow with Continental Stock Transfer & Trust Company during the period in which they are subject to the transfer restrictions described above.
Private shares and warrants		HSAC 2 Holdings, LLC, our sponsor, has committed to purchase from us an aggregate of (i) 450,000 ordinary shares, or “private shares,” at $10.00 per ordinary share (for a total purchase price of $4,500,000) and (ii) 1,500,000 warrants, or “private warrants,” at $1.00 per warrant (for a total purchase price of $1,500,000; and with the private share purchase described above, an aggregate of $6,000,000). The purchase price of the private shares and private warrants will be added to the proceeds from this offering to pay for the expenses of this offering and to be held in the trust account. If we do not complete our initial business combination within 24 months from the closing of this offering, the proceeds of the sale of the private shares and private warrants will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the private shares and private warrants will be worthless.
Limited payments to initial shareholders		There will be no fees, reimbursements or other cash payments paid to our initial shareholders or any of the members of our management team prior to, or for any services they render in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is) other than:
		• repayment at the closing of this offering of non-interest-bearing loans in an amount of $300,000;
		• payment of $10,000 per month to HSAC 2 Holdings, LLC for office space and related services, subject to deferral as described herein;
		• reimbursement of out-of-pocket expenses incurred by initial shareholders or any of their affiliates in connection with certain activities on our behalf, such as identifying and investigating possible business targets and business combinations; and
		• repayment of loans which may be made by our initial shareholders or any of their affiliates to finance transaction costs in connection with an initial business combination, the terms of which have not been determined.

		There is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account, such expenses would not be reimbursed by us unless we consummate an initial business combination. We have no policy which prohibits our initial shareholders or any member of our management team from negotiating the reimbursement of such expenses by a target business. Our audit committee will review and approve all reimbursements and payments made to any insider or member of our management team, or our or their respective affiliates, and any reimbursements and payments made to members of our audit committee will be reviewed and approved by our board of directors, with any interested director abstaining from such review and approval.
Potential revisions to agreements with initial shareholders		We could seek to amend certain agreements made by our management team disclosed in this prospectus without the approval of shareholders, although we have no intention to do so. For example, restrictions on our executives relating to the voting of securities owned by them, the agreement of our management team to remain with us until the closing of a business combination, the obligation of our management team to not propose certain changes to our organizational documents or the obligation of the management team and its affiliates to not receive any compensation in connection with a business combination could be modified without obtaining shareholder approval. Although shareholders would not be given the opportunity to redeem their shares in connection with such changes, in no event would we be able to modify the redemption or liquidation rights of our shareholders without permitting our shareholders the right to redeem their shares in connection with any such change. We will not agree to any such changes unless we believed that such changes were in the best interests of our shareholders (for example, if such a modification were necessary to complete a business combination).
Shareholder approval of, or tender offer in connection with, initial business combination		In connection with any proposed initial business combination, we will either (1) seek shareholder approval of such initial business combination at a general meeting called for such purpose at which shareholders may seek to convert their shares into the right to receive cash from the trust account, regardless of whether they vote for or against the proposed business combination; or (2) provide our shareholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of amount required to pay our income and franchise taxes), in each case subject to the limitations described herein. The decision as to whether we will seek shareholder approval of our proposed business combination or allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. If we provide shareholders with the opportunity to sell their shares to us by means of a tender offer, we will file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination as is required under the SEC’s proxy rules. If we seek shareholder approval of our initial business combination, we will consummate the business combination only if a majority of the outstanding ordinary shares voted are voted in favor of the business combination.

		Our initial shareholders have agreed (A) to vote their insider shares, private shares and any public shares acquired in or after this offering in favor of any proposed business combination, (B) not to propose, or vote in favor of, an amendment to our certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering, unless we provide our public shareholders with the opportunity to redeem their ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our portion of income and franchise taxes, divided by the number of then outstanding public shares, (C) not to convert any shares (including the insider shares and private shares) into the right to receive cash from the trust account in connection with a shareholder vote to approve our proposed initial business combination (or sell any shares they hold to us in a tender offer in connection with a proposed initial business combination) or a vote to amend the provisions of our certificate of incorporation relating to the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering and (D) that the insider shares and private shares shall not be entitled to be redeemed for a pro rata portion of the funds held in the trust account if a business combination is not consummated. Depending on how a business combination was structured, any shareholder approval requirement could be satisfied by obtaining the approval of either (i) a majority of our ordinary shares that were voted at the general meeting (assuming a quorum was present at the general meeting), or (ii) a majority of the outstanding ordinary shares. Because our initial shareholders will collectively beneficially own approximately 20% of our issued and outstanding ordinary shares (not including the private shares or private warrants and assuming our initial shareholders do not purchase any shares in this offering) upon consummation of this offering, a minimum of approximately 781,251 public ordinary shares, or 5.0% of the outstanding ordinary shares (if the approval requirement was a majority of shares voted and the minimum number of shares required for a quorum attended the general meeting and assuming the over-allotment option has not been exercised and an aggregate of 468,750 insider shares have been forfeited as a result thereof), would need to be voted in favor of a business combination in order for it to be approved.
		None of our initial shareholders, director nominees or their affiliates has committed to purchase shares in this offering or ordinary shares in the open market or in private transactions. However, if a significant number of shareholders vote, or indicate an intention to vote, against a proposed business combination, our initial shareholders or their affiliates could make such purchases in the open market or in private transactions in order to influence the vote. Notwithstanding the foregoing, our initial shareholders and their affiliates will not make purchases of ordinary shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.

Conditions to completing our initial business combination		There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. Our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the trust account (excluding any deferred underwriter’s fees and taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination. If we are no longer listed on Nasdaq, we will not be required to satisfy the 80% test.
		If our board is not able to independently determine the fair market value of the target business or businesses, we may obtain an opinion from an independent investment banking or accounting firm as to the fair market value of the target business. We will complete our initial business combination only if the post-transaction company in which our public shareholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business combination transaction. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% test, provided that in the event that the business combination involves more than one target business, the 80% test will be based on the aggregate value of all of the target businesses.
Conversion rights		In connection with a business combination, public shareholders will have the right to convert their shares into an amount equal to (1) the number of public shares being converted by such public holder divided by the total number of public shares multiplied by (2) the amount then in the trust account (initially $10.00 per ordinary share), which includes the deferred underwriting discounts and commissions, plus a pro rata portion of any interest earned on the funds held in the trust account less any amounts necessary to pay our taxes. At any general meeting called to approve an initial business combination, public shareholders may elect to convert their share regardless of whether or not they vote to approve the business combination
		Whether we elect to effectuate our initial business combination via shareholder vote or tender offer, we may require public shareholders wishing to exercise conversion rights, whether they are a record holder or hold their shares in “street name,” to either tender the certificates they are seeking to convert to our transfer agent or to deliver the shares they are seeking to convert to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, at least two business days prior to the vote on the business combination. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $45 and it would be up to the broker whether or not to pass this cost on to the converting holder.

Release of funds in trust account on closing of our initial business combination		On the completion of our initial business combination, all amounts held in the trust account will be released to us. We will use these funds to pay amounts due to any public shareholders who exercise their conversion rights as described above under “— Conversion rights,” to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or targets or owners of the target or targets of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using shares or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
Liquidation if no business combination		As described above, if we fail to consummate a business combination within 24 months from the consummation of this offering, it will trigger our automatic winding up, liquidation and dissolution pursuant to the terms of our Amended and Restated Memorandum and Articles of Association. As a result, this has the same effect as if we had formally gone through a voluntary liquidation procedure under the Companies Law.
		The amount in the trust account (less $1,250 representing the aggregate nominal par value of the shares of our public shareholders, but including the deferred underwriting compensation) under the Companies Law will be available for distribution under the Companies Law provided that immediately following the date on which the proposed distribution is to be made, we are able to pay our debts as they fall due in the ordinary course of business, and the value of the company’s assets exceed its liabilities. If we are forced to liquidate, we anticipate that we would distribute to our public shareholders the amount in the trust account calculated as of the date that is two days prior to the distribution date (including any accrued interest).

		In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per ordinary share due to reductions in the value of the trust assets, in each case less income and franchise taxes payable, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per ordinary share. If we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per ordinary share to our public shareholders. Additionally, if we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
		The holders of the insider shares, private shares and private warrants (and underlying securities) will not participate in any redemption distribution with respect to their insider shares, private shares or private warrants (and underlying securities), but may have any public shares redeemed upon liquidation.
		If we are unable to conclude our initial business combination and we expend all of the net proceeds of this offering not deposited in the trust account, without taking into account any interest earned on the trust account, we expect that the initial per-share redemption price will be approximately $10.00. However, if there are claims of creditors that take priority over the claims of our public shareholders that are not indemnified by our sponsor, the amount we distribute could be less than $10.00 per ordinary share
		We will pay the costs of any liquidation following the redemptions from our remaining assets outside of the trust account. If such funds are insufficient, our initial shareholders have agreed to pay the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and have agreed not to seek repayment for such expenses.

	June 30, 2020
Balance Sheet Data:
Working capital (deficiency)	$	(136,527	)
Total assets	$	343,750
Total liabilities	$	330,215
Shareholder’s equity	$	13,535

	Without Over-Allotment Option			Over-Allotment Option Exercised
Gross proceeds
From offering	$	125,000,000		$	143,750,000
From sale of private shares and private warrants		6,000,000			6,000,000
Total gross proceeds		131,000,000			149,750,000

Estimated Offering expenses(1)
Non-contingent underwriting discount (2.0% of gross proceeds from offering)		2,500,000	(2)		2,875,000	(2)
Initial Trustee Fee		6,500			6,500
Legal fees and expenses		275,000			275,000
Nasdaq listing fee		55,000			55,000
Printing and engraving expenses		45,000			45,000
Accounting fees and expenses		40,000			40,000
SEC/FINRA Expenses		39,486			39,486
Director & Officer liability insurance premiums		150,000			150,000
Miscellaneous		294,014			294,014
Total offering expenses (not including the deferred underwriting discount)		3,405,000	(3)		3,780,000	(3)

Held in the trust account(4)	$	125,000,000		$	143,750,000
Not held in the trust account	$	2,595,000		$	2,220,000

	Without Over-allotment									With Over-allotment
	Shares Purchased			Total Consideration				Average Price Per Share		Shares Purchased			Total Consideration				Average Price Per Share
	Number	Percentage		Amount		Percentage		Average Price Per Share		Number	Percentage		Amount		Percentage		Average Price Per Share
Insider shares	3,125,000	19.44	%	$	28,750	0.02	%	$	1.45	3,593,750	19.51	%	$	28,750	0.02	%	$	0.01
Private Placement Shares	450,000	2.80	%		4,500,000	3.48	%	$	10.00	450,000	2.44	%		4,500,000	3.03	%	$	10.00
New investors	12,500,000	77.76	%		125,000,000	96.50	%	$	10.00	14,375,000	78.05	%		143,750,000	96.95	%	$	10.00
	16,075,000	100	%	$	129,528,750	100.00	%			18,418,750	100	%	$	148,278,750	100.00	%

	June 30, 2020
	Actual			As Adjusted(1)
Notes payable to related party(2)	$	300,000		$	—
Deferred underwriting commissions		—			4,375,000
Ordinary shares subject to possible redemption; -0- and 11,823,353 shares, actual and as adjusted, respectively		—			118,233,530
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding, actual and as adjusted		—			—
Ordinary shares, $0.0001 par value, 100,000,000 shares authorized; 3,593,750 and 4,251,647 shares issued and outstanding (excluding -0- and 11,823,353 shares subject to possible redemption), actual and as adjusted, respectively(3)		359			425
Additional paid-in capital		28,391			5,014,795
Accumulated deficit		(15,215	)		(15,215	)
Total shareholders’ equity	$	13,535		$	5,000,005
Total capitalization	$	313,535		$	127,608,535

Name	Age	Position
Roderick Wong, MD	43	President, Chief Executive Officer and Chairman
Naveen Yalamanchi, MD	43	Executive Vice President, Chief Financial Officer and Director
Alice Lee, JD	50	Vice President of Operations, Secretary and Treasurer
Stephanie A. Sirota	45	Vice President of Corporate Strategy and Corporate Communications
Pedro Granadillo	73	Director
Carsten Boess	54	Director
Stuart Peltz, PHD	60	Director
Michael Brophy	40	Director

	Amount			% of Total
Legal, accounting and other third-party expenses attendant to the search for target businesses and to the due diligence investigation, structuring and negotiation of our initial business combination	$	350,000		13.4	%
Legal and accounting fees related to regulatory reporting obligations		150,000		5.7	%
Consulting, travel and miscellaneous expenses incurred during search for initial business combination target		100,000		3.8	%
Payment for office space, administrative and support services		240,000		9.2	%
Nasdaq continued listing fees		55,000		2.1	%
Working capital, as necessary		1,700,000	(5)	65.5	%
Total	$	2,595,000		100.0	%

	Without Over-allotment					With Over-allotment
Public offering price			$	10.00				$	10.00
Net tangible book deficit before this offering	(0.04	)				(0.04	)
Increase attributable to public shareholders	1.22					1.08
Pro forma net tangible book value after this offering and the sale of the private shares and private warrants				1.18					1.04
Dilution to public shareholders			$	8.82				$	8.96
Percentage of dilution to public shareholders				88.2	%				89.6	%

	Without Over-allotment			With Over-allotment
Numerator:
Net tangible book deficit before this offering	$	(136,527	)	$	(136,527	)
Net proceeds from this offering and sale of the private shares and private warrants		127,595,000			145,970,000
Plus: Offering costs paid in advance, excluded from tangible book value before this offering		150,062			150,062
Less: Deferred underwriting commissions		(4,375,000	)		(5,031,250	)
Less: Proceeds held in trust subject to redemption		(118,233,530	)		(135,952,280	)
	$	5,000,005		$	5,000,005
Denominator:
Ordinary shares outstanding prior to this offering		3,593,750			3,593,750
Ordinary shares forfeited if over-allotment is not exercised		(468,750	)		—
Ordinary shares offered		12,500,000			14,375,000
Private shares to be purchased by the Sponsor		450,000			450,000
Less: Shares subject to redemption		(11,823,353	)		(13,595,228	)
		4,251,647			4,823,522

	Terms of the Offering	Terms Under a Rule 419 Offering
Escrow of offering proceeds	$125,000,000 of the net offering proceeds and proceeds from the sale of the private shares and private warrants will be deposited into a trust account in the United States at Morgan Stanley Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee.	$105,498,000 of the offering proceeds would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account.
Investment of net proceeds	$125,000,000 of net offering proceeds and proceeds from the sale of the private shares and private warrants held in the trust account will be invested only in U.S. government treasury bills, bonds or notes with a maturity of 180 days or less or in money market funds meeting the applicable conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.	Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States.
Limitation on fair value or net assets of target business	Our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the trust account (excluding any deferred underwriter’s fees and taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination.	The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds.
Trading of securities issued	The ordinary shares may commence trading on or promptly after the date of this prospectus.	No trading of the ordinary shares would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.

	Terms of the Offering	Terms Under a Rule 419 Offering
Election to remain an investor	We will either (i) give our shareholders the opportunity to vote on the business combination or (ii) provide our public shareholders with the opportunity to sell their ordinary shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, less income and franchise taxes. If we hold a meeting to approve a proposed business combination, we will send each shareholder a proxy statement containing information required by the SEC. Alternatively, if we do not hold a meeting and instead conduct a tender offer, we will conduct such tender offer in accordance with the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination as we would have included in a proxy statement. Under our Amended and Restated Memorandum and Articles of Association, we must provide at least 10 days advance notice of any meeting of shareholders. Accordingly, this is the minimum amount of time we would need to provide holders to determine whether to exercise their rights to convert their shares into cash or to remain an investor in our company.	A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of a post-effective amendment to the company’s registration statement, to decide if he, she or it elects to remain a shareholder of the company or require the return of his, her or its investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the shareholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued.
Business combination deadline	Pursuant to our Amended and Restated Memorandum and Articles of Association, if we do not complete an initial business combination within 24 months from the consummation of this offering, it will trigger our automatic winding up, liquidation and dissolution.	If an acquisition has not been completed within 24 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors.
Interest earned on the funds in the trust account	There can be released to us, from time to time, any interest earned on the funds in the trust account that we may need to pay our portion of income and franchise tax obligations.	Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination.
Release of funds	Except for interest earned on the funds in the trust account that may be released to us to pay our income and franchise tax obligations, the proceeds held in the trust account will not be released until the earlier of the completion of our initial business combination and our liquidation upon failure to effect our initial business combination within the allotted time.	The proceeds held in the escrow account are not released until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time.

Name of Individual	Name of Affiliated Company	Entity’s Business	Affiliation
Roderick Wong, MD	RTW Investments, LP	Healthcare investment firm	Managing Partner
	Rocket Pharmaceuticals, Inc.	Gene therapies for rare diseases	Director
	RTW Venture Fund Limited	Publicly listed healthcare investment fund	Investment Manager
	Avidity Biosciences, Inc.	RNA-based medicines for serious diseases	Director
	Landos Biopharma, Inc.	Oral therapeutics for autoimmune diseases	Director
Naveen Yalamanchi, MD	RTW Investments, LP	Healthcare investment firm	Partner
	Rocket Pharmaceuticals, Inc.	Gene therapies for rare diseases	Director
	RTW Venture Fund Limited	Publicly listed healthcare investment fund	Investment Manager
Alice Lee, JD	RTW Investments, LP	Healthcare investment firm	Senior Counsel Chief Compliance Officer
Stephanie A. Sirota	RTW Investments, LP	Healthcare investment firm	Chief Business Officer
	RTW Venture Fund Limited	Publicly listed healthcare investment fund	Director
Pedro Granadillo	Rocket Pharmaceuticals, Inc.	Gene therapies for rare diseases	Director
Carsten Boess	Rocket Pharmaceuticals, Inc.	Gene therapies for rare diseases	Director
	Avidity Biosciences, Inc.	RNA-based medicines for serious diseases	Director
	Achilles Therapeutics, Inc.	Cell therapies for oncology	Director
Stuart Peltz, PHD	PTC Therapeutics, Inc.	Biopharmaceuticals for rare diseases	Chief Executive Officer, Director
Michael Brophy	Natera, Inc.	Genetic testing	Chief Financial Officer

	Prior to Offering			After Offering
Name and Address of Beneficial Owner(1)	Amount and Nature of Beneficial Ownership of Ordinary Shares	Approximate Percentage of Outstanding Ordinary Shares		Amount and Nature of Beneficial Ownership of Ordinary Shares(2)	Approximate Percentage of Outstanding Ordinary Shares
HSAC 2 Holdings, LLC (our sponsor)(3)	3,513,750	97.77	%	3,495,000	21.7	%
Roderick Wong, MD	0	0		0	0
Naveen Yalamanchi, MD	0	0		0	0
Alice Lee, JD	0	0		0	0
Stephanie A. Sirota	0	0		0	0
Pedro Granadillo	20,000	*		20,000	*
Carsten Boess	20,000	*		20,000	*
Stuart Peltz, PHD	20,000	*		20,000	*
Michael Brophy	20,000	*		20,000	*
All directors, nominees and executive officers and our sponsor as a group (8 individuals)	3,593,750	100.0	%	3,575,000	22.8	%

Underwriter		Number of Ordinary Shares
Chardan Capital Markets, LLC
Barclays Capital Inc.
Total		12,500,000

	Per Ordinary Share		Without Over-allotment		With Over-allotment
Public offering price	$	10.00	$	125,000,000	$	143,750,000
Discount(1)	$	.55	$	6,875,000	$	7,906,250
Proceeds before expenses(2)	$	9.45	$	118,125,000	$	135,853,750

		Page
Financial Statements of Health Sciences Acquisitions Corporation 2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		F-2
BALANCE SHEETS		F-3
STATEMENTS OF OPERATIONS		F-4
STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY		F-5
STATEMENTS OF CASH FLOWS		F-6
NOTES TO FINANCIAL STATEMENTS		F-7

	June 30, 2020			June 11, 2020
	(unaudited)
Assets:
Current assets:
Cash	$	193,688		$	328,750
Total current assets		193,688			328,750
Deferred offering costs associated with the proposed offering		150,062			50,000
Total assets	$	343,750		$	378,750

Liabilities and Shareholder’s Equity:
Current liabilities:
Accounts payable	$	—		$	50,000
Accrued expenses		30,215			14,363
Note payable - related party		300,000			300,000
Total current liabilities		330,215			364,363

Commitments and Contingencies

Shareholder’s Equity:
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—			—
Ordinary shares, $0.0001 par value; 100,000,000 shares authorized; 3,593,750 shares issued and outstanding(1)		359			359
Additional paid-in capital		28,391			28,391
Accumulated deficit		(15,215	)		(14,363	)
Total shareholder’s equity		13,535			14,387
Total Liabilities and Shareholder’s Equity	$	343,750		$	378,750

	For The Period From May 25, 2020 (inception) Through
	June 30, 2020			June 11, 2020
	(unaudited)
General and administrative expenses	$	15,215		$	14,363
Net loss	$	(15,215	)	$	(14,363	)
Weighted average shares outstanding, basic and diluted(1)		3,125,000			3,125,000
Basic and diluted net loss per ordinary share	$	(0.00	)	$	(0.00	)

	For The Period From May 25, 2020 (inception) Through June 30, 2020 (Unaudited)
	Ordinary Shares			Additional Paid-In Capital		Accumulated Deficit			Total Shareholder’s Equity
	Shares	Amount		Additional Paid-In Capital		Accumulated Deficit			Total Shareholder’s Equity
Balance – May 25, 2020 (inception)	—	$	—	$	—	$	—		$	—
Issuance of ordinary shares to Sponsor(1)	3,593,750		359		28,391		—			28,750
Net loss	—		—		—		(15,215	)		(15,215	)
Balance – June 30, 2020	3,593,750	$	359	$	28,391	$	(15,215	)	$	13,535

	For The Period From May 25, 2020 (inception) Through
	June 30, 2020			June 11, 2020
	(unaudited)
Cash Flows from Operating Activities:
Net loss	$	(15,215	)	$	(14,363	)
Changes in operating assets and liabilities:
Accrued expenses		15,215			14,363
Net cash used in operating activities		—			—

Cash Flows from Financing Activities:
Proceeds from issuance of ordinary shares to Sponsor		28,750			28,750
Proceeds from note payable to related party		300,000			300,000
Paid offering costs		(135,062	)		—
Net cash provided by financing activities		193,688			328,750

Net change in cash		193,688			328,750

Cash - beginning of the period		—			—
Cash - end of the period	$	193,688		$	328,750

Supplemental disclosure of noncash activities:
Deferred offering costs included in accrued expenses	$	15,000		$	—
Deferred offering costs included in accounts payable	$	—		$	50,000

Trustees fee	$	6,500
SEC Registration fees		17,423
FINRA filing fee		22,063
Accounting fees and expenses		40,000
Nasdaq listing fees		55,000
Printing and engraving expenses		45,000
Legal fees and expenses		275,000
Director & Officer liability insurance premiums		150,000
Miscellaneous(1)		294,014
Total	$	905,000

		HEALTH SCIENCES ACQUISITIONS CORPORATION 2
		By:		/s/ Roderick Wong
				Roderick Wong, MD
				President, Chief Executive Officer and Chairman of the Board

Signature	Title	Date
/s/ Roderick Wong	President, Chief Executive Officer and	July 17, 2020
Roderick Wong, MD	Chairman of the Board (Principal Executive Officer)
/s/ Naveen Yalamanchi	Executive Vice President, Chief Financial Officer and	July 17, 2020
Naveen Yalamanchi, MD	director (Principal Accounting and Financial Officer)

Exhibit No.		Description
1.1*		Form of Underwriting Agreement.
3.1*		Memorandum and Articles of Association.
3.2*		Form of Amended and Restated Memorandum and Articles of Association.
4.1*		Specimen Ordinary Share Certificate.
4.2*		Form of Warrant Agreement by and between the HSAC 2 Holdings, LLC and the Registrant.
5.1*		Opinion of Maples and Calder
10.1*		Promissory Note, dated as of June 11, 2020, issued to the Initial Shareholders.
10.2*		Form of Insider Letter Agreement among the Registrant and the Registrant’s Officers and Directors.
10.3*		Form of Investment Management Trust Agreement by and between Continental Stock Transfer & Trust Company and the Registrant.
10.4*		Form of Share Escrow Agreement among the Registrant, Continental Stock Transfer & Trust Company, and the Initial Shareholders.
10.5*		Form of Registration Rights Agreement by and between the Registrant and Initial Shareholders.
10.6*		Form of Indemnity Agreement.
10.7*		Administrative Services Agreement by and between the Registrant and HSAC 2 Holdings, LLC
10.8*		Form of Subscription Agreement.
10.9*		Form of Purchase Agreement between the Registrant and HSAC 2 Holdings, LLC
14*		Form of Code of Ethics.
23.1		Consent of WithumSmith+Brown, PC.
23.2*		Consent of Maples and Calder (included on Exhibit 5.1).
24		Power of Attorney (included on the signature page hereof).
99.1*		Form of Audit Committee Charter.
99.2*		Form of Compensation Committee Charter.