Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 09, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | Orchestra BioMed Holdings, Inc. | |
Trading Symbol | OBIO | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 35,755,084 | |
Amendment Flag | false | |
Entity Central Index Key | 0001814114 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-39421 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 92-2038755 | |
Entity Address, Address Line One | 150 Union Square Drive | |
Entity Address, City or Town | New Hope | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 18938 | |
City Area Code | (215) | |
Local Phone Number | 862-5797 | |
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 18,695 | $ 19,784 |
Marketable securities | 108,438 | 63,915 |
Strategic investments, current portion | 100 | 86 |
Accounts receivable, net | 76 | 96 |
Inventory | 232 | 276 |
Prepaid expenses and other current assets | 2,339 | 533 |
Total current assets | 129,880 | 84,690 |
Property and equipment, net | 1,453 | 1,489 |
Right-of-use assets | 2,032 | 2,187 |
Strategic investments, less current portion | 2,495 | 2,495 |
Deposits and other assets | 421 | 4,711 |
TOTAL ASSETS | 136,281 | 95,572 |
CURRENT LIABILITIES: | ||
Accounts payable | 2,765 | 3,968 |
Accrued expenses and other liabilities | 3,256 | 5,376 |
Operating lease liability, current portion | 711 | 697 |
Warrant liability | 2,089 | |
Deferred revenue, current portion | 5,325 | 6,436 |
Total current liabilities | 12,057 | 18,566 |
Deferred revenue, less current portion | 13,195 | 13,103 |
Loan payable, less current portion | 9,527 | 9,490 |
Operating lease liability, less current portion | 1,500 | 1,683 |
Other long-term liabilities | 249 | 196 |
TOTAL LIABILITIES | 36,528 | 43,038 |
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.0001 par value per share; 10,000,000 shares authorized; none issued or outstanding at March 31, 2023 and December 31, 2022. | ||
Common stock, $0.0001 par value per share; 340,000,000 shares authorized; 31,741,147 and 20,187,850 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively. | 3 | 2 |
Additional paid-in capital | 310,459 | 252,274 |
Accumulated other comprehensive loss | (35) | (8) |
Accumulated deficit | (210,674) | (199,734) |
TOTAL STOCKHOLDERS’ EQUITY | 99,753 | 52,534 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 136,281 | $ 95,572 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preference shares, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preference shares, shares authorized | 10,000,000 | 10,000,000 |
Preference shares, shares issued | ||
Preference shares, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 340,000,000 | 340,000,000 |
Common stock, shares issued | 31,741,147 | 20,187,850 |
Common stock, shares outstanding | 31,741,147 | 20,187,850 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue: | ||
Revenue | $ 1,164 | $ 866 |
Expenses: | ||
Cost of product revenues | 44 | 42 |
Research and development | 8,254 | 3,474 |
Selling, general and administrative | 4,411 | 2,478 |
Total expenses | 12,709 | 5,994 |
Loss from operations | (11,545) | (5,128) |
Other income (expense): | ||
Interest income (expense), net | 885 | (236) |
Loss on fair value adjustment of warrant liability | (294) | (145) |
Gain (loss) on fair value of strategic investments | 14 | (220) |
Total other income (expense) | 605 | (601) |
Net loss | $ (10,940) | $ (5,729) |
Net loss per share | ||
Basic and diluted (in Dollars per share) | $ (0.4) | $ (0.62) |
Weighted-average shares used in computing net loss per share, basic and diluted (in Shares) | 27,643,549 | 9,225,058 |
Comprehensive loss | ||
Net loss | $ (10,940) | $ (5,729) |
Unrealized loss on marketable securities | (27) | |
Comprehensive loss | (10,967) | (5,729) |
Partnership revenue | ||
Revenue: | ||
Revenue | 1,019 | 716 |
Product revenue | ||
Revenue: | ||
Revenue | $ 145 | $ 150 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Diluted | $ (0.40) | $ (0.62) |
Weighted-average shares used in computing net loss per share, Diluted | 27,643,549 | 9,225,058 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited) - USD ($) $ in Thousands | Previously Reported Convertible Preferred Stock | Previously Reported Common Stock | Previously Reported Additional Paid-In Capital | Previously Reported Accumulated Other Comprehensive (Loss) | Previously Reported Accumulated Deficit | Previously Reported | Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) | Accumulated Deficit | Total |
Balance at Dec. 31, 2021 | $ 51,452 | $ 94,894 | $ (166,126) | $ (71,232) | $ 1 | $ 146,345 | $ (166,126) | $ (19,780) | ||||
Balance (in Shares) at Dec. 31, 2021 | 12,075,976 | 2,185,297 | 8,822,280 | |||||||||
Retroactive application of reverse capitalization (Note 3) | $ (51,452) | $ 1 | 51,451 | 51,452 | ||||||||
Retroactive application of reverse capitalization (Note 3) (in Shares) | (12,075,976) | 6,636,983 | ||||||||||
Unrealized loss on marketable securities | ||||||||||||
Stock-based compensation | 70 | 70 | ||||||||||
Exercise of stock options | 25 | 25 | ||||||||||
Exercise of stock options (in Shares) | 5,696 | |||||||||||
Exercise of warrants | 230 | 230 | ||||||||||
Exercise of warrants (in Shares) | 68,588 | |||||||||||
Proceeds from private placement | 25,262 | 25,262 | ||||||||||
Proceeds from private placement (in Shares) | 1,240,169 | |||||||||||
Net loss | (5,729) | (5,729) | ||||||||||
Balance at Mar. 31, 2022 | $ 1 | 171,932 | (171,855) | 78 | ||||||||
Balance (in Shares) at Mar. 31, 2022 | 10,136,733 | |||||||||||
Balance at Dec. 31, 2022 | $ 165,923 | 86,353 | (8) | $ (199,734) | (113,389) | $ 2 | 252,275 | (8) | (199,734) | 52,535 | ||
Balance (in Shares) at Dec. 31, 2022 | 35,694,179 | 2,522,214 | 20,187,850 | |||||||||
Retroactive application of reverse capitalization (Note 3) | $ (165,923) | $ 2 | $ 165,922 | $ 165,924 | ||||||||
Retroactive application of reverse capitalization (Note 3) (in Shares) | (35,694,179) | 17,665,636 | ||||||||||
Effect of Merger and recapitalization (refer to Note 3) | $ 1 | 54,301 | 54,302 | |||||||||
Effect of Merger and recapitalization (refer to Note 3) (in Shares) | 11,422,741 | |||||||||||
Reclassification of Legacy Orchestra common stock warrants to stockholders’ equity | 2,373 | 2,373 | ||||||||||
Reclassification of Legacy Orchestra common stock warrants to stockholders’ equity (in Shares) | ||||||||||||
Unrealized loss on marketable securities | (27) | (27) | ||||||||||
Stock-based compensation | 1,489 | 1,489 | ||||||||||
Exercise of stock options | 10 | 10 | ||||||||||
Exercise of stock options (in Shares) | 2,325 | |||||||||||
Exercise of warrants | 11 | 11 | ||||||||||
Exercise of warrants (in Shares) | 128,231 | |||||||||||
Net loss | (10,940) | (10,940) | ||||||||||
Balance at Mar. 31, 2023 | $ 3 | $ 310,459 | $ (35) | $ (210,674) | $ 99,753 | |||||||
Balance (in Shares) at Mar. 31, 2023 | 31,741,147 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (10,940) | $ (5,729) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 71 | 48 |
Stock-based compensation | 1,489 | 70 |
Loss on fair value adjustment of warrant liability | 294 | 145 |
(Gain) loss on fair value of strategic investments | (14) | 220 |
Accretion and interest related to marketable securities | (1,056) | |
Non-cash lease expense | 155 | 132 |
Amortization of deferred financing fees | 36 | 55 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 20 | 42 |
Inventory | 44 | 36 |
Prepaid expenses and other assets | (1,497) | 72 |
Accounts payable, accrued expenses and other liabilities | (1,795) | 202 |
Operating lease liabilities – current and non-current | (169) | 99 |
Deferred revenue | (1,019) | (716) |
Net cash used in operating activities | (14,381) | (5,324) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (35) | (47) |
Purchases of marketable securities | (43,494) | |
Net cash used in investing activities | (43,529) | (47) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of debt financing, inclusive of debt extinguishment costs | (1,000) | |
Proceeds from exercise of warrants | 1 | 74 |
Proceeds from exercise of stock options | 10 | 25 |
Effect of merger, net of transaction costs (Note 3) | 56,810 | |
Proceeds from Legacy Orchestra Series D-1 Financing | 27,276 | |
Deferred financing, offering and merger costs | (1,611) | |
Net cash provided by financing activities | 56,821 | 24,764 |
Net (decrease) increase in cash and cash equivalents | (1,089) | 19,393 |
Cash and cash equivalents, beginning of the period | 19,784 | 9,938 |
Cash and cash equivalents, end of the period | 18,695 | 29,331 |
Cash paid during the three months ended March 31: | ||
Interest | 351 | 89 |
Non-cash financing activities: | ||
Deferred offering and merger costs in accounts payable and accrued expenses | $ 772 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Orchestra BioMed Holdings, Inc. (formerly known as Health Sciences Acquisitions Corporation 2) (collectively, with its subsidiaries, “Orchestra” or the “Company”) is a biomedical innovation company seeking to provide high-impact solutions for large unmet needs in procedure-based medicine. The Company’s partnership-enabled business model focuses on forging strategic collaborations with leading medical device companies to drive successful global commercialization of products it develops. The Company’s business model seeks to adapt the strategic partnering tactics widely used by the biopharmaceutical industry to the medical device market. The Company’s goal is to accelerate and improve the likelihood of the Company’s product candidates reaching patients and providers worldwide by sharing the risks and rewards of developing and commercializing these product candidates with established companies. The Company’s flagship product candidates are Virtue Sirolimus AngioInfusion Balloon (“Virtue SAB”) for the treatment of artery disease, the leading cause of mortality worldwide, and BackBeat Cardiac Neuromodulation Therapy (“BackBeat CNT”) for the treatment of hypertension, a significant risk factor for death worldwide. The Company has additional product candidates in its pipeline and plans to thoughtfully expand its product pipeline in the future through acquisitions, strategic collaborations, licensing and organic development. Prior to January 26, 2023, the Company was a special purpose acquisition company formed for the purpose of entering into a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. On January 26, 2023 (the “Closing Date”), the Company consummated the business combination contemplated by the Agreement and Plan of Merger, dated as of July 4, 2022 (a s amended by Amendment No. 1 to Agreement and Plan of Merger, dated July 21, 2022, and Amendment No. 2 to Agreement and Plan of Merger, dated November 21, 2022, Legacy Orchestra, the Company’s wholly owned subsidiary, was incorporated in Delaware in January 2017 and was formed to acquire operating and other assets as well as to raise capital conducted through private placements. In May 2018, Legacy Orchestra concurrently completed its formation mergers (the “Formation Mergers”) with Caliber Therapeutics, Inc. (“Caliber”), a Delaware corporation, BackBeat Medical, Inc. (“BackBeat”), a Delaware Corporation, and FreeHold Surgical, Inc. (“FreeHold”), a Delaware corporation. Caliber Caliber was incorporated in Delaware in October 2005 and began development of its lead product Virtue SAB in 2008. Virtue SAB is a patented drug/device combination product candidate for the treatment of artery disease that delivers a proprietary extended release formulation of sirolimus called SirolimusEFR to the vessel wall during balloon angioplasty without any coating on the balloon surface or the need for leaving a permanent implant such as a stent in the artery. In 2019, Legacy Orchestra entered into a distribution agreement with Terumo Medical Corporation (“Terumo”) for global development and commercialization of Virtue SAB (the “Terumo Agreement”) (See Note 4). BackBeat BackBeat was incorporated in Delaware in January 2010 and began development of its lead product BackBeat CNT that same year. BackBeat CNT is a patented implantable cardiac stimulation-based treatment for hypertension that is designed to immediately, substantially and persistently lower blood pressure while simultaneously modulating autonomic nervous system responses that normally drive and maintain blood pressure higher. BackBeat is currently in a pre-revenue stage of operations. Refer to Note 5 for details regarding the Exclusive License and Collaboration Agreement, dated as of June 30, 2022, by and among, Legacy Orchestra, BackBeat Medical, LLC and Medtronic, Inc. (an affiliate of Medtronic plc) (the “Medtronic Agreement”). FreeHold FreeHold was incorporated in Delaware in May 2010 and began development of its hands-free, intracorporeal retractor device for minimally-invasive surgery in 2012. FreeHold is engaged in the development, sales and marketing of its retractor products that provide optimized visual and total surgeon control during laparoscopic and robotic procedures. The Company generated revenue of approximately $145,000 and $150,000 during the three months ended March 31, 2023 and 2022, respectively related to this legacy FreeHold Surgical, Inc. technology. Basis of Presentation and Liquidity The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulation of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting. These condensed statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to fairly present the results of the interim periods. The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited financial statements at that date. Operating results and cash flows for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ended December 31, 2023 or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted in accordance with the rules and regulations for interim reporting of the SEC. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our report for the year ended December 31, 2022 together with the related notes thereto, filed as Exhibit 99.1 to the Company’s Form 8-K/A filed with the SEC on March 24, 2023. The Company has a limited operating history and the sales and income potential of its businesses and markets are unproven. As of March 31, 2023, the Company had an accumulated deficit of $210.7 million and has experienced net losses each year since its inception. The Company expects to incur substantial operating losses in future periods and will require additional capital as it seeks to advance its products to commercialization. The Company is subject to a number of risks and uncertainties similar to those of other companies of the same size within the biomedical device industry, such as uncertainty of clinical trial outcomes, uncertainty of additional funding, and history of operating losses. The Company follows the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements — Going Concern Based on the available balance of cash and cash equivalents and marketable securities as of March 31, 2023, management has concluded that sufficient capital is available to fund its operations and meet cash requirements through the one-year period subsequent to the issuance date of these financial statements. Management may consider plans to raise capital beyond the one-year period subsequent to the issuance date of these financial statements through issuance of equity securities, debt securities, and/or additional development and commercialization partnerships for other products within the Company’s development pipeline. The source, timing and availability of any future financing will depend principally upon market conditions, and, more specifically, on the progress of the Company’s research and development programs. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Reverse Recapitalization The Business Combination is accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, HSAC2 is treated as the “acquired” company and Legacy Orchestra is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy Orchestra issuing stock for the net assets of HSAC2, accompanied by a recapitalization. As a result, the consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Legacy Orchestra. Additionally, the shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the exchange ratio established in the Merger Agreement (the “Exchange Ratio”). For additional information on the Business Combination and the Exchange Ratio, see Note 3 to these unaudited condensed consolidated financial statements. Emerging Growth Company and Smaller Reporting Company Status The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933 (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”)., As such, it is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. The Company 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 the Company has total annual gross revenue of at least $1.235 billion, (3) the last day of the fiscal year in which the Company is 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 the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. The Company is also a “smaller reporting company” as defined in the Exchange Act. The Company may continue to be a smaller reporting company even after the Company is no longer an emerging growth company. The Company 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 the Company’s voting and non-voting Common Stock held by non-affiliates is less than $250.0 million measured on the last business day of the Company’s second fiscal quarter, or (ii)(a) the Company’s annual revenue is less than $100.0 million during the most recently completed fiscal year and (b) the market value of the Company’s voting and non-voting Common Stock held by non-affiliates is less than $700.0 million measured on the last business day of the Company’s second fiscal quarter. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Areas where significant estimates exist include, but are not limited to, the fair value of stock-based compensation, research and development costs incurred, the fair value of the warrant liability, and the estimated costs to complete the combined performance obligation pursuant to the Terumo Agreement (Note 4). Cash and Cash Equivalents Cash and cash equivalents are held in banks or in custodial accounts with banks. Cash equivalents are defined as all liquid investments and money market funds with maturity from date of purchase of 90 days or less that are readily convertible into cash. Marketable Securities The Company accounts for its marketable securities with remaining maturities of less than one year, or where its intent is to use the investments to fund current operations or to make them available for current operations, as short-term investments. These investments represent debt investments in corporate or government securities that are designated as available-for-sale and are carried at fair value, with unrealized gains and losses reported in stockholders’ equity as accumulated other comprehensive income (loss). The disclosed fair value related to the Company’s investments is based on market prices from a variety of industry standard data providers and generally represent quoted prices for similar assets in active markets or have been derived from observable market data. Strategic Investments Management has made investments in affiliated companies and assesses whether the Company exerts significant influence over its strategic investments. The Company considers the nature and magnitude of its investment, any voting and protective rights it holds, any participation in the governance of the other company, and other relevant factors such as the presence of a collaboration or other business relationships. To date, the Company has concluded that it does not have the ability to exercise significant influence over its strategic investments. The Company’s strategic investments consist of equity investments in common stock of a Motus GI Holdings, Inc. (“Motus GI”), a publicly-held company and related party, and preferred shares of Vivasure Medical Limited (“Vivasure”), a privately-held company and related party. The Company classifies strategic investments on its balance sheet as current assets if the assets are available for use for current operations, and the Company does not have a specific plan to hold the investments for a certain duration of time. The shares held of Motus GI represent equity securities with a readily determinable fair value and are 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, Recognition and Measurement of Financial Assets and Liabilities. Therefore, the Company categorized the investments as current assets. 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. Additionally, as the investments in Vivasure are not readily marketable, the Company categorized the investments as non-current assets. As of March 31, 2023 and December 31, 2022, the carrying value of the investments in Vivasure was $2.5 million. Fair Value of Financial Instruments The Company applies ASC 820, Fair Value Measurement (“ASC 820”) The carrying value of the Company’s cash and cash equivalents, accounts receivable, prepaid expense, accounts payable and accrued expenses approximate fair value because of the short-term maturity of these financial instruments. In addition, the Company records its investment in Motus GI, marketable securities, and warrant liabilities at fair value. In addition, at March 31, 2023, the Company believed the carrying value of debt approximates fair value as the interest rates were reflective of the rate the Company could obtain on debt with similar terms and conditions. See Note 7 for additional information regarding fair value measurements. The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below: Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable represent amounts due from customers. The allowance for doubtful accounts is recorded for estimated losses by evaluating various factors, including relative creditworthiness of each customer, historical collections experience and aging of the receivable. As of March 31, 2023 and December 31, 2022, an allowance for doubtful accounts was not deemed necessary. Inventory Inventory is stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) and net realizable value. Net realizable value represents the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company analyzes its inventory levels and writes down inventory that has become obsolete or has a cost basis in excess of its expected net realizable value or inventory quantities in excess of expected requirements. Excess requirements are determined based on comparison of existing inventories to forecasted sales, with consideration given to inventory shelf life. Expired inventory is disposed of, and the related costs are recognized in cost of goods sold. As of March 31, 2023 and December 31, 2022, an impairment charge as a result of obsolete inventory was not deemed necessary. Research and Development Prepayments, Accruals and Related Expenses The Company incurs costs of research and development activities conducted by its third-party service providers, which include the conduct of preclinical and clinical studies. The Company is required to estimate its prepaid and accrued research and development costs at each reporting date. These estimates are made as of the reporting date of the work completed over the life of the individual study in accordance with agreements established with our service providers. The Company determines the estimates of research and development activities incurred at the end of each reporting period through discussion with internal personnel and outside service providers, as to the progress or stage of completion of trials or services, as of the end of the reporting period, pursuant to contracts with the third parties and the agreed upon fee to be paid for such services. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are accepted by the Company or the services are performed. Accruals are recorded for the amounts of services provided that have not yet been invoiced. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the respective assets, generally three to five years. Leasehold improvements are amortized over the lesser of their useful life or the remaining life of the lease. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from the balance sheet and any resulting gain or loss is reflected in operations in the period realized. Maintenance and repairs are charged to operations as incurred. Asset category Depreciable life Manufacturing equipment 10 years Office equipment 3 – 7 years Research and development equipment 7 years Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the terms of the arrangement. The Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its operating right-of-use (“ROU”) assets and operating lease liabilities at the lease commencement date, and thereafter if modified. The lease term includes any renewal options that the Company is reasonably assured to exercise. The Company’s policy is to not record leases with a lease term of 12 months or less on its balance sheets. The ROU asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its estimated secured incremental borrowing rate for that lease term. Lease expense for operating leases is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in operating expense in the statements of operations. Payments due under each lease agreement include fixed and variable payments. Variable payments relate to the Company’s share of the lessor’s operating costs associated with the underlying asset and are recognized when the event on which those payments are assessed occurs. Variable payments have been excluded from the lease liability and associated right-of-use asset. The interest rate implicit in lease agreements is typically not readily determinable, and as such, the Company utilizes the incremental borrowing rate to calculate lease liabilities, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Debt Discount and Debt Issuance Costs Debt discounts and debt issuance costs incurred in connection with the issuance of debt are capitalized and reflected as a reduction to the related debt liability. The costs are amortized to interest expense over the term of the debt using the effective-interest method. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount to the future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. The Company has not identified any such impairment losses to date. Warrants The Company evaluates its warrants to determine if the contracts qualify as liabilities in accordance with ASC 480-10, Distinguishing Liabilities from Equity, Derivatives and Hedging In bundled transactions, the proceeds received from any debt instruments and liability classified warrants are allocated to the warrant at fair value first, and the residual value is then allocated to the debt instrument. Upon conversion or exercise of a warrant that is subject to liability treatment, the instrument is marked to fair value at the conversion or exercise date and the fair value is reclassified to equity. Equity classified warrants are recorded within additional paid-in capital at the time of issuance at fair value as of the issuance date and are not subject to subsequent remeasurement. Revenue Recognition The Company recognizes revenue under the core principle according to ASC 606, Revenue from Contracts with Customers (“ASC 606”) The Company’s revenues are currently comprised of product revenue from the sale of FreeHold’s intracorporeal organ retractors, and partnership revenues from the Terumo Agreement related to the development and commercialization of Virtue SAB. Product Revenues Product revenues related to sales of FreeHold’s intracorporeal organ retractors are recognized at a point-in-time upon the shipment of the product to the customer, and there are no significant estimates or judgments related to estimating the transaction price. The product revenues consist of a single performance obligation, and the payment terms are typically 30 days. Product revenues are recognized solely in the United States. Partnership Revenues To date, the Company’s partnership revenues have related to the Terumo Agreement as further described in Note 4. In future periods, partnership revenues may also include revenues related to the Medtronic Agreement as discussed in Note 5. The Company assessed whether the Terumo Agreement fell within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) The promised goods or services in the Terumo Agreement include (i) license rights to the Company’s intellectual property, and (ii) research and development services. The Company also has optional additional items in the Terumo Agreement which are considered marketing offers and are accounted for as separate contracts with the customer if such option is elected by the customer, unless the option provides a material right which would not be provided without entering into the contract. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer. Promised goods or services are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources or (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct in the Terumo Agreement, the Company considered factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on their own or whether the required expertise is readily available. The Company estimates the transaction price for the Terumo Agreement performance obligations based on the amount expected to be received for transferring the promised goods or services in the contract. The consideration includes both fixed consideration and variable consideration. At the inception of the Terumo Agreement, as well as at each reporting period, the Company evaluates the amount of potential payments and the likelihood that the payments will be received. The Company utilizes either the most likely amount method or expected amount method to estimate the amount expected to be received based on which method better predicts the amount expected to be received. If it is probable that a significant revenue reversal would not occur, the variable consideration is included in the transaction price. The Terumo Agreement contains development and regulatory milestone payments. At contract inception and at each reporting period, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect partnership revenues and earnings in the period of adjustment. The Terumo Agreement also includes sales-based royalties and the license is deemed to be the predominant item to which the royalties relate. Accordingly, the Company will recognize royalty revenue when the related sales occur. To date, the Company has not recognized any royalty revenue under the arrangement. The Company has determined that intellectual property licensed to Terumo and the research and development services to be provided through the premarket approval by the U.S. Food and Drug Administration (the “FDA”) for the in-stent restenosis (“ISR”) indication represent a combined performance obligation that is satisfied over time, 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. The Company evaluates the measure of progress at each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company receives payments from Terumo based on billing schedules established in the contract. Such billings for milestone related events have 10-day terms from the date the milestone is achieved, royalty payments are 20-day terms after the close of each quarter, any optional services are 20 days after receipt of an invoice and any sales of the SirolimusEFR are within 30 days after receipt of the shipping invoices. Upfront payments are recorded as deferred revenue upon receipt or when due until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the right to consideration is unconditional. Stock-Based Compensation The Company applies ASC 718-10, Compensation — Stock Compensation Under the requirements of ASU 2018-07, the Company accounts for stock-based compensation to nonemployees under the fair value method, which requires all such compensation to be calculated based on the fair value at the measurement date (generally the grant date) and recognized in the Company’s condensed consolidated statements of operations and comprehensive loss over the requisite service period. The Company accounts for forfeitures of stock-based awards as they occur. Net Loss Per Share Attributable to Common Stockholders Basic and diluted net loss per share is calculated by dividing net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration of potential dilutive shares of common stock. Since the Company was in a loss position for the periods presented, basic net loss is the same as diluted net loss since the effects of potentially dilutive securities are antidilutive. Potentially dilutive securities include all outstanding warrants, stock options, Earnout Consideration (Note 3) and unvested restricted stock awards. Shares of Company Common Stock outstanding but subject to forfeiture and cancellation by the Company (e.g., the Forfeitable Shares (as defined in Note 3)) are excluded from the weighted-average number of shares until the period in which such shares are no longer subject to forfeiture. In periods in which there is net income, the Company would apply the two-class method to compute net income per share. Under this method, earnings are allocated to common stock and participating securities based on their respective rights to receive dividends, as if all undistributed earnings for the period were distributed. The two-class method does not apply in periods in which a net loss is reported. Income Taxes The Company accounts for income taxes using the asset-and-liability method in accordance with ASC 740, Income Taxes (“ASC 740”) The Company follows the guidance in ASC Topic 740-10 in assessing uncertain tax positions. The standard applies to all tax positions and clarifies the recognition of tax benefits in the financial statements by providing for a two-step approach of recognition and measurement. The first step involves assessing whether the tax position is more-likely-than-not to be sustained upon examination based upon its technical merits. The second step involves measurement of the amount to be recognized. Tax positions that meet the more-likely than-not threshold are measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate finalization with the taxing authority. The Company recognizes the impact of an uncertain income tax position in the financial statements if it believes that the position is more likely than not to be sustained by the relevant taxing authority. The Company will recognize interest and penalties related to tax positions in income tax expense. Deferred Offering and Merger Costs Offering and merger costs, consisting of legal, accounting, printer and filing fees were deferred to be offset against proceeds received when the Business Combination was completed. As of December 31, 2022, there were $4.0 million of deferred transaction costs included in deposits and other assets on the accompanying condensed consolidated balance sheet. Upon the close of the Business Combination, these deferred costs were recorded against net proceeds in additional paid-in capital. For further discussion on the Business Combination, see Note 3. Defined Contribution Plan The Company has a defined retirement savings plan under Section 401(k) of the Internal Revenue Code. This plan allows eligible employees to defer a portion of their annual compensation on a pre-tax basis. Effective January 1, 2023, the Company participates in a matching safe harbor 401(k) Plan with a Company contribution of up to 3.5% of each eligible participating employee’s compensation. Safe harbor contributions vest immediately for each participant. During the three months ended March 31, 2023, the Company made $113,000 in contributions under this safe harbor 401(k) Plan. Comprehensive Loss Comprehensive loss is comprised of net loss and changes in unrealized gains and losses on the Company’s available-for-sale investments. Segment Reporting Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined it operates in one segment. New Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In June 2022, the FASB issued ASU No. 2022-03 — Fair Value Measurement (ASC 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions |
Business Combination and Recapi
Business Combination and Recapitalization | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Recapitalization [Abstract] | |
Business Combination and Recapitalization | 3. Business Combination and Recapitalization On January 26, 2023, Legacy Orchestra and HSAC2 consummated the Business Combination, with Legacy Orchestra surviving as a wholly owned subsidiary of HSAC2. As part of the Business Combination, HSAC2 changed its name to Orchestra BioMed Holdings, Inc. Upon the closing of the Business Combination (the “Closing”), the Company’s certificate of incorporation provided for, among other things, a total number of authorized shares of capital stock of 350,000,000 shares, of which 340,000,000 shares were designated common stock, $0.0001 par value per share, and of which 10,000,000 shares were designated preferred stock, $0.0001 par value per share. The Business Combination is accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, HSAC2 is treated as the “acquired” company and Legacy Orchestra is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy Orchestra issuing stock for the net assets of HSAC2, accompanied by a recapitalization. The net assets of HSAC2 are stated at historical cost, with no goodwill or intangible assets recorded. In connection with the Business Combination, HSAC 2 Holdings, LLC (the “Sponsor”) agreed that 25% or 1,000,000 shares of its shares of common stock of the Company (“Company Common Stock”) will be forfeited to the Company (the “Forfeitable Shares”) on the first business day following the fifth anniversary of the Closing unless, as to 500,000 shares, the volume-weighted average price of the Company Common Stock is greater than or equal to $15.00 per share over any 20 trading days within any 30-trading day period (the “Initial Milestone Event”), and as to the remaining 500,000 shares, the volume-weighted average price of the Company Common Stock is greater than or equal to $20.00 per share over any 20 trading days within any 30-trading day period (the “Final Milestone Event”). Further, the Sponsor and HSAC2’s other initial shareholders prior to HSAC2’s initial public offering (the “HSAC2 IPO”) agreed to subject (i) the 4,000,000 shares of Company Common Stock issued to HSAC2’s initial shareholders prior to the HSAC2 IPO (the “Insider Shares”) and (ii) the 450,000 shares of Company Common Stock purchased in a private placement simultaneously with the HSAC2 IPO (the “Private Shares”) to a lock-up for up to 12 months following the Closing, and the Sponsor forfeited 50% of its 1,500,000 warrants in HSAC2 purchased upon consummation of the HSAC2 IPO (the “Private Warrants”), comprising 750,000 Private Warrants, for no consideration, immediately prior to the Closing (the “Sponsor Forfeiture”). Pursuant to the terms of the Merger Agreement, immediately following the Sponsor Forfeiture and prior to the Closing, HSAC2 issued 750,000 warrants to purchase Company Common Stock to eleven specified employees and directors of Legacy Orchestra. These new warrants have substantially similar terms to the forfeited Private Warrants, except that they will become exercisable between 24 and 36 months after the Closing. In connection with the Business Combination, existing Legacy Orchestra stockholders also had the opportunity to elect to participate in an earnout (the “Earnout”) pursuant to which each such electing stockholder (an “Earnout Participant”) may receive a portion of additional contingent consideration of up to 8,000,000 shares of Company Common Stock in the aggregate (“Earnout Consideration”). Each Earnout Participant agreed to extend their applicable lock-up period from 6 months to 12 months, pursuant to an Earnout Election Agreement and such Earnout Participants will collectively be entitled to receive: (i) 4,000,000 shares of the Earnout Consideration, in the aggregate, in the event that, from the time beginning immediately after the Closing until the fifth anniversary of the Closing Date (the “Earnout Period”), the Initial Milestone Event occurs; and (ii) an additional 4,000,000 shares of the Earnout Consideration, in the aggregate, in the event that, during the Earnout Period, the Final Milestone Event occurs. Approximately, 91% of Legacy Orchestra stockholders elected to participate in the Earnout. Simultaneously with the execution of the Merger Agreement, HSAC2 and Legacy Orchestra entered into separate forward purchase agreements (each, as amended, a “Forward Purchase Agreement” and, together, the “Forward Purchase Agreements”) with certain funds managed by RTW Investments, LP (the “RTW Funds”) and Covidien Group S.à.r.l., an affiliate of Medtronic plc (“Medtronic” and the RTW Funds, each a “Purchasing Party”), pursuant to which each of the Purchasing Parties agreed to purchase $10 million of ordinary shares of HSAC2 (“HSAC2 Ordinary Shares”) immediately prior to the Domestication (as defined below), less the dollar amount of HSAC2 Ordinary Shares holding redemption rights that the Purchasing Party acquired and held until immediately prior to the Domestication (such HSAC2 Ordinary Shares either purchased from HSAC2 or acquired and held until immediately prior to the Domestication, the “Forward Purchase Shares”). The RTW Funds completed their purchases of HSAC2 Ordinary Shares under their Forward Purchase Agreement on or before July 22, 2022. Medtronic completed approximately $9.9 million of purchases of HSAC2 Ordinary Shares under its Forward Purchase Agreement on or before January 20, 2023. Medtronic subsequently completed $0.1 million in purchases of HSAC2 Ordinary Shares and/or Company Common Stock on or before January 30, 2023. Simultaneously with the execution of the Merger Agreement and Forward Purchase Agreements, HSAC2, Legacy Orchestra and the RTW Funds entered into a Backstop Agreement (the “Backstop Agreement”), pursuant to which the RTW Funds, jointly and severally, agreed to purchase such number of HSAC2 Ordinary Shares at a price of $10.00 per share to the extent that the amount of cash remaining in HSAC2’s working capital and trust account as of immediately prior to the closing of the Merger was less than $60 million (which calculation excludes amounts received pursuant to Medtronic’s Forward Purchase Agreement or are otherwise held in HSAC2’s trust account established pursuant to the HSAC2 IPO (the “HSAC2 Trust Account”) in respect of Medtronic’s Forward Purchase Shares, but is inclusive of amounts received pursuant to the RTW Funds’ Forward Purchase Agreement and otherwise held in the HSAC2 Trust Account in respect of the RTW Funds’ Forward Purchase Shares). Pursuant to the Backstop Agreement, the RTW Funds purchased 1,808,512 HSAC2 Ordinary Shares on January 25, 2023, immediately prior to the Domestication. Immediately prior to the closing of the Business Combination, each issued and outstanding share of Legacy Orchestra preferred stock (the “Legacy Orchestra Preferred Stock”) was canceled and converted into shares of Legacy Orchestra common stock (the “Legacy Orchestra Common Stock”) based on predetermined ratios (see Note 9). Upon the consummation of the Business Combination, each issued and outstanding share of Legacy Orchestra Common Stock was canceled and converted into the right to receive shares of Company Common Stock based upon the Exchange Ratio. The shares and corresponding capital amounts and loss per share related to Legacy Orchestra Common Stock prior to the Business Combination have been retroactively restated to reflect the Exchange Ratio. Outstanding stock options, whether vested or unvested, to purchase shares of Legacy Orchestra Common Stock (“Legacy Orchestra Options”) granted under the Orchestra BioMed, Inc. 2018 Stock Incentive Plan (“2018 Plan”) (see Note 11) converted into stock options for shares of Company Common Stock upon the same terms and conditions that were in effect with respect to such stock options immediately prior to the Business Combination, after giving effect to the Exchange Ratio (the “Exchanged Options”). The following table details the number of shares of Company Common Stock issued immediately following the consummation of the Business Combination: Number of Shares Common stock of HSAC2, outstanding prior to the Business Combination 6,762,117 Less: Redemption of HSAC2 shares (1,597,888 ) Common stock held by former HSAC2 shareholders 5,164,229 HSAC2 sponsor shares 4,450,000 Shares issued related to Backstop Agreement 1,808,512 Total shares outstanding prior to issuance of merger consideration to Legacy Orchestra stockholders 11,422,741 Shares issued to Legacy Orchestra stockholders – Company Common Stock (1) 20,191,338 Total shares of Company Common Stock immediately after Business Combination (2) 31,614,079 (1) The number of shares of common stock issued to Legacy Orchestra equity holders was determined based on (i) 2,522,214 shares of Legacy Orchestra Common Stock outstanding immediately prior to the closing of the Business Combination converted based on the Exchange Ratio and (ii) 35,694,179 shares of Legacy Orchestra Preferred Stock outstanding immediately prior to the closing of the Business Combination converted based on the Exchange Ratio. All fractional shares were rounded down. (2) Excludes 8,000,000 shares of Company Common Stock to be issued based on satisfaction of the Initial Milestone Event and the Final Milestone Event. The following table reconciles the elements of the Business Combination to the Company’s condensed consolidated statement of changes in stockholders’ equity (deficit) (in thousands): Amount Cash – HSAC2’s trust (net of redemption) $ 51,915 Cash – Backstop Agreement 18,085 Gross proceeds 70,000 Less: HSAC2 and Legacy Orchestra transaction costs paid (15,698 ) Effect of Business Combination, net of redemptions and transaction costs $ 54,302 The $54.3 million above differs from the $56.8 million effect of the Business Combination on the condensed consolidated statements of cash flows, due to $2.5 million of transaction costs paid by Legacy Orchestra in 2022. |
Terumo Agreement
Terumo Agreement | 3 Months Ended |
Mar. 31, 2023 | |
Terumo Agreement Abstract | |
Terumo Agreement | 4. Terumo Agreement In June 2019, Legacy Orchestra entered into the Terumo Agreement, pursuant to which Terumo secured global commercialization rights for Virtue SAB in coronary and peripheral vascular indications (the “Terumo Indications”). Under this agreement, Legacy Orchestra received an upfront payment of $30 million and an equity commitment of up to $5 million of which $2.5 million was invested in June 2019 as part of the Legacy Orchestra Series B-1 financing and $2.5 million was invested in June 2022 as part of the Legacy Orchestra Series D-2 financing. The Company has concluded that the license granted to Terumo is not distinct from the research and development services that will be provided to Terumo through the completion of the development of ISR indication, as Terumo cannot obtain the benefit of the license without the related research and development services. Accordingly, the Company will recognize revenues for this combined performance obligation over the estimated period of research and development services using a proportional performance model. The Company measures proportional performance based on the costs incurred relative to the total estimated costs of the research and development services. In 2019, Legacy Orchestra received a total of $32.5 million from Terumo related to the stock purchase and the revenue generating elements of the Terumo Agreement. The Company recorded the estimated fair value of the shares of $2.5 million in stockholders’ equity, as the value paid by Terumo is consistent with the value paid by other third-party stockholders in Legacy Orchestra’s offering of its Series B-1 Preferred Stock. The Company allocated the remaining $30 million to the transaction price of the Terumo Agreement. The Company considers the future potential development and regulatory milestones to be variable consideration, which are fully constrained from the transaction price as of March 31, 2023 and December 31, 2022, as the achievement of such milestone payments are uncertain and highly susceptible to factors outside of the Company’s control. The Company plans to re-evaluate the transaction price at each reporting period and as uncertain events are resolved or other changes in circumstances occur. In addition, the arrangement also includes sales-based royalties on product sales by Terumo subsequent to commercialization ranging from 10 - 15%, none of which have been recognized to date. The Company recorded the $30 million upfront payment received from Terumo in 2019 within deferred revenue. The following table presents the changes in the Company’s deferred revenue balance from the Terumo Agreement during the three months ended March 31, 2023 and 2022 Deferred Revenue – December 31, 2022 (in thousands) $ 19,539 Revenue recognized (1,019 ) Deferred Revenue – March 31, 2023 $ 18,520 Deferred Revenue – December 31, 2021 $ 22,401 Revenue recognized (716 ) Deferred Revenue – March 31, 2022 $ 21,685 The Company’s balance of deferred revenue contains the transaction price from the Terumo Agreement allocated to the combined license and research and development performance obligation, which was partially unsatisfied as of March 31, 2023 As of each quarterly reporting date, the Company evaluates its estimates of the total costs expected to be incurred through the completion of the combined performance obligation and updates its estimates as necessary. For the three months ended March 31, 2023 and 2022 three months ended March 31, 2023 and 2022 three months ended March 31, 2023 and 2022 The Company will also manufacture, or have manufactured, SirolimusEFR and has exclusive rights to sell it on a per unit basis to Terumo for use in the Virtue SAB product. The Company has determined that this promise does not contain a material right as the pricing is based on standalone selling prices. Through December 31, 2022, there have been no additional amounts recognized as revenue under the Terumo Agreement other than the recognition of a portion of the upfront payment described above. |
Medtronic Agreement
Medtronic Agreement | 3 Months Ended |
Mar. 31, 2023 | |
Medtronic Agreement [Abstract] | |
Medtronic Agreement | 5. Medtronic Agreement In June 2022, Legacy Orchestra, BackBeat Medical, LLC and Medtronic entered into the Medtronic Agreement for the development and commercialization of BackBeat CNT for the treatment of hypertension (“HTN”) in patients indicated for a cardiac pacemaker (the “Primary Field”). Under the terms of the Medtronic Agreement, the Company will sponsor a multinational pivotal study to support regulatory approval of BackBeat CNT in the Primary Field and be financially responsible for development, clinical and regulatory costs associated with this pivotal study. Medtronic is currently working with the Company to integrate BackBeat CNT into its top-of-the-line, commercially available dual-chamber pacemaker system for use in the pivotal trial and will provide development, clinical and regulatory resources in support of the pivotal trial, for which the Company will reimburse Medtronic at cost. Under the terms of the Medtronic Agreement, Medtronic will have exclusive rights to commercialize BackBeat CNT-enabled pacing systems globally following receipt of regulatory approval. Medtronic would be entirely responsible for global commercialization following receipt of regulatory approvals, including manufacturing, sales, marketing and distribution costs. The Company is expected to receive between $500 and $1,600 per BackBeat CNT-enabled device sold based on a formula of the higher of (1) a fixed dollar amount per BackBeat CNT-enabled device (amount varies materially on a country-by-country basis) or (2) a percentage of the BackBeat CNT-generated sales. Procedures using the BackBeat CNT-enabled pacemakers are expected to be billed under existing reimbursement codes. Medtronic has a right of first negotiation through FDA approval of BackBeat CNT in the Primary Field, to expand its global rights to BackBeat CNT for the treatment of HTN patients not indicated for a pacemaker. The Company assessed whether the Medtronic Agreement fell within the scope of ASC 808 and concluded that the Medtronic Agreement is a collaboration within the scope of ASC 808. In addition, the Company determined that Medtronic is a customer for a good or service that is a distinct unit of account, and therefore, the transactions in the Medtronic Agreement should be accounted for under ASC 606. The Company has concluded that the license granted to Medtronic is not distinct from the development and implementation services that will be provided to Medtronic through the completion of the development of HTN indication, as Medtronic cannot obtain the benefit of the license without the related development and implementation services. ASC 606-10-55-65 includes an exception for the recognition of revenue relating to licenses of intellectual property with sales-based or usage-based royalties. Under this exception, royalty revenue is not recorded until the subsequent sale or usage occurs, or the performance obligation has been satisfied, whichever is later. The Company concluded that the exemption applies and therefore, the royalty revenue associated with these performance obligations will be recognized as the underlying sales occur. Additionally, pursuant to the Medtronic Agreement, expenses incurred by Medtronic in connection with clinical device development and regulatory activities performed will be reimbursed by the Company. The Company will record such expenses as research and development expenses as incurred. During the three months ended March 31, 2023 Concurrently with the close of the Medtronic Agreement, Legacy Orchestra also received a $40 million investment from Medtronic in connection with Legacy Orchestra’s Series D-2 Preferred Stock financing. The equity was purchased at a fair value consistent with the price paid by other investors at that time, and accordingly, the proceeds received were recorded as an equity investment. Through March 31, 2023, there have been no amounts recognized as revenue under the Medtronic Agreement. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | 6. Financial Instruments and Fair Value Measurements The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy: March 31, 2023 (in thousands) Level 1 Level 2 Level 3 Total Assets Money market fund (included in cash and cash equivalents) $ 18,039 $ — $ — $ 18,039 Investment in Motus GI (see Note 7) 100 — — 100 Marketable securities (Corporate and Government debt securities) — 108,438 — 108,438 Total assets $ 18,139 $ 108,438 $ — $ 126,577 December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets Money market fund (included in cash and cash equivalents) $ 8,708 $ — $ — $ 8,708 Investment in Motus GI (see Note 7) 86 — — 86 Marketable securities (Corporate and Government debt securities) — 63,915 — 63,915 Total assets $ 8,794 $ 63,915 $ — $ 72,709 Liabilities: Warrant liability (see Note 10) $ — $ — $ 2,089 $ 2,089 Total liabilities $ — $ — $ 2,089 $ 2,089 The Level 2 assets consist of government and corporate debt securities which are valued using market observable inputs, including the current interest rate and other characteristics for similar types of investments, whose fair value may not represent actual transactions of identical securities. There were no transfers between Levels 1, 2 or 3 for the periods presented. Prior to the closing of the Business Combination, the Company’s warrant liability was measured at fair value on a recurring basis using unobservable inputs and were classified as Level 3 inputs, and any change in fair value was recognized as change in fair value of warrant liability in the Company’s condensed consolidated statements of operations and comprehensive loss. As of the Closing Date, all Legacy Orchestra liability classified warrants were reclassified to equity. Refer to Note 9 for the valuation technique and assumptions used in estimating the fair value of the warrants and discussion on the change in classification. The following table presents a roll-forward of the aggregate fair values of the Company’s liabilities for which fair value is determined by Level 3 inputs (in thousands): Warrant Balance—December 31, 2022 $ 2,089 Warrants exercised prior to the Business Combination (10 ) Change in fair value of warrants 294 Warrants reclassified to equity (2,373 ) Balance—March 31, 2023 $ — |
Marketable Securities and Strat
Marketable Securities and Strategic Investments | 3 Months Ended |
Mar. 31, 2023 | |
Marketable Securities and Strategic Investments [Abstract] | |
Marketable Securities and Strategic Investments | 7. Marketable Securities and Strategic Investments Marketable Securities The following is a summary of the Company’s marketable securities as of March 31, 2023 and December 31, 2022: March 31, 2023 (in thousands) Amortized Unrealized Unrealized Fair Corporate debt securities $ 18,598 $ 3 $ — $ 18,601 Government debt securities 89,875 — (38 ) 89,837 Total $ 108,473 $ 3 $ (38 ) $ 108,438 December 31, 2022 (in thousands) Amortized Unrealized Unrealized Fair Corporate debt securities $ 52,242 $ 7 $ — $ 52,249 Government debt securities 11,681 — (15 ) 11,666 Total $ 63,923 $ 7 $ (15 ) $ 63,915 The Company believes it is more likely than not that its marketable securities in an unrealized loss position will be held until maturity or the recovery of the cost basis of the investment. To date, the Company has not recorded any allowance for credit losses on its investment securities. The Company determined that the unrealized losses were not attributed to credit risk but were primarily driven by the broader change in interest rates. For the three months ended March 31, 2023 and the year ended December 31, 2022, the Company did not recognize any realized gains or losses on its marketable securities. Strategic Investments The Company values the Motus GI investment by measuring fair value using the listed share price on the Nasdaq Capital Market on each valuation date. Aggregate gains of $14,000 and losses of $220,000 during the three months ended March 31, 2023 and 2022 The Company’s long term strategic investments as of March 31, 2023 represent investments made in Vivasure in 2020, 2021 and 2022 that were originally recorded at cost. There were no observable price changes or impairments identified during the three months ended March 31, 2023 or the three months ended March 31, 2022 related to these investments. In May 2022, Vivasure announced a Series D private placement, in which it received a material investment from a new strategic investor. As a result, Legacy Orchestra’s existing convertible redeemable notes converted into Series D Preferred Stock of Vivasure in May 2022. The investment in the Vivasure Series D Preferred Stock represents an observable price change in an orderly transaction for an identical instrument of the same issuer, and accordingly, the Company recognized a gain on its strategic investment in Vivasure of $1.9 million in the second quarter of 2022. This amount represents a portion of the previously impaired investment balance described below. During the fourth quarter of 2019, the Company identified indicators of impairment of Vivasure strategic investments held at that time as a result of adverse changes in Vivasure’s business operations, including liquidity concerns. As a result, the Company recorded an impairment charge in the fourth quarter of 2019 of $5.8 million, which represents the cumulative impairment charges recorded on Vivasure strategic investments to date. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2023 | |
Balance Sheet Components [Abstract] | |
Balance Sheet Components | 8. Balance Sheet Components Property and Equipment, Net Property and equipment, net consists of the following: (in thousands) March 31, December 31, Equipment $ 1,747 $ 1,712 Office furniture 364 364 Leasehold improvements 191 191 Property and equipment, gross 2,302 2,267 Less accumulated depreciation and amortization (849 ) (778 ) Total Property and equipment, net $ 1,453 $ 1,489 Depreciation and amortization expense was $71,000 and $48,000 for the three months ended March 31, 2023 and 2022, respectively. Accrued Expenses Accrued expenses consist of the following: (in thousands) March 31, December 31, Accrued compensation $ 909 $ 2,480 Clinical trial accruals 966 1,003 Other accrued expenses 1,381 1,893 Total accrued expenses $ 3,256 $ 5,376 |
Common and Preferred Stock
Common and Preferred Stock | 3 Months Ended |
Mar. 31, 2023 | |
Common and Preferred Stock [Abstract] | |
Common and Preferred Stock | 9. Common and Preferred Stock Common Stock The Company is authorized to issue up to 340,000,000 shares of Company Common Stock, par value $0.0001 per share. As discussed in Note 3, the Company has retroactively adjusted the shares issued and outstanding prior to January 26, 2023 to give effect to the Exchange Ratio to determine the number of shares of Company Common Stock into which they were converted. Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share. The board of directors of the Company (the “Board”) has the authority to issue preferred stock and to determine the rights, privileges, preferences, restrictions, and voting rights of those shares. As of March 31, 2023, no shares of preferred stock were outstanding. In January 2022, Legacy Orchestra initiated a Series D Preferred Stock financing comprised of Series D-1 and Series D-2 Preferred Stock. In March 2022, Legacy Orchestra closed the Series D-1 Preferred Stock financing over two closings, receiving gross proceeds of approximately $27.3 million. Each share of Series D-1 Preferred Stock was convertible into 1.1 shares of Legacy Orchestra Common Stock. In connection with the Series D-1 Preferred Stock financing, Legacy Orchestra incurred approximately $2.0 million in offering costs. In June 2022, Legacy Orchestra closed the Series D-2 Preferred Stock financing, receiving gross proceeds of approximately $82.6 million, inclusive of a $40 million investment from Covidien Group S.à.r.l., an affiliate of Medtronic plc. In connection with the Series D-2 Preferred Stock financing, Legacy Orchestra incurred $6.2 million of offering costs. Prior to the Business Combination, Legacy Orchestra had shares of $0.001 par value Series A, Series B, Series B-1, Series D-1 and Series D-2 preferred stock outstanding, all of which were convertible into shares of Legacy Orchestra Common Stock, subject to certain anti-dilution protections. Upon the Closing, the outstanding shares of Legacy Orchestra Preferred Stock were converted into Legacy Orchestra Common Stock in accordance with the terms of each class of Legacy Orchestra Preferred Stock (as described below), and then into Company Common Stock at the Exchange Ratio. The Series A and Series D-2 Preferred Stock converted into Legacy Orchestra Common Stock at a 1:1 ratio while the Series D-1 Preferred Stock converted at a 1:1.1 ratio. Except as noted below, the Series B Preferred Stock and the Series B-1 Preferred Stock (collectively, the “Series B/B-1 Preferred Stock”) converted into Legacy Orchestra Common Stock at a 1:1 ratio. However, the Series B/B-1 Preferred Stock had an innovative conversion feature. In the event of a follow-on offering of at least $8 million, excluding amounts invested attributable to holders exercising their preemptive rights, a holder of Series B/B-1 Preferred Stock was entitled to an adjustment to their conversion ratio to a 1:2 basis (i.e., one share of Series B Preferred Stock or Series B-1 Preferred Stock was convertible into two shares of common stock) if such investor invested at least 100% of its original investment in the initial offerings of Series B Preferred Stock or Series B-1 Preferred Stock in a specified follow-on offering (the “Conversion Rate Adjustment”). |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2023 | |
Warrants [Abstract] | |
Warrants | 10. Warrants The Company evaluates its outstanding warrants to determine if the instruments qualify for equity or liability classification. Private Warrants Prior to the Merger, HSAC2 had outstanding 1,500,000 Private Warrants, which were issued in connection with the HSAC2 IPO to the Sponsor. Each Private Warrant entitles the holder thereof to purchase one share of Company Common Stock at a price of $11.50 per share, subject to adjustment as provided herein. The Private Warrants became exercisable 30 days after the completion of the Business Combination and will expire five years after the completion of the Business Combination. Each Private Warrant is non-redeemable and may be exercised on a cashless basis. Since these warrants are indexed to the Company’s publicly traded common stock, they are classified within equity. As described in Note 3, the Sponsor and HSAC2’s other initial shareholders prior to the HSAC2 IPO agreed to subject (i) the 4,000,000 Insider Shares and (ii) the 450,000 Private Shares to a lock-up for up to 12 months following the Closing and the Sponsor forfeited 50% of its 1,500,000 Private Warrants, comprising 750,000 Private Warrants, for no consideration, immediately prior to the Closing. Pursuant to the terms of the Merger Agreement, immediately following the Sponsor Forfeiture and prior to the Closing, HSAC2 issued 750,000 warrants to purchase Company Common Stock to eleven specified employees and directors of Legacy Orchestra. These new warrants have substantially similar terms to the forfeited Private Warrants, except that they will become exercisable between 24 and 36 months after the Closing. Assumed Legacy Orchestra Warrants Prior to the close of the Business Combination, the majority of Legacy Orchestra’s warrants (the “Legacy Orchestra Warrants”) were required to be accounted for as liabilities as certain features within the warrant agreements contained features that were not considered “fixed for fixed” pursuant to ASC 815, and therefore, the fair value of the warrant liability was marked-to-market at each balance sheet date, with the change in fair value recorded in the Company’s condensed consolidated statements of operations and comprehensive loss within other income (expense). Upon the close of the Business Combination, all liability classified Legacy Orchestra Warrants became equity classified on that date, as the warrant agreements became “fixed for fixed.” As a result, the warrant liability was fair valued and adjusted from $2.1 million as of December 31, 2022 to $2.4 million as of January 26, 2023, and then subsequently reclassified into stockholders’ equity. In addition, Legacy Orchestra also had outstanding other equity classified warrants recorded within additional paid-in capital at the time of issuance at fair value that were not subject to subsequent remeasurement. The Company calculates the fair value of the outstanding warrant liability at each reporting date by estimating the equity value of the Company, and then utilizing option pricing models to allocate the total equity value to the shares and warrants outstanding. The inputs used in the valuation models for the Company’s warrant liability are as follows: Period from Three months Expected volatility 44 – 49 % 49 – 53 % Risk-free interest rate 3.60 – 4.80 % 1.16 – 2.44 % Remaining term in years 0.35 – 5.00 1.17 – 7.69 Exercise price of common warrants $ 1.08 – $30.11 $ 1.08 – $30.11 Exercise price of Legacy preferred warrants — $ 9.00 – $15.00 Common stock price $ 10.63 $ 4.06 Legacy preferred stock price — $ 6.49 – $8.79 Expected dividend yield 0 % 0 % The Company’s warrant liability related to Legacy Orchestra warrant activity rollforward is as follows, with the warrants having been converted to reflect the effect of the Merger: (in thousands, except share data) Preferred Common Amount Balance December 31, 2022 — 1,327,074 $ 2,089 Warrants exercised prior to the business combination — (1,163 ) (10 ) Change in fair value of warrants as of January 26, 2023 — — 294 Warrants reclassified to equity — (1,325,911 ) (2,373 ) Balance March 31, 2023 — — $ — (in thousands, except share data) Preferred Common Amount Balance December 31, 2021 206,997 1,189,162 $ 635 Exercise of warrants — (68,587 ) (156 ) Change in the fair value of warrants — — 145 Balance March 31, 2022 206,997 1,120,575 $ 624 Private Warrants and Assumed Legacy Orchestra Warrants The following table summarizes outstanding warrants to purchase shares of Company Common Stock as of March 31, 2023 and December 31, 2022: Number of Shares March 31, December 31, Exercise Price Term Liability-classified Warrants Legacy Orchestra Warrants — 1,327,074 $ 0.50 – $14.00 0.35 – 5.00 — 1,327,074 Equity-classified Warrants Legacy Orchestra Warrants 1,425,936 250,000 $ 0.50 – $14.00 0.35 – 9.25 Private Warrants Held by Sponsor 750,000 1,500,000 $ 11.50 4.82 – 5.07 Private Warrants Held by Employees (Note 11) 750,000 — $ 11.50 4.82 2,925,936 1,750,000 Total Outstanding 2,925,936 3,077,074 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 11. Stock-Based Compensation As of March 31, 2023, the only equity compensation plan from which the Company may currently issue new awards is the Company’s 2023 Equity Incentive Plan (the “2023 Plan”), as more fully described below. Orchestra BioMed, Inc. 2018 Stock Incentive Plan Prior to the Merger, Legacy Orchestra maintained the 2018 Plan, under which Legacy Orchestra granted incentive stock options, non-qualified stock options and restricted stock awards to its employees and certain non-employees, including consultants, advisors and directors. The maximum aggregate shares of Legacy Orchestra Common Stock that was subject to awards and issuable under the 2018 Plan was 5.2 million shares prior to the Merger. Employees, consultants, and directors were eligible for awards granted under the 2018 Plan which generally have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the Board. Vesting generally occurs over a period of not greater than three years. As described in Note 3, in connection with the Merger, each Legacy Orchestra Option that was outstanding and unexercised immediately prior to the time that the Merger became effective (the “Effective Time”) (whether vested or unvested) was assumed by the Company and converted into an option to purchase an adjusted number of shares of Company Common Stock at an adjusted exercise price per share, based on the Exchange Ratio, and will continue to be governed by substantially the same terms and conditions, including vesting, as were applicable to the former option. Each Exchanged Option is exercisable for a number of whole shares of Company Common Stock equal to the product of the number of shares of Legacy Orchestra Common Stock underlying such Legacy Orchestra Options multiplied by the Exchange Ratio, and the per share exercise price of such Exchanged Option is equal to the quotient determined by dividing the exercise price per share of the Legacy Orchestra Option by the Exchange Ratio. Following the closing of the Merger, no new awards may be made under the 2018 Plan. The Company accounted for the Exchanged Options as a modification of the existing options. Incremental compensation costs, measured as the excess, if any, of the fair value of the modified options over the fair value of the original options immediately before its terms are modified, is measured based on the fair value of the underlying shares and other pertinent factors at the modification date. The impact of the option modifications were de minimis. Orchestra BioMed Holdings, Inc. 2023 Equity Incentive Plan At the Effective Time, the Company adopted the 2023 Plan which permits the granting of incentive stock options, non-qualified options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based award to employees, directors, and non-employee consultants and/or advisors. As of March 31, 2023, 3,455,303 shares of Company Common Stock are authorized for issuance pursuant to awards under the 2023 Plan. The pool of available shares will be automatically increased on the first day of each calendar year, beginning January 1, 2023 and ending January 1, 2032, by an amount equal to the lesser of (i) 4.8% of the outstanding shares of our Common Stock determined on a fully-diluted basis as of the immediately preceding December 31 and (ii) 3,036,722 shares of Common Stock, and (iii) such number of shares of Common Stock determined by the Board or the Compensation Committee prior to January 1st of a given year. In addition, any awards outstanding under the 2018 Plan upon the Closing, after adjustment for the Business Combination, remain outstanding. If any of those awards subsequently expire, terminate, or are surrendered or forfeited for any reason without issuance of shares after the closing of the Business Combination, the shares of Company Common Stock underlying those awards will automatically become available for issuance under the 2023 Plan. Total stock-based compensation related to option issuances was as follows: Three Months Ended (in thousands) 2023 2022 Research and development $ 485 $ 39 Selling, general and administrative 738 16 Total stock-based compensation $ 1,223 $ 55 As of March three Total stock-based compensation related to restricted stock was as follows: Three Months Ended (in thousands) 2023 2022 Research and development $ — $ — Selling, general and administrative 50 15 Total stock-based compensation $ 50 $ 15 As of March three As previously discussed in Note 3 and Note 10, pursuant to the terms of the Merger Agreement, immediately following the Sponsor Forfeiture and prior to the Closing, the Company issued 750,000 warrants to purchase Company Common Stock to eleven specified employees and directors of Legacy Orchestra. These warrants have substantially similar terms to the forfeited Private Warrants, except that they will become exercisable between 24 and 36 months after the Business Combination. The estimated grant-date fair value of these warrant awards issued concurrent with the close of the Business Combination was calculated using the Black-Scholes option pricing model. Assumptions used were an expected term (in years) of 5.00, expected volatility of 50%, risk-free interest rate of 3.54%, expected dividend yield of 0%, and fair value of common stock of $10.63. Total stock-based compensation related to warrants was as follows: Three Months Ended (in thousands) 2023 2022 Research and development $ 86 $ — Selling, general and administrative 130 — Total stock-based compensation $ 216 $ — As of March three Stock Option Activity The following table summarizes the stock option activity of the Company under the 2018 Plan and the 2023 Plan: Shares Weighted Weighted Aggregate Outstanding at January 1, 2023 7,868,448 3.51 8.35 — Retroactive application of Reverse Recapitalization (Note 3) (4,209,620 ) 4.05 Outstanding at January 1, 2023, effect of Merger 3,658,828 7.56 8.35 Granted 323,175 9.89 — — Exercised (2,325 ) 4.30 — — Forfeited/canceled (35,043 ) 8.02 — — Outstanding March 31, 2023 3,944,635 7.76 5.38 $ 46,409 Exercisable at March 31, 2023 2,014,416 6.67 6.70 $ 24,964 The following table summarizes the restricted stock activity of the Company under the Plan: Restricted Weighted Aggregate Outstanding January 1, 2023 158,589 9.14 — Granted — — — Vested (40,078 ) — — Forfeited/canceled — — — Outstanding March 31, 2023 118,511 8.90 $ 2,542 During the three months ended March 31, 2023, the Company did not grant any restricted stock awards (“RSAs”) while 40,078 RSAs vested at a weighted-average grant date fair value of $3.37. Determination of Stock Option Awards Fair Value The estimated grant-date fair value of all the Company’s option awards was calculated using the Black-Scholes option pricing model, based on the following weighted average assumptions: Three Months Ended 2023 2022 Expected term (in years) 6.00 6.00 Expected volatility 50 % 51 % Risk-free interest rate 3.60 % 1.72 % Expected dividend yield 0 % 0 % Fair value of common stock $ 9.63 $ 4.06 The fair value of each stock option grant was determined by the Company using the methods and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment and estimation by management. Expected Term Expected Volatility Risk-Free Interest Rate Expected Dividend Yield Fair Value of Common Stock Prior to the Business Combination, Subsequent to the Business Combination, the Company utilizes the price of its publicly-traded Company Common Stock to determine the grant date fair value of awards. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstrac] | |
Leases | 12. Leases Office Lease In August 2019, Legacy Orchestra entered into an addendum to the original December 2009 lease agreement for 8,052 square feet of office space in New Hope, PA. The lease will expire in September 2024. Monthly fees will be between $9,000 and $19,000 for the period from commencement through termination. In November 2019, Legacy Orchestra entered into a new lease agreement for approximately 5,200 square feet of office space in New York, NY. The lease will expire in March 2028. Monthly fees will be between $28,000 and $30,000 for the period from commencement through termination. In January 2020, Legacy Orchestra entered into an agreement for the use of portions of the office space of Motus GI, a related party, in Fort Lauderdale, Florida. The agreement will expire in September 2024. The monthly fee commenced on the month following the date of agreement. Monthly fees will be between $12,000 and $17,000 for the period from commencement through termination. In May 2022, Legacy Orchestra amended the agreement with Motus GI for a larger portion of the office space and extended the expiration date to November 2024. Monthly fees will be between $7,000 and $23,000 for the period from commencement of the amendment to expiration. The amount paid is estimated to be proportionate to the percentage of space used by the Company applied to the monthly rent obligated to be paid by Motus GI to their landlord. Operating cash flow supplemental information for the three months ended March 31, 2023 Cash paid for amounts included in the present value of operating lease liabilities was $205,000 during the three months ended March 31, 2023 compared to $185,000 during the three months ended March 31, 2022 As of March 31, 2023: Weighted average remaining lease term – operating leases, in years 3.89 Weighted average discount rate – operating leases 6.25 % Operating Leases Rent/lease expense for office and lab space was approximately $209,000 and $174,000 for the three months ended March 31, 2023 and 2022, respectively. The table below shows the future minimum rental payments, exclusive of taxes, insurance, and other costs, under the leases as of March 31, 2023: Operating Year ending December 31: (in thousands) 2023 (remaining nine months) $ 618 2024 727 2025 352 2026 352 2027 352 Thereafter 88 Total future minimum lease payments $ 2,489 Imputed interest (278 ) Total liability $ 2,211 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 13. Related Party Transactions In addition to transactions and balances related to cash and stock-based compensation to officers and directors, the Company had the following transactions and balances with related parties during the year ended 2022 and the three months ended March 31, 2023: Vivasure Investments In December 2020 and 2021, and April 2022, Legacy Orchestra invested in Vivasure, a related party, $183,000, $213,000, and $208,000, respectively, in the form of unsecured convertible redeemable notes. The unsecured convertible redeemable notes converted into Series D preferred stock of Vivasure in May of 2022 (Note 7). |
Debt Financing
Debt Financing | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt Financing | 14. Debt Financing In June 2022, Legacy Orchestra entered into a Loan and Security Agreement with Avenue Venture Opportunities Fund I and II (the “2022 Loan and Security Agreement”). The terms of the 2022 Loan and Security Agreement include a term loan of up to $20 million available in two tranches with the first tranche of $10 million that was drawn at closing in June of 2022, and a second tranche of $10 million available at closing of the Legacy Orchestra Series D-2 Preferred Stock financing that has not yet been drawn. Additionally, the Company may have access to a third tranche of $30 million subject to certain financing milestones. The term loan matures on June 1, 2026. In addition, the lender has the right, at its discretion, but not the obligation, to convert any portion of the outstanding principal amount of the loans up to $5 million into shares of Company Common Stock at a price per share equal to $12.00 (the “Conversion Option”), subject to adjustment; provided, however, the Conversion Option shall not be exercised by lender during the six (6) month period after completion of the Business Combination. Pursuant to the terms of the 2022 Loan and Security Agreement, Legacy Orchestra issued Avenue Venture Opportunities Fund I and II warrants that will be exercisable for 100,000 shares of Company Common Stock, and the estimated fair value of the warrants of $178,000 was recorded as debt discount on the date of issuance and is being amortized to interest expense over the term of the 2022 Loan and Security Agreement. In addition, other financing costs totaling $405,000 were also recorded as debt discount and is being amortized to interest expense over the term of the facility. The term loan accrues interest at a floating per annum rate equal to the Wall Street Journal prime rate plus 6.45%. The rate in effect at March 31, 2023 Concurrent with the closing of the 2022 Loan and Security Agreement, Legacy Orchestra terminated and repaid an existing 2019 Loan and Security Agreement with Silicon Valley Bank (the “2019 Loan and Security Agreement”), which resulted in a loss on extinguishment of $682,000. Pursuant to the terms of the 2019 Loan and Security Agreement, Legacy Orchestra issued Silicon Valley Bank a warrant that, to the extent Legacy Orchestra made draws on the 2019 Loan and Security Agreement, was exercisable for a number of shares of Legacy Orchestra Common Stock equal to 2% of the amount drawn divided by the exercise price of $1.33 per share of Legacy Orchestra Common Stock. As a result of the draw in December of 2020, Legacy Orchestra issued 150,000 Legacy Orchestra Common Stock warrants to Silicon Valley Bank, and the estimated fair value of the warrants of $544,000 was recorded as debt discount on the date of issuance and was being amortized to interest expense over the term of the credit facility. The term loan accrued interest at a floating per annum rate equal to the greater of (i) the Wall Street Journal prime rate plus 1.00% or (ii) 6.25%. In addition, there was a final payment equal to 8.25% of the original aggregate principal amount which accrued over the term of the loan using the effective-interest method. Total interest expense recorded on these facilities during th e three months ended March 31, 2023 and March 31, 2022 The following table shows the amount of principal payments due pursuant to the term loan by year: Principal Period ending March 31: (in thousands) 2023 (remaining 9 months) $ — 2024 2,500 2025 5,000 2026 2,500 Total $ 10,000 The term loan is secured by all of the Company’s assets, excluding intellectual property and certain other assets. The loan contains customary affirmative and restrictive covenants, including the Company’s ability to enter into fundamental transactions, incur additional indebtedness, grant liens, pay any dividend or make any distributions to its holders, make investments, merge or consolidate with any other person or engage in transactions with the Company’s affiliates, but does not include any financial covenants. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 15. Net Loss Per Share Basic net loss per share of Company Common Stock is computed by dividing net loss by the weighted-average number of shares of Company Common Stock. Shares of Company Common Stock outstanding but subject to forfeiture and cancellation by the Company (e.g., the Forfeitable Shares – see Note 3) are excluded from the weighted-average number of shares until the period in which such shares are no longer subject to forfeiture. Diluted net loss per share of Company Common Stock includes the effect, if any, from the potential exercise or conversion of securities, such as stock options, Legacy Orchestra Warrants and Private Warrants, and Forfeitable Shares and Earnout Consideration, which would result in the issuance of incremental shares of Company Common Stock, unless their effect would be anti-dilutive. The following outstanding potentially dilutive securities have been excluded from the calculation of diluted net loss per share for the three months ended March 31, 2023 and March 31, 2022, as their effect is anti-dilutive: Three Months Ended March 31, 2023 2022 Stock options 3,944,635 1,342,768 Company Common Stock warrants 2,925,936 1,565,730 Unvested Restricted Stock Awards 118,511 131,511 Conversion Option 416,667 — Forfeitable Shares 1,000,000 — Earnout Consideration 8,000,000 — Total 16,405,749 3,040,009 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events The Company has evaluated subsequent events through May 12, 2023, the date on which these condensed consolidated financial statements were issued. As discussed in Note 3, in connection with the Business Combination, existing Legacy Orchestra stockholders had the opportunity to elect to participate in the Earnout pursuant to which each such Earnout Participant may receive a portion of additional contingent consideration of up to 8,000,000 shares of Earnout Consideration. On April 12, 2023, the Initial Milestone Event was achieved, and each Earnout Participant was issued their Pro Rata Portion (as such term is defined in the Merger Agreement) of 4,000,000 shares of Company Common Stock. Additionally, 500,000 of the Forfeitable Shares are no longer subject to forfeiture as a result of the Initial Milestone Event. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Reverse Recapitalization | Reverse Recapitalization The Business Combination is accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, HSAC2 is treated as the “acquired” company and Legacy Orchestra is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy Orchestra issuing stock for the net assets of HSAC2, accompanied by a recapitalization. As a result, the consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Legacy Orchestra. Additionally, the shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the exchange ratio established in the Merger Agreement (the “Exchange Ratio”). For additional information on the Business Combination and the Exchange Ratio, see Note 3 to these unaudited condensed consolidated financial statements. |
Emerging Growth Company and Smaller Reporting Company Status | Emerging Growth Company and Smaller Reporting Company Status The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933 (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”)., As such, it is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. The Company 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 the Company has total annual gross revenue of at least $1.235 billion, (3) the last day of the fiscal year in which the Company is 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 the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. The Company is also a “smaller reporting company” as defined in the Exchange Act. The Company may continue to be a smaller reporting company even after the Company is no longer an emerging growth company. The Company 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 the Company’s voting and non-voting Common Stock held by non-affiliates is less than $250.0 million measured on the last business day of the Company’s second fiscal quarter, or (ii)(a) the Company’s annual revenue is less than $100.0 million during the most recently completed fiscal year and (b) the market value of the Company’s voting and non-voting Common Stock held by non-affiliates is less than $700.0 million measured on the last business day of the Company’s second fiscal quarter. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Areas where significant estimates exist include, but are not limited to, the fair value of stock-based compensation, research and development costs incurred, the fair value of the warrant liability, and the estimated costs to complete the combined performance obligation pursuant to the Terumo Agreement (Note 4). |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are held in banks or in custodial accounts with banks. Cash equivalents are defined as all liquid investments and money market funds with maturity from date of purchase of 90 days or less that are readily convertible into cash. |
Marketable Securities | Marketable Securities The Company accounts for its marketable securities with remaining maturities of less than one year, or where its intent is to use the investments to fund current operations or to make them available for current operations, as short-term investments. These investments represent debt investments in corporate or government securities that are designated as available-for-sale and are carried at fair value, with unrealized gains and losses reported in stockholders’ equity as accumulated other comprehensive income (loss). The disclosed fair value related to the Company’s investments is based on market prices from a variety of industry standard data providers and generally represent quoted prices for similar assets in active markets or have been derived from observable market data. |
Strategic Investments | Strategic Investments Management has made investments in affiliated companies and assesses whether the Company exerts significant influence over its strategic investments. The Company considers the nature and magnitude of its investment, any voting and protective rights it holds, any participation in the governance of the other company, and other relevant factors such as the presence of a collaboration or other business relationships. To date, the Company has concluded that it does not have the ability to exercise significant influence over its strategic investments. The Company’s strategic investments consist of equity investments in common stock of a Motus GI Holdings, Inc. (“Motus GI”), a publicly-held company and related party, and preferred shares of Vivasure Medical Limited (“Vivasure”), a privately-held company and related party. The Company classifies strategic investments on its balance sheet as current assets if the assets are available for use for current operations, and the Company does not have a specific plan to hold the investments for a certain duration of time. The shares held of Motus GI represent equity securities with a readily determinable fair value and are 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, Recognition and Measurement of Financial Assets and Liabilities. Therefore, the Company categorized the investments as current assets. 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. Additionally, as the investments in Vivasure are not readily marketable, the Company categorized the investments as non-current assets. As of March 31, 2023 and December 31, 2022, the carrying value of the investments in Vivasure was $2.5 million. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies ASC 820, Fair Value Measurement (“ASC 820”) The carrying value of the Company’s cash and cash equivalents, accounts receivable, prepaid expense, accounts payable and accrued expenses approximate fair value because of the short-term maturity of these financial instruments. In addition, the Company records its investment in Motus GI, marketable securities, and warrant liabilities at fair value. In addition, at March 31, 2023, the Company believed the carrying value of debt approximates fair value as the interest rates were reflective of the rate the Company could obtain on debt with similar terms and conditions. See Note 7 for additional information regarding fair value measurements. The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below: Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable represent amounts due from customers. The allowance for doubtful accounts is recorded for estimated losses by evaluating various factors, including relative creditworthiness of each customer, historical collections experience and aging of the receivable. As of March 31, 2023 and December 31, 2022, an allowance for doubtful accounts was not deemed necessary. |
Inventory | Inventory Inventory is stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) and net realizable value. Net realizable value represents the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company analyzes its inventory levels and writes down inventory that has become obsolete or has a cost basis in excess of its expected net realizable value or inventory quantities in excess of expected requirements. Excess requirements are determined based on comparison of existing inventories to forecasted sales, with consideration given to inventory shelf life. Expired inventory is disposed of, and the related costs are recognized in cost of goods sold. As of March 31, 2023 and December 31, 2022, an impairment charge as a result of obsolete inventory was not deemed necessary. |
Research and Development Prepayments, Accruals and Related Expenses | Research and Development Prepayments, Accruals and Related Expenses The Company incurs costs of research and development activities conducted by its third-party service providers, which include the conduct of preclinical and clinical studies. The Company is required to estimate its prepaid and accrued research and development costs at each reporting date. These estimates are made as of the reporting date of the work completed over the life of the individual study in accordance with agreements established with our service providers. The Company determines the estimates of research and development activities incurred at the end of each reporting period through discussion with internal personnel and outside service providers, as to the progress or stage of completion of trials or services, as of the end of the reporting period, pursuant to contracts with the third parties and the agreed upon fee to be paid for such services. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are accepted by the Company or the services are performed. Accruals are recorded for the amounts of services provided that have not yet been invoiced. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the respective assets, generally three to five years. Leasehold improvements are amortized over the lesser of their useful life or the remaining life of the lease. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from the balance sheet and any resulting gain or loss is reflected in operations in the period realized. Maintenance and repairs are charged to operations as incurred. Asset category Depreciable life Manufacturing equipment 10 years Office equipment 3 – 7 years Research and development equipment 7 years |
Leases | Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the terms of the arrangement. The Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its operating right-of-use (“ROU”) assets and operating lease liabilities at the lease commencement date, and thereafter if modified. The lease term includes any renewal options that the Company is reasonably assured to exercise. The Company’s policy is to not record leases with a lease term of 12 months or less on its balance sheets. The ROU asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its estimated secured incremental borrowing rate for that lease term. Lease expense for operating leases is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in operating expense in the statements of operations. Payments due under each lease agreement include fixed and variable payments. Variable payments relate to the Company’s share of the lessor’s operating costs associated with the underlying asset and are recognized when the event on which those payments are assessed occurs. Variable payments have been excluded from the lease liability and associated right-of-use asset. The interest rate implicit in lease agreements is typically not readily determinable, and as such, the Company utilizes the incremental borrowing rate to calculate lease liabilities, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. |
Debt Discount and Debt Issuance Costs | Debt Discount and Debt Issuance Costs Debt discounts and debt issuance costs incurred in connection with the issuance of debt are capitalized and reflected as a reduction to the related debt liability. The costs are amortized to interest expense over the term of the debt using the effective-interest method. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount to the future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. The Company has not identified any such impairment losses to date. |
Warrants | Warrants The Company evaluates its warrants to determine if the contracts qualify as liabilities in accordance with ASC 480-10, Distinguishing Liabilities from Equity, Derivatives and Hedging In bundled transactions, the proceeds received from any debt instruments and liability classified warrants are allocated to the warrant at fair value first, and the residual value is then allocated to the debt instrument. Upon conversion or exercise of a warrant that is subject to liability treatment, the instrument is marked to fair value at the conversion or exercise date and the fair value is reclassified to equity. Equity classified warrants are recorded within additional paid-in capital at the time of issuance at fair value as of the issuance date and are not subject to subsequent remeasurement. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under the core principle according to ASC 606, Revenue from Contracts with Customers (“ASC 606”) The Company’s revenues are currently comprised of product revenue from the sale of FreeHold’s intracorporeal organ retractors, and partnership revenues from the Terumo Agreement related to the development and commercialization of Virtue SAB. |
Product Revenues | Product Revenues Product revenues related to sales of FreeHold’s intracorporeal organ retractors are recognized at a point-in-time upon the shipment of the product to the customer, and there are no significant estimates or judgments related to estimating the transaction price. The product revenues consist of a single performance obligation, and the payment terms are typically 30 days. Product revenues are recognized solely in the United States. |
Partnership Revenues | Partnership Revenues To date, the Company’s partnership revenues have related to the Terumo Agreement as further described in Note 4. In future periods, partnership revenues may also include revenues related to the Medtronic Agreement as discussed in Note 5. The Company assessed whether the Terumo Agreement fell within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) The promised goods or services in the Terumo Agreement include (i) license rights to the Company’s intellectual property, and (ii) research and development services. The Company also has optional additional items in the Terumo Agreement which are considered marketing offers and are accounted for as separate contracts with the customer if such option is elected by the customer, unless the option provides a material right which would not be provided without entering into the contract. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer. Promised goods or services are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources or (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct in the Terumo Agreement, the Company considered factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on their own or whether the required expertise is readily available. The Company estimates the transaction price for the Terumo Agreement performance obligations based on the amount expected to be received for transferring the promised goods or services in the contract. The consideration includes both fixed consideration and variable consideration. At the inception of the Terumo Agreement, as well as at each reporting period, the Company evaluates the amount of potential payments and the likelihood that the payments will be received. The Company utilizes either the most likely amount method or expected amount method to estimate the amount expected to be received based on which method better predicts the amount expected to be received. If it is probable that a significant revenue reversal would not occur, the variable consideration is included in the transaction price. The Terumo Agreement contains development and regulatory milestone payments. At contract inception and at each reporting period, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect partnership revenues and earnings in the period of adjustment. The Terumo Agreement also includes sales-based royalties and the license is deemed to be the predominant item to which the royalties relate. Accordingly, the Company will recognize royalty revenue when the related sales occur. To date, the Company has not recognized any royalty revenue under the arrangement. The Company has determined that intellectual property licensed to Terumo and the research and development services to be provided through the premarket approval by the U.S. Food and Drug Administration (the “FDA”) for the in-stent restenosis (“ISR”) indication represent a combined performance obligation that is satisfied over time, 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. The Company evaluates the measure of progress at each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company receives payments from Terumo based on billing schedules established in the contract. Such billings for milestone related events have 10-day terms from the date the milestone is achieved, royalty payments are 20-day terms after the close of each quarter, any optional services are 20 days after receipt of an invoice and any sales of the SirolimusEFR are within 30 days after receipt of the shipping invoices. Upfront payments are recorded as deferred revenue upon receipt or when due until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the right to consideration is unconditional. |
Stock-Based Compensation | Stock-Based Compensation The Company applies ASC 718-10, Compensation — Stock Compensation Under the requirements of ASU 2018-07, the Company accounts for stock-based compensation to nonemployees under the fair value method, which requires all such compensation to be calculated based on the fair value at the measurement date (generally the grant date) and recognized in the Company’s condensed consolidated statements of operations and comprehensive loss over the requisite service period. The Company accounts for forfeitures of stock-based awards as they occur. |
Net Loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders Basic and diluted net loss per share is calculated by dividing net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration of potential dilutive shares of common stock. Since the Company was in a loss position for the periods presented, basic net loss is the same as diluted net loss since the effects of potentially dilutive securities are antidilutive. Potentially dilutive securities include all outstanding warrants, stock options, Earnout Consideration (Note 3) and unvested restricted stock awards. Shares of Company Common Stock outstanding but subject to forfeiture and cancellation by the Company (e.g., the Forfeitable Shares (as defined in Note 3)) are excluded from the weighted-average number of shares until the period in which such shares are no longer subject to forfeiture. In periods in which there is net income, the Company would apply the two-class method to compute net income per share. Under this method, earnings are allocated to common stock and participating securities based on their respective rights to receive dividends, as if all undistributed earnings for the period were distributed. The two-class method does not apply in periods in which a net loss is reported. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset-and-liability method in accordance with ASC 740, Income Taxes (“ASC 740”) The Company follows the guidance in ASC Topic 740-10 in assessing uncertain tax positions. The standard applies to all tax positions and clarifies the recognition of tax benefits in the financial statements by providing for a two-step approach of recognition and measurement. The first step involves assessing whether the tax position is more-likely-than-not to be sustained upon examination based upon its technical merits. The second step involves measurement of the amount to be recognized. Tax positions that meet the more-likely than-not threshold are measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate finalization with the taxing authority. The Company recognizes the impact of an uncertain income tax position in the financial statements if it believes that the position is more likely than not to be sustained by the relevant taxing authority. The Company will recognize interest and penalties related to tax positions in income tax expense. |
Deferred Offering and Merger Costs | Deferred Offering and Merger Costs Offering and merger costs, consisting of legal, accounting, printer and filing fees were deferred to be offset against proceeds received when the Business Combination was completed. As of December 31, 2022, there were $4.0 million of deferred transaction costs included in deposits and other assets on the accompanying condensed consolidated balance sheet. Upon the close of the Business Combination, these deferred costs were recorded against net proceeds in additional paid-in capital. For further discussion on the Business Combination, see Note 3. |
Defined Contribution Plan | Defined Contribution Plan The Company has a defined retirement savings plan under Section 401(k) of the Internal Revenue Code. This plan allows eligible employees to defer a portion of their annual compensation on a pre-tax basis. Effective January 1, 2023, the Company participates in a matching safe harbor 401(k) Plan with a Company contribution of up to 3.5% of each eligible participating employee’s compensation. Safe harbor contributions vest immediately for each participant. During the three months ended March 31, 2023, the Company made $113,000 in contributions under this safe harbor 401(k) Plan. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is comprised of net loss and changes in unrealized gains and losses on the Company’s available-for-sale investments. |
Segment Reporting | Segment Reporting Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined it operates in one segment. |
New Accounting Standards | New Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In June 2022, the FASB issued ASU No. 2022-03 — Fair Value Measurement (ASC 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment | Asset category Depreciable life Manufacturing equipment 10 years Office equipment 3 – 7 years Research and development equipment 7 years |
Business Combination and Reca_2
Business Combination and Recapitalization (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Recapitalization (Tables) [Line Items] | |
Schedule of table reconciles elements of the business combination | Number of Shares Common stock of HSAC2, outstanding prior to the Business Combination 6,762,117 Less: Redemption of HSAC2 shares (1,597,888 ) Common stock held by former HSAC2 shareholders 5,164,229 HSAC2 sponsor shares 4,450,000 Shares issued related to Backstop Agreement 1,808,512 Total shares outstanding prior to issuance of merger consideration to Legacy Orchestra stockholders 11,422,741 Shares issued to Legacy Orchestra stockholders – Company Common Stock (1) 20,191,338 Total shares of Company Common Stock immediately after Business Combination (2) 31,614,079 (1) The number of shares of common stock issued to Legacy Orchestra equity holders was determined based on (i) 2,522,214 shares of Legacy Orchestra Common Stock outstanding immediately prior to the closing of the Business Combination converted based on the Exchange Ratio and (ii) 35,694,179 shares of Legacy Orchestra Preferred Stock outstanding immediately prior to the closing of the Business Combination converted based on the Exchange Ratio. All fractional shares were rounded down. (2) Excludes 8,000,000 shares of Company Common Stock to be issued based on satisfaction of the Initial Milestone Event and the Final Milestone Event. |
Business Combination [Member] | |
Business Combination and Recapitalization (Tables) [Line Items] | |
Schedule of table reconciles elements of the business combination | Amount Cash – HSAC2’s trust (net of redemption) $ 51,915 Cash – Backstop Agreement 18,085 Gross proceeds 70,000 Less: HSAC2 and Legacy Orchestra transaction costs paid (15,698 ) Effect of Business Combination, net of redemptions and transaction costs $ 54,302 |
Terumo Agreement (Tables)
Terumo Agreement (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Terumo Agreement Abstract | |
Schedule of deferred revenue balance from the terumo agreement | Deferred Revenue – December 31, 2022 (in thousands) $ 19,539 Revenue recognized (1,019 ) Deferred Revenue – March 31, 2023 $ 18,520 Deferred Revenue – December 31, 2021 $ 22,401 Revenue recognized (716 ) Deferred Revenue – March 31, 2022 $ 21,685 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities measured at fair value | March 31, 2023 (in thousands) Level 1 Level 2 Level 3 Total Assets Money market fund (included in cash and cash equivalents) $ 18,039 $ — $ — $ 18,039 Investment in Motus GI (see Note 7) 100 — — 100 Marketable securities (Corporate and Government debt securities) — 108,438 — 108,438 Total assets $ 18,139 $ 108,438 $ — $ 126,577 December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets Money market fund (included in cash and cash equivalents) $ 8,708 $ — $ — $ 8,708 Investment in Motus GI (see Note 7) 86 — — 86 Marketable securities (Corporate and Government debt securities) — 63,915 — 63,915 Total assets $ 8,794 $ 63,915 $ — $ 72,709 Liabilities: Warrant liability (see Note 10) $ — $ — $ 2,089 $ 2,089 Total liabilities $ — $ — $ 2,089 $ 2,089 |
Schedule of liabilities for which fair value is determined by Level 3 | Warrant Balance—December 31, 2022 $ 2,089 Warrants exercised prior to the Business Combination (10 ) Change in fair value of warrants 294 Warrants reclassified to equity (2,373 ) Balance—March 31, 2023 $ — |
Marketable Securities and Str_2
Marketable Securities and Strategic Investments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Marketable Securities and Strategic Investments [Abstract] | |
Schedule of marketable securities | March 31, 2023 (in thousands) Amortized Unrealized Unrealized Fair Corporate debt securities $ 18,598 $ 3 $ — $ 18,601 Government debt securities 89,875 — (38 ) 89,837 Total $ 108,473 $ 3 $ (38 ) $ 108,438 December 31, 2022 (in thousands) Amortized Unrealized Unrealized Fair Corporate debt securities $ 52,242 $ 7 $ — $ 52,249 Government debt securities 11,681 — (15 ) 11,666 Total $ 63,923 $ 7 $ (15 ) $ 63,915 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Balance Sheet Components [Abstract] | |
Schedule of property and equipment, net | Asset category Depreciable life Manufacturing equipment 10 years Office equipment 3 – 7 years Research and development equipment 7 years |
Schedule of accrued expenses | (in thousands) March 31, December 31, Accrued compensation $ 909 $ 2,480 Clinical trial accruals 966 1,003 Other accrued expenses 1,381 1,893 Total accrued expenses $ 3,256 $ 5,376 |
Property, Plant and Equipment [Member] | |
Balance Sheet Components [Abstract] | |
Schedule of property and equipment, net | (in thousands) March 31, December 31, Equipment $ 1,747 $ 1,712 Office furniture 364 364 Leasehold improvements 191 191 Property and equipment, gross 2,302 2,267 Less accumulated depreciation and amortization (849 ) (778 ) Total Property and equipment, net $ 1,453 $ 1,489 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Warrants [Abstract] | |
Schedule of fair value of the outstanding warrant liability | Period from Three months Expected volatility 44 – 49 % 49 – 53 % Risk-free interest rate 3.60 – 4.80 % 1.16 – 2.44 % Remaining term in years 0.35 – 5.00 1.17 – 7.69 Exercise price of common warrants $ 1.08 – $30.11 $ 1.08 – $30.11 Exercise price of Legacy preferred warrants — $ 9.00 – $15.00 Common stock price $ 10.63 $ 4.06 Legacy preferred stock price — $ 6.49 – $8.79 Expected dividend yield 0 % 0 % |
Schedule of purchase shares of Company Common Stock | Number of Shares March 31, December 31, Exercise Price Term Liability-classified Warrants Legacy Orchestra Warrants — 1,327,074 $ 0.50 – $14.00 0.35 – 5.00 — 1,327,074 Equity-classified Warrants Legacy Orchestra Warrants 1,425,936 250,000 $ 0.50 – $14.00 0.35 – 9.25 Private Warrants Held by Sponsor 750,000 1,500,000 $ 11.50 4.82 – 5.07 Private Warrants Held by Employees (Note 11) 750,000 — $ 11.50 4.82 2,925,936 1,750,000 Total Outstanding 2,925,936 3,077,074 |
Warrant [Member] | |
Warrants [Abstract] | |
Schedule of purchase shares of Company Common Stock | (in thousands, except share data) Preferred Common Amount Balance December 31, 2022 — 1,327,074 $ 2,089 Warrants exercised prior to the business combination — (1,163 ) (10 ) Change in fair value of warrants as of January 26, 2023 — — 294 Warrants reclassified to equity — (1,325,911 ) (2,373 ) Balance March 31, 2023 — — $ — (in thousands, except share data) Preferred Common Amount Balance December 31, 2021 206,997 1,189,162 $ 635 Exercise of warrants — (68,587 ) (156 ) Change in the fair value of warrants — — 145 Balance March 31, 2022 206,997 1,120,575 $ 624 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation | Three Months Ended (in thousands) 2023 2022 Research and development $ 485 $ 39 Selling, general and administrative 738 16 Total stock-based compensation $ 1,223 $ 55 Three Months Ended (in thousands) 2023 2022 Research and development $ — $ — Selling, general and administrative 50 15 Total stock-based compensation $ 50 $ 15 Three Months Ended (in thousands) 2023 2022 Research and development $ 86 $ — Selling, general and administrative 130 — Total stock-based compensation $ 216 $ — |
Schedule of stock option activity | Shares Weighted Weighted Aggregate Outstanding at January 1, 2023 7,868,448 3.51 8.35 — Retroactive application of Reverse Recapitalization (Note 3) (4,209,620 ) 4.05 Outstanding at January 1, 2023, effect of Merger 3,658,828 7.56 8.35 Granted 323,175 9.89 — — Exercised (2,325 ) 4.30 — — Forfeited/canceled (35,043 ) 8.02 — — Outstanding March 31, 2023 3,944,635 7.76 5.38 $ 46,409 Exercisable at March 31, 2023 2,014,416 6.67 6.70 $ 24,964 |
Schedule of restricted stock activity | Restricted Weighted Aggregate Outstanding January 1, 2023 158,589 9.14 — Granted — — — Vested (40,078 ) — — Forfeited/canceled — — — Outstanding March 31, 2023 118,511 8.90 $ 2,542 |
Schedule of black-scholes option pricing model | Three Months Ended 2023 2022 Expected term (in years) 6.00 6.00 Expected volatility 50 % 51 % Risk-free interest rate 3.60 % 1.72 % Expected dividend yield 0 % 0 % Fair value of common stock $ 9.63 $ 4.06 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of recognized as an asset and operating lease liabilities | As of March 31, 2023: Weighted average remaining lease term – operating leases, in years 3.89 Weighted average discount rate – operating leases 6.25 % |
Schedule of future minimum rental payments, exclusive of taxes, insurance and other costs, under the leases | Operating Year ending December 31: (in thousands) 2023 (remaining nine months) $ 618 2024 727 2025 352 2026 352 2027 352 Thereafter 88 Total future minimum lease payments $ 2,489 Imputed interest (278 ) Total liability $ 2,211 |
Debt Financing (Tables)
Debt Financing (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of amount of principal payments | Principal Period ending March 31: (in thousands) 2023 (remaining 9 months) $ — 2024 2,500 2025 5,000 2026 2,500 Total $ 10,000 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of diluted net loss per share | Three Months Ended March 31, 2023 2022 Stock options 3,944,635 1,342,768 Company Common Stock warrants 2,925,936 1,565,730 Unvested Restricted Stock Awards 118,511 131,511 Conversion Option 416,667 — Forfeitable Shares 1,000,000 — Earnout Consideration 8,000,000 — Total 16,405,749 3,040,009 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Organization and Basis of Presentation (Details) [Line Items] | |||
Revenue | $ 1,164,000 | $ 866,000 | |
Accumulated deficit | (210,674,000) | $ (199,734,000) | |
Business Combination [Member] | |||
Organization and Basis of Presentation (Details) [Line Items] | |||
Accumulated deficit | 210,700,000 | ||
FreeHold Surgical, Inc [Member] | |||
Organization and Basis of Presentation (Details) [Line Items] | |||
Revenue | $ 145,000 | $ 150,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | ||
Jan. 01, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Emerging growth company ,description | The Company 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 the Company has total annual gross revenue of at least $1.235 billion, (3) the last day of the fiscal year in which the Company is 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 the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. | ||
Smaller reporting company , description | The Company 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 the Company’s voting and non-voting Common Stock held by non-affiliates is less than $250.0 million measured on the last business day of the Company’s second fiscal quarter, or (ii)(a) the Company’s annual revenue is less than $100.0 million during the most recently completed fiscal year and (b) the market value of the Company’s voting and non-voting Common Stock held by non-affiliates is less than $700.0 million measured on the last business day of the Company’s second fiscal quarter. | ||
Income tax benefit percentage | 50% | ||
Deferred offering deposit | $ 4,000,000 | ||
Defined contribution plan, percentage | 3.50% | ||
Contribution | $ 113,000 | ||
Strategic Investments, Current Portion [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Strategic investments | 2,500,000 | 2,500,000 | |
Strategic Investments, Less Current Portion [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Strategic investments | $ 2,500,000 | $ 2,500,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment | Dec. 31, 2022 |
Manufacturing Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Total asset category | 10 years |
Office Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Total asset category | 3 years |
Office Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Total asset category | 7 years |
Research and Development Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Total asset category | 7 years |
Business Combination and Reca_3
Business Combination and Recapitalization (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jan. 30, 2023 | Jan. 25, 2023 | Jan. 20, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2008 | Jan. 26, 2023 | Dec. 31, 2022 | |
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Common stock, shares authorized | 340,000,000 | 340,000,000 | 340,000,000 | |||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Sponsor Forfeiture Share Percentage | 25% | |||||||
Shares forfeitures | 1,000,000 | |||||||
Forfeitable shares | 500,000 | |||||||
Sponsor to forfeit (in Dollars per share) | $ 15 | |||||||
Shares consideration | 8,000,000 | |||||||
Earnout consideration description | (i) 4,000,000 shares of the Earnout Consideration, in the aggregate, in the event that, from the time beginning immediately after the Closing until the fifth anniversary of the Closing Date (the “Earnout Period”), the Initial Milestone Event occurs; and (ii) an additional 4,000,000 shares of the Earnout Consideration, in the aggregate, in the event that, during the Earnout Period, the Final Milestone Event occurs. | |||||||
Earnout percentage | 91% | |||||||
Purchase of ordinary shares (in Dollars) | $ 100,000 | |||||||
Business combination transaction costs (in Dollars) (in Dollars) | $ 54,302,000 | |||||||
Business combination transaction costs (in Dollars) | $ 56,810,000 | |||||||
Business Combination [Member] | ||||||||
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Number of shares excluded for Common Stock to be issued based on satisfaction of the Initial Milestone Event and the Final Milestone Event | 8,000,000 | |||||||
Business combination transaction costs (in Dollars) | $ 2,500,000 | |||||||
Common Stock [Member] | ||||||||
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Common stock, shares authorized | 340,000,000 | 350,000,000 | ||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.0001 | |||||||
Minimum [Member] | ||||||||
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Warrants exercisable terms | 24 months | |||||||
Minimum [Member] | Business Combination [Member] | ||||||||
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Business combination transaction costs (in Dollars) (in Dollars) | $ 54,300,000 | |||||||
Maximum [Member] | ||||||||
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Warrants exercisable terms | 36 months | |||||||
Maximum [Member] | Business Combination [Member] | ||||||||
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Business combination transaction costs (in Dollars) | $ 56,800,000 | |||||||
Sponsor [Member] | ||||||||
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Sponsor Forfeitable Shares for Final Milestone | 500,000 | |||||||
Share Price for Final Milestone Event (in Dollars per share) | $ 20 | |||||||
Initial Public Offering [Member] | ||||||||
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Sponsor description | (i) the 4,000,000 shares of Company Common Stock issued to HSAC2’s initial shareholders prior to the HSAC2 IPO (the “Insider Shares”) and (ii) the 450,000 shares of Company Common Stock purchased in a private placement simultaneously with the HSAC2 IPO (the “Private Shares”) to a lock-up for up to 12 months following the Closing, and the Sponsor forfeited 50% of its 1,500,000 warrants in HSAC2 purchased upon consummation of the HSAC2 IPO (the “Private Warrants”), comprising 750,000 Private Warrants, for no consideration, immediately prior to the Closing (the “Sponsor Forfeiture”). Pursuant to the terms of the Merger Agreement, immediately following the Sponsor Forfeiture and prior to the Closing, HSAC2 issued 750,000 warrants to purchase Company Common Stock to eleven specified employees and directors of Legacy Orchestra. | |||||||
Forward purchase agreement [Member] | ||||||||
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount (in Dollars) | $ 10,000,000 | |||||||
Purchase of ordinary shares (in Dollars) | $ 9,900,000 | |||||||
Backstop [Member] | ||||||||
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Purchase of ordinary shares (in Dollars) | $ 1,808,512 | |||||||
Contractual requirement of the BACKSTOP agreement (in Dollars) | $ 60,000,000 | |||||||
Merger Agreement [Member] | ||||||||
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Purchase share price (in Dollars per share) | $ 10 | |||||||
Business Combination [Member] | ||||||||
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Common stock issued | 2,522,214 | |||||||
Legacy Orchestra [Member] | ||||||||
Business Combination and Recapitalization (Details) [Line Items] | ||||||||
Converted based shares | 35,694,179 |
Business Combination and Reca_4
Business Combination and Recapitalization (Details) - Schedule of number of shares of company common stock issued | 3 Months Ended | |
Dec. 31, 2018 shares | ||
Schedule Of Number Of Shares Of Company Common Stock Issued Abstract | ||
Common stock of HSAC2, outstanding prior to the Business Combination | 6,762,117 | |
Less: Redemption of HSAC2 shares | (1,597,888) | |
Common stock held by former HSAC2 shareholders | 5,164,229 | |
HSAC2 sponsor shares | 4,450,000 | |
Shares issued related to Backstop Agreement | 1,808,512 | |
Total shares outstanding prior to issuance of merger consideration to Legacy Orchestra stockholders | 11,422,741 | |
Shares issued to Legacy Orchestra stockholders – Company Common Stock(1) | 20,191,338 | [1] |
Total shares of Company Common Stock immediately after Business Combination(2) | 31,614,079 | [2] |
[1]The number of shares of common stock issued to Legacy Orchestra equity holders was determined based on (i) 2,522,214 shares of Legacy Orchestra Common Stock outstanding immediately prior to the closing of the Business Combination converted based on the Exchange Ratio and (ii) 35,694,179 shares of Legacy Orchestra Preferred Stock outstanding immediately prior to the closing of the Business Combination converted based on the Exchange Ratio. All fractional shares were rounded down.[2]Excludes 8,000,000 shares of Company Common Stock to be issued based on satisfaction of the Initial Milestone Event and the Final Milestone Event. |
Business Combination and Reca_5
Business Combination and Recapitalization (Details) - Schedule of table reconciles elements of the business combination $ in Thousands | 12 Months Ended |
Dec. 31, 2008 USD ($) | |
Schedule Of Table Reconciles Elements Of The Business Combination Abstract | |
Cash – HSAC2’s trust (net of redemption) | $ 51,915 |
Cash – Backstop Agreement | 18,085 |
Gross proceeds | 70,000 |
Less: HSAC2 and Legacy Orchestra transaction costs paid | (15,698) |
Effect of Business Combination, net of redemptions and transaction costs | $ 54,302 |
Terumo Agreement (Details)
Terumo Agreement (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2019 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2019 | Dec. 31, 2022 | |
Terumo Agreement [Abstract] | ||||||
Upfront payment | $ 30,000,000 | $ 30,000,000 | ||||
Equity commitment | 5,000,000 | |||||
Variable consideration subject to future milestones | 65,000,000 | 30,000,000 | ||||
Terumo target achievement amount. | $ 25,000,000 | $ 5,000,000 | ||||
Estimated fair value | $ 2,500,000 | |||||
Deferred Revenue, Current | $ 5,325,000 | $ 6,436,000 | ||||
Deferred revenue | 13,195,000 | $ 13,103,000 | ||||
Expenses incurred | $ 3,800,000 | $ 2,700,000 | ||||
Estimated total costs percentage | 0.70% | |||||
Increased by approximately percentage | 0.10% | |||||
Increase/decrease in revenue due to total costs of project | $ 81,000 | |||||
Revenue remaining performance obligation amount | $ 10,000 | |||||
Minimum [Member] | ||||||
Terumo Agreement [Abstract] | ||||||
Royalty rate of percentage | 10% | |||||
Commercialization percentage | 10% | |||||
Maximum [Member] | ||||||
Terumo Agreement [Abstract] | ||||||
Royalty rate of percentage | 15% | |||||
Commercialization percentage | 15% | |||||
Terumo Agreement [Member] | ||||||
Terumo Agreement [Abstract] | ||||||
Deferred Revenue, Current | 5,300,000 | |||||
Deferred revenue | $ 13,200,000 | |||||
Legacy Orchestra Series B-1 [Member] | ||||||
Terumo Agreement [Abstract] | ||||||
Customers investments | $ 2,500,000 | |||||
Legacy Orchestra Series D-2 [Member] | ||||||
Terumo Agreement [Abstract] | ||||||
Customers investments | $ 2,500,000 | |||||
Legacy Orchestra [Member] | ||||||
Terumo Agreement [Abstract] | ||||||
Procceds from stock acquired | $ 32,500,000 |
Terumo Agreement (Details) - Sc
Terumo Agreement (Details) - Schedule of deferred revenue balance from the terumo agreement - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Schedule of Deferred Revenue Balance From the Terumo Agreement [Abstract] | ||
Deferred Revenue, beginning | $ 19,539 | $ 22,401 |
Revenue recognized | (1,164) | (866) |
Deferred Revenue, ending | 18,520 | 21,685 |
Partnership revenue [Member] | ||
Schedule of Deferred Revenue Balance From the Terumo Agreement [Abstract] | ||
Revenue recognized | $ (1,019) | $ (716) |
Medtronic Agreement (Details)
Medtronic Agreement (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Medtronic Agreement (Details) [Line Items] | |
Reimbursable research and development expense | $ 1,300,000 |
Minimum [Member] | |
Medtronic Agreement (Details) [Line Items] | |
Expected to receive product price | 500 |
Maximum [Member] | |
Medtronic Agreement (Details) [Line Items] | |
Expected to receive product price | 1,600 |
Medtronic Agreement [Member] | |
Medtronic Agreement (Details) [Line Items] | |
Investment | $ 40,000,000 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements (Details) - Schedule of financial assets and liabilities measured at fair value - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Assets | ||||
Money market fund (included in cash and cash equivalents) | $ 18,039 | $ 8,708 | ||
Investment in Motus GI (see Note 7) | 100 | 86 | ||
Marketable securities (Corporate and Government debt securities) | 108,438 | 63,915 | ||
Total assets | 126,577 | 72,709 | ||
Liabilities: | ||||
Warrant liability (see Note 10) | 2,089 | $ 624 | $ 635 | |
Total liabilities | 2,089 | |||
Level 1 | ||||
Assets | ||||
Money market fund (included in cash and cash equivalents) | 18,039 | 8,708 | ||
Investment in Motus GI (see Note 7) | 100 | 86 | ||
Marketable securities (Corporate and Government debt securities) | ||||
Total assets | 18,139 | 8,794 | ||
Liabilities: | ||||
Warrant liability (see Note 10) | ||||
Total liabilities | ||||
Level 2 | ||||
Assets | ||||
Money market fund (included in cash and cash equivalents) | ||||
Investment in Motus GI (see Note 7) | ||||
Marketable securities (Corporate and Government debt securities) | 108,438 | 63,915 | ||
Total assets | 108,438 | 63,915 | ||
Liabilities: | ||||
Warrant liability (see Note 10) | ||||
Total liabilities | ||||
Level 3 | ||||
Assets | ||||
Money market fund (included in cash and cash equivalents) | ||||
Investment in Motus GI (see Note 7) | ||||
Marketable securities (Corporate and Government debt securities) | ||||
Total assets | ||||
Liabilities: | ||||
Warrant liability (see Note 10) | 2,089 | |||
Total liabilities | $ 2,089 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements (Details) - Schedule of liabilities for which fair value is determined by Level 3 - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Jan. 26, 2023 | Dec. 31, 2022 | |
Schedule of Liabilities for Which Fair Value is Determined by Level 3 [Abstract] | |||
Balance—December 31, 2022 | $ 2,089 | ||
Warrants exercised prior to the Business Combination | (10) | ||
Change in fair value of warrants | 294 | ||
Warrants reclassified to equity | (2,373) | $ (2,400) | $ (2,100) |
Balance—March 31, 2023 |
Marketable Securities and Str_3
Marketable Securities and Strategic Investments (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
May 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2019 | Dec. 31, 2022 | |
Marketable Securities and Strategic Investments (Details) [Line Items] | |||||
Unrealized gains/losses | $ 14,000 | $ 220,000 | |||
Investments fair value | 100,000 | $ 86,000 | |||
Impairment charge | $ 5,800,000 | ||||
Strategic investments Motus GI [Member] | |||||
Marketable Securities and Strategic Investments (Details) [Line Items] | |||||
Investments fair value | $ 100,000 | $ 86,000 | |||
Strategic investment Vivasure [Member] | |||||
Marketable Securities and Strategic Investments (Details) [Line Items] | |||||
Investments gain | $ 1,900,000 |
Marketable Securities and Str_4
Marketable Securities and Strategic Investments (Details) - Schedule of marketable securities - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Schedule of Marketable Securities [Abstract] | ||
Amortized Cost Basis | $ 108,473 | $ 63,923 |
Unrealized Gains | 3 | 7 |
Unrealized Losses | (38) | (15) |
Fair Value | 108,438 | 63,915 |
Corporate Debt Securities [Member] | ||
Schedule of Marketable Securities [Abstract] | ||
Amortized Cost Basis | 18,598 | 52,242 |
Unrealized Gains | 3 | 7 |
Unrealized Losses | ||
Fair Value | 18,601 | 52,249 |
Government debt securities [Member] | ||
Schedule of Marketable Securities [Abstract] | ||
Amortized Cost Basis | 89,875 | 11,681 |
Unrealized Gains | ||
Unrealized Losses | (38) | (15) |
Fair Value | $ 89,837 | $ 11,666 |
Balance Sheet Components (Detai
Balance Sheet Components (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Balance Sheet Components [Abstract] | ||
Depreciation and amortization expense | $ 71,000 | $ 48,000 |
Balance Sheet Components (Det_2
Balance Sheet Components (Details) - Schedule of property and equipment, net - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Schedule of Property and Equipment, Net [Abstract] | ||
Equipment | $ 1,747 | $ 1,712 |
Office furniture | 364 | 364 |
Leasehold improvements | 191 | 191 |
Property and equipment, gross | 2,302 | 2,267 |
Less accumulated depreciation and amortization | (849) | (778) |
Total Property and equipment, net | $ 1,453 | $ 1,489 |
Balance Sheet Components (Det_3
Balance Sheet Components (Details) - Schedule of accrued expenses - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Schedule of Accrued Expenses [Abstract] | ||
Accrued compensation | $ 909 | $ 2,480 |
Clinical trial accruals | 966 | 1,003 |
Other accrued expenses | 1,381 | 1,893 |
Total accrued expenses | $ 3,256 | $ 5,376 |
Common and Preferred Stock (Det
Common and Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Mar. 31, 2023 | Jan. 26, 2023 | Dec. 31, 2022 | |
Common and Preferred Stock (Details) [Line Items] | |||||
Common stock shares authorized | 340,000,000 | 340,000,000 | 340,000,000 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred stock shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||
Preferred stock parvalue | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Offering costs | $ 2 | ||||
Preferred units description | Upon the Closing, the outstanding shares of Legacy Orchestra Preferred Stock were converted into Legacy Orchestra Common Stock in accordance with the terms of each class of Legacy Orchestra Preferred Stock (as described below), and then into Company Common Stock at the Exchange Ratio. The Series A and Series D-2 Preferred Stock converted into Legacy Orchestra Common Stock at a 1:1 ratio while the Series D-1 Preferred Stock converted at a 1:1.1 ratio. Except as noted below, the Series B Preferred Stock and the Series B-1 Preferred Stock (collectively, the “Series B/B-1 Preferred Stock”) converted into Legacy Orchestra Common Stock at a 1:1 ratio. However, the Series B/B-1 Preferred Stock had an innovative conversion feature. | ||||
Capital obtaining from shares issuance | $ 8 | ||||
Original investments in intitial offerings | 100% | ||||
Common Stock [Member] | |||||
Common and Preferred Stock (Details) [Line Items] | |||||
Common stock shares authorized | 340,000,000 | 350,000,000 | |||
Common stock, par value | $ 0.0001 | ||||
Preferred Stock [Member] | |||||
Common and Preferred Stock (Details) [Line Items] | |||||
Preferred stock shares authorized | 10,000,000 | ||||
Preferred stock parvalue | $ 0.0001 | ||||
Series D-1 Preferred Stock [Member] | |||||
Common and Preferred Stock (Details) [Line Items] | |||||
Preferred stock parvalue | 0.001 | ||||
Gross proceeds | $ 27.3 | ||||
Offering costs | $ 6.2 | ||||
Series D-2 Preferred Stock [Member] | |||||
Common and Preferred Stock (Details) [Line Items] | |||||
Preferred stock parvalue | 0.001 | ||||
Gross proceeds | 82.6 | ||||
Offering costs | 6.2 | ||||
Series A [Member] | |||||
Common and Preferred Stock (Details) [Line Items] | |||||
Preferred stock parvalue | 0.001 | ||||
Series B [Member] | |||||
Common and Preferred Stock (Details) [Line Items] | |||||
Preferred stock parvalue | 0.001 | ||||
Series B-1 [Member] | |||||
Common and Preferred Stock (Details) [Line Items] | |||||
Preferred stock parvalue | $ 0.001 | ||||
Covidien [Member] | |||||
Common and Preferred Stock (Details) [Line Items] | |||||
Gross proceeds | $ 40 |
Warrants (Details)
Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Jan. 26, 2023 | Dec. 31, 2022 | |
Warrants (Details) [Line Items] | |||
Outstanding warrants (in Shares) | 2,925,936 | 3,077,074 | |
Price per share (in Dollars per share) | $ 11.5 | ||
Warrant description | (i) the 4,000,000 Insider Shares and (ii) the 450,000 Private Shares to a lock-up for up to 12 months following the Closing and the Sponsor forfeited 50% of its 1,500,000 Private Warrants, comprising 750,000 Private Warrants, for no consideration, immediately prior to the Closing. Pursuant to the terms of the Merger Agreement, immediately following the Sponsor Forfeiture and prior to the Closing, HSAC2 issued 750,000 warrants to purchase Company Common Stock to eleven specified employees and directors of Legacy Orchestra. These new warrants have substantially similar terms to the forfeited Private Warrants, except that they will become exercisable between 24 and 36 months after the Closing. | ||
Warrant liability | $ 2,373 | $ 2,400 | $ 2,100 |
Private Warrants Held by Sponsor [Member] | |||
Warrants (Details) [Line Items] | |||
Outstanding warrants (in Shares) | 1,500,000 |
Warrants (Details) - Schedule o
Warrants (Details) - Schedule of fair value of the outstanding warrant liability - $ / shares | 1 Months Ended | 3 Months Ended | |
Jan. 26, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Risk-free interest rate | 3.54% | ||
Remaining term in years | 5 years | ||
Exercise price of Legacy preferred warrants | |||
Common stock price | 10.63 | $ 4.06 | |
Legacy preferred stock price | |||
Expected dividend yield | 0% | 0% | |
Minimum [Member] | |||
Expected volatility | 44% | 49% | |
Risk-free interest rate | 3.60% | 1.16% | |
Remaining term in years | 4 months 6 days | 1 year 2 months 1 day | |
Exercise price of common warrants | $ 1.08 | $ 1.08 | |
Exercise price of Legacy preferred warrants | 9 | ||
Legacy preferred stock price | $ 6.49 | ||
Maximum [Member] | |||
Expected volatility | 49% | 53% | |
Risk-free interest rate | 4.80% | 2.44% | |
Remaining term in years | 5 years | 7 years 8 months 8 days | |
Exercise price of common warrants | $ 30.11 | $ 30.11 | |
Exercise price of Legacy preferred warrants | 15 | ||
Legacy preferred stock price | $ 8.79 |
Warrants (Details) - Schedule_2
Warrants (Details) - Schedule of legacy orchestra warrant activity roll forward - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Preferred Warrants, Balance at beginning | 206,997 | |
Common Warrants, Balance at beginning | 1,327,074 | 1,189,162 |
Balance at beginning (in Dollars) | $ 2,089 | $ 635 |
Preferred Warrants, Warrants exercised prior to the business combination | ||
Common Warrants, Warrants exercised prior to the business combination | (1,163) | |
Warrants exercised prior to the business combination (in Dollars) | $ (10) | |
Preferred Warrants, Exercise of warrants | ||
Common Warrants, Exercise of warrants | (68,587) | |
Exercise of warrants (in Dollars) | $ (156) | |
Preferred Warrants, Change in the fair value of warrants | ||
Common Warrants, Change in the fair value of warrants | ||
Change in the fair value of warrants (in Dollars) | $ 294 | $ 145 |
Preferred Warrants, Warrants reclassified to equity | ||
Common Warrants, Warrants reclassified to equity | (1,325,911) | |
Warrants reclassified to equity (in Dollars) | $ (2,373) | |
Preferred Warrants, Ending at ending | 206,997 | |
Common Warrants, Ending at ending | 1,120,575 | |
Ending at ending (in Dollars) | $ 624 |
Warrants (Details) - Schedule_3
Warrants (Details) - Schedule of purchase shares of Company Common Stock - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Class of Warrant or Right [Line Items] | ||
Liability classified warrants, Number of Shares | 1,327,074 | |
Equity classified warrants, Number of Shares | 2,925,936 | 1,750,000 |
Total Outstanding, Number of Shares | 2,925,936 | 3,077,074 |
Legacy Orchestra Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Liability classified warrants, Number of Shares | 1,327,074 | |
Equity classified warrants, Number of Shares | 1,425,936 | 250,000 |
Legacy Orchestra Warrants [Member] | Minimum [Member] | ||
Class of Warrant or Right [Line Items] | ||
Liability classified warrants, Exercise Price (in Dollars per share) | $ 0.5 | |
Liability classified warrants, Term | 4 months 6 days | |
Equity classified warrants, Exercise Price (in Dollars per share) | $ 0.5 | |
Equity classified warrants, Term | 4 months 6 days | |
Legacy Orchestra Warrants [Member] | Maximum [Member] | ||
Class of Warrant or Right [Line Items] | ||
Liability classified warrants, Exercise Price (in Dollars per share) | $ 14 | |
Liability classified warrants, Term | 5 years | |
Equity classified warrants, Exercise Price (in Dollars per share) | $ 14 | |
Equity classified warrants, Term | 9 years 3 months | |
Private Warrants Held by Sponsor [Member] | ||
Class of Warrant or Right [Line Items] | ||
Equity classified warrants, Number of Shares | 750,000 | 1,500,000 |
Equity classified warrants, Exercise Price (in Dollars per share) | $ 11.5 | |
Private Warrants Held by Sponsor [Member] | Minimum [Member] | ||
Class of Warrant or Right [Line Items] | ||
Equity classified warrants, Term | 4 years 9 months 25 days | |
Private Warrants Held by Sponsor [Member] | Maximum [Member] | ||
Class of Warrant or Right [Line Items] | ||
Equity classified warrants, Term | 5 years 25 days | |
Private Warrants Held by Employees [Member] | ||
Class of Warrant or Right [Line Items] | ||
Equity classified warrants, Number of Shares | 750,000 | |
Equity classified warrants, Exercise Price (in Dollars per share) | $ 11.5 | |
Equity classified warrants, Term | 4 years 9 months 25 days |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Stock-Based Compensation (Details) [Line Items] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in Shares) | 5,200,000 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period | 10 years |
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 3 years |
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount (in Dollars) | $ | $ 7,400,000 |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years |
Expected term | 5 years |
Expected volatility rate | 50% |
Risk-free interest rate | 3.54% |
Expected dividend yield rate | 0% |
Fair value of common stock (in Dollars) | $ | $ 10.63 |
Restricted stock award, shares (in Shares) | 40,078 |
Weighted-average grant date fair value (in Dollars per share) | $ / shares | $ 3.37 |
Warrant [Member] | |
Stock-Based Compensation (Details) [Line Items] | |
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount (in Dollars) | $ | $ 3,400,000 |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years |
Restricted Stock [Member] | |
Stock-Based Compensation (Details) [Line Items] | |
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount (in Dollars) | $ | $ 358,000 |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years |
Orchestra BioMed Holdings, Inc. [Member] | |
Stock-Based Compensation (Details) [Line Items] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in Shares) | 3,455,303 |
Outstanding Shares percentage | 4.80% |
Common Stock, Capital Shares Reserved for Future Issuance (in Shares) | 3,036,722 |
Sponsor [Member] | |
Stock-Based Compensation (Details) [Line Items] | |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | 750,000 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) - Schedule of stock-based compensation - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Warrants [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Total stock-based compensation | $ 216 | |
Research and development [Member] | Warrants [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Total stock-based compensation | 86 | |
Selling, general and administrative [Member] | Warrants [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Total stock-based compensation | 130 | |
Share Based Compensation [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Total stock-based compensation | 1,223 | 55 |
Share Based Compensation [Member] | Research and development [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Total stock-based compensation | 485 | 39 |
Share Based Compensation [Member] | Selling, general and administrative [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Total stock-based compensation | 738 | 16 |
Restricted Stock [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Total stock-based compensation | 50 | 15 |
Restricted Stock [Member] | Research and development [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Total stock-based compensation | ||
Restricted Stock [Member] | Selling, general and administrative [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation [Line Items] | ||
Total stock-based compensation | $ 50 | $ 15 |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details) - Schedule of stock option activity $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Schedule of Stock Option Activity [Abstract] | |
Shares Underlying Options Outstanding, Beginning at January 1, 2023 | shares | 7,868,448 |
Weighted Average Exercise Price Outstanding, Beginning at January 1, 2023 | $ / shares | $ 3.51 |
Weighted Average Remaining Term (years) Outstanding, Beginning | 8 years 4 months 6 days |
Aggregate Intrinsic Value Outstanding, Beginning | $ | |
Shares Underlying Options, Retroactive application of Reverse Recapitalization (Note 3) | shares | (4,209,620) |
Weighted Average Exercise Price, Retroactive application of Reverse Recapitalization (Note 3) | $ / shares | $ 4.05 |
Shares Underlying Options, Outstanding at January 1, 2023, effect of Merger | shares | 3,658,828 |
Weighted Average Exercise Price, Outstanding at January 1, 2023, effect of Merger | $ / shares | $ 7.56 |
Weighted Average Remaining Term (years), Outstanding at January 1, 2023, effect of Merger | 8 years 4 months 6 days |
Shares Underlying Options, Granted | shares | 323,175 |
Weighted Average Exercise Price, Granted | $ / shares | $ 9.89 |
Weighted Average Remaining Term (years), Granted | |
Aggregate Intrinsic Value, Granted | $ | |
Shares Underlying Options, Exercised | shares | (2,325) |
Weighted Average Exercise Price, Exercised | $ / shares | $ 4.3 |
Weighted Average Remaining Term (years), Exercised | |
Aggregate Intrinsic Value, Exercised | $ | |
Shares Underlying Options, Forfeited/canceled | shares | (35,043) |
Weighted Average Exercise Price, Forfeited/canceled | $ / shares | $ 8.02 |
Weighted Average Remaining Term (years), Forfeited/canceled | |
Aggregate Intrinsic Value, Forfeited/canceled | $ | |
Shares Underlying Options, Outstanding March 31, 2023 | shares | 3,944,635 |
Weighted Average Exercise Price, Outstanding March 31, 2023 | $ / shares | $ 7.76 |
Weighted Average Remaining Term (years), Outstanding March 31, 2023 | 5 years 4 months 17 days |
Aggregate Intrinsic Value, Outstanding March 31, 2023 | $ | $ 46,409 |
Shares Underlying Options, Exercisable at March 31, 2023 | shares | 2,014,416 |
Weighted Average Exercise Price, Exercisable at March 31, 2023 | $ / shares | $ 6.67 |
Weighted Average Remaining Term (years), Exercisable at March 31, 2023 | 6 years 8 months 12 days |
Aggregate Intrinsic Value, Exercisable at March 31, 2023 | $ | $ 24,964 |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details) - Schedule of restricted stock activity $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) shares | |
Schedule of Restricted Stock Activity [Abstract] | |
Restricted Stock Outstanding, Beginning | shares | 158,589 |
Weighted Average Remaining Term (years), Beginning | 9 years 1 month 20 days |
Aggregate Intrinsic Value, Beginning | $ | |
Restricted Stock Outstanding, Granted | shares | |
Weighted Average Remaining Term (years), Granted | |
Aggregate Intrinsic Value, Granted | $ | |
Restricted Stock Outstanding, Vested | shares | (40,078) |
Weighted Average Remaining Term (years), Vested | |
Aggregate Intrinsic Value, Vested | $ | |
Restricted Stock Outstanding, Forfeited/canceled | shares | |
Weighted Average Remaining Term (years), Forfeited/canceled | |
Aggregate Intrinsic Value, Forfeited/canceled | $ | |
Restricted Stock Outstanding, Ending | shares | 118,511 |
Weighted Average Remaining Term (years), Ending | 8 years 10 months 24 days |
Aggregate Intrinsic Value, Ending | $ | $ 2,542 |
Stock-Based Compensation (Det_5
Stock-Based Compensation (Details) - Schedule of black-scholes option pricing model - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Schedule of Black-Scholes Option Pricing Model [Abstract] | ||
Expected term (in years) | 6 years | 6 years |
Expected volatility | 50% | 51% |
Risk-free interest rate | 3.60% | 1.72% |
Expected dividend yield | 0% | 0% |
Fair value of common stock (in Dollars per share) | $ 9.63 | $ 4.06 |
Leases (Details)
Leases (Details) | 3 Months Ended | ||||||
May 31, 2022 USD ($) | Jan. 31, 2020 USD ($) | Nov. 30, 2019 USD ($) ft² | Aug. 31, 2019 USD ($) ft² | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Leases (Details) [Line Items] | |||||||
lease agreement (in Square Feet) | ft² | 5,200 | 8,052 | |||||
Rent lease expense | $ 209,000 | $ 174,000 | |||||
Operating lease liabilities | $ 205,000 | $ 185,000 | |||||
Minimum [Member] | |||||||
Leases (Details) [Line Items] | |||||||
Rent lease expense | $ 7,000 | $ 12,000 | $ 28,000 | $ 9,000 | |||
Maximum [Member] | |||||||
Leases (Details) [Line Items] | |||||||
Rent lease expense | $ 23,000 | $ 17,000 | $ 30,000 | $ 19,000 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of recognized as an asset and operating lease liabilities | Mar. 31, 2023 |
Schedule of recognized as an asset and operating lease liabilities [Abstract] | |
Weighted average remaining lease term – operating leases, in years | 3 years 10 months 20 days |
Weighted average discount rate – operating leases | 6.25% |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of future minimum rental payments, exclusive of taxes, insurance and other costs, under the leases $ in Thousands | Mar. 31, 2023 USD ($) |
Schedule of future minimum rental payments, exclusive of taxes, insurance and other costs, under the leases [Abstract] | |
2023 (remaining nine months) | $ 618 |
2024 | 727 |
2025 | 352 |
2026 | 352 |
2027 | 352 |
Thereafter | 88 |
Total future minimum lease payments | 2,489 |
Imputed interest | (278) |
Total liability | $ 2,211 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | Apr. 30, 2023 | Dec. 31, 2021 | Dec. 31, 2020 |
Related Party Transactions (Details) [Line Items] | |||
Unsecured convertible redeemable notes | $ 213,000 | $ 183,000 | |
Subsequent Event [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Unsecured convertible redeemable notes | $ 208,000 |
Debt Financing (Details)
Debt Financing (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jun. 30, 2022 | |
Debt Disclosure [Abstract] | ||||
Term loan amount | $ 20,000,000 | |||
First tranche | 10,000,000 | |||
Second tranche | 10,000,000 | |||
Third tranche | $ 30,000,000 | |||
Conversion option outstanding balance converted into shares (in Shares) | 5,000,000 | |||
Avenue conversion option price per share (in Dollars per share) | $ 12 | |||
Debt related warrants issued to avenue (in Shares) | 100,000 | |||
Fair value of the warrants | $ 178,000 | |||
Other financing costs | $ 405,000 | |||
Prime rate | 6.45% | |||
Interest rate | 14.45% | |||
Loan include monthly payments | 4 years | |||
Monthly principal payment | 24 months | |||
Monthly principal payments | $ 417,000 | |||
Interest expense debt percentage | 4.25% | |||
Lender commitment | $ 20,000,000 | |||
Loss on extinguishment | $ 682,000 | |||
Percent number of warrants for amount drawn | 2% | |||
Exercise price for the warrants issued in connection with the debt agreement (in Dollars per share) | $ 1.33 | |||
Warrant issued to silicon valley bank (in Shares) | 150,000 | |||
Fair value of warrants issued in connection with the debt | $ 544,000 | |||
Description of potential interest owed | (i) the Wall Street Journal prime rate plus 1.00% or (ii) 6.25%. In addition, there was a final payment equal to 8.25% of the original aggregate principal amount which accrued over the term of the loan using the effective-interest method. | |||
Total interest expense | $ 351,000 | $ 236,000 |
Debt Financing (Details) - Sche
Debt Financing (Details) - Schedule of amount of principal payments $ in Thousands | Mar. 31, 2023 USD ($) |
Schedule of Amount Principal Payments [Abstract] | |
2023 (remaining 9 months) | |
2024 | 2,500 |
2025 | 5,000 |
2026 | 2,500 |
Total | $ 10,000 |
Net Loss Per Share (Details) -
Net Loss Per Share (Details) - Schedule of calculation of diluted net loss per share - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Schedule of Calculation of Diluted Net Loss Per Share [Abstract] | ||
Stock options | 3,944,635 | 1,342,768 |
Debt financing warrants | 2,925,936 | 1,565,730 |
Unvested Restricted Stock Awards | 118,511 | 131,511 |
Conversion Option | 416,667 | |
Forfeitable Shares | 1,000,000 | |
Earnout Consideration | 8,000,000 | |
Total | 16,405,749 | 3,040,009 |
Subsequent Events (Details)
Subsequent Events (Details) - shares | 3 Months Ended | |
Apr. 12, 2023 | Mar. 31, 2023 | |
Subsequent Events (Details) [Line Items] | ||
Shares consideration | 8,000,000 | |
Forfeitable shares | 500,000 | |
Subsequent Event [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Earnout first milestone | 4,000,000 | |
Forfeitable shares | 500,000 |