16. Subsequent Events

Ligand Pharmaceuticals Incorporated Revenue Participation Right Purchase and Sale Agreement and Purchase of Shares

On July 31, 2025, the Company entered into a revenue participation right purchase and sale agreement (the “Revenue Purchase and Sale Agreement”) with Ligand Pharmaceuticals Incorporated (“Ligand”). Under the terms of the Revenue Purchase and Sale Agreement, in exchange for payment of $35.0 million (the “Investment Amount”), less certain reimbursable expenses, Ligand acquired from the Company the right to receive tiered revenue payments (the “Revenue Interest”) with respect to revenue (including certain licensing revenue) received by the Company in a calendar year in connection with worldwide net product sales, or other product revenue received by, by the Company and its licensees

(“Annual Net Sales”) of (a) AVIM therapy (the “Primary Product”) and (b) Virtue SAB (the “Secondary Product” and together with the Primary Product, the “Products”) in the field of coronary artery treatment.

Subject to the Performance Ratchet (as defined below), Revenue Interest rates are based on the Annual Net Sales of the Products. The Applicable Purchaser Revenue Interest Rate is 17.0% for Annual Net Sales less than or equal to $100 million, in any field. The Applicable Purchaser Revenue Interest Rate is 4.0% for Annual Net Sales of greater than or equal to $100 million, only in the fields described above.

Pursuant to the Revenue Purchase and Sale Agreement, the Investment Amount shall be paid in two tranches: (i) $20.0 million was paid on August 4, 2025 (the “Ligand Closing”) and (ii) $15.0 million is payable on May 1, 2026 (the “Second Installment”), provided certain conditions have been met. In accordance with the terms of the Revenue Purchase and Sale Agreement, the Applicable Purchaser Revenue Interest Rates set forth above will incrementally increase from 17.0% and 4.0% up to 20.0% and 7.0%, respectively, if the Company does not achieve certain enrollment milestones relating to the BACKBEAT clinical study through January 1, 2027 (the “Performance Ratchet”).

The Revenue Interest in respect of Annual Net Sales of the Products will end on the date in which no Product is being developed or commercialized by or on behalf of the Company, any of its affiliates, or any of its or their licensees or distributors and Ligand has received the last Revenue Interest payment payable under the terms of the Revenue Purchase and Sale Agreement. The obligations arising under the Revenue Purchase and Sale Agreement are secured by security interests in, and pledges over, the Revenue Interest, the Revenue Participation Right (as defined in the Revenue Purchase and Sale Agreement) and the Company’s interests in the Products and associated intellectual property rights, subject to certain agreed security principles, permitted liens and other customary exceptions and qualifications, and the security interests in the Products and associated intellectual property rights of the Company are subordinate in right of payment to the prior payment in full of the outstanding indebtedness under the 2024 LSA. The Revenue Purchase and Sale Agreement contains customary representations, warranties and indemnities of the Company and Ligand, and customary covenants on the part of the Company. The Ligand Closing occurred on August 4, 2025. 

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In connection with the sale of the Revenue Interest, and pursuant to the terms of the Revenue Purchase and Sale Agreement, on August 4, 2025, the Company issued to Ligand a warrant (the “Ligand Warrant”) to purchase up to 2,000,000 shares of the Company Common Stock (and, such shares underlying the Ligand Warrant, the “Ligand Warrant Shares”), at an exercise price equal to $3.67 per share. The exercise price of the Ligand Warrant and the number of Ligand Warrant Shares issuable upon exercise of the Ligand Warrant are subject to adjustments for stock splits, combinations, stock dividends or similar events. Pursuant to the terms of the Ligand Warrant, the Ligand Warrant Shares shall vest and become exercisable as follows: (i) 1,142,857 of the Ligand Warrant Shares (the “First Tranche”) vested upon issuance; however, the Ligand Warrant may not be exercised for six months after the issuance of the Ligand Warrant and (ii) 857,143 of the Ligand Warrant Shares will vest on the date of payment of the Second Installment. In the event that the Second Installment is not paid, the Ligand Warrant shall only be exercisable with respect to the First Tranche. The Ligand Warrant is exercisable for ten years from the date of issuance.

Concurrent with the execution of the Revenue Purchase and Sale Agreement, Ligand also agreed to purchase $5.0 million of shares of Company Common Stock (the “Ligand Private Placement Shares”) pursuant to a stock purchase agreement, dated as of July 31, 2025, between the Company and Ligand (the “Ligand Stock Purchase Agreement”), at a purchase price per share equal to the public offering price per share in the Company’s next public offering of its equity securities. Pursuant to the Ligand Stock Purchase Agreement, Ligand purchased 1,818,181 shares of Company Common Stock at a purchase price of $2.75 per share on August 4, 2025 in connection with the closing of the Public Offering (as defined below).

Purchase of Shares by Medtronic and Loan Agreement with Medtronic

On July 31, 2025, the Company and its wholly-owned subsidiaries, Legacy Orchestra and BackBeat, entered into a Loan Agreement (the “Medtronic Loan Agreement”) with Medtronic, pursuant to which Medtronic agreed to extend a convertible loan to the Company in the aggregate original principal amount of $20.0 million (the “Medtronic Loan”). The Medtronic Loan is evidenced by a secured subordinated convertible promissory note (the “Medtronic Note”) of the

Company. The issuance of the Medtronic Note to Medtronic and the funding of the Medtronic Loan will take place on April 27, 2026 subject to certain closing conditions as described in the Medtronic Loan Agreement.

The Medtronic Note will accrue simple interest at a rate of 11% per annum. The Medtronic Note does not allow for prepayment without the prior consent of Medtronic. Unless earlier converted, or redeemed, the Medtronic Note will mature on April 27, 2031 (the “Repayment Date”). In addition, the payment or other satisfaction of the obligations set forth in the Medtronic Loan Agreement are subordinate in right of payment to the prior payment in full of the senior obligations. The obligations arising under the Medtronic Loan Agreement and the Medtronic Note are secured by security interests in, and pledges over, the Company’s assets, subject to certain agreed security principles, permitted liens and other customary exceptions and qualifications.

The principal balance of the Medtronic Note, together with all accrued and unpaid interest thereon (collectively, the “Balance”) will automatically convert into a revenue share (the “Revenue Share Credit”), if FDA approval of a Medtronic device incorporating AVIM is achieved prior to the Repayment Date. Upon conversion of the then outstanding Balance the Company shall pay to Medtronic the Revenue Share Credit, which shall equal 15% of the revenue share amounts that the Company receives under the Medtronic Agreement, until such time as the total Revenue Share Credit payments equal $40.0 million.

The Medtronic Loan Agreement contains customary representations, warranties and affirmative and negative covenants. In addition, the Medtronic Loan Agreement contains customary events of default that entitle Medtronic to cause the Company’s indebtedness under the Note to become immediately due and payable, and to exercise remedies against the Company and the collateral securing the Loan. Upon the occurrence and for the duration of an event of default, an additional default interest rate equal to 2.0% per annum may apply to all obligations owed under the Loan Agreement.

In addition, in connection with the closing of the Public Offering on August 4, 2025, Medtronic, through its affiliate Covidien Group S.à.r.l. (“Covidien”), purchased 4,077,427 shares of Company Common Stock (together with the Ligand Private Placement Shares, the “Private Placement Shares”) pursuant to a stock purchase agreement, dated as of July 31, 2025 and amended on August 1, 2025, between the Company and Covidien (as amended, the “Medtronic Stock Purchase Agreement” and, together with the Ligand Stock Purchase Agreement, the “Stock Purchase Agreements”), at a purchase price of $2.75 per share. In addition, pursuant to the terms and subject to the conditions of the Medtronic Stock Purchase Agreement, if the underwriters in the Public Offering (as defined below) exercise their option to purchase an additional 2,182,500 shares of Company Common Stock, Medtronic will be obligated to purchase an additional 132,282 shares of Company Common Stock at a purchase price of $2.75 per share.

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Amendment of Exclusive License and Collaboration Agreement

On July 31, 2025, the Company, BackBeat and Medtronic entered into an amendment to the Medtronic Agreement, which became effective on August 4, 2025 (the “Medtronic Agreement Amendment”), to provide, among other things, a development and commercialization framework for future AVIM-therapy integration into a dual-chamber leadless pacemaker. Pursuant to the Medtronic Agreement Amendment, the Company will, among other things, be required to reimburse Medtronic for certain expenses incurred in connection with the integration of AVIM-therapy into Medtronic’s dual-chamber leadless pacemaker, up to a specified cap.  

Amendments to Hercules Loan and Security Agreement and Warrant Agreements

On July 31, 2025, the Borrower, the Hercules Lenders and Hercules entered into the LSA Amendment to the 2024 LSA, which, among other things, amended the existing 2024 LSA to (i) delay the initial date upon which the Company has to begin amortizing term loans under the 2024 LSA from (a) December 1, 2026 (with amortization payments delayed to as late December 1, 2027 if certain conditions were met) to (b) July 1, 2027 (with amortization payments delayed to as late as January 1, 2028 if certain conditions are met); and (ii) increase by $15.0 million (from $20.0 million to $35.0 million) the amount that that may be borrowed by the Company in the discretion of the lender’s investment committee’s and (iii) eliminate the Company’s ability to draw up to $15.0 million if certain milestones are achieved. The LSA Amendment became effective on August 4, 2025.

Under the 2024 LSA as amended by the LSA Amendment (the “Amended 2024 LSA”), beginning on December 1, 2025, the Borrower must maintain Qualified Cash (as defined in the Amended 2024 LSA) in an amount greater than or equal to (x) the outstanding principal amount of the Term Loan Advances, multiplied by (y) the applicable Cash Coverage Percentage (as defined in the Amended 2024 LSA), which percentage ranges from a minimum of 60% to a maximum of 100% of Term Loan Advances, depending upon the amount of Qualified Cash.

 In addition, on July 31, 2025, the Company entered into amendments to the Hercules Warrants with the Hercules Lenders (the “Warrant Agreement Amendments”). As a result of the Warrant Agreement Amendments, among other things:

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Registration Rights Agreement

In connection with the Stock Purchase Agreements and the Ligand Warrant, on August 4, 2025, the Company, Ligand and Medtronic entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which the Company has agreed to file a shelf registration statement providing for the resale of the Private Placement Shares and the Ligand Warrant Shares within 90 calendar days of the closing of the Stock Purchase Agreements, to use its commercially reasonable efforts to cause such registration statement to be declared effective after its filing at the earliest possible date, but no later than the earlier of (i) the 180^th calendar day following the issuance of the Private Placement Shares, if the SEC notifies the Company that it will “review” such registration statement and (ii) the 5^th business day after the date the Company is notified by the SEC that such registration statement will not be “reviewed” or will be subject to no further review, and to maintain the effectiveness of such registration statement until the date as of which there are no longer any Registrable Securities (as such term is defined in the Registration Rights Agreement).

Public Offering

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On August 4, 2025, the Company closed an underwritten public offering of 9,413,637 shares of Company Common Stock at a price to the public of $2.75 per share and pre-funded warrants to purchase 5,136,363 shares of Company Common Stock at a price to the public of $2.7499 per pre-funded warrant, which represents the per share public offering price for the shares of Company Common Stock less the $0.0001 per share exercise price for each pre-funded warrant, for total gross proceeds of approximately $40.0 million, before deducting underwriting discounts and commissions and estimated offering expenses (the “Public Offering”). In addition, as part of the Public Offering, the Company granted the underwriters a 30-day option to purchase up to an additional 2,182,500 shares of Company Common Stock at the public offering price per share, less underwriting discounts and commissions.

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