UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ________________

Commission file number: 001-39421

HEALTH SCIENCES ACQUISITIONS CORPORATION 2

(Exact name of registrant as specified in its charter)

Cayman Islands n/a

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area

code: (646)597-6980

Securities registered pursuant to Section 12(b) of

the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Ordinary Shares, par value $0.0001 per share HSAQ The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of

the Act: None.

Indicate by check mark if the registrant is a well-known

seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒

Indicate by check mark if the registrant is not required

to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐

No☒

Indicate by check mark whether the registrant (1)

has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months

(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements

for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has

submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405

of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is

a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”

and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☒

If an emerging growth company, indicate by check

mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting

standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has

filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting

under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its

audit report. ☐

Indicate by check mark whether the registrant is

a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒No ☐

At June 30, 2022, the aggregate market value of the

registrant’s ordinary shares held by non-affiliates of the registrant was approximately $159.4 million.

As of January 23, 2023, 11,212,117 ordinary shares,

par value $0.0001 per share, were issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

HEALTH SCIENCES ACQUISITIONS CORPORATION 2

Annual Report on Form 10-K for the Year Ended December

31, 2022

part I 1

ITEM 1. Business 1

ITEM 1A. Risk Factors 9

ITEM 1B. Unresolved Staff Comments 9

ITEM 2. Properties 9

ITEM 3. Legal Proceedings 9

ITEM 4. Mine Safety Disclosures 9

ITEM 6. [Reserved] 10

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 19

ITEM 8. Financial Statements and Supplementary Data 19

ITEM 9A. Controls and Procedures 19

ITEM 9B. Other Information 20

ITEM 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 20

Part III 21

ITEM 10. Directors, Executive Officers and Corporate Governance 21

ITEM 11. Executive Compensation 29

ITEM 14. Principal Accountant Fees and Services 35

ITEM 15. Exhibits and Financial Statement Schedules 36

Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking

statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the

Securities Exchange Act of 1934, as amended, or the Exchange Act. The statements contained in this report that are not purely historical

are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management’s

expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts

or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The

words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,”

“intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,”

“project,” “should,” “would” and similar expressions may identify forward-looking statements, but

the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this report may include,

for example, statements about:

● our ability to complete our initial business combination;

● our pool of prospective target businesses;

● the potential liquidity and trading of our securities;

● the lack of a market for our securities;

● our financial performance.

The forward-looking statements contained in this

report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can

be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve

a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance

to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or

uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those

projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether

as a result of new information, future events or otherwise, except as may be required under applicable securities laws and/or if and

when management knows or has a reasonable basis on which to conclude that previously disclosed projections are no longer reasonably attainable.

part I

ITEM 1. BUSINESS

General

Health Sciences Acquisitions Corporation 2 (“we,”

“us,” or “our”) is a blank check company incorporated on May 25, 2020 as a Cayman Islands exempted company. We

were incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization

or similar business combination with one or more businesses, which we refer to throughout this annual report as our initial business

combination. Although there is no restriction or limitation on what industry our target operates in, it is our intention to pursue prospective

targets that are focused on healthcare innovation. We are an emerging growth company and, as such, we are subject to all of the risks

associated with emerging growth companies.

Our sponsor is HSAC 2 Holdings, LLC (the “Sponsor”).

The registration statement for our initial public offering (the “Initial Public Offering”) was declared effective on August

3, 2020. On August 6, 2020, we consummated an Initial Public Offering of 16,000,000 ordinary shares (the “Public Shares”),

including the 2,086,956 Public Shares as a result of the underwriters’ full exercise of their over-allotment option, at an offering

price of $10.00 per Public Share, generating gross proceeds of $160.0 million, and incurring offering costs of approximately $9.4 million,

inclusive of $5.6 million in deferred underwriting commissions.

Simultaneously with the closing of the Initial Public

Offering, we consummated a private placement (the “Private Placement”) with the Sponsor of (i) 450,000 ordinary shares (the

“Private Placement Shares”) at $10.00 per Private Placement Share (for a total purchase price of $4.5 million) and (ii) 1,500,000

warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant (for a total purchase price

of $1.5 million), generating gross proceeds of $6.0 million.

Upon the closing of the Initial Public Offering and

the Private Placement (including the exercise of the over-allotment option), $160.0 million (or $10.00 per Public Share) of the net proceeds

of the sale of the Public Shares in the Initial Public Offering and the Private Placement were placed in a trust account (“Trust

Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and held as cash

or invested only in U.S. “government securities,” within the meaning set forth in Section 2(a)(16) of the Investment Company

Act, with a maturity of 185 days or less, or in money market funds meeting certain conditions under the Investment Company Act, which

invest only in direct U.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of an initial

business combination and (ii) the distribution of the Trust Account.

We paid a total of $3.2 million in underwriting discounts

and commissions (not including the $5.6 million deferred underwriting commissions payable at the consummation of the initial business

combination) and approximately $0.6 million for other costs and expenses related to our formation and the Initial Public Offering.

We will have until February 6, 2023, or such later

time as our shareholders may approve in accordance with the Company’s amended and restated memorandum (the “Combination Period”),

or such later time as our shareholders may approve in accordance with the Company’s amended and restated memorandum and articles

of association, to complete our initial business combination. If we do not complete an initial business combination by that date, it

will trigger the Company’s automatic winding up, liquidation and dissolution and, upon notice from us, the trustee of the Trust

Account will distribute the amount in the Trust Account to holders of the Public Shares (the “Public Shareholders”). Concurrently,

we shall pay, or reserve for payment, from funds not held in trust, our liabilities and obligations, although we cannot assure that there

will be sufficient funds for such purpose. If there are insufficient funds held outside the Trust Account for such purpose, our Sponsor

has agreed that it will be liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses

or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us and which

have not executed a waiver agreement. However, we cannot assure that the liquidator will not determine that he or she requires additional

time to evaluate creditors’ claims (particularly if there is uncertainty over the validity or extent of the claims of any creditors).

We also cannot assure that a creditor or shareholder will not file a petition with the Cayman Islands Court which, if successful, may

result in the Company’s liquidation being subject to the supervision of that court. Such events might delay distribution of some

or all of our assets to the Public Shareholders.

Proposed Business Combination

On July 4, 2022, we entered into an agreement and

plan of merger agreement (as amended on July 21, 2022, the “Merger Agreement”) with HSAC Olympus Merger Sub, Inc., a Delaware

corporation and wholly owned subsidiary of the Company (“Merger Sub”), and Orchestra BioMed, Inc., a Delaware corporation

(“Orchestra”). Pursuant to the terms of the Merger Agreement, a business combination between the Company and Orchestra (the

“Orchestra Business Combination”) will be effected in two steps. First, before the closing of the Orchestra Business Combination,

we will deregister in the Cayman Islands and domesticate as a Delaware corporation. Second, at the closing of the Orchestra Business

Combination, Merger Sub will merge with and into Orchestra, with Orchestra surviving such merger as the surviving entity (the “Merger”).

Upon consummation of the Orchestra Business Combination, Orchestra will become a wholly owned subsidiary of the Company. The Company

will then change its name to “Orchestra BioMed Holdings, Inc.”. The Company, after giving effect to the Orchestra Business

Combination, will be referred to as “New Orchestra”.

The Merger Agreement contains customary representations,

warranties and covenants of the parties thereto. The consummation of the proposed Merger is subject to certain conditions as further

described in the Merger Agreement.

Simultaneously with the execution of the Merger Agreement,

we and Orchestra entered into separate forward purchase agreements (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 approximately

$10.0 million of the Company’s ordinary shares, for a total of approximately $20.0 million, less the dollar amount of the Company’s

ordinary shares holding redemption rights that the Purchasing Party acquires and holds until immediately prior to the domestication.

Simultaneously with the execution of the Merger Agreement

and the Forward Purchase Agreements, we, 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 the Company’s ordinary shares at a price

of $10.00 per share to the extent that the amount of Parent Closing Cash (as defined in the Merger Agreement) as of immediately prior

to the closing of the Orchestra Business Combination is less than $60.0 million (inclusive of the $10.0 million commitment by the RTW

Funds pursuant to the Forward Purchase Agreement described above).

On October 21, 2022, the Backstop Agreement and the

Forward Purchase Agreement with the RTW Funds were amended to provide that: (1) the per share purchase price under each of the Backstop

Agreement and the Forward Purchase Agreement will not exceed the redemption price available to Public Shareholders exercising redemption

rights at the shareholder meeting held to approve the business combination; (2) any shares purchased pursuant to the Backstop Agreement

or the Forward Purchase Agreement, or otherwise acquired by the RTW Funds outside of the existing redemption offer, will not be voted

in favor of approving the business combination; and (3) the RTW Funds will waive redemption rights with respect to such purchases in

the vote to approve the business combination. The amendments have been filed with the SEC on a Current Report on Form 8-K on October

21, 2022. The Forward Purchase Agreement with Medtronic was not amended.

The closing under the Forward Purchase Agreement

with the RTW Funds occurred on July 22, 2022, pursuant to which the RTW Funds purchased 1,000,000 of our ordinary shares at a price of

$10.01 per share from an accredited investor in a privately negotiated transaction. The closing under the Forward Purchase Agreement

with Medtronic and the closing under the Backstop Agreement, if any, will occur immediately prior to the domestication. The Sponsor and

the Purchasing Parties will have registration rights pursuant to the Amended and Restated Registration Rights and Lock-Up Agreement with

respect to the Company’s ordinary shares, received in the domestication.

In addition, the Sponsor has agreed that 25% or 1,000,000

shares of its New Orchestra common stock received in the domestication will be forfeited to New Orchestra on the first business day following

the fifth anniversary of the closing unless, as to 500,000 shares, the VWAP (as defined in the Merger Agreement) of the New Orchestra

common stock is greater than or equal to $15.00 per share over any 20 Trading Days (as defined in the Merger Agreement) within any 30-Trading

Day period, and as to the remaining 500,000 shares, the VWAP of the New Orchestra common stock is greater than or equal to $20.00 per

share over any 20-Trading Days within any 30-Trading Day period. In addition, subject to the closing of the Orchestra Business Combination,

the Sponsor has agreed to forfeit 50% of its Private Placement Warrants, comprising 750,000 Private Placement Warrants, for no consideration.

Further, the Sponsor and the other shareholders of the Company as of immediately prior to our Initial Public Offering (the “Initial

Stockholders”) have agreed to subject the 4,000,000 shares of New Orchestra common stock to be received in the domestication in

exchange for the 4,000,000 ordinary shares held or controlled by the Initial Shareholders prior to the Initial Public Offering (the “Insider

Shares”) and 450,000 shares of New Orchestra common stock to be received in the domestication in exchange for the 450,000 Private

Placement Shares, to a lock-up for up to 12 months.

See the proxy statement/prospectus included in the

Registration Statement on Form S-4/A filed by us with the SEC on December 13, 2022 for additional information.

Extension, Redemptions and Private Purchase

On July 26, 2022, we held an extraordinary general

meeting of our shareholders, where the shareholders approved a special resolution (the “Extension Proposal”) to amend the

Company’s amended and restated memorandum and articles of association to (i) extend from August 6, 2022 (the “Original Termination

Date”) to November 6, 2022 (the “Extended Date”), the date by which, if we had not consummated an initial business

combination, the Company must liquidate and dissolve, and (ii) allow us, without another shareholder vote, to elect to extend the date

to consummate a business combination on a monthly basis for up to three times by an additional one month each time after the Extended

Date, upon five days’ advance notice prior to the applicable deadlines, until February 6, 2023 or a total of up to six months after

the Original Termination Date, unless the closing of our initial business combination shall have occurred. On October 31, 2022, November

15, 2022, and December 15, 2022, our board of directors of elected to extend the deadline until December 6, 2022, January 6, 2023, and

February 6, 2023, respectively.

In connection with the vote to approve the Extension

Proposal, the holders of 9,237,883 Public Shares properly exercised their right to redeem their shares for cash at a redemption price

of approximately $10.02 per share, for an aggregate redemption amount of approximately $92.6 million. As such, approximately 57.7% of

the Public Shares were redeemed and approximately 42.3% of the Public Shares remain outstanding. After the satisfaction of such redemptions,

the balance in our Trust Account was $67.8 million.

See the proxy statement/prospectus included in the

Registration Statement on Form S-4/A filed by us with the SEC on December 13, 2022 for additional information.

Business Combination Meeting

On January 24, 2023, we held an

extraordinary general meeting of shareholders (the “General Meeting”) for the purpose of considering and voting upon,

among other things, the Orchestra Business Combination. Each of the proposals presented at the General Meeting, as more fully

described in the proxy statement/prospectus dated December 16, 2022, was approved. The submission of the Orchestra Business

Combination to the shareholders entitled holders of Public Shares to redeem their shares for their pro rata portion of the funds

held in the Trust Account. In connection with the General Meeting, as of January 24, 2023, we received requests for redemption from

holders with respect to 1,597,888 Public Shares. The closing date of the Orchestra Business Combination is anticipated to be in

January 2023.

Shareholder Approval of Business Combination

In connection with the Orchestra Business Combination,

we are seeking shareholder approval of our initial business combination at a general meeting called for such purpose at which public

shareholders may seek to convert their public shares, regardless of whether they vote for or against the proposed business combination,

into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable). See the proxy statement/prospectus

included in the Registration Statement on Form S-4/A filed by us with the SEC on December 13, 2022 for additional information.

In connection with the Orchestra Business Combination,

we will:

● file proxy materials with the SEC.

Notwithstanding the foregoing, our initial shareholders

have agreed, pursuant to written letter agreements with us, not to convert any public shares held by them into their pro rata

share of the aggregate amount then on deposit in the trust account. We will consummate our initial business combination only if we have

net tangible assets of at least $5,000,001 upon such consummation and an ordinary resolution under Cayman Islands law, which requires

the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company will be required to approve

the business combination..

Our initial shareholders, including our officers

and directors, have agreed (1) to vote any ordinary shares owned by them in favor of any proposed business combination, subject to applicable

law, (2) not to convert any ordinary shares into the right to receive cash from the trust account in connection with a shareholder vote

to approve a proposed initial business combination or a vote to amend the provisions of our memorandum and articles of association relating

to shareholders’ rights or pre-business combination activity and (3) not to sell any ordinary shares in any tender in connection

with a proposed initial business combination. As a result, we could need as little as 126,060 of our public shares (or approximately

1.12% of our public shares) to attend the general meeting to form a quorum, none of which needs to be voted in favor of the transaction

in order to have such transaction approved.

Conversion/Tender Rights

At any general meeting called to approve an initial

business combination, public shareholders may seek to convert their public shares, regardless of whether they vote for or against the

proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account, less any

taxes then due but not yet paid. Notwithstanding the foregoing, our initial shareholders have agreed, pursuant to written letter agreements

with us, not to convert any public shares held by them into their pro rata share of the aggregate amount then on deposit in the

trust account. The conversion rights will be effected under our Amended and Restated Memorandum and Articles of Association and Cayman

Islands law as redemptions. If we hold a meeting to approve an initial business combination, a holder will always have the ability to

vote against a proposed business combination and not seek conversion of his shares.

Our initial shareholders, officers and directors

will not have conversion rights with respect to any ordinary shares owned by them, directly or indirectly.

We may also require public shareholders, whether

they are a record holder or hold their shares in “street name,” to either tender their certificates (if any) to our transfer

agent or to deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal

At Custodian) System, at the holder’s option, at any time at or prior to the vote on the business combination. Once the shares

are converted by the holder, and effectively redeemed by us under Cayman Islands law, the transfer agent will then update our Register

of Members to reflect all conversions. The proxy solicitation materials that we will furnish to shareholders in connection with the vote

for any proposed business combination will indicate whether we are requiring shareholders to satisfy such delivery requirements. Accordingly,

a shareholder would have from the time our proxy statement is mailed through the vote on the business combination to deliver his, her

or its shares if he, she or it wishes to seek to exercise his conversion rights. Under our Amended and Restated Memorandum and Articles

of Association, we are required to provide at least 10 days’ advance notice of any general meeting, which would be the minimum

amount of time a shareholder would have to determine whether to exercise conversion rights. As a result, if we require public shareholders

who wish to convert their ordinary shares into the right to receive a pro rata portion of the funds in the trust account to comply

with the foregoing delivery requirements, holders may not have sufficient time to receive the notice and deliver their shares for conversion.

Accordingly, investors may not be able to exercise their conversion rights and may be forced to retain our ordinary shares when they

otherwise would not want to.

There is a nominal cost associated with this tendering

process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge

the tendering broker a nominal fee and it would be up to the broker whether or not to pass this cost on to the converting holder. However,

this fee would be incurred regardless of whether or not we require holders seeking to exercise conversion rights. The need to deliver

shares is a requirement of exercising conversion rights regardless of the timing of when such delivery must be effectuated. However,

in the event we require shareholders seeking to exercise conversion rights to deliver their shares prior to the consummation of the proposed

business combination and the proposed business combination is not consummated, this may result in an increased cost to shareholders.

Any request to convert or tender such shares, once

made, may be withdrawn at any time up to the vote on the proposed business combination. Furthermore, if a holder of a public share delivered

his, her or its certificate in connection with an election of his, her or its conversion or tender and subsequently decides prior to

the vote on the business combination or the expiration of the tender offer not to elect to exercise such rights, he, she or it may simply

request that the transfer agent return the certificate (physically or electronically).

If the initial business combination is not approved

or completed for any reason, then our public shareholders who elected to exercise their conversion or tender rights would not be entitled

to convert their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any shares

delivered by public holders.

Liquidation if No Business Combination

If we do not complete a business combination by February

6, 2023, or such later time as our shareholders may approve in accordance with the Company’s amended and restated memorandum, it

will trigger our automatic winding up, liquidation and dissolution pursuant to the terms of our Amended and Restated Memorandum and Articles

of Association. As a result, this has the same effect as if we had formally gone through a voluntary liquidation procedure under the

Companies Law. Accordingly, no vote would be required from our shareholders to commence such a voluntary winding up, liquidation and

dissolution. At such time, the private warrants will expire and our sponsor will receive nothing upon a liquidation with respect to such

private warrants, and the private warrants will be worthless.

The amount in the trust account (less approximately

$1,600 representing the aggregate nominal par value of the shares of our public shareholders) under the Companies Law will be treated

as share premium which is distributable under the Companies Law, provided that immediately following the date on which the proposed distribution

is proposed to be made, we are able to pay our debts as they fall due in the ordinary course of business. If we are forced to liquidate

the trust account, we anticipate that we would distribute to our public shareholders the amount in the trust account calculated as of

the date that is two days prior to the distribution date (including any accrued interest). Prior to such distribution, we would be required

to assess all claims that may be potentially brought against us by our creditors for amounts they are actually owed and make provision

for such amounts, as creditors take priority over our public shareholders with respect to amounts that are owed to them. We cannot assure

you that we will properly assess all claims that may be potentially brought against us. As such, our shareholders could potentially be

liable for any claims of creditors to the extent of distributions received by them as an unlawful payment in the event we enter an insolvent

liquidation. Furthermore, while we will seek to have all vendors and service providers (which would include any third parties we engaged

to assist us in any way in connection with our search for a target business) and prospective target businesses execute agreements with

us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, there is no guarantee

that they will execute such agreements. Nor is there any guarantee that, even if such entities execute such agreements with us, they

will not seek recourse against the trust account or that a court would conclude that such agreements are legally enforceable.

Each of our initial shareholders and our sponsor

has agreed to waive its rights to participate in any liquidation of our trust account or other assets with respect to the insider shares

and private shares and to vote their insider shares and private shares in favor of any dissolution and plan of distribution which we

submit to a vote of shareholders. There will be no distribution from the trust account with respect to our private warrants, which will

expire worthless.

If we do not complete an initial business combination

and expend all of the proceeds of our initial public offering other than the proceeds deposited in the trust account, and without taking

into account interest, if any, earned on the trust account, the initial per-share distribution from the trust account would be $10.00.

The proceeds deposited in the trust account could,

however, become subject to the claims of our creditors, which would be prior to the claims of our public shareholders. Although we will

seek to have all vendors, including lenders for money borrowed, prospective target businesses or other entities we engage execute agreements

with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our

public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would

be prevented from bringing claims against the trust account, including but not limited to, fraudulent inducement, breach of fiduciary

responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain

an advantage with a claim against our assets, including the funds held in the trust account. If any third party refused to execute an

agreement waiving such claims to the monies held in the trust account, we would perform an analysis of the alternatives available to

us if we chose not to engage such third party and evaluate if such engagement would be in the best interest of our shareholders if such

third party refused to waive such claims. Examples of possible instances where we may engage a third party that refused to execute a

waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly

superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a provider

of required services willing to provide the waiver. In any event, our management would perform an analysis of the alternatives available

to it and would only enter into an agreement with a third party that did not execute a waiver if management believed that such third

party’s engagement would be significantly more beneficial to us than any alternative. In addition, there is no guarantee that such

entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or

agreements with us and will not seek recourse against the trust account for any reason.

Our sponsor, HSAC 2 Holdings, LLC, has agreed that,

if we liquidate the trust account prior to the consummation of a business combination, it will be liable to pay debts and obligations

to target businesses or vendors or other entities that are owed money by us for services rendered or contracted for or products sold

to us, but only to the extent necessary to ensure that such debts or obligations do not reduce the amounts in the trust account and only

if such parties have not executed a waiver agreement. However, we cannot assure you that our sponsor will be able to satisfy those obligations

if it is required to do so. Accordingly, the actual per-share distribution could be less than $10.00 due to claims of creditors. Additionally,

if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds

held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and

subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete

the trust account, we cannot assure you we will be able to return to our public shareholders at least $10.00 per ordinary share.

Potential Revisions to Agreements with our Initial Shareholders

Each of our initial shareholders has entered into

letter agreements with us pursuant to which each of them has agreed to do certain things relating to us and our activities prior to a

business combination. We could seek to amend these letter agreements without the approval of shareholders, although we have no intention

to do so. In particular:

Except as specified above, shareholders would not

be required to be given the opportunity to redeem their shares in connection with such changes. Such changes could result in:

We will not agree to any such changes unless we believed

that such changes were in the best interests of our shareholders (for example, if we believed such a modification were necessary to complete

a business combination). Each of our officers and directors has fiduciary obligations to us requiring that he or she act in our best

interests and the best interests of our shareholders.

Emerging Growth Company Status and Other Information

We are an emerging growth company as defined in Section

2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012

(which we refer to herein as the JOBS Act). As such, we are 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, or the Sarbanes-Oxley Act, reduced

disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements

of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously

approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities

and the prices of our securities may be more volatile.

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 Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a 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 an 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 financial statement 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.

We will remain an emerging growth company until the

earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of the IPO, (b) in which we have total

annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market

value of our ordinary shares that are held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which

we have issued more than $1.0 billion in non-convertible debt during the prior three year period.

Competition

In identifying, evaluating and selecting a target

business, we encountered and may continue to encounter intense competition from other entities having a business objective similar to

ours. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly

or through affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources

will be relatively limited when contrasted with those of many of these competitors. While we believe there may be numerous potential

target businesses that we could complete a business combination with utilizing the net proceeds of our initial public offering, our ability

to compete in completing a business combination with certain sizable target businesses may be limited by our available financial resources.

The following also may not be viewed favorably by

certain target businesses:

Any of these factors may place us at a competitive

disadvantage in successfully negotiating our initial business combination. Our management believes, however, that our status as a public

entity and potential access to the United States public equity markets may give us a competitive advantage over privately held entities

having a similar business objective as ours in connection with an initial business combination with a target business with significant

growth potential on favorable terms.

If we succeed in effecting our initial business combination,

there will be, in all likelihood, intense competition from competitors of the target business. Subsequent to our initial business combination,

we may not have the resources or ability to compete effectively.

Employees

We have four executive officers. These individuals

are not obligated to devote any specific number of hours to our matters and intend to devote only as much time as they deem necessary

to our affairs. The amount of time they will devote in any time period will vary based on whether a target business has been selected

for the business combination and the stage of the business combination process the company is in. Accordingly, once a suitable target

business to consummate our initial business combination with has been located, management will spend more time investigating such target

business and negotiating and processing the business combination (and consequently spend more time on our affairs) than had been spent

prior to locating a suitable target business. We presently expect our executive officers to devote an average of approximately 10 hours

per week to our business. We do not intend to have any full-time employees prior to the consummation of our initial business combination.

ITEM 1A. RISK FACTORS

As a smaller reporting company, we are not required to make disclosures

under this Item.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

We currently maintain our principal executive offices

at 40 10th Avenue, Floor 7, New York, NY 10014. The cost for this space is included in the $10,000 per-month fee (subject

to deferral as described herein) payable to HSAC 2 Holdings, LLC, for office space, utilities and secretarial services. Our agreement

with HSAC 2 Holdings, LLC provides that, commencing on the date that our ordinary shares were first listed on the Nasdaq Capital Market

and until we consummate a business combination, such office space, as well as utilities and secretarial services, will be made available

to us as may be required from time to time. We believe that the fee charged by HSAC 2 Holdings, LLC is at least as favorable as we could

have obtained from an unaffiliated person. We consider our current office space, combined with the other office space otherwise available

to our executive officers, adequate for our current operations.

ITEM 3. LEGAL PROCEEDINGS

We may be subject to legal proceedings, investigations

and claims incidental to the conduct of our business from time to time. We are not currently a party to any material litigation or other

legal proceedings brought against us. We are also not aware of any legal proceeding, investigation or claim, or other legal exposure

that has a more than remote possibility of having a material adverse effect on our business, financial condition or results of operations.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

part II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY,

RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our ordinary shares began to trade on The Nasdaq

Capital Market, or Nasdaq, under the symbol “HSAQ” on August 4, 2020.

Holders of Record

As of January 23, 2023, there were 11,212,117 of

our ordinary shares issued and outstanding held by 7 holders of record. The number of record holders was determined from the records

of our transfer agent and does not include beneficial owners of ordinary shares whose shares are held in the names of various security

brokers, dealers, and registered clearing agencies.

Dividends

We have not paid any cash dividends on our ordinary

shares to date and do not intend to pay cash dividends prior to the completion of an initial business combination. The payment of cash

dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition

subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination will be within

the discretion of our board of directors at such time. It is the present intention of our board of directors to retain all earnings,

if any, for use in our business operations and, accordingly, our board of directors does not anticipate declaring any dividends in the

foreseeable future. In addition, our board of directors is not currently contemplating and does not anticipate declaring any share dividends

in the foreseeable future. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants

we may agree to in connection therewith.

Securities Authorized for Issuance Under Equity Compensation Plans

None.

Recent Sales of Unregistered Securities

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Extension Proposal