Correspondence 0001140361-24-020618 from Adagio Medical Holdings, Inc. (ADGM) (CIK 0002006986) (ADGM)
Adagio Medical Holdings, Inc. (ADGM) (CIK 0002006986)
Date: April 18, 2024 · CIK: 0002006986 · Accession: 0001140361-24-020618
AI Filing Summary & Sentiment
Letter
Aja HoldCo, Inc.
51 Astor Place, 10th Floor
New York, New York 10003
April 18, 2024
VIA EDGAR
Securities and Exchange Commission
Division of Corporation Finance
Office of Industrial Applications and Services
100 F Street, N.E.
Washington, D.C. 20549
Attention: Conlon Danberg and Tonya Aldave
Re:
Aja HoldCo, Inc.
Draft Registration Statement on Form S-4
Submitted February 14, 2024
CIK No. 0002006986
Ladies and Gentlemen:
On behalf of our client, Aja HoldCo, Inc. (the “Registrant”), we set forth below the Registrant’s response to the letter, dated March 12, 2024, containing the comments of the staff of the Division of Corporation Finance (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) with respect to the above referenced draft registration statement on Form S-4 confidentially submitted by the Registrant on February 14, 2024 (the “Draft Registration Statement”).
In order to facilitate your review, we have restated the Staff’s comments in this letter, and we have set forth the Registrant’s responses immediately below the Staff’s comments.
In addition, the Registrant has revised the Draft Registration Statement in response to the Staff’s comments and is, concurrently with the submission of this letter, publicly filing an amendment to the Draft Registration Statement (the “Amendment”), which reflects the revisions described in the Registrant’s responses below and clarifies certain other information. The page numbers in the text of the Registrant’s responses included below correspond to the page numbers in the Amendment. Unless otherwise indicated, capitalized terms used herein have the meanings assigned to them in the Amendment.
Draft Registration Statement on Form S-4
Notice of Extraordinary General Meeting, page i
1.
Staff’s Comment: We note that the Dear Shareholders letter contains long sections of what appears to be entire clauses copied and pasted from legal agreements. Please revise to summarize the transactions and agreements described in the letter in plain English. Similarly, revise the entire section on pages 104 through 118.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure in the Dear Shareholders letter and on pages 113 through 125.
Securities and Exchange Commission
Division of Corporate Finance
Office of Industrial Applications and Services
April 18, 2024
Page 2
Market and Industry Data, page iii
2.
Staff’s Comment: Your statements that (i) “you are cautioned not to give undue weight to these estimates,” (ii) “the accuracy and completeness of such information is not guaranteed,” and (iii) “Adagio has not independently verified any third-party information” may imply an inappropriate disclaimer of responsibility with respect to the third party information and internal research. Please revise to clarify that, notwithstanding the foregoing, you believe that this information is reliable.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page iii.
3.
Staff’s Comment: Please revise here and in the business section to explain what you mean by your disclosure on page iv relating to “the novelty of the markets for Adagio’s products” or remove this disclosure.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has removed this disclosure on page iv.
Questions and Answers for Shareholders of Arya
Q. What proposals are shareholders of ARYA being asked to vote upon, page xiv
4.
Staff’s Comment: We note that The Adjournment Proposal permits adjournment “if the holders of the Public Shares have elected to redeem such number of shares such that the New Adagio Common Stock would not be approved for listing on a U.S. stock exchange.” Here or elsewhere in the Prospectus, please briefly describe the specific listing rules that could be implicated by redemptions and to provide additional detail regarding the level of redemptions that could cause the New Adagio Common Stock to fail to qualify for listing on a U.S. stock exchange. Include risk factor disclosure to describe material risks to public shareholders seeking to exercise their redemption rights.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has included a new Question and Answer on page xv and revised the disclosure on page 98.
Securities and Exchange Commission
Division of Corporate Finance
Office of Industrial Applications and Services
April 18, 2024
Page 3
Summary
Adagio Business Summary, page 1
5.
Staff’s Comment: Please balance your disclosure regarding Adagio in the Summary section to include equally prominent disclosure of the limitations you face in implementing your business strategy, including, but not limited to, the fact that Adagio has incurred net losses in each quarterly and annual period since inception and that it has not yet generated any meaningful revenue.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 1.
6.
Staff’s Comment: We note your statement that the preliminary data from your clinical trials is “suggestive of outcomes favorable to the current standard of care.” Please expand on this statement to briefly describe the current standard of care and the way or ways in which the preliminary data from your clinical trials suggests more favorable outcomes compared to the current standard.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 1 and 221.
7.
Staff’s Comment: Please disclose that Adagio’s audit report includes a paragraph related to substantial doubt about the ability of Adagio to continue as a going concern.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 1.
8.
Staff’s Comment: We note your statement here that “[s]ome of Adagio’s products have obtained regulatory approvals in the EU for commercialization” and on page 31 that “Adagio only has one product, iCLAS ULTC catheter and system, which is authorized for commercialization only in the European Union.” If true, please revise your Summary section to state that you only have one product that has obtained regulatory approval or otherwise clarify this description.
Response: The Registrant acknowledges the Staff’s comment and respectfully advises the Staff that Adagio’s iCLAS(TM) ULTC System and VT ULTC System (inclusive of vCLAS(TM) catheter) have obtained regulatory approvals in the EU for commercialization, and it has revised the disclosure on pages 1 and 221.
Securities and Exchange Commission
Division of Corporate Finance
Office of Industrial Applications and Services
April 18, 2024
Page 4
The ARYA Board’s Reasons for the Business Combination, page 5
9.
Staff’s Comment: We note your statement here and on page 133 regarding “the support for the implied valuation of Adagio indicated by the commitments obtained from the PIPE Investors.” Please clarify what you mean by “the implied valuation indicated by such commitments.”
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 6 and 144.
Sponsor Letter Agreement, page 9
10.
Staff’s Comment: We note your disclosure that pursuant to the Sponsor Letter Agreement “each of the Insiders and ARYA agreed to terminate certain existing agreements or arrangements.” Please clarify what existing agreements or arrangements will be terminated.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 10, 15, and 130.
Organizational Structure, page 10
11.
Staff’s Comment: We note that you included your organizational structures before and after the merger. Please revise the post business combination structure to show what percentages of the combined company will be owned by the current officers, directors and shareholders of both ARYA and Adagio, as well as PIPE investors.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the structure chart on page 12 and related disclosure on pages xix through xxiii, and 125 through 126.
Securities and Exchange Commission
Division of Corporate Finance
Office of Industrial Applications and Services
April 18, 2024
Page 5
Risk Factors
Risks Related to Adagio’s Business
Adagio is dependent on limited third-party suppliers and manufacturers, page 40
12.
Staff’s Comment: We note your disclosure that “Adagio relies on third-party suppliers to provide it with certain components of its products, some of which are single-source suppliers.” Please identify specific third-party suppliers and briefly describe any contracts with such third-party suppliers, upon which Adagio’s business is substantially dependent.
Response: The Registrant acknowledges the Staff’s comment and respectfully advises the Staff that Adagio does not believe any of the contracts with such third-party suppliers, including the single-source suppliers, constitutes a material contract that requires disclosure under Item 601(b)(10) of Regulation S-K. The Registrant respectfully advises the Staff that, in using the term “single-source supplier,” Adagio is referring to the fact that it sources particular component(s) for its products from a single supplier and is not suggesting that it is only able to locate one supplier in the market to supply such component(s). On the contrary, in the event that Adagio’s suppliers, including the single-source suppliers, are unable or unwilling to manufacture the components or materials in Adagio’s required volumes, or at specified times, Adagio believes it can find and qualify replacement suppliers without a material disruption to its business given its safety stock and the availability of alternative suppliers for its components. The Registrant has included the foregoing in said Risk Factor on page 44.
Unfavorable U.S. or global economic conditions as a result of the COVID-19 pandemic, page 46
13.
Staff’s Comment: We note your reference to the potential impact on Adagio’s “proteomics product platform.” Please revise here and in the Business section to describe this product platform or advise.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 50.
Subscription Agreements, page 119
14.
Staff’s Comment: We note that in several sections of your prospectus you refer to the “commitments by certain investors to subscribe for and purchase Class A Ordinary Shares in the open market and not to redeem such shares prior to the Closing Date.” Please disclose here and in other appropriate sections of the filing how you will determine the number of shares, also referred to as the “New Adagio Common Stock,” to be issued pursuant to the subscription agreements.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 126 through 128 and in other appropriate sections of the Amendment.
Securities and Exchange Commission
Division of Corporate Finance
Office of Industrial Applications and Services
April 18, 2024
Page 6
Background of the Business Combination, page 123
15.
Staff’s Comment: We note your disclosure that on January 25, 2023, representatives of ARYA provided representatives of Adagio with a draft, non-binding term sheet with respect to the potential business combination, which provided for a $75 million pre-transaction equity value of Adagio. Please expand on this disclosure to explain how the parties arrived at the $75 million pre-transaction equity valuation, including the methodology employed in reaching the valuation. Please provide corresponding disclosure for the other valuations noted in the background section or explain what led to the changes in valuation during the course of the negotiations. In this regard, we note that between October 18, 2023 and November 28, 2023 it appears the equity value was reduced to $24 million. Finally, please expand on your discussion of the drafts of the business combination agreement to note the equity valuation included in such drafts or that the terms were consistent with the non-binding term sheet.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 133 through 138.
16.
Staff’s Comment: We note your disclosure that during the November 28, 2023 meeting, “ARYA’s management and representatives of the Sponsor provided the ARYA directors with an update on Adagio’s business, including updates to Adagio’s financial projections and refinements to Adagio’s go-to-market strategy.” Please expand on this disclosure to describe Adagio’s original financial projections and go-to-market strategy as well as the changes to such items.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 139.
17.
Staff’s Comment: We note your discussion relating to three potential business combination targets and seven potential business combination targets on page 122. You identify only Adagio and Amicus as potential acquisition targets in this section. Please identify each potential target and describe any letters of intent or confidentially agreements entered into with these target companies.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 130 through 132.
Securities and Exchange Commission
Division of Corporate Finance
Office of Industrial Applications and Services
April 18, 2024
Page 7
18.
Staff’s Comment: We note your discussion of the PIPE financing in this section. Please revise your disclosure to discuss whether there were any valuations or other material information about the SPAC, the target, or the de-SPAC transaction provided to potential PIPE investors that have not been disclosed publicly.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 142.
Opinion of ARYA’s Financial Advisor, page 136
19.
Staff’s Comment: We note your disclosure that in arriving at its opinion, Scalar reviewed certain internal estimates, and other data relating to the business and financial prospects of Adagio that were provided to Scalar by the management of ARYA. We also note your statement that “Scalar also was advised by
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filename1.htm
Aja HoldCo, Inc.
51 Astor Place, 10th Floor
New York, New York 10003
April 18, 2024
VIA EDGAR
Securities and Exchange Commission
Division of Corporation Finance
Office of Industrial Applications and Services
100 F Street, N.E.
Washington, D.C. 20549
Attention: Conlon Danberg and Tonya Aldave
Re:
Aja HoldCo, Inc.
Draft Registration Statement on Form S-4
Submitted February 14, 2024
CIK No. 0002006986
Ladies and Gentlemen:
On behalf of our client, Aja HoldCo, Inc. (the “Registrant”), we set forth below the Registrant’s response to the letter, dated March 12, 2024, containing the
comments of the staff of the Division of Corporation Finance (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) with respect to the above
referenced draft registration statement on Form S-4 confidentially submitted by the Registrant on February 14, 2024 (the “Draft Registration Statement”).
In order to facilitate your review, we have restated the Staff’s comments in this letter, and we have set forth the Registrant’s responses immediately below the Staff’s comments.
In addition, the Registrant has revised the Draft Registration Statement in response to the Staff’s comments and is, concurrently with the submission of this letter, publicly filing an amendment to
the Draft Registration Statement (the “Amendment”), which reflects the revisions described in the Registrant’s responses below and clarifies certain other information. The page numbers in the text of the
Registrant’s responses included below correspond to the page numbers in the Amendment. Unless otherwise indicated, capitalized terms used herein have the meanings assigned to them in the Amendment.
Draft Registration Statement on Form S-4
Notice of Extraordinary General Meeting, page i
1.
Staff’s Comment: We note that the Dear Shareholders letter contains long sections of what appears to be entire clauses copied and pasted from legal agreements. Please revise to
summarize the transactions and agreements described in the letter in plain English. Similarly, revise the entire section on pages 104 through 118.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure in the Dear Shareholders
letter and on pages 113 through 125.
Securities and Exchange Commission
Division of Corporate Finance
Office of Industrial Applications and Services
April 18, 2024
Page 2
Market and Industry Data, page iii
2.
Staff’s Comment: Your statements that (i) “you are cautioned not to give undue weight to these estimates,” (ii) “the accuracy and completeness of such information is not
guaranteed,” and (iii) “Adagio has not independently verified any third-party information” may imply an inappropriate disclaimer of responsibility with respect to the third party information and internal research. Please revise to clarify
that, notwithstanding the foregoing, you believe that this information is reliable.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page iii.
3.
Staff’s Comment: Please revise here and in the business section to explain what you mean by your disclosure on page iv relating to “the novelty of the markets for Adagio’s
products” or remove this disclosure.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has removed this disclosure on page iv.
Questions and Answers for Shareholders of Arya
Q. What proposals are shareholders of ARYA being asked to vote upon, page xiv
4.
Staff’s Comment: We note that The Adjournment Proposal permits adjournment “if the holders of the Public Shares have elected to redeem such number of shares such that the New
Adagio Common Stock would not be approved for listing on a U.S. stock exchange.” Here or elsewhere in the Prospectus, please briefly describe the specific listing rules that could be implicated by redemptions and to provide additional detail
regarding the level of redemptions that could cause the New Adagio Common Stock to fail to qualify for listing on a U.S. stock exchange. Include risk factor disclosure to describe material risks to public shareholders seeking to exercise
their redemption rights.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has included a new Question and Answer on page xv
and revised the disclosure on page 98.
Securities and Exchange Commission
Division of Corporate Finance
Office of Industrial Applications and Services
April 18, 2024
Page 3
Summary
Adagio Business Summary, page 1
5.
Staff’s Comment: Please balance your disclosure regarding Adagio in the Summary section to include equally prominent disclosure of the limitations you face in implementing your
business strategy, including, but not limited to, the fact that Adagio has incurred net losses in each quarterly and annual period since inception and that it has not yet generated any meaningful revenue.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 1.
6.
Staff’s Comment: We note your statement that the preliminary data from your clinical trials is “suggestive of outcomes favorable to the current standard of care.” Please expand
on this statement to briefly describe the current standard of care and the way or ways in which the preliminary data from your clinical trials suggests more favorable outcomes compared to the current standard.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 1 and 221.
7.
Staff’s Comment: Please disclose that Adagio’s audit report includes a paragraph related to substantial doubt about the ability of Adagio to continue as a going concern.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 1.
8.
Staff’s Comment: We note your statement here that “[s]ome of Adagio’s products have obtained regulatory approvals in the EU for commercialization” and on page 31 that “Adagio
only has one product, iCLAS ULTC catheter and system, which is authorized for commercialization only in the European Union.” If true, please revise your Summary section to state that you only have one product that has obtained regulatory
approval or otherwise clarify this description.
Response: The Registrant acknowledges the Staff’s comment and respectfully advises the Staff that Adagio’s iCLAS(TM) ULTC System and VT
ULTC System (inclusive of vCLAS(TM) catheter) have obtained regulatory approvals in the EU for commercialization, and it has revised the disclosure on pages 1 and 221.
Securities and Exchange Commission
Division of Corporate Finance
Office of Industrial Applications and Services
April 18, 2024
Page 4
The ARYA Board’s Reasons for the Business Combination, page 5
9.
Staff’s Comment: We note your statement here and on page 133 regarding “the support for the implied valuation of Adagio indicated by the commitments obtained from the PIPE
Investors.” Please clarify what you mean by “the implied valuation indicated by such commitments.”
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 6 and 144.
Sponsor Letter Agreement, page 9
10.
Staff’s Comment: We note your disclosure that pursuant to the Sponsor Letter Agreement “each of the Insiders and ARYA agreed to terminate certain existing agreements or
arrangements.” Please clarify what existing agreements or arrangements will be terminated.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 10, 15, and 130.
Organizational Structure, page 10
11.
Staff’s Comment: We note that you included your organizational structures before and after the merger. Please revise the post business combination structure to show what
percentages of the combined company will be owned by the current officers, directors and shareholders of both ARYA and Adagio, as well as PIPE investors.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the structure chart on page 12 and
related disclosure on pages xix through xxiii, and 125 through 126.
Securities and Exchange Commission
Division of Corporate Finance
Office of Industrial Applications and Services
April 18, 2024
Page 5
Risk Factors
Risks Related to Adagio’s Business
Adagio is dependent on limited third-party suppliers and manufacturers, page 40
12.
Staff’s Comment: We note your disclosure that “Adagio relies on third-party suppliers to provide it with certain components of its products, some of which are single-source
suppliers.” Please identify specific third-party suppliers and briefly describe any contracts with such third-party suppliers, upon which Adagio’s business is substantially dependent.
Response: The Registrant acknowledges the Staff’s comment and respectfully advises the Staff that Adagio does not believe any of the
contracts with such third-party suppliers, including the single-source suppliers, constitutes a material contract that requires disclosure under Item 601(b)(10) of Regulation S-K. The Registrant respectfully advises the Staff that, in using the term
“single-source supplier,” Adagio is referring to the fact that it sources particular component(s) for its products from a single supplier and is not suggesting that it is only able to locate one supplier in the market to supply such component(s). On
the contrary, in the event that Adagio’s suppliers, including the single-source suppliers, are unable or unwilling to manufacture the components or materials in Adagio’s required volumes, or at specified times, Adagio believes it can find and qualify
replacement suppliers without a material disruption to its business given its safety stock and the availability of alternative suppliers for its components. The Registrant has included the foregoing in said Risk Factor on page 44.
Unfavorable U.S. or global economic conditions as a result of the COVID-19 pandemic, page 46
13.
Staff’s Comment: We note your reference to the potential impact on Adagio’s “proteomics product platform.” Please revise here and in the Business section to describe this product
platform or advise.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 50.
Subscription Agreements, page 119
14.
Staff’s Comment: We note that in several sections of your prospectus you refer to the “commitments by certain investors to subscribe for and purchase Class A Ordinary Shares in
the open market and not to redeem such shares prior to the Closing Date.” Please disclose here and in other appropriate sections of the filing how you will determine the number of shares, also referred to as the “New Adagio Common Stock,” to
be issued pursuant to the subscription agreements.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 126 through 128
and in other appropriate sections of the Amendment.
Securities and Exchange Commission
Division of Corporate Finance
Office of Industrial Applications and Services
April 18, 2024
Page 6
Background of the Business Combination, page 123
15.
Staff’s Comment: We note your disclosure that on January 25, 2023, representatives of ARYA provided representatives of Adagio with a draft, non-binding term sheet with respect to
the potential business combination, which provided for a $75 million pre-transaction equity value of Adagio. Please expand on this disclosure to explain how the parties arrived at the $75 million pre-transaction equity valuation, including
the methodology employed in reaching the valuation. Please provide corresponding disclosure for the other valuations noted in the background section or explain what led to the changes in valuation during the course of the negotiations. In
this regard, we note that between October 18, 2023 and November 28, 2023 it appears the equity value was reduced to $24 million. Finally, please expand on your discussion of the drafts of the business combination agreement to note the equity
valuation included in such drafts or that the terms were consistent with the non-binding term sheet.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 133 through 138.
16.
Staff’s Comment: We note your disclosure that during the November 28, 2023 meeting, “ARYA’s management and representatives of the Sponsor provided the ARYA directors with an
update on Adagio’s business, including updates to Adagio’s financial projections and refinements to Adagio’s go-to-market strategy.” Please expand on this disclosure to describe Adagio’s original financial projections and go-to-market
strategy as well as the changes to such items.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 139.
17.
Staff’s Comment: We note your discussion relating to three potential business combination targets and seven potential business combination targets on page 122. You identify only
Adagio and Amicus as potential acquisition targets in this section. Please identify each potential target and describe any letters of intent or confidentially agreements entered into with these target companies.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 130 through
132.
Securities and Exchange Commission
Division of Corporate Finance
Office of Industrial Applications and Services
April 18, 2024
Page 7
18.
Staff’s Comment: We note your discussion of the PIPE financing in this section. Please revise your disclosure to discuss whether there were any valuations or other material
information about the SPAC, the target, or the de-SPAC transaction provided to potential PIPE investors that have not been disclosed publicly.
Response: The Registrant acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page 142.
Opinion of ARYA’s Financial Advisor, page 136
19.
Staff’s Comment: We note your disclosure that in arriving at its opinion, Scalar reviewed certain internal estimates, and other data relating to the business and financial
prospects of Adagio that were provided to Scalar by the management of ARYA. We also note your statement that “Scalar also was advised by