United States securities and exchange commission logo
March 12, 2024
Adam Stone
Chief Executive Officer
Aja Holdco, Inc.
51 Astor Place, 10th Floor
New York, New York 10003
Re: Aja Holdco, Inc.
Draft Registration
Statement on Form S-4
Submitted February
14, 2024
CIK No. 0002006986
Dear Adam Stone:
We have reviewed your
draft registration statement and have the following comments.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe a comment applies to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to this
letter and your amended
draft registration statement or filed registration statement, we may
have additional comments.
Draft Registration Statement on Form S-4
Notice of Extraordinary General Meeting, page i
1. 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.
Market and Industry Data, page iii
2. 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.
Adam Stone
FirstName
Aja Holdco,LastNameAdam Stone
Inc.
Comapany
March NameAja Holdco, Inc.
12, 2024
March2 12, 2024 Page 2
Page
FirstName LastName
3. 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.
Questions and Answers for Shareholders of Arya
Q. What proposals are shareholders of ARYA being asked to vote upon, page xiv
4. 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.
Summary
Adagio Business Summary, page 1
5. 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.
6. 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.
7. 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.
8. 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.
The ARYA Board's Reasons for the Business Combination, page 5
9. 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."
Adam Stone
FirstName
Aja Holdco,LastNameAdam Stone
Inc.
Comapany
March NameAja Holdco, Inc.
12, 2024
March3 12, 2024 Page 3
Page
FirstName LastName
Sponsor Letter Agreement, page 9
10. 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.
Organizational Structure, page 10
11. 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.
Risk Factors
Risks Related to Adagio's Business
Adagio is dependent on limited third-party suppliers and manufacturers, page 40
12. 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.
Unfavorable U.S. or global economic conditions as a result of the COVID-19
pandemic, page 46
13. 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.
Subscription Agreements, page 119
14. 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.
Background of the Business Combination, page 123
15. 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
Adam Stone
FirstName
Aja Holdco,LastNameAdam Stone
Inc.
Comapany
March NameAja Holdco, Inc.
12, 2024
March4 12, 2024 Page 4
Page
FirstName LastName
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.
16. 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.
17. 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
Amucus 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.
18. 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.
Opinion of ARYA's Financial Advisor, page 136
19. 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 ARYA s senior management, and Scalar
assumed, that the
financial projections and other prospective information, including,
but not limited to,
projections for the timely receipt of governmental, regulatory and
other third-party
approvals, represented a reasonable basis upon which to evaluate the
future business and
financial prospects of Adagio." Please clarify if Scalar received and
reviewed financial
projections in connection with arriving at its opinion. If so, please
disclose such
projections and qualitatively and quantitatively describe all material
assumptions
underlying such projections.
Opinion of ARYA's Financial Advisor
Selected Precedent Financings and M&A Transactions Analysis, page 141
20. We note your statement that "Scalar selected these financings and M&A
transactions
based on information obtained by searching SEC filings, public company
disclosures,
press releases, equity research reports, industry and popular press
reports, databases and
other sources." Please revise to clarify the specific selection
criteria used to create the list
Adam Stone
Aja Holdco, Inc.
March 12, 2024
Page 5
of precedent financing and M&A transactions. Additionally, please note
whether there
were any financing or M&A transactions that met the selection criteria
but were excluded
from the list of precedent transactions.
Unaudited Pro Forma Condensed Combined Financial Information, page 166
21. Please expand your disclosures here or within Note 1 to provide a
clear description of all
material components of Business Combination Agreement in addition to
the Subscription
Agreements and any other material agreements as required by Article
11-02(a)(2) of
Regulation S-X. In this regard, also particularly provide discussions
about the conversion
of both entity s equity outstanding prior to the closing.
Note 2. Basis of Pro Forma Presentation, page 172
22. We note your conclusion that ARYA will be the accounting acquirer and
Adagio will be
the accounting acquiree resulting in the use of the accounting method
of accounting in
accordance with ASC 805. We further note that this conclusion is
based, in part, on your
assessment that Adagio is considered a Variable Interest Entity (VIE)
upon consummation
of the business combination due to the amount of expected cash on
hand resulting in the
equity at risk being considered insufficient for Adagio to finance its
activities without
additional subordinated financial support. Please provide us with
your detailed analysis
of Adagio s anticipated facts and circumstances at the closing of
the business combination
with specific reference to the authoritative literature that supports
your position. Refer to
ASC 810-10-25-37 and ASC 810-10-15-14 for guidance. In this regard, we
note that prior
to the closing of the business combination, Adagio s October 2022
convertible notes,
warrants, and convertible preferred stock all convert into Adagio s
common stock. Lastly,
please include in your response an accounting acquirer analysis under
ASC 805-10-55-11
through ASC 805-10-55-15.
23. Please revise your tabular presentation of the pro forma shares of New
Adagio Common
Stock outstanding to exclude all dilutive securities and present the
dilutive securities to be
outstanding with the closing in a separate table or footnote disclosure
by type and by
holder. Also address the need to disclose the New Adagio options issued
to Adagio option
holders within Note 6. In this regard, we note the Sponsor Earn-Out
Shares will be subject
to a vesting criteria and Adagio s options will be converted into New
Adagio options.
Also, separately present the shares to be acquired by the Perceptive
PIPE Investor from
the other PIPE Investors, as it would appear that the Perceptive PIPE
Investor has an
FirstName LastNameAdam Stone
existing relationship with Adagio prior to the Business Combination.
Refer to your
Comapany NameAja
disclosures on Holdco,
page 262,Inc.
which notes CVF LLC, the Preceptive PIPE
Investor, is a holder
of more than
March 12, 2024 Page 5 5% of Adagio s capital stock.
FirstName LastName
Adam Stone
FirstName
Aja Holdco,LastNameAdam Stone
Inc.
Comapany
March NameAja Holdco, Inc.
12, 2024
March6 12, 2024 Page 6
Page
FirstName LastName
Business of Adagio and Certain Information about Adagio, page 202
24. Please revise this section to disclose the following:
In regard to Adagio's product approved in the EU, please disclose
if you are seeking
EU approval for your other products and if not, why not.
In regard to Adagio's aspiration to receive FDA approval in the
USA, clearly disclose
which of your three products you are seeking the FDA approval for.
Clarify in what "select European markets" Adagio has commercially
launched its
iCLAS Cryoablation System, as referenced on page 231.
Clarify where Adagio's 97 full-time employees are located, as
referenced on page
230.
Clarify the basis for your belief that "Adagio s future success
is largely dependent on
its ability to successfully develop and commercialize in the
United States its pipeline
products," as stated on page 32, because it appears that even
though Adagio's product
launched in the EU in 2020, the company only achieved combined
sales of less than
$0.5 million in the fiscal years 2021 and 2022.
Market Opportunity, page 202
25. Please provide the source or basis for the valuations, growth rates
and estimates included
in this section or note these statements are the belief of management.
With respect to the
CAGRs listed on page 203, please discuss any material assumptions
underlying these
projections.
Current Ablation Catheter Technology Landscape, page 210
26. Please expand on your disclosure to explain the CIRCA-DOSE randomized
clinical trial,
including who conducted the trial and when it was performed.
Key Benefits of ULTC, page 213
27. We note your statement that "[w]hile still at an early stage, we
believe our ULTC results
could potentially demonstrate a more durable clinical outcome." Please
clarify what you
mean by a more durable clinical outcome. Additionally, we note that
the data presented in
the chart on page 213 is not based on head-to-head clinical trials.
You may not present a
comparison of your product candidate to other products or third party
product candidates
unless you have conducted head-to-head trials. You may present
objective result of
clinical trials, but such results should not be compared to
alternative products unless head-
to-head studies were conducted. Accordingly, please remove these
comparisons from the
prospectus.
Clinical Data, page 217
28. Please revise this section to include a brief description of the
October 2021 SAE that
occurred during the US pivotal clinical study of the CE marked iCLAS
Cryoablation
Catheter, the six month voluntary pause in the study, and the
subsequent resumption of the
Adam Stone
FirstName
Aja Holdco,LastNameAdam Stone
Inc.
Comapany
March NameAja Holdco, Inc.
12, 2024
March7 12, 2024 Page 7
Page
FirstName LastName
study following the May 2022 FSCA submission.
Adagio's Management's Discussion and Analysis of Financial Condition and
Results of
Operations
Results of Operations, page 235
29. Considering the significance of the research and development expense
to your operating
results, please expand your disclosures to include the types of
expenses incurred during
each period presented for each of your product candidates. If you do
not track
your research and development costs by project, please disclose that
fact and explain why
you do not maintain and evaluate research and development expenses by
project. Also,
provide other quantitative or qualitative disclosure that provides
more transparency as to
the type of research and development expenses incurred (i.e., by
nature or type of
expense) which should reconcile to total research and development
expense. In this
regard, we note your disclosures on page 216 that your product
portfolio consists of three
product families.
Employment Arrangements with Named Executive Officers, page 247
30. We note your disclosure regarding the Dahldorf offer letter. Please
file the offer letter as
an exhibit to the registration statement or explain why you are not
required to do so.
Beneficial Ownership of Securities, page 255
31. Please disclose the natural person or persons who have voting and
dispositive control over
the shares held by Glazer Capital, LLC and Radcliffe Capital
Management, L.P.
(footnotes 9 and 10 to the beneficial ownership table).
Related Party Loans, page 259
32. Please revise the first and second paragraph of this section to
identify the related party and
"an affiliate of the Sponsor," as well as the basis on which the
person is a related
party. Refer to Item 404(a)(1) of Regulation S-K.
Index to Financial Statements, page F-1
33. Pursuant to Item 14(e) of the Form S-4, please provide financial
statements of the
registrant, Aja HoldCo, Inc. Please also include the registrant in a
separate column in the
pro forma financial information provided in accordance with Article
11-02(a)(4) of
Regulation S-X.
Adagio Medical, Inc. Financial Statements
Note 2 - Summary of Significant Accounting Policies
Inventory, page F-75
34. We note your statement that cost for inventory is determined
principally under standard
cost methods. Please revise your disclosure to state the specific
inventory costing method
Adam Stone
FirstName
Aja Holdco,LastNameAdam Stone
Inc.
Comapany
March NameAja Holdco, Inc.
12, 2024
March8 12, 2024 Page 8
Page
FirstName LastName
utilized (e.g., LIFO, FIFO, average, specific identification, et
cetera). Refer to ASC 330-
10-50-1 for guidance.
Note 5 - Property and Equipment, page F-80
35. Please either separately present the carrying value of the Consoles in
the table or disclose
the amount as a footnote to the table. Also, specifically disclose the
useful life of the
consoles.
Note 15 - Subsequent Events, page F-90
36. Please disclose the specific date through which subsequent events were
evaluated in
accordance with ASC 855-10-50-1.
Annex R -- Form of Proxy Card, page R-1
37. We note that your proxy card is seven pages long and appears to
include entire clauses of
the merger agreement. Please consider clarifying your proxy card in
plain English.
Signatures, page II-7
38. Please have the majority of your board sign the registration statement
or advise why the
filing is signed by two people only in their individual capacities. In
this regard, we note
your disclosure on page 185 where you appear to indicate that your
board consists
of six directors. Refer to Instruction 1 to the Signature section of
Form S-1.
General
39. Please disclose that ARYA has received a notice from the staff of the
Listing
Qualifications Department of the Nasdaq Stock Market regarding
non-compliance with
Nasdaq Rule IM-5101-2, as disclosed in ARYA's Form 8-K filed on
February 28, 2024.
Please revise your disclosure throughout the filing to briefly
describe the Nasdaq notice
and its potential consequences. In addition, provide an update on the
status of this notice
and the status of any hearing related to the notice. Finally, add risk
factor disclosure
related to potential delisting from the exchange.
40. We note your disclosure on page 92 that Goldman Sachs & Co. LLC waived
its deferred
underwriting commission what would otherwise be due to it upon the
closing of the
business combination. Please address the following:
Disclose how this waiver was obtained, why the waiver was agreed
to, and
clarify ARYA's current relationship with Goldman Sachs.
Please disclose the basis for your conclusion that "no inference
should be drawn that
Goldman Sachs & Co LLC agrees with the disclosure regarding its
waiver."
Describe what relationship existed between Goldman Sachs and ARYA
after the
close of the IPO, including any financial or merger-related
advisory
services conducted by Goldman Sachs. For example, clarify whether
Goldman Sachs
had any role in the identification or evaluation of business
combination targets.
Adam Stone
Aja Holdco, Inc.
March 12, 2024
Page 9
Disclose whether ARYA's or Adagio's boards of directors relied on
the work
performed by Goldman Sachs related to the merger transaction.
Tell us whether Goldman Sachs was involved in the preparation of
any disclosure
that is included in this draft registration statement, including any
analysis underlying
disclosure in the registration statement. If so, clarify their
involvement, whether they
have retracted any work product associated with the transaction, and
the risk of such
withdrawal and reliance on their expertise. Further, if true, please
clarify whether
Goldman Sachs claims no role in the SPAC s business combination
transaction and
has affirmatively disclaimed any responsibility for any of the
disclosure in this
registration statement.
41. We note your disclosure that Annexes A through I are included in the
filing, but we are
unable to locate them. Please include these annexes in your next
amendment.
42. We note your disclosure related to the "Base Warrants" and "Pre-Funded
Warrants."
Please disclose the material terms and the dates of signing the Base
Warrant Agreement
and the Pre-Funded Warrant Agreement. Disclose the exercise price or
formula for the
pre-funded warrants and the warrant holders' obligation not to redeem
their shares for a
specified period of time. Consider adding a question and answer related
to the pre-funded
warrants and appropriate risk factor disclosure.
Please contact Tracey Houser at 202-551-3736 or Li Xiao at 202-551-4391
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Conlon Danberg at 202-551-4466 or Tonya Aldave at 202-551-3601 with any other
questions.
Sincerely,
FirstName LastNameAdam Stone Division of
Corporation Finance
Office of
Industrial Applications and
Comapany NameAja Holdco, Inc.
Services
March 12, 2024 Page 9
cc: Peter Seligson, Esq.
FirstName LastName