United States securities and exchange commission logo
May 3, 2024
Adam Stone
Chief Executive Officer
Aja Holdco, Inc.
51 Astor Place, 10th Floor
New York, New York 10003
Re: Aja Holdco, Inc.
Registration
Statement on Form S-4
Filed April 19,
2024
File No. 333-278811
Dear Adam Stone:
We have reviewed your
registration statement and have the following comments.
Please respond to this letter by amending your registration
statement and providing the
requested information. 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 any amendment to your registration statement and
the information you
provide in response to this letter, we may have additional comments.
Registration Statement on Form S-4
Summary
Adagio Business Summary, page 1
1. We note your revised
disclosure in response to prior comment 6 and reissue in part. Please
briefly explain the way
or ways that your preliminary data suggests more favorable
combinations of safety,
acute and chronic effectiveness as compared to the current
standard of care.
Certain Agreements Related to the Business Combination
Subscription Agreements, page 8
2. We note your revised
disclosure in response to prior comment 14. We also note that under
the terms of the
subscription agreements, the PIPE Investors will purchase Class A
ordinary shares in the
open market and agree not to redeem such shares prior to the
closing date in
exchange for the issuance of shares of New Adagio common stock and
warrants. As such, the
subscription agreements appear to contemplate the purchase of
Adam Stone
Aja Holdco, Inc.
May 3, 2024
Page 2
Class A ordinary shares by the PIPE Investors outside the redemption
offer in exchange
for consideration paid by New Adagio. Please provide us with your
analysis as to how the
purchases under these agreements comply with Rule 14e-5. To the extent
you are relying
on Tender Offer Rules and Schedules Compliance and Disclosure
Interpretation 166.01
(March 22, 2022), please provide an analysis regarding how it applies
to your
circumstances.
Organizational Structure, page 11
3. We note your response to prior comment 11 and your revised disclosure.
Please also
identify Aja HoldCo, Inc. in the organizational structure.
Sources and Uses of Funds for the Business Combination, page 23
4. We note your tabular presentation of sources of funds. Please address
each of the
following:
Expand footnote 2 to disclose that the number of New Adagio
options to be issued to
Adagio s option holders is 1,110 and how you calculated that
the net cash proceeds
will be $24 million.
We note that you have included $45 million for PIPE Financing
and also $20 million
for the New Adagio Convertible Notes, which would result in an
additional $65
million of financing. Please reconcile this disclosure with your
disclosure throughout
the Form S-4 that the Subscription Agreements and associated PIPE
Financing is an
approximate total of $45 million.
In terms of the $20 million of New Adagio Convertible Notes,
please revise footnote
3 to clarify why it is appropriate to include the $7 million that
represents a conversion
of Adagio s $7 million 2024 Bridge Financing Note already paid
to Adagio by the
Perceptive PIPE Financing.
Please revise footnote 3 to clarify whether the condition for
the $7.5 million New
Adagio Convertible Note to the Convert Investor is met for each
scenario.
Please reconcile the significant differences between your
presentation of the
estimated remaining cash to New Adagio Balance Sheet and pro
forma cash prepared
in accordance with Article 11 of Regulation S-K and why you
believe it is
appropriate to present such an amount.
Nasdaq mayLastNameAdam
FirstName delist ARYA's Stone
Class A ordinary shares from its exchange, page 97
Comapany
5. NameAja
We note Holdco, Inc.
your response to prior comment 39 and your revised risk factor
disclosure. Please
May 3,disclose the2date of the upcoming Nasdaq hearing.
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Background of the Business Combination, page 130
6. We note your revised disclosure in response to prior comment 15 and
reissue in part. You
state on page 138 that "the prospective PIPE Investors conveyed to
Jefferies their
proposed subscription amounts, and based on PIPE Investor feedback,
ARYA and
Adagio s discussions with Jefferies and Stifel and the perspectives
and recommendations
offered by such financial advisors, ARYA and Adagio agreed to revise
the fixed pre-
transaction equity value of Adagio to $24 million." Please disclose
how the parties arrived
at the $24 million pre-transaction equity valuation, including the
methodology employed
in reaching the valuation. Additionally, please explain the factors
that resulted in this
valuation being significantly lower than the previous $75 million
valuation.
7. We note your revised disclosure in response to prior comment 16 that
"Adagio has
developed a two-year go-forward business plan, contemplating expenses
of $48 million
during such time." Please clarify if there were any other terms
included in the financial
projections in addition to the $48 million of expenses.
8. We note your disclosure on pages 141-142 that on February 13, 2024,
"ARYA s
independent directors, in a separate vote, and the entire ARYA Board
each adopted and
approved" resolutions to approve the Business Combination. Please
clarify if these
approvals were unanimous or if there were any abstentions or
dissenting votes.
Unaudited Pro Forma Condensed Combined Financial Information, page 166
Note 1. Description of the Transaction, page 182
9. We note that under the Subscription Agreements / PIPE Financing, the
Perceptive PIPE
Investor and Other PIPE Investors have committed to providing
financing of
approximately $45 million that is comprised of multiple components. To
allow an investor
to better understand the components of this financing, please provide
a table of the
components of this financing and provide a label to the disclosures
that provides
additional details for each component.
10. We note your disclosures in the first full paragraph on page 183 that
as part of the PIPE
Financing, the PIPE Investors will also subscribe for base warrants or
a combination of
base warrants and pre-funded warrants. However, we did not note any
adjustment for this
portion of the PIPE Financing to the pro forma balance sheet. Please
address this
inconsistency.
11. Please disclose the amount of available unrestricted cash on the
Closing Date required for
the closing of the $7.5 million financing by a Convert Investor,
whether the pro forma
scenarios presented fulfill this requirement, and whether both
scenarios should assume
receipt of the $7.5 million financing.
Note 2. Basis of Pro Forma Presentation, page 184
12. We note your response to comment 22. Please further address each of
the following to
Adam Stone
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May 3, 2024NameAja Holdco, Inc.
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allow us to better understand your conclusion that Adagio meets the
definition of a VIE in
ASC 810.
We note that you evaluated Adagio s facts and circumstances
as of the date at which
Adagio became involved with the Registrant per ASC
810-10-25-37. Please tell us
your consideration of the guidance in ASC 810-10-35-4. In this
regard, we note that
prior to the merger transaction, Adagio s preferred stock and
October 2022
convertible notes will convert into shares of Adagio s common
stock. Further, we
note that in connection with the merger transaction, Subscription
Agreements were
entered into for approximately $45 million and ARYA has $32.3
million in its Trust
Account that is fully available under the no further redemption
scenario.
Please provide us with a more comprehensive analysis of your
conclusion that
Adagio does not have sufficient equity to finance its operations
in accordance with
ASC 810-10-14.a. and ASC 810-10-25-45 through 25-47. As part of
your response,
ensure that you clearly disclose and quantify the equity at-risk,
including why you
have included or excluded any equity or temporary equity
instruments and how you
assessed the fair value of those instruments. Also tell us how
the equity at-risk
compares to the fair value of Adagio s total assets and your
estimate of expected
losses, including what those expected losses represent and how
you arrived at that
estimate.
We note that you have identified ListCo (i.e., Aja HoldCo,
Inc.) as the accounting
acquirer. Please tell us your consideration of the guidance in
ASC 805105515 in
arriving at this conclusion.
To the extent that you continue to conclude that Adagio is a
VIE and the accounting
acquiree in accordance with ASC 805, please also address whether
Adagio s
historical financial statements will be reflected as the
predecessor and the
implications to the pro forma financial statements including the
impact on the equity
section.
To the extent that you conclude that Adagio does not meet the
definition of a VIE,
please provide us with your analysis of the entity with financial
controlling interest in
accordance with ASC 805-10-25-5 with reference to ASC
810-10-15-8. If there is no
clear indication from this guidance, provide us with your
analysis of the factors in
ASC 805-10-55-11 through 55-15.
13. We note your statement under Scenario 2 that you are assuming that
both Adagio and
ARYA agree to waive their rights to terminate the Business Combination
agreement, as
the Aggregate Transaction Proceeds is not equal to or greater than $50
million. Please
expand your disclosures to clarify what will happen if one or both of
the parties do not
waive their right to terminate the Business Combination. Also, please
include all material
terms of the Transaction within Note 1, which is to include any
material requirements to
Adam Stone
Aja Holdco, Inc.
May 3, 2024
Page 5
be met for the Business Combination to be consummated as previously
requested in
comment 21.
14. We note your tabular presentations of the pro forma ownership of
shares of New Adagio
Common Stock on a non-dilutive basis and also dilutive basis. To allow
investors to better
understand the terms of the merger transactions and also the financing
transactions and
with reference to your disclosures in Note (S) on page 191, please
present the conversion
of Adagio s liabilities and equity outstanding prior to the Closing
as either one line item or
separately presenting the components that then sum to one amount with
the percentage
ownership. In this regard, it appears that interests held in Adagio by
the Perceptive PIPE
Investor and Other PIPE Investors are reflected in those line items
along with the interests
to be acquired through the Subscription Agreements and PIPE Financings
that are separate
from the Merger transaction. As of December 31, 2023, there are
4,939,946 shares of
Adagio s Preferred Stock outstanding. However, only 3,757,752 of
those shares are
included in the Adagio shareholders line. We also note that currently
outstanding Adagio
convertible notes payable that will convert into New Adagio Common
Stock are also not
included in the Adagio shareholders line. Finally, if the number of
shares attributable to
Adagio shareholders does not agree to the number of shares used to
estimate the purchase
price, include a comprehensive disclosure explaining the differences.
Note 4. Preliminary Allocation of Purchase Price, page 187
15. Please expand your footnote disclosure to provide the calculation of
the total
consideration transferred in accordance with the guidance in ASC
805-30-30 and ASC
805-40-30-1 through 30-2. Refer to ASC 805-30-50-1.b. for guidance
regarding
disclosures.
16. We note that you used the cost approach to estimate the fair value of
the developed
technology and IPR&D. Please provide us with a comprehensive
explanation as to how
you concluded the cost approach is the most reasonable method for
estimating fair value
and the specific references to the guidance supporting your
conclusion. In addition, tell us
why the goodwill estimated to be recognized significantly exceeds the
fair value of the
developed technology and IPR&D considering the nature of the
activities of Adagio,
which appears to be research and development focused.
17. Other than for the intangible assets, it appears that you have prepared
the allocation of the
consideration to the assets acquired and liabilities assumed based on
Adagio s historical
carrying values rather than the estimated fair values in accordance with
ASC 805-20-30.
FirstName LastNameAdam Stone
Please revise the purchase price allocation to include estimates of fair
value. Also provide
Comapany NameAjaofHoldco,
a description Inc.
the assumptions used to estimate material assets and
liabilities at fair
May 3,value. Refer5to ASC 805-20-50-1 for the required disclosures.
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Note 5. Adjustments to Unaudited Pro Forma Condensed Combined Financial
Information, page
189
18. Please revise note (G) to clearly explain each of the components of
the adjustments
included on the face of the pro forma balance sheet and to exclude
references to
transactions that are not part of the adjustments being referenced by
this note. In this
regard, we note references to the 349,654 shares represented by the
release of cash from
the Trust Fund in note (A) and the $20 million of New Adagio
Convertible Notes
represented by note (I). Please also ensure your disclosures provide
clear and sufficient
information for investors to calculate the adjustment amounts.
Specifically, please
disclose the net cash value for the sales of New Adagio Common Stock.
Finally, please
explain the difference between the sale of 6,545,953 shares of New
Adagio Common
Stock to be sold pursuant to the Subscription Agreements in connection
with the PIPE
Financing and the sale of 3,546,634 shares of New Adagio Common Stock
including the
timing of the sales of these shares. In this regard, note (S) only
includes the sale of the
3,546,634 shares of New Adagio Common Stock and not also the sale of
6,545,953 shares
of New Adagio Common Stock.
19. Please expand note (I) to disclose your accounting for the $20 million
New Adagio
Convertible Notes and 1.5 million warrants; how you estimated the
value for the notes and
the warrants.
20. Please expand notes (J), (K), (U) and (V), as appropriate, to clearly
disclose how the
acquisition of Adagio in accordance with ASC 805 has been reflected in
the pro forma
balance sheet.
21. In note (L), you state that the preliminary estimated direct and
incremental transaction
costs to be incurred by Adagio of $6 million and by ARYA of $3 million
will be
recognized as a charge to additional paid-in capital for Adagio and as
a charge to expenses
for ARYA. Please tell us the authoritative literature that supports
your intended
accounting following your conclusion of their role as accounting
acquirer or acquiree
under the merger.
22. Please expand note (P) to show your calculation of the $36.8 million
deferred tax asset
and $8.4 million deferred tax liability. Please also explain to us why
you believe the net
deferred tax asset position being appropriate under ASC 740
considering the cumulative
loss position of the company.
Business of Adagio and Certain Information About Adagio, page 221
23. We note your revised disclosure in response to prior comment 25 and
reissue in part. With
respect to the CAGRs listed on page 222, please discuss any material
assumptions
underlying these projections.
Adam Stone
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May 3, 2024NameAja Holdco, Inc.
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Clinical Data, page 237
24. We note your response to prior comment 28 and your revised disclosure.
If true, revise the
last column on page 237 to clarify that the SAE was a death that
occurred, or advise.
Index to Financial Statements, page F-1
25. As previously requested in comment 37 and pursuant to Item 14(e) of
the Form S-4,
please provide financial statements of the registrant, Aja HoldCo,
Inc., from which shares
are being issued and shareholders are voting on the issuance by Aja
HoldCo, Inc. of those
shares. 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.
Exhibit 23.2, page II-4
26. Please request WithumSmith+Brown, PC to revise its consent to (a)
ensure the audit
report date agrees to the date of the audit report included in the
Form S-4 and (b)
specifically identifies the financial statement periods covered by the
identified report.
General
27. We note your revised disclosure in response to prior comment 40 and
your statement that
"GS has not otherwise reviewed this proxy statement/prospectus."
Please clarify if ARYA
provided a copy of the revised disclosure to Goldman Sachs and if
Goldman Sachs
provided any response or feedback regarding the disclosure. In
addition, disclose 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. If Goldman did not provide
any services to
you, ARYA or Adagio after ARYA's IPO and until July 2022, please
revise your
disclosure to make that clear.
Adam Stone
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Aja Holdco,LastNameAdam Stone
Inc.
Comapany
May 3, 2024NameAja Holdco, Inc.
May 3,
Page 8 2024 Page 8
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We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
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,
Division of
Corporation Finance
Office of Industrial
Applications and
Services
cc: Peter Seligson, Esq.