ADGM

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2024, for Adagio Medical Holdings, Inc. (formerly known as Aja Holdco, Inc. or "ListCo"). The filing represents a shell company formed on December 19, 2023, with no prior operating activities. The primary purpose of the entity was to facilitate a business combination with Adagio Medical, Inc.

Subsequent Event: On July 31, 2024, subsequent to the reporting period, the business combination with Adagio Medical was consummated. The combined entity is now named Adagio Medical Holdings, Inc. and trades on the Nasdaq under the symbol ADGM. The financial statements in this report reflect the pre-combination shell company status.

Key Financial Metrics

As a pre-combination shell company, the entity had no revenue, assets, or cash flow from operations during the period.

Note: The net loss is entirely attributable to "Subscription Agreement expense" related to the accounting treatment of PIPE financing commitments, which is a non-cash charge offset by an increase in additional paid-in capital.

Material Changes and Unusual Items

• Subscription Agreement Expense: The company recorded a non-cash expense of $2,134,199 for the six months ended June 30, 2024. This relates to the fair value measurement of equity instruments (shares and warrants) to be issued to PIPE investors upon the closing of the business combination.
• Going Concern: Prior to the July 31, 2024 closing, there was substantial doubt about the company's ability to continue as a going concern. This doubt was alleviated upon the consummation of the business combination.
• Capital Structure: As of June 30, 2024, only one share of common stock was issued and outstanding. Post-closing, the capital structure expanded significantly to include shares issued to Adagio Medical shareholders and PIPE investors.

Guidance, Outlook, and Risks

Outlook and Financing: The combined company raised approximately $84.2 million in connection with the business combination. This included funds from the trust account, a concurrent equity and warrant private placement (PIPE) of approximately $62.8 million, and a convertible security financing of $20.0 million.

Management Commentary: Management expects to generate operating revenues only after the completion of the business combination. The combined entity will operate as a medical device company focused on commercializing its product portfolio.

Risk Factors:

• Adagio Medical has incurred net losses in every period to date and expects to continue to incur significant losses.
• Success depends on the ability to accelerate commercialization, establish manufacturing capacity, and navigate a highly competitive life sciences market.
• Risks related to the integration of the business combination and the ability to retain key employees.
• Regulatory risks and the potential for delays in product commercialization.

Investor Verification Checklist

• Post-Closing Financials: Verify the pro forma financial statements and the actual cash position of the combined entity in the subsequent Form 8-K or 10-K, as this 10-Q reflects only the shell company.
• Debt Obligations: Review the terms of the $20 million 13% senior secured convertible notes issued to Convert Investors, including maturity dates and conversion triggers.
• Share Count: Confirm the fully diluted share count post-combination, noting the issuance of ~7.95 million shares and various warrants to PIPE investors.
• Going Concern Status: Confirm that the post-combination entity has sufficient liquidity to fund operations, given the historical losses of Adagio Medical.
• Accounting Treatment: Understand that the $2.1 million loss reported here is a non-cash accounting entry and does not reflect operational cash burn.