"We are pleased with the preliminary FULCRUM-VT acute data, which highlight the potential of Adagio's proprietary ULTC technology to transform treatment for patients with ventricular tachycardia,†said Todd Usen, Chief Executive Officer of Adagio Medical. "On behalf of the entire Adagio Medical team, I want to thank all of the investigators, research coordinators and patients who have supported this study and whose commitment to serving this underserved population of patients will bring us one step closer to ...

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) This section provides administrative details of the Form 10-Q filing, including company classification and reporting period [Filing Details](index=1&type=section&id=Filing%20Details) This document is a Quarterly Report on Form 10-Q for Adagio Medical Holdings, Inc., filed for the quarterly period ended June 30, 2025, classifying the company as a non-accelerated filer, a smaller reporting company, and an emerging growth company - The report is a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2](index=2&type=chunk) - Adagio Medical Holdings, Inc. is registered in Delaware with Commission file number **001-42199**[2](index=2&type=chunk) Registrant Classification | Classification | Status | | :------------- | :----- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☒ | [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section cautions readers that the report contains forward-looking statements subject to risks and uncertainties, which may differ from actual results [Nature of Forward-Looking Statements](index=3&type=section&id=Nature%20of%20Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements about the company and its industry, which involve substantial risks and uncertainties, are not predictions of future events, and actual results may differ materially due to various factors - The report contains forward-looking statements that involve substantial risks and uncertainties, and should not be relied upon as predictions of future events[8](index=8&type=chunk)[9](index=9&type=chunk) - The company operates in a competitive and rapidly changing environment, with new risks and uncertainties emerging over time[9](index=9&type=chunk) - The company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the report date, except as required by law[10](index=10&type=chunk) [Key Areas of Forward-Looking Statements](index=3&type=section&id=Key%20Areas%20of%20Forward-Looking%20Statements) Forward-looking statements cover a broad range of business aspects, including product development, regulatory approvals, clinical trials, market expansion, reimbursement, personnel, manufacturing, market opportunity, intellectual property, supply chains, corporate initiatives, capital access, and the company's ability to continue as a going concern - Ability to develop innovative, proprietary products that address significant clinical needs safely and effectively - Ability to obtain and maintain regulatory clearances or approvals - Ability to demonstrate safety and effectiveness in sponsored and third-party clinical trials - Ability to expand sales force across key markets to increase physician awareness - Ability to obtain and maintain coverage and adequate reimbursement for procedures using products - Ability to attract and retain skilled research, development, sales, and clinical personnel - Ability to cost-effectively manufacture, market, and sell products - Estimates of market opportunity and scope of intellectual property protection - Timing and results from clinical trials and other studies, and regulatory filings and feedback - Competition in served markets and expectations of product reliability and performance - Impact of proposed tariffs on business, including gross margins and demand - Factors impacting supply chains, including tariffs, raw material availability, and skilled labor costs - Reliance on a limited number of suppliers, including sole source suppliers - Ability to sustain or increase demand for products - Estimates regarding costs and risks associated with international operations and expansion - Effects of corporate prioritization initiative and ability to retain/recruit key personnel - Ability to access capital markets and fund working capital requirements - Compliance with, and cost of, federal, state, and foreign regulatory requirements - Factors impacting financial results and anticipated trends/challenges in business and markets - Ability to continue as a going concern [PART I: FINANCIAL INFORMATION](index=6&type=section&id=PART%20I:%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Adagio Medical Holdings, Inc., including the Balance Sheets, Statements of Operations and Comprehensive Loss, Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit), and Statements of Cash Flows, along with detailed notes explaining the company's accounting policies, business combination, fair value measurements, and other financial details [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides the company's unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | Assets (in thousands) | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :-------------------- | :------------------------ | :-------------------------- | | Cash and cash equivalents | $8,200 | $20,586 | | Total current assets | $12,227 | $25,349 | | Total assets | $35,876 | $48,448 | | Total current liabilities | $4,884 | $7,763 | | Convertible notes payable, net | $16,945 | $16,076 | | Total liabilities | $27,210 | $28,536 | | Total stockholders' equity | $8,666 | $19,912 | | Total liabilities and stockholders' equity | $35,876 | $48,448 | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section presents the unaudited condensed consolidated statements of operations and comprehensive loss for the reported periods Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | (in thousands) | Three Months Ended June 30, 2025 (Successor) | Three Months Ended June 30, 2024 (Predecessor) | Six Months Ended June 30, 2025 (Successor) | Six Months Ended June 30, 2024 (Predecessor) | | :--------------- | :------------------------------------------- | :------------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Revenue | $— | $254 | $— | $280 | | Cost of revenue | $342 | $682 | $595 | $1,224 | | Research and development | $1,971 | $2,865 | $5,630 | $6,334 | | Selling, general, and administrative | $2,404 | $3,366 | $5,976 | $8,196 | | Loss from operations | $(4,717) | $(6,659) | $(12,201) | $(15,474) | | Net loss | $(3,947) | $(5,734) | $(11,660) | $(13,043) | | Basic net loss per share | $(0.26) | $(7.35) | $(0.76) | $(16.72) | | Diluted net loss per share | $(0.35) | $(7.35) | $(0.86) | $(16.72) | [Unaudited Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)) This section details changes in the company's convertible preferred stock and stockholders' equity (deficit) for the specified periods Stockholders' Equity (Deficit) (in thousands) | (in thousands) | Balance as of March 31, 2025 (Successor) | Balance as of June 30, 2025 (Successor) | | :--------------- | :--------------------------------------- | :-------------------------------------- | | Common Stock Amount | $2 | $2 | | Additional Paid-in Capital | $90,713 | $90,947 | | Accumulated Deficit | $(78,256) | $(82,184) | | Total Stockholders' Equity | $12,399 | $8,666 | Stockholders' Equity (Deficit) (in thousands) | (in thousands) | Balance as of December 31, 2024 (Successor) | Balance as of June 30, 2025 (Successor) | | :--------------- | :---------------------------------------- | :-------------------------------------- | | Common Stock Amount | $2 | $2 | | Additional Paid-in Capital | $90,495 | $90,947 | | Accumulated Deficit | $(70,586) | $(82,184) | | Total Stockholders' Equity | $19,912 | $8,666 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | (in thousands) | Six Months Ended June 30, 2025 (Successor) | Six Months Ended June 30, 2024 (Predecessor) | | :--------------- | :----------------------------------------- | :----------------------------------------- | | Net cash used in operating activities | $(11,867) | $(13,684) | | Net cash used in investing activities | $(345) | $(337) | | Net cash provided by financing activities | $— | $14,643 | | Net change in cash and cash equivalents | $(12,386) | $662 | | Cash and cash equivalents, at end of period | $8,200 | $2,045 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed notes explaining the company's accounting policies, business combination, fair value measurements, and other financial details [Note 1 - Description of Organization and Business Operations](index=11&type=section&id=Note%201%20-%20Description%20of%20Organization%20and%20Business%20Operations) Adagio Medical Holdings, Inc. is a medical technology company focused on developing and commercializing ablation technologies for cardiac arrhythmias, particularly ventricular tachycardia (VT) with its vCLAS™ Cryoablation System, which received FDA Breakthrough Device designation in April 2025, but faces substantial doubt about its ability to continue as a going concern beyond Q4 2025 due to limited revenue, recurring operating losses, and negative cash flows - Adagio Medical Holdings, Inc. is a medical technology company developing and commercializing ablation technologies for cardiac arrhythmias, with an initial focus on ventricular tachycardia (VT)[27](index=27&type=chunk) - The vCLAS™ Cryoablation System received FDA Breakthrough Device designation in April 2025 for drug-refractory, recurrent, sustained monomorphic VT in patients with structural heart disease[27](index=27&type=chunk) - The company completed a business combination on July 31, 2024, and its common stock began trading on Nasdaq under **'ADGM'** on August 1, 2024[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - The company has limited revenue, recurring operating losses, and negative cash flows, leading to substantial doubt about its ability to continue as a going concern beyond the **fourth quarter of 2025**[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - Management plans to mitigate going concern risks through cash equity/debt financing, pursuing U.S. market regulatory approvals, and executing cost-cutting measures[34](index=34&type=chunk) [Note 2 - Summary of Significant Accounting Policies](index=13&type=section&id=Note%202%20-%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the significant accounting policies, including the basis of presentation under U.S. GAAP, the treatment of the Business Combination as an acquisition where ListCo is the accounting acquirer and Legacy Adagio is the predecessor, and the company's status as an emerging growth company, detailing policies for revenue recognition, inventory, property and equipment, intangible assets, goodwill, fair value measurements, warrants, debt, stock-based compensation, and income taxes - The financial statements are prepared in accordance with U.S. GAAP, with ListCo treated as the accounting acquirer and Legacy Adagio as the predecessor following the Business Combination on July 31, 2024[38](index=38&type=chunk)[40](index=40&type=chunk) - The company is an **'emerging growth company'** and has elected to use the extended transition period for complying with new or revised financial accounting standards[44](index=44&type=chunk)[45](index=45&type=chunk) - Revenue is primarily generated from the sale of cryoablation catheters (Consumables) and, to a lesser extent, lease revenue from loaned consoles, recognized when control of goods is transferred to the customer[52](index=52&type=chunk)[55](index=55&type=chunk) - No revenue was recognized for the three and six months ended June 30, 2025 (Successor), while revenue for the same periods in 2024 (Predecessor) was solely from European markets[60](index=60&type=chunk) - The company operates as one reportable segment, with the CEO acting as the Chief Operating Decision Maker (CODM) reviewing consolidated financial information[48](index=48&type=chunk) [Note 3 – Forward Merger](index=25&type=section&id=Note%203%20%E2%80%93%20Forward%20Merger) This note details the Business Combination completed on July 31, 2024, where ARYA Sciences Acquisition Corp IV merged with Legacy Adagio, with ListCo (now Adagio Medical Holdings, Inc.) as the parent, involving redemptions of ARYA shares, conversion of various Legacy Adagio securities into Company common stock and warrants, and a **$64.5 million** PIPE Financing, with ListCo identified as the accounting acquirer and the **$53.5 million** purchase price allocated to acquired assets and assumed liabilities, resulting in **$44.3 million** in goodwill and **$26.2 million** in intangible assets - The Business Combination was consummated on July 31, 2024, involving ARYA Sciences Acquisition Corp IV, ListCo (now Adagio Medical Holdings, Inc.), and Legacy Adagio[28](index=28&type=chunk)[29](index=29&type=chunk)[104](index=104&type=chunk) - Holders of **2,707,555 ARYA Class A ordinary shares** redeemed their shares for approximately **$31.3 million**[105](index=105&type=chunk) - The PIPE Financing committed **$64.5 million**, including cash investments and conversion of Bridge Financing Notes into Company common stock and Base Warrants[108](index=108&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) - ListCo was treated as the accounting acquirer, and the acquisition method of accounting was applied[115](index=115&type=chunk) Business Combination Purchase Price Allocation (in thousands) | Item | Amount (in thousands) | | :---------------------------------------- | :-------------------- | | Total purchase price | $53,546 | | Total assets acquired | $77,252 | | Total liabilities assumed | $23,706 | | Net total | $53,546 | | Intangible assets, net (acquired) | $26,200 | | Goodwill (acquired) | $44,291 | [Note 4 – Fair Value Measurements](index=31&type=section&id=Note%204%20%E2%80%93%20Fair%20Value%20Measurements) This note details the fair value measurements of the company's financial instruments, including cash equivalents, convertible notes payable, and warrant liabilities, categorized into a three-tier hierarchy, with Convertible Securities Notes and Convert Warrants classified as Level 3 liabilities due to significant unobservable inputs, and changes in their fair value recognized in the statements of operations - The company's financial instruments, including convertible notes and warrant liabilities, are measured at fair value and categorized into a three-tier hierarchy (Level 1, 2, 3)[124](index=124&type=chunk)[125](index=125&type=chunk)[87](index=87&type=chunk) - Convertible Securities Notes and Convert Warrants are classified as **Level 3** measurements due to significant unobservable inputs[138](index=138&type=chunk)[147](index=147&type=chunk) Convertible Securities Notes Fair Value (in thousands) | (in thousands) | June 30, 2025 (Successor) | | :--------------- | :------------------------ | | Balance (beginning of period)* | $17,180 | | Accrued interest | $1,382 | | Fair value measurement adjustments | $(1,617) | | Balance (end of period) | $16,945 | Convert Warrants Fair Value (in thousands) | (in thousands) | Six Months Ended June 30, 2025 (Successor) | | :--------------- | :--------------------------------------- | | Balance (beginning of period) | $152 | | Additions | $— | | Fair value measurement adjustments | $103 | | Balance (end of period) | $255 | [Note 5 - Inventory, net](index=38&type=section&id=Note%205%20-%20Inventory,%20net) Inventory, valued at the lower of cost or net realizable value using the first-in first-out method, decreased from **$2.6 million** at December 31, 2024, to **$1.8 million** at June 30, 2025, primarily in work-in-process and finished goods, with all inventory related to VT products and Consoles Inventory, net (in thousands) | (in thousands) | June 30, 2025 (Successor) | December 31, 2024 (Successor) | | :--------------- | :------------------------ | :-------------------------- | | Raw materials | $1,564 | $1,683 | | Work-in-Process | $92 | $388 | | Finished goods | $185 | $495 | | Total inventory | $1,841 | $2,566 | - Inventory is valued at the lower of cost or net realizable value using the first-in first-out method[63](index=63&type=chunk) - All inventory as of June 30, 2025, is related to VT products and Consoles[151](index=151&type=chunk) [Note 6 - Property and Equipment](index=38&type=section&id=Note%206%20-%20Property%20and%20Equipment) Net property and equipment decreased slightly from **$1.96 million** at December 31, 2024, to **$1.88 million** at June 30, 2025, following a change in the estimated useful life of Consoles from five years to three years effective January 1, 2024 Property and Equipment, net (in thousands) | (in thousands) | June 30, 2025 (Successor) | December 31, 2024 (Successor) | | :--------------- | :------------------------ | :-------------------------- | | Consoles | $3,336 | $3,060 | | Total property and equipment | $5,259 | $4,691 | | Less: accumulated depreciation | $(3,377) | $(2,730) | | Property and equipment, net | $1,882 | $1,961 | - Depreciation expense was **$0.5 million** for the six months ended June 30, 2025 (Successor), compared to **$0.6 million** for the same period in 2024 (Predecessor)[152](index=152&type=chunk) - Effective January 1, 2024, the useful life of Consoles was changed from five years to three years to better reflect their estimated service periods[64](index=64&type=chunk) [Note 7 – Goodwill and Intangible Assets](index=39&type=section&id=Note%207%20%E2%80%93%20Goodwill%20and%20Intangible%20Assets) The company's intangible assets, primarily In-Process Research and Development (IPR&D), remained at **$6.97 million** as of June 30, 2025, with no amortization, and goodwill also remained at **$13.97 million**, with no further impairment recorded in the current period after significant impairment charges in Q4 2024 Intangible Assets, net (in thousands) | (in thousands) | June 30, 2025 (Successor) | | :--------------- | :------------------------ | | IPR&D | $6,969 | | Total | $6,969 | Goodwill (in thousands) | (in thousands) | June 30, 2025 (Successor) | | :--------------- | :------------------------ | | Goodwill | $13,967 | - During Q4 2024, the company recorded an **$18.9 million** impairment charge on intangible assets and a **$30.3 million** goodwill impairment charge, driven by a sustained decline in share price and market capitalization[155](index=155&type=chunk)[158](index=158&type=chunk) - No intangible asset or goodwill impairment charges were recorded for the three and six months ended June 30, 2025 (Successor)[156](index=156&type=chunk)[159](index=159&type=chunk) [Note 8 - Accrued Liabilities](index=40&type=section&id=Note%208%20-%20Accrued%20Liabilities) Total accrued liabilities decreased from **$3.68 million** at December 31, 2024, to **$3.36 million** at June 30, 2025, primarily due to a reduction in compensation and related expenses, partially offset by an increase in research and development expenses Accrued Liabilities (in thousands) | (in thousands) | June 30, 2025 (Successor) | December 31, 2024 (Successor) | | :--------------- | :------------------------ | :-------------------------- | | Compensation and related expenses | $1,690 | $2,622 | | Research and development expenses | $1,343 | $775 | | Other | $331 | $279 | | Total accrued liabilities | $3,364 | $3,676 | [Note 9 - Debt](index=40&type=section&id=Note%209%20-%20Debt) The company's outstanding debt primarily consists of **$16.9 million** in Convertible Securities Notes as of June 30, 2025, issued on July 31, 2024, with a **13%** interest rate and a maturity of three years and nine months, convertible into common stock at **$10.00 per share** Outstanding Debt (in thousands) | (in thousands) | June 30, 2025 (Successor) | December 31, 2024 (Successor) | | :--------------- | :------------------------ | :-------------------------- | | Convertible Securities Notes (including accrued interest) | $16,945 | $17,180 | | Total outstanding debt | $16,945 | $17,180 | - The **$20.0 million** Convertible Securities Notes were issued on July 31, 2024, with a **13%** interest rate, a maturity of three years and nine months, and are convertible into common stock at **$10.00 per share**[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) - Legacy Adagio's **$29.5 million** Bridge Financing Notes and accrued interest were converted into **4,372,607 shares** of Company common stock and **3,540,000 Base Warrants** as part of the PIPE Financing[188](index=188&type=chunk) - The **$7.0 million** February 2024 Convertible Notes were converted into **$7.0 million** Convertible Securities Notes and **525,000 Convert Warrants** upon the Business Combination[179](index=179&type=chunk)[365](index=365&type=chunk) [Note 10 - Warrants](index=46&type=section&id=Note%2010%20-%20Warrants) The company has various warrants, including **1.5 million** Convert Warrants (exercisable at **$24.00/share**, classified as derivative liabilities) and **7.5 million** PIPE Base Warrants (exercisable at **$10.00/share**, classified as equity), while **670,000** PIPE Pre-funded Warrants were exercised in December 2024 and Legacy Adagio's SVB Warrants and Series E Pre-funded Warrants were terminated or converted during the Business Combination - **1,500,000 Convert Warrants** were issued with the Convertible Securities Notes, exercisable at **$24.00 per share**, and are classified as derivative liabilities due to potential cash settlement outside the company's control[201](index=201&type=chunk)[146](index=146&type=chunk) - **7,528,727 PIPE Base Warrants** were issued in the PIPE Financing, exercisable at **$10.00 per share**, and are classified as equity because they meet ASC 815-40 indexation guidance[206](index=206&type=chunk)[207](index=207&type=chunk)[209](index=209&type=chunk) - **670,000 PIPE Pre-funded Warrants** were issued and subsequently exercised on a cashless basis for **663,096 shares** of common stock on December 26, 2024, with none outstanding as of June 30, 2025[202](index=202&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) - Legacy Adagio's SVB Warrants were terminated, and Series E Pre-funded Warrants were converted into Company common stock prior to or upon the Business Combination[198](index=198&type=chunk)[200](index=200&type=chunk) [Note 11 - Operating Leases](index=49&type=section&id=Note%2011%20-%20Operating%20Leases) The company leases facilities under operating leases expiring between March 2026 and January 2030, with a weighted-average remaining lease term of **4.2 years** and an **8.0%** discount rate as of June 30, 2025, and operating lease costs for the six months ended June 30, 2025, were **$107 thousand**, a decrease from **$181 thousand** in the prior year period - The company leases facilities under operating leases with expirations ranging from March 2026 to January 2030[211](index=211&type=chunk) - As of June 30, 2025, the weighted average remaining lease term was **4.2 years**, and the weighted average discount rate was **8.0%**[212](index=212&type=chunk) Operating Lease Costs (in thousands) | Period | Operating Lease Cost (Successor) | | :----- | :------------------------------- | | Three months ended June 30, 2025 | $107 | | Six months ended June 30, 2025 | $181 | [Note 12 - Commitments and Contingencies](index=49&type=section&id=Note%2012%20-%20Commitments%20and%20Contingencies) The company is not currently involved in any material legal proceedings that would significantly impact its business, financial condition, or results of operations, and litigation costs are expensed as incurred - The company is not currently party to any material legal proceedings[214](index=214&type=chunk) - Costs related to legal proceedings are expensed as incurred[214](index=214&type=chunk) [Note 13 - Mezzanine Equity and Stockholders' Equity (Deficit)](index=50&type=section&id=Note%2013%20-%20Mezzanine%20Equity%20and%20Stockholders'%20Equity%20(Deficit)) Prior to the Business Combination, Legacy Adagio's convertible preferred stock was classified as temporary equity, but upon the Business Combination, all Legacy Adagio preferred and common stock converted into Company common stock, with the Company now authorized to issue **210 million** common shares, of which **15.4 million** are issued and outstanding (including **1.1 million** Sponsor Earnout shares), and **22.3 million** common shares are reserved for future issuance - Legacy Adagio's convertible preferred stock was classified as temporary equity due to redemption features outside its control[216](index=216&type=chunk) - Upon the Business Combination, Legacy Adagio's **4,732,044** convertible preferred stocks were converted into **789,337 shares** of the Company's common stock[218](index=218&type=chunk) - As of June 30, 2025, the Company is authorized to issue up to **210,000,000 shares** of common stock and **20,000,000 shares** of preferred stock[233](index=233&type=chunk) - **15,381,565 shares** of common stock were issued and outstanding as of June 30, 2025, including **1,147,500 Sponsor Earnout shares** subject to vesting conditions[233](index=233&type=chunk)[234](index=234&type=chunk) Common Stock Reserved for Future Issuance (Successor, June 30, 2025) | Item | Number of Shares | | :-------------------------------------------------------------------------------- | :--------------- | | Base Warrants | 7,528,727 | | Convertible Securities Notes | 3,231,327 | | Convert Warrants | 1,500,000 | | Company's common stock issuable upon the exercise of outstanding options | 7,587 | | Common stock reserved for future issuance under the 2024 Equity Incentive Plan | 6,197,737 | | Common stock reserved for future issuance under the 2024 Key Employee Equity Incentive Plan | 3,354,444 | | Common stock reserved for future issuance under the 2024 Employee Stock Purchase Plan | 441,293 | | Total common stock reserved for future issuance | 22,261,115 | [Note 14 - Stock-Based Compensation](index=54&type=section&id=Note%2014%20-%20Stock-Based%20Compensation) Stock-based compensation expense for the six months ended June 30, 2025 (Successor), was **$452 thousand**, an increase from **$221 thousand** in the prior year period (Predecessor), following the adoption of the 2024 Equity Incentive Plan and the termination of Legacy Adagio's prior plans upon the Business Combination Total Stock-Based Compensation Expense (in thousands) | (in thousands) | Three Months Ended June 30, 2025 (Successor) | Three Months Ended June 30, 2024 (Predecessor) | Six Months Ended June 30, 2025 (Successor) | Six Months Ended June 30, 2024 (Predecessor) | | :--------------- | :------------------------------------------- | :------------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Research and development | $79 | $15 | $88 | $29 | | Selling, general, and administration | $155 | $96 | $364 | $192 | | Total stock-based compensation expense | $234 | $111 | $452 | $221 | - The 2024 Equity Incentive Plan was adopted on July 26, 2024, authorizing up to **4,472,593 shares** plus annual increases, and **5,687,965 awards** were granted under this plan during the six months ended June 30, 2025[248](index=248&type=chunk)[249](index=249&type=chunk) - Legacy Adagio's 2012 and 2022 Stock Incentive Plans were terminated upon the Business Combination, with **45,544 in-the-money options** exchanged for **7,587 options** to purchase Company common stock[245](index=245&type=chunk) [Note 15 – Loss Per Share ("LPS")](index=58&type=section&id=Note%2015%20%E2%80%93%20Loss%20Per%20Share%20(%22LPS%22)) For the six months ended June 30, 2025 (Successor), basic net loss per share was **$(0.76)** and diluted net loss per share was **$(0.86)**, compared to **$(16.72)** for the same period in 2024 (Predecessor), with potentially dilutive securities excluded from diluted LPS calculations for the Successor period as their inclusion would be anti-dilutive Basic Net Loss Per Share (Successor) | (in thousands, except share and per share data) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--------------------------------------------- | :------------------------------- | :----------------------------- | | Net loss | $(3,947) | $(11,660) | | Weighted-average shares outstanding | 15,381,565 | 15,378,543 | | Net loss per share attributable to each class of participating securities – Basic | $(0.26) | $(0.76) | Diluted Net Loss Per Share (Successor) | (in thousands, except share and per share data) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--------------------------------------------- | :------------------------------- | :----------------------------- | | Net loss attributable to common stockholders – Diluted | $(5,374) | $(13,277) | | Weighted-average shares outstanding – Diluted | 15,381,565 | 15,378,543 | | Net loss per share attributable to common shares – Diluted (if-converted method) | $(0.35) | $(0.86) | - Potentially dilutive securities, including Base Warrants (**7.5M**), Convert Warrants (**1.5M**), and Earn-out Shares (**1.1M**), were excluded from diluted LPS calculations for the Successor period as their impact would be anti-dilutive[262](index=262&type=chunk) [Note 16 - Income Taxes](index=61&type=section&id=Note%2016%20-%20Income%20Taxes) The company maintains a full valuation allowance against its deferred tax assets, resulting in a **0.0%** effective tax rate for the three and six months ended June 30, 2025 (Successor) and 2024 (Predecessor), and is currently assessing the impact of the recently enacted One Big Beautiful Bill Act (OBBBA) - The company has a full valuation allowance against its deferred tax assets, indicating uncertainty about their future realization[264](index=264&type=chunk) - The effective tax rate was **0.0%** for the three and six months ended June 30, 2025 (Successor) and 2024 (Predecessor), primarily due to the valuation allowance[265](index=265&type=chunk) - The company is currently assessing the impact of the recently enacted One Big Beautiful Bill Act (OBBBA) on its consolidated financial statements[267](index=267&type=chunk) [Note 17 - Related Party Transactions](index=61&type=section&id=Note%2017%20-%20Related%20Party%20Transactions) The company incurred **$0.4 million** in shared services expenses with Fjord Ventures for the six months ended June 30, 2025, a decrease from **$0.8 million** in the prior year period, and also engaged in related party transactions involving the issuance of Convertible Securities Notes and shares/warrants in the PIPE Financing to Perceptive PIPE Investor Shared Services Agreement Expenses (in thousands) | Period | Shared Services Expense (Successor) | Shared Services Expense (Predecessor) | | :----- | :---------------------------------- | :------------------------------------ | | Three months ended June 30, 2025 | $200 | $400 | | Six months ended June 30, 2025 | $400 | $800 | - The company issued a **$7.0 million** Convertible Securities Note to Perceptive PIPE Investor (controlling party) in exchange for their investment in Legacy Adagio's February 2024 Convertible Notes[272](index=272&type=chunk) - Perceptive PIPE Investor also received **4,372,607 shares** of common stock and **3,540,000 Base Warrants** for Bridge Financing Notes, and an additional **2,250,352 shares** and **1,905,069 Base Warrants** for a **$15.9 million** cash investment[273](index=273&type=chunk)[274](index=274&type=chunk) [Note 18 – Segment Reporting](index=63&type=section&id=Note%2018%20%E2%80%93%20Segment%20Reporting) The company operates as a single reportable segment, focusing on the design, development, and commercialization of ablation technologies for cardiac arrhythmias, with the Chief Executive Officer reviewing financial information on a consolidated basis for operating decisions and performance assessment - The company operates as one reportable segment, managed on a consolidated basis by the Chief Executive Officer (CODM)[275](index=275&type=chunk) - The segment focuses on the design, development, and commercialization of ablation technologies for cardiac arrhythmias[275](index=275&type=chunk) Summary of Segment Net Loss (in thousands) | (in thousands) | Three Months Ended June 30, 2025 (Successor) | Three Months Ended June 30, 2024 (Predecessor) | Six Months Ended June 30, 2025 (Successor) | Six Months Ended June 30, 2024 (Predecessor) | | :--------------- | :------------------------------------------- | :------------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Revenue | $— | $254 | $— | $280 | | Net loss | $(3,947) | $(5,734) | $(11,660) | $(13,043) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=64&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting the impact of the July 2024 Business Combination, its focus on ULTC technology for cardiac arrhythmias, and key factors affecting performance such as innovation, regulatory approvals, competition, and reimbursement, while also covering revenue, operating expenses, fair value adjustments, interest, and liquidity, emphasizing ongoing net losses and the 'going concern' uncertainty [Overview](index=64&type=section&id=Overview) This section provides an overview of Adagio Medical Holdings, Inc.'s business, its focus on ULTC technology for cardiac arrhythmias, and its financial status, including recurring net losses and going concern uncertainty - Adagio Medical Holdings, Inc. is a medical device company focused on developing and commercializing products for cardiac arrhythmias using its proprietary Ultra-Low Temperature Cryoablation (ULTC) technology, initially targeting ventricular tachycardia (VT)[281](index=281&type=chunk) - The vCLAS™ Cryoablation System received FDA Breakthrough Device designation in April 2025 for drug-refractory, recurrent, sustained monomorphic VT[282](index=282&type=chunk) - The company's FULCRUM-VT IDE pivotal clinical trial is currently enrolling **206 patients** across **20 centers** in the U.S. and Canada, with results expected in **H2 2025** to support FDA approval[284](index=284&type=chunk) - The company has incurred net losses since inception, with an accumulated deficit of **$82.2 million** as of June 30, 2025, and cash of **$8.2 million**, raising substantial doubt about its ability to continue as a going concern[286](index=286&type=chunk)[287](index=287&type=chunk)[32](index=32&type=chunk) [Description of the Merger](index=68&type=section&id=Description%20of%20the%20Merger) This section details the Business Combination completed on July 31, 2024, involving ARYA Sciences Acquisition Corp IV, ListCo (now Adagio Medical Holdings, Inc.), and Legacy Adagio, which resulted in the conversion of various shares and notes into Company common stock and a **$64.5 million** PIPE Financing - The Business Combination was consummated on July 31, 2024, involving ARYA Sciences Acquisition Corp IV, ListCo (now Adagio Medical Holdings, Inc.), and Legacy Adagio[290](index=290&type=chunk)[291](index=291&type=chunk) - The merger resulted in the conversion of ARYA Class A and B ordinary shares, Legacy Adagio convertible notes, preferred stock, and common stock into shares of the Company's common stock[293](index=293&type=chunk)[298](index=298&type=chunk) - The PIPE Financing committed **$64.5 million**, including cash investments and conversion of Bridge Financing Notes into Company common stock and Base Warrants[295](index=295&type=chunk)[296](index=296&type=chunk)[299](index=299&type=chunk) [Key Factors Affecting Our Performance](index=72&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) This section outlines key factors influencing the company's performance, including innovation, regulatory approvals, growth investments, competition, and reimbursement - Innovation: Developing new products and differentiating from competitors, with increasing R&D expenditures - Regulatory: Obtaining and maintaining regulatory clearances/approvals (e.g., FDA) and complying with requirements - Investments in Growth: Expanding sales and marketing infrastructure, recruiting and training personnel, and increasing marketing efforts - Competition: Operating in an intensely competitive industry with large, well-capitalized competitors - Reimbursement and Insurance Coverage: Securing adequate financial coverage and reimbursement from third-party payors in both U.S. and international markets [Key Components of Results of Operations](index=74&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section describes the main components of the company's results of operations, including revenue from cryoablation catheters and loaned consoles, cost of revenue, research and development expenses, selling, general, and administrative expenses, and other income/expense items such as fair value adjustments, interest, and foreign currency gains/losses - Revenue is primarily from sales of cryoablation catheters and, to a lesser extent, lease revenue from loaned consoles, recognized when control is transferred[310](index=310&type=chunk) - Cost of revenue includes raw materials, direct labor, manufacturing overhead, shipping, and depreciation of loaned consoles[311](index=311&type=chunk) - Research and development expenses, expensed as incurred, are expected to increase due to ongoing ULTC product development and clinical trials[312](index=312&type=chunk)[313](index=313&type=chunk) - Selling, general and administrative expenses are expected to decrease slightly in **FY2025** due to lower payroll from a corporate prioritization initiative and absence of Business Combination transaction costs[315](index=315&type=chunk) - Other income/expense items include fair value adjustments for convertible notes and warrant liabilities, interest expense from debt obligations, interest income from cash balances, and foreign currency gains/losses[316](index=316&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk)[320](index=320&type=chunk) [Results of Operations Comparison](index=76&type=section&id=Results%20of%20Operations%20Comparison) This section compares the company's financial results for the three and six months ended June 30, 2025, and 2024, across key revenue and expense categories, highlighting significant decreases in revenue, cost of revenue, R&D, and SG&A expenses, alongside fair value adjustments and increased interest income Summary of Results of Operations (in thousands) | (in thousands) | Three Months Ended June 30, 2025 (Successor) | Three Months Ended June 30, 2024 (Predecessor) | Six Months Ended June 30, 2025 (Successor) | Six Months Ended June 30, 2024 (Predecessor) | | :--------------- | :------------------------------------------- | :------------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Revenue | $— | $254 | $— | $280 | | Cost of revenue | $342 | $682 | $595 | $1,224 | | Research and development | $1,971 | $2,865 | $5,630 | $6,334 | | Selling, general, and administrative | $2,404 | $3,366 | $5,976 | $8,196 | | Loss from operations | $(4,717) | $(6,659) | $(12,201) | $(15,474) | | Net loss | $(3,947) | $(5,734) | $(11,660) | $(13,043) | - Revenue: Decreased by **$0.3 million (100%)** for both three and six months ended June 30, 2025, due to inventory repurchase and pause in European commercial activity[323](index=323&type=chunk)[324](index=324&type=chunk) - Cost of Revenue: Decreased by **$0.3 million (50%)** for three months and **$0.6 million (51%)** for six months, primarily due to reduced commercial activity in Europe[325](index=325&type=chunk)[326](index=326&type=chunk) - Research and Development Expenses: Decreased by **$0.9 million (31%)** for three months and **$0.7 million (11%)** for six months, driven by reductions in quality assurance, operations, product development, and payroll costs[330](index=330&type=chunk)[331](index=331&type=chunk) - Selling, General and Administrative Expenses: Decreased by **$1.0 million (29%)** for three months and **$2.2 million (27%)** for six months, mainly due to lower headcount and reduced payroll/personnel expenses[332](index=332&type=chunk)[333](index=333&type=chunk) - Convertible Notes Fair Value Adjustment: Resulted in a gain of **$1.4 million** for three months and **$1.6 million** for six months in 2025, compared to gains of **$1.6 million** and **$4.0 million** in 2024, respectively[334](index=334&type=chunk)[335](index=335&type=chunk) - Warrant Liabilities Fair Value Adjustment: Resulted in a loss of **$141 thousand** for three months and **$103 thousand** for six months in 2025, compared to gains of **$94 thousand** and **$14 thousand** in 2024, respectively[336](index=336&type=chunk)[337](index=337&type=chunk) - Interest Income: Increased significantly by **$100 thousand** for three months and **$263 thousand** for six months, primarily due to higher cash balances in an asset management account[338](index=338&type=chunk)[339](index=339&type=chunk) [Liquidity and Capital Resources](index=79&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity and capital resources, highlighting that operations have been financed primarily through equity and convertible notes, resulting in recurring operating losses and negative cash flows, with current cash and cash equivalents of **$8.2 million** insufficient to fund operations for the next 12 months, raising substantial doubt about its ability to continue as a going concern - The company's operations have been financed primarily through equity securities, convertible promissory notes, and a term loan, resulting in recurring operating losses and negative cash flows[340](index=340&type=chunk) Cash and Cash Equivalents (in thousands) | Period | Cash and Cash Equivalents | | :----- | :------------------------ | | June 30, 2025 (Successor) | $8,200 | | December 31, 2024 (Successor) | $20,600 | - Net cash used in operating activities was **$11.9 million** for the six months ended June 30, 2025 (Successor), compared to **$13.7 million** for the same period in 2024 (Predecessor)[341](index=341&type=chunk)[371](index=371&type=chunk)[372](index=372&type=chunk) - Current cash and cash equivalents are not sufficient to fund operations for the next 12 months, raising substantial doubt about the company's ability to continue as a going concern[342](index=342&type=chunk) - Future funding requirements depend on revenue growth, R&D efforts, sales/marketing, clinical trial outcomes, reimbursement, intellectual property, personnel, and potential acquisitions[344](index=344&type=chunk)[349](index=349&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=87&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Adagio Medical Holdings, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[384](index=384&type=chunk) [Item 4. Controls and Procedures](index=88&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were deemed effective at a reasonable assurance level as of June 30, 2025, with a material weakness in internal control over financial reporting identified as of December 31, 2024, related to management's review controls over third-party valuation reports, having been remediated as of May 15, 2025 - As of June 30, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[387](index=387&type=chunk) - A material weakness in internal control over financial reporting, identified as of December 31, 2024, regarding management's review controls over third-party valuation reports, was remediated as of May 15, 2025[388](index=388&type=chunk) [PART II - OTHER INFORMATION](index=89&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part provides additional information including legal proceedings, risk factors, sales of equity, defaults, and exhibits [Item 1. Legal Proceedings](index=89&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings that would have a significant adverse effect on its business, financial condition, or results of operations - The company is not currently a party to any legal proceedings that would individually or in the aggregate have a material adverse effect on its business, financial condition, and results of operations[392](index=392&type=chunk) [Item 1A. Risk Factors](index=89&type=section&id=Item%201A.%20Risk%20Factors) This section updates the risk factors from the 2024 Annual Report, highlighting new or materially changed risks, including the adverse impact of international trade policies on global supply chains and profitability, potential unintended consequences from the corporate prioritization initiative, and the uncertainty that FDA Breakthrough Device designation for vCLAS™ will lead to faster development or approval - International trade policies, including tariffs and trade barriers, may adversely affect the company's business, financial condition, and results of operations due to reliance on a global supply chain and foreign manufacturers[394](index=394&type=chunk)[395](index=395&type=chunk)[396](index=396&type=chunk) - The corporate prioritization initiative, implemented in February 2025, may not achieve its intended outcome and could result in adverse consequences such as loss of expertise, decreased morale, or inability to pursue new opportunities[400](index=400&type=chunk) - FDA Breakthrough Device designation for vCLAS™ may not lead to a faster development, regulatory review, or approval process, nor does it guarantee ultimate PMA approval[401](index=401&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=90&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds from registered securities to report during the period - No unregistered sales of equity securities or use of proceeds from registered securities to report[402](index=402&type=chunk) [Item 3. Defaults Upon Senior Securities](index=91&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report during the period - No defaults upon senior securities to report[403](index=403&type=chunk) [Item 4. Mine Safety Disclosures](index=92&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[404](index=404&type=chunk) [Item 5. Other Information](index=92&type=section&id=Item%205.%20Other%20Information) During the last fiscal quarter, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the last fiscal quarter[405](index=405&type=chunk) [Item 6. Exhibits](index=92&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished with, or incorporated by reference into, this Quarterly Report on Form 10-Q, including the Business Combination Agreement, Amended and Restated Certificate of Incorporation, By-Laws, an Offer Letter, and various certifications (31.1, 31.2, 32.1, 32.2) and XBRL documents - Business Combination Agreement (Exhibit 2.1, 2.2) - Amended and Restated Certificate of Incorporation (Exhibit 3.1) - Amended and Restated By-Laws (Exhibit 3.2) - Offer Letter (Exhibit 10.1) - Certifications of Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2) - Inline XBRL Instance Document and Taxonomy Extensions (Exhibits 101.INS, 101.CAL, 101.SCH, 101.DEF, 101.LAB, 101.PRE, 104)

[Introduction](index=1&type=section&id=Introduction) Adagio Medical Holdings, Inc. announced its financial results for the second quarter ended June 30, 2025, highlighting its focus on catheter ablation technologies for cardiac arrhythmias - Adagio Medical Holdings, Inc. (Nasdaq: ADGM) reported **Q2 2025 financial results**[1](index=1&type=chunk) [Recent Business Highlights](index=1&type=section&id=Recent%20Business%20Highlights) The company reported strong progress in its FULCRUM-VT study enrollment and advanced its next-generation product pipeline, alongside achieving a reduced cash burn due to corporate prioritization [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Todd Usen highlighted strong momentum in FULCRUM-VT study enrollment, validating market need, and significant progress in developing the next-generation product to enhance usability and ULTC platform capabilities - CEO Todd Usen noted **strong momentum in FULCRUM-VT study enrollment**, validating market need for ULTC solutions for ventricular tachycardia[3](index=3&type=chunk) - The company made progress in advancing its **next-generation product**, designed to improve physician usability and enhance ULTC platform capabilities[3](index=3&type=chunk) [Key Operational Achievements](index=1&type=section&id=Key%20Operational%20Achievements) Adagio surpassed 85% enrollment in its FULCRUM-VT pivotal study, published first-in-human results for its PARALELL study on Pulsed Field Cryoablation, and reduced cash burn through corporate prioritization - Surpassed **85% enrollment in the FULCRUM-VT pivotal study** for the vCLAS™ Cryoablation System, targeting 206 patients across 20 U.S. and Canadian centers, on track for completion in H2 2025[6](index=6&type=chunk) - **First-in-human results** from the PARALELL study, evaluating Pulsed Field Cryoablation (PFCA), were published in the Journal of Cardiovascular Electrophysiology[6](index=6&type=chunk) - Reduced **cash burn quarter-over-quarter** due to corporate prioritization and resource realignment[6](index=6&type=chunk) [Second Quarter 2025 Financial Results Overview](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results%20Overview) Adagio Medical reported a reduced net loss of $3.9 million for Q2 2025, down from $5.7 million in Q2 2024, with corresponding improvements in basic net loss per share. The company held $8.2 million in cash and cash equivalents as of June 30, 2025 Q2 2025 vs Q2 2024 Key Financials | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :-------------------------------- | :----------------- | :----------------- | :---------------- | | Cost of revenue | $0.3 | $0.7 | -$0.4 | | Research and development expenses | $2.0 | $2.9 | -$0.9 | | Selling, general and administrative expenses | $2.4 | $3.4 | -$1.0 | | Net loss | $(3.9) | $(5.7) | +$1.8 | | Basic net loss per share | $(0.26) | $(7.35) | +$7.09 | - **Cash and cash equivalents** stood at **$8.2 million** as of June 30, 2025[5](index=5&type=chunk) [About Adagio Medical Holdings, Inc.](index=1&type=section&id=About%20Adagio%20Medical%20Holdings%2C%20Inc.) Adagio Medical is a medical device company specializing in Ultra-Low Temperature Cryoablation (ULTC) technology for cardiac arrhythmias, particularly ventricular tachycardia (VT). Its vCLAS™ Cryoablation System is CE Marked and undergoing a pivotal U.S. IDE study (FULCRUM-VT) for FDA approval [Company Profile and Technology](index=1&type=section&id=Company%20Profile%20and%20Technology) Adagio develops and commercializes catheter-based Ultra-Low Temperature Cryoablation (ULTC) technology, designed to create large, durable lesions for treating cardiac arrhythmias, with a current focus on ventricular tachycardia (VT) using its vCLAS™ Cryoablation System - Adagio is a medical device company focused on developing and commercializing products for cardiac arrhythmias using proprietary catheter-based **Ultra-Low Temperature Cryoablation (ULTC) technology**[6](index=6&type=chunk) - **ULTC technology** is designed to create large, durable lesions through cardiac tissue[6](index=6&type=chunk) - The company's **vCLAS™ Cryoablation System is CE Marked** and is currently under evaluation in the FULCRUM-VT U.S. IDE Pivotal Study for ventricular tachycardia (VT)[7](index=7&type=chunk) [FULCRUM-VT Study Details](index=3&type=section&id=FULCRUM-VT%20Study%20Details) FULCRUM-VT is a prospective, multi-center, open-label, single-arm study enrolling 206 patients with structural heart disease and drug-refractory VT, aiming to support FDA premarket approval for Adagio's vCLAS™ Cryoablation System for a broad indication of scar-mediated VT - **FULCRUM-VT** is a prospective, multi-center, open-label, single-arm study enrolling **206 patients** with structural heart disease and drug-refractory VT[8](index=8&type=chunk) - Study results will be used for **FDA premarket approval (PMA)** for Adagio's vCLAS™ Cryoablation System, potentially leading to the broadest industry indication for purely endocardial ablation of scar-mediated VT[8](index=8&type=chunk) [Product Commercialization Status](index=3&type=section&id=Product%20Commercialization%20Status) Adagio's vCLAS™ Cryoablation System is commercially available for monomorphic ventricular tachycardia treatment in Europe and other select regions, but its use in the United States is currently limited to investigational purposes - The **vCLAS™ Cryoablation System is commercially available** for monomorphic ventricular tachycardia treatment in Europe and select other geographies[9](index=9&type=chunk) - In the United States, the **vCLAS™ Cryoablation System is limited to investigational use**[9](index=9&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) The financial statements provide detailed balance sheet data as of June 30, 2025, and statements of operations for the three months ended June 30, 2025 and 2024, showing changes in assets, liabilities, equity, revenues, and expenses [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2025, Adagio reported $8.2 million in cash and cash equivalents, with total assets of $35.88 million, total liabilities of $27.21 million, and total stockholders' equity of $8.67 million Condensed Balance Sheet Data (in thousands) | Metric | As of 6/30/2025 (Thousands) | As of 12/31/2024 (Thousands) | | :---------------------- | :-------------------------- | :--------------------------- | | Cash and cash equivalents | $8,200 | $20,586 | | Total assets | $35,876 | $48,448 | | Total Liabilities | $27,210 | $28,536 | | Total stockholders' equity | $8,666 | $19,912 | [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) For Q2 2025, the company reported no revenue, a net loss of $3.95 million (compared to $5.73 million in Q2 2024), and a basic net loss per share of $(0.26) (compared to $(7.35) in Q2 2024). Operating expenses significantly decreased year-over-year Condensed Statements of Operations (Three months ended June 30, in thousands) | Metric | 2025 (Thousands) | 2024 (Thousands) | Change (2025 vs 2024) (Thousands) | | :------------------------------------ | :--------------- | :--------------- | :-------------------------------- | | Revenue | $— | $254 | -$254 | | Cost of revenue | $342 | $682 | -$340 | | Research and development | $1,971 | $2,865 | -$894 | | Selling, general, and administrative | $2,404 | $3,366 | -$962 | | Total cost of revenue and operating expenses | $4,717 | $6,913 | -$2,196 | | Loss from operations | $(4,717) | $(6,659) | +$1,942 | | Net loss | $(3,947) | $(5,734) | +$1,787 | | Basic net loss per share | $(0.26) | $(7.35) | +$7.09 | | Diluted net loss per share | $(0.35) | $(7.35) | +$7.00 | | Weighted average shares outstanding, basic and diluted | 15,381,565 | 779,908 | +14,601,657 | [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains standard forward-looking statements regarding the potential of Adagio's products, R&D plans, regulatory approvals, and financial resources, emphasizing that actual results may differ due to various risks and uncertainties detailed in SEC filings - **Forward-looking statements** cover product potential, R&D plans, regulatory approvals (FDA/foreign agencies), and financial resources[10](index=10&type=chunk) - These statements are subject to **risks and uncertainties** that could cause actual results to differ materially, as detailed in Adagio's SEC filings[10](index=10&type=chunk) [Contact Information](index=3&type=section&id=Contact%20Information) Contact details for investor and media inquiries are provided, listing Debbie Kaster, Chief Business Officer, as the primary contact - Contact for inquiries is **Debbie Kaster, Chief Business Officer**, via dkaster@adagiomedical.com[11](index=11&type=chunk)

PART I: FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Adagio Medical Holdings Inc.'s unaudited condensed consolidated financial statements and notes for Q1 2025 (Successor) and Q1 2024 (Predecessor) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Item | March 31, 2025 (Successor) | December 31, 2024 (Successor) | | :--------------------------------- | :-------------------------- | :-------------------------- | | **Assets** | | | | Cash and cash equivalents | $12,963 | $20,586 | | Total current assets | $17,373 | $25,349 | | Total assets | $41,338 | $48,448 | | **Liabilities & Equity** | | | | Total current liabilities | $6,006 | $6,659 | | Convertible notes payable, net | $17,652 | $17,180 | | Total liabilities | $28,939 | $28,536 | | Total stockholders' equity | $12,399 | $19,912 | | Total liabilities, convertible preferred stock, and stockholders' equity | $41,338 | $48,448 | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share data) | Item | Three Months Ended March 31, 2025 (Successor) | Three Months Ended March 31, 2024 (Predecessor) | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | | Revenue | $— | $26 | | Cost of revenue | $253 | $542 | | Research and development | $3,659 | $3,469 | | Selling, general, and administrative | $3,485 | $4,830 | | Total cost of revenue and operating expenses | $7,397 | $8,841 | | Loss from operations | $(7,397) | $(8,815) | | Convertible notes fair value adjustment | $190 | $1,673 | | Warrant liabilities fair value adjustment | $38 | $(80) | | Interest expense | $(662) | $(754) | | Interest income | $164 | $1 | | Net loss | $(7,713) | $(8,018) | | Basic net loss per share | $(0.50) | $(10.28) | | Diluted net loss per share | $(0.51) | $(10.28) | | Weighted-average shares used to compute net loss per common share, basic and diluted | 15,375,521 | 779,908 | [Unaudited Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)) Changes in Stockholders' Equity (Deficit) for Three Months Ended March 31, 2025 (Successor) (in thousands) | Item | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | | :--------------------------------- | :-------------------- | :------------------ | :------------------------- | :------------------ | :------------------------------------------ | :------------------------- | | Balance as of December 31, 2024 | 15,198,232 | $2 | $90,495 | $(70,586) | $1 | $19,912 | | Foreign currency translation adjustment | — | — | — | $43 | $(61) | $(18) | | Issuance of Waiver Shares | 183,333 | — | — | — | — | — | | Stock-based compensation | — | — | $218 | — | — | $218 | | Net loss | — | — | — | $(7,713) | — | $(7,713) | | Balance as of March 31, 2025 | 15,381,565 | $2 | $90,713 | $(78,256) | $(60) | $12,399 | Changes in Stockholders' Equity (Deficit) for Three Months Ended March 31, 2024 (Predecessor) (in thousands) | Item | Convertible Preferred Stock Shares | Convertible Preferred Stock Amount | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Stockholders' Equity (Deficit) | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------ | :------------------ | :------------------------- | :------------------ | :------------------------------------- | :------------------------------- | | Balance as of December 31, 2023 | 4,939,946 | $91,469 | 779,908 | $1 | $1,608 | $(135,205) | $17 | $(133,579) | | Foreign currency translation adjustment | — | — | — | — | — | — | $3 | $3 | | Stock option exercises | — | — | 161 | — | $1 | — | — | $1 | | Stock-based compensation | — | — | — | — | $110 | — | — | $110 | | Net loss | — | — | — | — | — | $(8,018) | — | $(8,018) | | Balance as of March 31, 2024 | 4,939,946 | $91,469 | 780,069 | $1 | $1,719 | $(143,223) | $20 | $(141,483) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 (Successor) | Three Months Ended March 31, 2024 (Predecessor) | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net cash used in operating activities | $(7,211) | $(6,739) | | Net cash used in investing activities | $(335) | $(162) | | Net cash provided by financing activities | $— | $9,571 | | Effect of foreign currency translation on cash and cash equivalents | $(77) | $30 | | Net change in cash and cash equivalents | $(7,623) | $2,700 | | Cash and cash equivalents, at beginning of period | $20,586 | $1,383 | | Cash and cash equivalents, at end of period | $12,963 | $4,083 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This note details Adagio Medical's medical technology focus, recent Business Combination, and significant going concern uncertainties [Note 1 - Description of Organization and Business Operations](index=10&type=section&id=Note%201%20-%20Description%20of%20Organization%20and%20Business%20Operations) This note details Adagio Medical's medical technology focus, recent Business Combination, and significant going concern uncertainties - Adagio Medical Holdings Inc. is a medical technology company specializing in ablation technologies for cardiac arrhythmias, utilizing proprietary Ultra-Low Temperature Cryoablation (ULTC) and Pulsed Field Cryoablation (PFCA) platforms[28](index=28&type=chunk) - The company's iCLAS™ Cryoablation System for atrial fibrillation received CE Mark in Europe in June 2020, and the vCLAS™ Cryoablation System for ventricular tachycardia received CE Mark in March 2024[28](index=28&type=chunk) - The vCLAS™ Cryoablation System is currently undergoing the FULCRUM-VT IDE Study to support FDA approval in the U.S[28](index=28&type=chunk) - A Business Combination was consummated on July 31, 2024, with ARYA Sciences Acquisition Corp IV, leading to ListCo (now Adagio Medical Holdings, Inc.) becoming the Successor entity, with its common stock trading on Nasdaq under 'ADGM' since August 1, 2024[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - The company has experienced recurring operating losses and negative cash flows since inception, with a cash balance of **$13.0 million** and an accumulated deficit of **$78.3 million** as of March 31, 2025[33](index=33&type=chunk)[34](index=34&type=chunk) Key Financials (in millions) | Metric | Three Months Ended March 31, 2025 (Successor) | Three Months Ended March 31, 2024 (Predecessor) | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net loss | $(7.7) | $(8.0) | | Net cash used in operating activities | $(7.2) | $(6.7) | - Management believes current cash and cash equivalents are insufficient to fund operations for the next 12 months, raising substantial doubt about the company's ability to continue as a going concern[35](index=35&type=chunk) - Mitigation plans include negotiating cash equity or debt financing, pursuing U.S. regulatory approvals, and executing cost-cutting measures, including a corporate prioritization initiative in February 2025 focusing on the FULCRUM-VT clinical trial and product design optimization[36](index=36&type=chunk)[38](index=38&type=chunk) [Note 2 - Summary of Significant Accounting Policies](index=12&type=section&id=Note%202%20-%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's significant accounting policies, including U.S. GAAP basis, Business Combination accounting, and EGC status - The condensed consolidated financial statements are prepared in accordance with U.S. GAAP, with certain information condensed or omitted, and should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 2024[40](index=40&type=chunk)[41](index=41&type=chunk) - Due to the Business Combination, ListCo is the accounting acquirer (Successor) and Legacy Adagio is the accounting acquiree (Predecessor), with the Successor period covering July 31, 2024, through March 31, 2025[42](index=42&type=chunk) - The company is an 'emerging growth company' and has elected to use the extended transition period for complying with new or revised financial accounting standards[46](index=46&type=chunk)[47](index=47&type=chunk) - The company operates as one reportable segment, with the CEO acting as the Chief Operating Decision Maker (CODM) reviewing financial information on a consolidated basis[50](index=50&type=chunk) - Revenue is primarily generated from the sale of cryoablation catheters (Consumables) and, to a lesser extent, lease revenue from loaned Consoles, recognized when control of goods is transferred to the customer (FOB Shipping Point)[54](index=54&type=chunk)[57](index=57&type=chunk) - Inventory is valued at the lower of cost or net realizable value using the FIFO method, and property and equipment are recorded at cost less accumulated depreciation, with the useful life of Consoles changed from five to three years effective January 1, 2024[65](index=65&type=chunk)[66](index=66&type=chunk) - Intangible assets (IPR&D, developed technology) and goodwill are tested for impairment annually or when indicators arise; an **$18.9 million** impairment charge for intangible assets and a **$30.3 million** goodwill impairment charge were recorded in Q4 2024[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[157](index=157&type=chunk)[160](index=160&type=chunk) - The company's financial instruments, including convertible notes payable and warrant liabilities, are measured at fair value using a three-tier hierarchy, with most classified as Level 3 due to unobservable inputs[84](index=84&type=chunk)[85](index=85&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - Research and development expenses are expensed as incurred and are expected to increase, while selling, general, and administrative expenses are expected to decrease slightly in FY2025 due to cost-cutting and reduced transaction costs[82](index=82&type=chunk)[83](index=83&type=chunk)[312](index=312&type=chunk)[314](index=314&type=chunk) - The company has a full valuation allowance against its deferred tax assets, resulting in a **0.0% effective tax rate** for the periods presented[262](index=262&type=chunk)[263](index=263&type=chunk) [Note 3 – Forward Merger](index=24&type=section&id=Note%203%20%E2%80%93%20Forward%20Merger) This note details the Business Combination, including the merger structure, PIPE financing, and purchase price allocation with goodwill and intangible assets - The Business Combination was consummated on July 31, 2024, involving ARYA Sciences Acquisition Corp IV, ListCo (now Adagio Medical Holdings, Inc.), and Legacy Adagio[106](index=106&type=chunk) - Holders of **2,707,555 ARYA Class A ordinary shares** redeemed their shares for approximately **$31.3 million** in cash prior to the annual general meeting[107](index=107&type=chunk) - The transaction involved the conversion of ARYA shares, Legacy Adagio warrants, convertible promissory notes, preferred stock, common stock, and options into shares of the Company's common stock and new options[108](index=108&type=chunk) - A PIPE Financing of **$64.5 million** was committed by PIPE Investors, including cash investments and conversion of Bridge Financing Notes[109](index=109&type=chunk)[110](index=110&type=chunk) - ListCo issued **$20.0 million** of 13% senior secured Convertible Securities Notes and **1,500,000 Convert Warrants** to Convert Investors[115](index=115&type=chunk) - The Business Combination was accounted for as a forward-merger using the acquisition method, with ListCo as the accounting acquirer and Legacy Adagio's assets and liabilities recorded at fair value[117](index=117&type=chunk) Purchase Price Calculation (in thousands) | Item | Amount | | :--------------------------------- | :------- | | Total shares and stock options | 6,779,356 | | Multiplied by the Company's common stock price at the Closing | $6.64 | | Total | $45,015 | | Estimated fair value of PIPE Base Warrants issued in lieu of settling Bridge Financing Notes | $8,531 | | Total purchase price | $53,546 | Allocation of Purchase Price (in thousands) | Item | Amount | | :--------------------------------- | :------- | | Total assets acquired | $77,252 | | Total liabilities assumed | $23,706 | | Net total | $53,546 | | Intangible assets, net | $26,200 | | Goodwill | $44,291 | [Note 4 – Fair Value Measurements](index=30&type=section&id=Note%204%20%E2%80%93%20Fair%20Value%20Measurements) This note details fair value measurements for financial instruments, including Level 3 convertible notes and warrant liabilities, and their adjustments - The company's financial instruments, including convertible notes payable and warrant liabilities, are carried at fair value, categorized within a three-tier hierarchy[126](index=126&type=chunk)[127](index=127&type=chunk) Financial Instruments at Fair Value (in thousands) | Item | March 31, 2025 (Successor) | December 31, 2024 (Successor) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Money market account (Level 1) | $11,469 | $19,014 | | Convertible Securities Notes (Level 3) | $17,652 | $17,180 | | Convert Warrants (Level 3) | $114 | $152 | - Legacy Adagio Convertible Notes (October 2022, April 2023, November 2023, February 2024, May 2024, June 2024, July 2024) were measured at fair value (Level 3) and converted upon the Business Combination[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) - Convertible Securities Notes (Successor) are measured at fair value (Level 3) using a binomial lattice model, with a fair value adjustment of **$(190) thousand** for the three months ended March 31, 2025[138](index=138&type=chunk)[139](index=139&type=chunk) - Convert Warrants (Successor) are classified as derivative liabilities (Level 3) due to potential cash settlement and are valued using the Black-Scholes Merton option model, with a fair value adjustment of **$(38) thousand** for the three months ended March 31, 2025[147](index=147&type=chunk)[148](index=148&type=chunk) - PIPE Pre-funded Warrants (Successor) were classified as derivative liabilities (Level 3) and were exercised on December 26, 2024, with none outstanding as of March 31, 2025[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) [Note 5 - Inventory, net](index=36&type=section&id=Note%205%20-%20Inventory,%20net) This note breaks down inventory by category, valued at the lower of cost or net realizable value using FIFO Inventory, net (in thousands) | Category | March 31, 2025 (Successor) | December 31, 2024 (Successor) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Raw materials | $1,542 | $1,683 | | Work-in-Process | $105 | $388 | | Finished goods | $663 | $495 | | Total inventory | $2,310 | $2,566 | - Inventory is recorded net of obsolescence and manufacturing scrap of **$0.2 million** for both the three months ended March 31, 2025 (Successor) and March 31, 2024 (Predecessor)[153](index=153&type=chunk) [Note 6 - Property and Equipment](index=36&type=section&id=Note%206%20-%20Property%20and%20Equipment) This note details property and equipment, net, including Consoles and machinery, along with accumulated depreciation and expense Property and Equipment, net (in thousands) | Category | March 31, 2025 (Successor) | December 31, 2024 (Successor) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Consoles | $3,336 | $3,060 | | Machinery and equipment | $842 | $709 | | Total property and equipment | $5,114 | $4,691 | | Less: accumulated depreciation | $(3,021) | $(2,730) | | Property and equipment, net | $2,093 | $1,961 | - Depreciation expense was **$0.3 million** for both the three months ended March 31, 2025 (Successor) and March 31, 2024 (Predecessor)[154](index=154&type=chunk) [Note 7 – Goodwill and Intangible Assets](index=37&type=section&id=Note%207%20%E2%80%93%20Goodwill%20and%20Intangible%20Assets) This note details intangible assets and goodwill, noting Q4 2024 impairment charges and no new charges in Q1 2025 Intangible Assets, net (in thousands) | Category | Useful Life | March 31, 2025 (Successor) Net Carrying Amount | | :--------------------------------- | :---------- | :------------------------------------------ | | IPR&D | Indefinite | $6,969 | | Total | | $6,969 | - During the fourth quarter of 2024, the company recorded an **$18.9 million** impairment charge on its indefinite-lived intangible assets due to a sustained decline in share price and market capitalization[157](index=157&type=chunk) - No intangible assets impairment charges were recorded for the three months ended March 31, 2025 (Successor)[158](index=158&type=chunk) Goodwill (in thousands) | Category | March 31, 2025 (Successor) Net Carrying Amount | | :--------------------------------- | :------------------------------------------ | | Goodwill | $13,967 | - During the fourth quarter of 2024, the company recorded a **$30.3 million** goodwill impairment charge due to a sustained decline in share price and market capitalization[160](index=160&type=chunk) - No goodwill impairment charges were recorded for the three months ended March 31, 2025 (Successor)[161](index=161&type=chunk) [Note 8 - Accrued Liabilities](index=38&type=section&id=Note%208%20-%20Accrued%20Liabilities) This note provides a breakdown of accrued liabilities, primarily compensation and R&D expenses Accrued Liabilities (in thousands) | Category | March 31, 2025 (Successor) | December 31, 2024 (Successor) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Compensation and related expenses | $1,931 | $2,622 | | Research and development expenses | $1,012 | $775 | | Other | $153 | $279 | | Total accrued liabilities | $3,096 | $3,676 | [Note 9 - Debt](index=38&type=section&id=Note%209%20-%20Debt) This note details outstanding debt, including Successor Convertible Securities Notes and Predecessor notes converted or paid off Outstanding Debt (in thousands) | Category | March 31, 2025 (Successor) | December 31, 2024 (Successor) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Convertible Securities Notes | $17,652 | $17,180 | | Total outstanding debt | $17,652 | $17,180 | - Legacy Adagio's October 2022 Convertible Notes (**$9.5 million** principal) were converted into **1,444,899 shares** of the Company's common stock upon the Business Combination[165](index=165&type=chunk)[170](index=170&type=chunk) - Various Bridge Financing Notes (April 2023, November 2023, May 2024, June 2024, July 2024) totaling **$29.5 million** principal plus accrued interest were converted into **4,372,607 shares** of the Company's common stock and **3,540,000 Base Warrants** as part of the PIPE Financing[172](index=172&type=chunk)[175](index=175&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk)[186](index=186&type=chunk)[188](index=188&type=chunk) - The February 2024 Convertible Notes (**$7.0 million** principal) were converted into **$7.0 million** Convertible Securities Notes and **525,000 Convert Warrants** upon the Business Combination[179](index=179&type=chunk)[181](index=181&type=chunk) - The SVB Term Loan (Predecessor) had an outstanding principal of **$1.4 million** as of March 31, 2024, and was paid at the Closing of the Business Combination[191](index=191&type=chunk)[192](index=192&type=chunk) - The Successor issued **$20.0 million** of Convertible Securities Notes on July 31, 2024, with a **13% interest rate**, a three-year and nine-month maturity, and a conversion price of **$10.00 per share**[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) - Interest expense for the Convertible Securities Notes was **$0.7 million** for the three months ended March 31, 2025 (Successor)[196](index=196&type=chunk) [Note 10 - Warrants](index=44&type=section&id=Note%2010%20-%20Warrants) This note describes various warrants, including Predecessor terminations and Successor derivative and equity classified warrants - SVB Warrants (Predecessor) with an exercise price of **$7.97 per share** were terminated prior to the Business Combination as their fair market value was lower than the exercise price[197](index=197&type=chunk)[198](index=198&type=chunk) - Series E Pre-funded Warrants (Predecessor) were converted into **34,680 shares** of the Company's common stock upon the Business Combination[199](index=199&type=chunk)[200](index=200&type=chunk) - The Successor issued **1,500,000 Convert Warrants** with an exercise price of **$24.00 per share**, expiring on the seventh anniversary of issuance, classified as derivative liabilities due to potential cash settlement[201](index=201&type=chunk) - The Successor issued **670,000 PIPE Pre-funded Warrants** with an exercise price of **$0.01 per share**, which were exercised on a cashless basis for **663,096 shares** of common stock on December 26, 2024, with none outstanding as of March 31, 2025[202](index=202&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) - The Successor issued **7,528,727 PIPE Base Warrants** (including those from Bridge Financing Notes conversion and cash investment) with an exercise price of **$10.00 per share**, classified as equity[206](index=206&type=chunk)[207](index=207&type=chunk)[209](index=209&type=chunk) [Note 11 - Operating Leases](index=46&type=section&id=Note%2011%20-%20Operating%20Leases) This note outlines operating lease arrangements for facilities, including terms, cash flows, and future minimum payments - The company leases distribution and R&D facilities, and sub-leases office and manufacturing space, with lease expirations ranging from March 2026 to January 2030[211](index=211&type=chunk) Operating Lease Information (in thousands) | Metric | Three Months Ended March 31, 2025 (Successor) | Three Months Ended March 31, 2024 (Predecessor) | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | | Operating cash flows paid for operating leases | $66 | $45 | | Weighted average remaining lease term (years) | 4.2 | 2.0 | | Weighted average discount rate | 8.0% | 8.0% | | Operating lease cost | $74 | $47 | Future Minimum Payments Under Non-Cancelable Operating Leases as of March 31, 2025 (in thousands) | Period | Amount | | :--------------------------------- | :------- | | Nine months ending December 31, 2025 | $243 | | Year ending December 31, 2026 | $223 | | Year ending December 31, 2027 | $197 | | Year ending December 31, 2028 | $206 | | Year ending December 31, 2029 | $214 | | Year ending December 31, 2030 | $18 | | Total undiscounted future cash flows | $1,101 | | Less: imputed interest | $(170) | | Total operating lease liability | $931 | [Note 12 - Commitments and Contingencies](index=46&type=section&id=Note%2012%20-%20Commitments%20and%20Contingencies) The company is not currently involved in any material legal proceedings that would adversely affect its financial condition - The company is not currently party to any legal proceedings that, if determined adversely, would individually or in the aggregate have a material adverse effect on its business, financial condition, and results of operations[214](index=214&type=chunk) [Note 13 - Mezzanine Equity and Stockholders' Equity (Deficit)](index=47&type=section&id=Note%2013%20-%20Mezzanine%20Equity%20and%20Stockholders'%20Equity%20(Deficit)) This note details the company's equity structure, including authorized shares, preferred stock conversion, and common stock issuance post-Business Combination - Prior to the Business Combination, Legacy Adagio's authorized shares included **6,594,946 common stock** and **4,939,946 preferred stock**[215](index=215&type=chunk) - Legacy Adagio's convertible preferred stock was classified as temporary equity due to contingent redeemability and was converted into Legacy Adagio common stock, then into **789,337 shares** of the Company's common stock upon the Business Combination[216](index=216&type=chunk)[218](index=218&type=chunk) - As of March 31, 2025, the Successor company is authorized to issue up to **210,000,000 common stock** and **20,000,000 preferred stock**, with **15,381,565 common shares** issued and outstanding[233](index=233&type=chunk) - The company issued **1,147,500 Sponsor Earnout shares** in September 2024, which vest upon the stock price reaching **$24.00** for 20 trading days within a 30-day period or a company sale, and are classified as equity[234](index=234&type=chunk)[236](index=236&type=chunk) Common Stock Outstanding Immediately Following Closing | Item | Number of Shares | | :--------------------------------- | :--------------- | | Contribution from PIPE Financing for cash | 3,287,018 | | Conversion of ARYA convertible promissory notes | 355,100 | | Conversion of ARYA Class A ordinary shares and Class B ordinary shares | 2,089,000 | | Conversion of Class A ordinary shares subject to redemption | 123,520 | | Shares issued in purchase consideration | 6,771,769 | | Additional shares issued and reclassification of Class A ordinary shares subject to non-redemption agreements and open market subscription agreements | 761,229 | | Total | 13,387,636 | Reserved Common Stock for Future Issuance (Successor) | Item | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :------------- | :------------- | | Base Warrants | 7,528,727 | 7,528,727 | | Convertible Securities Notes | 3,231,327 | 3,231,327 | | Convert Warrants | 1,500,000 | 1,500,000 | | Company's common stock issuable upon the exercise of outstanding options | 7,587 | 7,587 | | Common stock reserved for future issuance under the 2024 Equity Incentive Plan | 6,197,737 | 4,472,592 | | Common stock reserved for future issuance under the 2024 Key Employee Equity Incentive Plan | 3,354,444 | 3,354,444 | | Common stock reserved for future issuance under the 2024 Employee Stock Purchase Plan | 441,293 | 441,293 | | Common stock reserved for future issuance | 22,261,115 | 20,535,970 | [Note 14 - Stock-Based Compensation](index=51&type=section&id=Note%2014%20-%20Stock-Based%20Compensation) This note details stock-based compensation plans, including Predecessor and Successor plans, option activity, and compensation expense - Legacy Adagio's 2012 and 2022 Stock Incentive Plans permitted grants of ISOs and NSOs, with options generally vesting over four years and having a ten-year contractual term[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk) - Upon the Business Combination, **45,544 In-the-Money Adagio Options** were canceled and exchanged for **7,587 options** to purchase the Company's common stock, and the 2022 Plan was terminated[244](index=244&type=chunk) Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2025 (Successor) | Three Months Ended March 31, 2024 (Predecessor) | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | | Research and development | $9 | $14 | | Selling, general, and administration | $209 | $96 | | Total stock-based compensation expense | $218 | $110 | - The Successor adopted the 2024 Equity Incentive Plan, authorizing up to **4,472,593 shares** plus annual increases, and granted **4,868,965 awards** under this plan during the three months ended March 31, 2025[246](index=246&type=chunk)[247](index=247&type=chunk) - The 2024 Key Employee Equity Incentive Plan and 2024 Employee Stock Purchase Plan were also adopted, but no awards or purchase rights have been granted under these plans as of March 31, 2025[248](index=248&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk)[251](index=251&type=chunk) Stock Option Activity for Three Months Ended March 31, 2025 (Successor) | Item | Shares | Weighted Average Exercise Price Per Share | | :--------------------------------- | :------- | :------------------------------------ | | Outstanding, December 31, 2024 | 7,587 | $— | | Options granted | 4,868,965 | $0.97 | | Outstanding, March 31, 2025 | 4,876,552 | $0.97 | | Options vested, March 31, 2025 | 518,253 | $0.87 | | Options vested and exercisable, March 31, 2025 | 4,876,552 | $0.97 | [Note 15 – Loss Per Share ("LPS")](index=55&type=section&id=Note%2015%20%E2%80%93%20Loss%20Per%20Share%20(%22LPS%22)) This note details Loss Per Share (LPS) calculation for Predecessor and Successor periods, including basic and diluted methods - For the Predecessor period, basic and diluted net loss per common share were the same due to net losses causing potential dilutive securities to be anti-dilutive[253](index=253&type=chunk) Basic and Diluted Net Loss Per Share (Predecessor) (in thousands, except per share data) | Item | Three Months Ended March 31, 2024 | | :--------------------------------- | :-------------------------------- | | Net loss attributable to common stockholders | $(8,018) | | Weighted-average shares outstanding | 779,908 | | Net loss per share attributable to common stockholders - basic and diluted | $(10.28) | - For the Successor period, basic LPS is computed using the two-class method, and diluted LPS is disclosed under the if-converted method, as it resulted in a lower diluted LPS[255](index=255&type=chunk)[258](index=258&type=chunk) Basic LPS (Successor) (in thousands, except per share data) | Item | Three Months Ended March 31, 2025 | | :--------------------------------- | :-------------------------------- | | Net loss | $(7,713) | | Weighted-average shares outstanding | 15,375,521 | | Net loss per share attributable to each class of participating securities – Basic | $(0.50) | Diluted LPS (Successor) (in thousands, except per share data) | Item | Three Months Ended March 31, 2025 | | :--------------------------------- | :-------------------------------- | | Net loss – Basic | $(7,713) | | Less: Adjustment for fair value changes to convertible securities notes | $(190) | | Net loss attributable to common stockholders – Diluted | $(7,903) | | Weighted-average shares outstanding – Basic | 15,375,521 | | Weighted-average effect of shares issuable to Convertible Securities Notes (if-converted method) | — | | Weighted-average shares outstanding – Diluted | 15,375,521 | | Net loss per share attributable to common shares – Diluted (if-converted method) | $(0.51) | - Potentially dilutive securities, including Base Warrants, Convert Warrants, Earn-out Shares, and stock options, totaling **10,183,814**, were excluded from diluted LPS calculation for the Successor period as they were anti-dilutive[261](index=261&type=chunk) [Note 16 - Income Taxes](index=58&type=section&id=Note%2016%20-%20Income%20Taxes) This note explains income tax accounting, including the full valuation allowance and 0.0% effective tax rate due to deferred tax assets - The company maintains a full valuation allowance against its deferred tax assets, with no material change from the fiscal year ended December 31, 2024[262](index=262&type=chunk) - The effective tax rate for the company's operations was **0.0%** for both the three months ended March 31, 2025 (Successor) and March 31, 2024 (Predecessor), primarily due to the valuation allowance offsetting the tax benefit on pre-tax losses[263](index=263&type=chunk) - The U.S. federal income tax years 2020-2023 and other foreign and state tax jurisdictions' years 2019-2023 remain open to examination[264](index=264&type=chunk) [Note 17 - Related Party Transactions](index=58&type=section&id=Note%2017%20-%20Related%20Party%20Transactions) This note details related party transactions, including shared services with Fjord Ventures and investments by Perceptive PIPE Investor - The company incurred **$0.2 million** (Q1 2025 Successor) and **$0.4 million** (Q1 2024 Predecessor) for finance, accounting, and administrative support services under a Shared Services Agreement with Fjord Ventures, a company owned by the former CEO[265](index=265&type=chunk) - Legacy Adagio had a **$0.5 million** convertible promissory note with Fjordinvest, also owned by the former CEO[268](index=268&type=chunk) - Perceptive PIPE Investor, the controlling party, received **4,372,607 shares** of the Company's common stock and **3,540,000 Base Warrants** in exchange for Bridge Financing Notes during the PIPE Financing[270](index=270&type=chunk) - Perceptive PIPE Investor also made an additional cash investment of approximately **$15.9 million**, receiving **2,250,352 shares** of the Company's common stock and **1,905,069 Base Warrants**[271](index=271&type=chunk) [Note 18 – Segment Reporting](index=60&type=section&id=Note%2018%20%E2%80%93%20Segment%20Reporting) This note confirms the company operates as a single reportable segment, managed on a consolidated basis by the CEO - The company operates as one reportable segment, managed on a consolidated basis by the Chief Executive Officer (CODM)[272](index=272&type=chunk) - The CODM assesses performance and allocates resources based on consolidated net loss[273](index=273&type=chunk) [Note 19 - Subsequent Events](index=60&type=section&id=Note%2019%20-%20Subsequent%20Events) This note discloses the subsequent appointment of Daniel George as Interim Chief Financial Officer on April 17, 2025 - On April 17, 2025, Daniel George was appointed as Interim Chief Financial Officer, principal financial officer, and principal accounting officer, with compensation at a rate of **$400 per hour**[275](index=275&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=62&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's discussion and analysis of financial condition and results of operations, highlighting going concern uncertainties [Overview](index=62&type=section&id=Overview) This overview introduces Adagio Medical's ULTC technology for cardiac arrhythmias, its vCLAS™ system, and ongoing financial challenges - The company is a medical device company focused on developing and commercializing catheter-based Ultra-Low Temperature Cryoablation (ULTC) technology for cardiac arrhythmias, with an initial focus on ventricular tachycardia (VT)[279](index=279&type=chunk) - The vCLAS™ Cryoablation System for VT has European CE Mark approval, and the 206-patient FULCRUM-VT IDE pivotal clinical trial is currently enrolling patients in the U.S. and Canada, with results expected in the second half of 2025 to support FDA approval[282](index=282&type=chunk) - The company has also developed Pulsed Field Cryoablation (PFCA) technology, with early demonstrations in European trials for persistent atrial fibrillation and preclinical studies for VT ablations[283](index=283&type=chunk) Key Financials (in millions) | Metric | March 31, 2025 (Successor) | December 31, 2024 (Successor) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Accumulated deficit | $78.3 | $70.6 | | Cash and cash equivalents | $13.0 | $20.6 | | Net loss (Q1) | $(7.7) | $(8.0) | | Net cash used in operating activities (Q1) | $(7.2) | $(6.7) | [Going Concern](index=64&type=section&id=Going%20Concern) Recurring losses and negative cash flows raise substantial doubt about the company's ability to continue as a going concern - The company's recurring operating losses and negative cash flows since inception raise substantial doubt about its ability to continue as a going concern for the next twelve months from the filing date[285](index=285&type=chunk) - Current cash and cash equivalents of **$13.0 million** as of March 31, 2025, are not sufficient to fund operations for at least the next 12 months[284](index=284&type=chunk)[285](index=285&type=chunk) - Mitigation strategies include negotiating cash equity or debt financing, pursuing necessary regulatory approvals for U.S. market launch, and executing cost-cutting measures[286](index=286&type=chunk) [Description of the Merger](index=64&type=section&id=Description%20of%20the%20Merger) This section describes the July 2024 Business Combination, including share redemptions, PIPE financing, and public company implications - The Business Combination was consummated on July 31, 2024, with ARYA Sciences Acquisition Corp IV and Legacy Adagio merging, and ListCo (now Adagio Medical Holdings, Inc.) becoming the combined public entity[287](index=287&type=chunk)[288](index=288&type=chunk) - Prior to the merger, **$31.3 million** in ARYA Class A ordinary shares were redeemed[289](index=289&type=chunk) - The PIPE Financing committed **$64.5 million**, involving various investors purchasing shares and warrants, and converting existing convertible notes[292](index=292&type=chunk)[293](index=293&type=chunk)[298](index=298&type=chunk) - The company issued **$20.0 million** of 13% senior secured Convertible Securities Notes and **1,500,000 Convert Warrants** to Convert Investors[295](index=295&type=chunk) - As a public company, Adagio Medical Holdings, Inc. expects to incur additional ongoing expenses for compliance, directors' and officers' liability insurance, and administrative resources[296](index=296&type=chunk) [Recent Developments](index=70&type=section&id=Recent%20Developments) In February 2025, the company initiated a corporate prioritization to focus on the FULCRUM-VT trial and product design - In February 2025, the company implemented a corporate prioritization initiative to focus all resources on the FULCRUM-VT clinical trial activities and a new product design optimization program[300](index=300&type=chunk) - One-time expenses related to this initiative were incurred during the three months ended March 31, 2025[300](index=300&type=chunk) [Key Factors Affecting Our Performance](index=70&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) Performance is driven by innovation, regulatory approvals, clinical success, market expansion, reimbursement, and intellectual property protection - Continued success depends on innovation, regulatory clearances/approvals, demonstrating safety and effectiveness in clinical trials, expanding sales force, obtaining adequate reimbursement, attracting and retaining skilled personnel, and protecting intellectual property[301](index=301&type=chunk)[302](index=302&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk) - The industry is intensely competitive, with significant competition from large, well-capitalized companies[306](index=306&type=chunk) - Commercial success relies heavily on the availability of adequate financial coverage and reimbursement from third-party payors in both U.S. and international markets[307](index=307&type=chunk) [Key Components of Results of Operations](index=73&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section defines key components of operations, including revenue, expenses, fair value adjustments, and interest income/expense - Revenue is generated from the sale of cryoablation catheters and implied rental of loaned consoles, recognized under ASC Topic 606[309](index=309&type=chunk) - Cost of revenue includes raw materials, labor, manufacturing overhead, shipping, and depreciation of loaned consoles[310](index=310&type=chunk) - Research and development expenses are expensed as incurred and are expected to increase due to ongoing product development and clinical trials[311](index=311&type=chunk)[312](index=312&type=chunk) - Selling, general and administrative expenses are expensed as incurred and are expected to decrease slightly in FY2025 due to lower payroll from the corporate prioritization initiative and the absence of Business Combination-related transaction costs[314](index=314&type=chunk) - Fair value adjustments are recorded for convertible notes and warrant liabilities, reflecting changes in their estimated fair value[315](index=315&type=chunk)[316](index=316&type=chunk) - Interest expense primarily arises from outstanding debt obligations, while interest income is earned on cash and cash equivalents[317](index=317&type=chunk)[318](index=318&type=chunk) [Results of Operations](index=76&type=section&id=Results%20of%20Operations) This section analyzes Q1 2025 (Successor) versus Q1 2024 (Predecessor) results, noting revenue decline and expense changes Summary of Results of Operations (in thousands) | Item | 2025 (Successor) | 2024 (Predecessor) | Change ($) | Change (%) | | :--------------------------------- | :--------------- | :----------------- | :--------- | :--------- | | Revenue | $— | $26 | $(26) | (100)% | | Cost of revenue | $253 | $542 | $(289) | (53)% | | Research and development | $3,659 | $3,469 | $190 | 5% | | Selling, general, and administrative | $3,485 | $4,830 | $(1,345) | (28)% | | Loss from operations | $(7,397) | $(8,815) | $1,418 | (16)% | | Convertible notes fair value adjustment | $190 | $1,673 | $(1,483) | (89)% | | Warrant liabilities fair value adjustment | $38 | $(80) | $118 | (148)% | | Interest expense | $(662) | $(754) | $92 | (12)% | | Interest income | $164 | $1 | $163 | 16,300% | | Net loss | $(7,713) | $(8,018) | $305 | (4)% | | Comprehensive loss | $(7,774) | $(8,015) | $241 | (3)% | - Revenue decreased by **$26 thousand (100%)** to nil for Q1 2025, primarily due to the repurchase of previously sold inventory and a pause in European commercial activity[322](index=322&type=chunk) - Cost of revenue decreased by **$0.2 million (53%)** due to a change in the estimated useful life of Consoles and the impact of an inventory buyback[323](index=323&type=chunk) - Research and development expenses increased by **$0.2 million (5%)** to **$3.7 million**, driven by higher product development and clinical trial costs, partially offset by reduced quality assurance and operations costs[324](index=324&type=chunk) - Selling, general and administrative expenses decreased by **$1.3 million (28%)** to **$3.5 million**, mainly due to lower payroll and headcount resulting from a corporate prioritization initiative[326](index=326&type=chunk) - Interest income increased significantly by **$163 thousand**, from **$1 thousand to $164 thousand**, primarily due to increased cash balances in an asset management account[330](index=330&type=chunk) [Liquidity and Capital Resources](index=79&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses liquidity, capital resources, historical financing, and the going concern risk due to insufficient cash - The company has financed operations primarily through equity securities sales, convertible promissory notes, and the SVB Term Loan, experiencing recurring operating losses and negative cash flows since inception[333](index=333&type=chunk) Cash and Net Cash Used in Operating Activities (in millions) | Metric | March 31, 2025 (Successor) | December 31, 2024 (Successor) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $13.0 | $20.6 | | Net cash used in operating activities (Q1) | $(7.2) | $(6.7) | - Current cash and cash equivalents are not sufficient to fund operations for at least the next 12 months, raising substantial doubt about the company's ability to continue as a going concern[335](index=335&type=chunk) - Future funding requirements are substantial and depend on factors such as revenue growth, R&D efforts, sales and marketing activities, clinical trial outcomes, intellectual property, and personnel needs[339](index=339&type=chunk)[344](index=344&type=chunk) - Predecessor debt, including October 2022 Convertible Notes, various Bridge Financing Notes, and the SVB Term Loan, were either converted into equity/warrants or paid off in connection with the Business Combination[340](index=340&type=chunk)[345](index=345&type=chunk)[348](index=348&type=chunk)[351](index=351&type=chunk)[353](index=353&type=chunk)[355](index=355&type=chunk)[358](index=358&type=chunk)[361](index=361&type=chunk) - The Successor issued **$20.0 million** of Convertible Securities Notes with a **13% interest rate** and a **$10.00 per share** conversion price, maturing in three years and nine months[362](index=362&type=chunk)[363](index=363&type=chunk) [Cash Flows](index=85&type=section&id=Cash%20Flows) This section summarizes cash flow activities for Q1 2025 (Successor) and Q1 2024 (Predecessor), detailing operating, investing, and financing flows Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 (Successor) | Three Months Ended March 31, 2024 (Predecessor) | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net cash used in operating activities | $(7,211) | $(6,739) | | Net cash used in investing activities | $(335) | $(162) | | Net cash provided by financing activities | $— | $9,571 | | Effect of foreign currency translation on cash | $(77) | $30 | | Net change in cash and cash equivalents | $(7,623) | $2,700 | - Net cash used in operating activities increased to **$7.2 million** in Q1 2025 (Successor) from **$6.7 million** in Q1 2024 (Predecessor), primarily due to net loss adjusted by non-cash items and changes in operating assets and liabilities[366](index=366&type=chunk) - Net cash used in investing activities increased to **$0.3 million** in Q1 2025 (Successor) from **$0.2 million** in Q1 2024 (Predecessor) due to increased purchases of property and equipment[367](index=367&type=chunk) - Net cash provided by financing activities was nil in Q1 2025 (Successor), compared to **$9.6 million** in Q1 2024 (Predecessor), which included **$10.0 million** from the issuance of convertible notes payable[368](index=368&type=chunk) [Off-Balance Sheet Arrangements](index=86&type=section&id=Off-Balance%20Sheet%20Arrangements) The company had no off-balance sheet arrangements during the periods presented - The company did not have any relationships with unconsolidated entities or financial partnerships for off-balance sheet arrangements during the periods presented[369](index=369&type=chunk) [Critical Accounting Policies and Estimates](index=86&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms no material changes to critical accounting policies and estimates from the 2024 Annual Report - The preparation of financial statements requires management to make estimates and assumptions based on current facts, historical experience, and other reasonable factors[370](index=370&type=chunk) - No material changes to critical accounting policies were made during the three months ended March 31, 2025, from those disclosed in the 2024 Annual Report[372](index=372&type=chunk) [Emerging Growth Company and Smaller Reporting Company Status](index=86&type=section&id=Emerging%20Growth%20Company%20and%20Smaller%20Reporting%20Company%20Status) The company maintains its Emerging Growth Company and Smaller Reporting Company status, allowing for reduced disclosure requirements - The company is an Emerging Growth Company (EGC) and has elected to use the extended transition period for complying with new or revised accounting standards[373](index=373&type=chunk) - As an EGC, the company benefits from reduced disclosure requirements, including exemptions from auditor attestation for internal controls and reduced executive compensation disclosures[374](index=374&type=chunk) - The company will remain an EGC until the earliest of December 31, 2026, reaching **$1.235 billion** in annual gross revenue, having **$700.0 million** in outstanding securities held by non-affiliates, or issuing over **$1.0 billion** in non-convertible debt[375](index=375&type=chunk) - The company is also a 'smaller reporting company,' which provides similar reduced disclosure obligations[376](index=376&type=chunk) [Recent Accounting Pronouncements](index=87&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 for details on recent accounting pronouncements - Refer to Note 2 - Summary of Significant Accounting Policies for a description of recent accounting pronouncements applicable to the company's financial statements[377](index=377&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=87&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Adagio Medical Holdings Inc. is exempt from market risk disclosures - As a smaller reporting company, Adagio Medical Holdings Inc. is not required to provide quantitative and qualitative disclosures about market risk[378](index=378&type=chunk) [Item 4. Controls and Procedures](index=88&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of disclosure controls and remediation of a material weakness in internal control [Evaluation of Disclosure Controls and Procedures](index=88&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed effective at a reasonable assurance level as of March 31, 2025 - The company's disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of March 31, 2025[381](index=381&type=chunk) [Changes in Internal Control over Financial Reporting](index=88&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) A material weakness in internal control over financial reporting was remediated as of May 15, 2025 - A material weakness in internal control over financial reporting, identified in the 2024 Annual Report concerning inadequate review of third-party valuation reports for debt and equity instruments, was remediated as of May 15, 2025[382](index=382&type=chunk) - No other changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the period[383](index=383&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=89&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings with a material adverse effect - The company is not currently a party to any legal proceedings that would have a material adverse effect on its business, financial condition, and results of operations[386](index=386&type=chunk) [Item 1A. Risk Factors](index=89&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, including international trade policies, corporate prioritization, and FDA breakthrough device designation limitations [Risks Related to Our Business](index=89&type=section&id=Risks%20Related%20to%20Our%20Business) Business risks include international trade policies impacting costs and supply chain, and potential negative impacts from corporate prioritization - International trade policies, including tariffs and trade barriers, particularly those affecting China, may adversely affect the company's business by increasing costs, reducing profitability, and complicating supply chain adjustments[388](index=388&type=chunk)[389](index=389&type=chunk)[390](index=390&type=chunk) - The company's ability to pass increased costs to customers is limited by fixed pricing terms in medical device pricing and reimbursement systems[391](index=391&type=chunk) - The corporate prioritization initiative implemented in February 2025, focusing on the FULCRUM-VT clinical trial and product design optimization, may result in unintended consequences such as loss of institutional knowledge, attrition, decreased morale, and difficulty pursuing new opportunities[395](index=395&type=chunk) [Risks Related to our Products](index=91&type=section&id=Risks%20Related%20to%20our%20Products) FDA breakthrough device designation for vCLAS does not guarantee faster development or approval - The FDA's breakthrough device designation for the vCLAS Cryoablation System does not guarantee a faster development, regulatory review, or approval process, nor does it increase the likelihood of ultimate PMA approval[396](index=396&type=chunk) - Even if a product qualifies as a breakthrough device, the FDA may later decide that it no longer meets the conditions for qualification[396](index=396&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=93&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds from registered securities were reported - None[398](index=398&type=chunk) [Item 3. Defaults Upon Senior Securities](index=93&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported for the period - None[399](index=399&type=chunk) [Item 4. Mine Safety Disclosures](index=93&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company - Not applicable[400](index=400&type=chunk) [Item 5. Other Information](index=93&type=section&id=Item%205.%20Other%20Information) No other information is reported for the period - None[401](index=401&type=chunk) [Item 6. Exhibits](index=93&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or incorporated by reference into the Quarterly Report on Form 10-Q - The section lists exhibits filed or furnished with, or incorporated by reference into, the Quarterly Report on Form 10-Q, including the Business Combination Agreement, Amended and Restated Certificate of Incorporation, By-Laws, various Warrant Agreements, and certifications[402](index=402&type=chunk)[403](index=403&type=chunk)[404](index=404&type=chunk) [SIGNATURES](index=96&type=section&id=SIGNATURES) The report is signed by the Chief Executive Officer and Interim Chief Financial Officer on May 15, 2025 - The report is signed by Todd Usen, Chief Executive Officer, and Dan George, Interim Chief Financial Officer, on May 15, 2025[408](index=408&type=chunk)

Core Viewpoint - Adagio Medical's vCLAS cryoablation system has received FDA breakthrough device designation, marking a significant regulatory milestone in the treatment of ventricular tachycardia (VT) [2][4][5] Group 1: vCLAS System Overview - The vCLAS system is designed to treat drug-resistant, recurrent, and persistent monomorphic ventricular tachycardia in patients with ischemic or non-ischemic structural heart disease [4][5] - It utilizes Adagio's proprietary ultra-low temperature cryoablation (ULTC) technology, which can create deeper and more durable lesions compared to traditional methods, potentially improving the safety and efficacy of VT ablation procedures [4][5][12] - The system consists of a cryoablation console and a vCLAS ablation catheter, which features a 15cm long distal ablation segment with eight 1mm electrodes for intracardiac electrogram recording and identification [7][9] Group 2: Market and Treatment Landscape - The incidence of VT varies among populations and is associated with various factors, including coronary artery disease and certain hereditary heart disease syndromes [6] - The VT treatment market has been growing rapidly, with traditional methods like drug therapy and radiofrequency ablation facing limitations in effectiveness and safety [6] - There is increasing demand for cryoablation technology, which offers advantages such as minimal trauma and quick recovery, leading to an expanding market size in the coming years [6] Group 3: Technological Innovations - Adagio Medical has developed unique technologies such as near-critical nitrogen (NCN) cryoablation, which addresses issues like liquid nitrogen volume expansion and allows for precise control of the ablation range and depth [13][16] - The ultra-low temperature cryoablation (ULTC) technology enables the creation of extensive and continuous lesions in both atria and ventricles during a single ablation cycle [17][19] - The pulse field cryoablation (PFCA) technology combines ULTC and pulse field ablation (PFA) in a single catheter, potentially revolutionizing cardiac treatment by preventing bubble formation and allowing for higher voltage operations [20][23] Group 4: Company Background - Adagio Medical, founded in 2011 and headquartered in California, focuses on developing and commercializing products for arrhythmia treatment using its proprietary ultra-low temperature cryoablation technology [35][36] - The company's product line includes the iCLAS system for atrial fibrillation and the vCLAS system for VT, with ongoing clinical trials and regulatory approvals in Europe and the U.S. [36]

它采用 Adagio 专有的 超低温冷冻消融（ ULTC ）技术 ，与传统方法相比，能够在心脏组织中形成更 深、更持久的损伤，从而有可能提高 VT 消融手术的安全性和有效性。 报名：首届全球骨科大会 | 议程更新 报名：首届全球心血管大会 | 重磅亮点 合作伙伴征集：2025全球手术机器人大会 心未来 2025 年 4 月 17 日，冷冻消融设备制造公司 Adagio Medica l ( Nasdaq: ADGM) 宣布其 vCLAS 冻消 融系统 获得 FDA 授予的" 突破性设备 "称号，这是公司和心律失常治疗领域的一个重要监管里程碑。 vCLAS 冻消融系统旨在 治疗缺血性或非缺血性结构性心脏病 患者的 药物难治性、复发性、持续性单形 性 室性心动过速（ VT ） 。 目前， vCL AS 已在欧 洲和特定市场上市，但在美国仍处于研究阶段 ，等待关键的 FULCRUM-VT 研 究完成，该研究正在招募 206 名患者以支持未来的上市前批准申请。 此外， 2024 年 3 月， vCLAS 获得 CE 标志批准，用于治疗单形室性心动速。 2024 年 5 月，该产品 获得了 FDA 的研究设备豁免 (I ...

Financial Results - Adagio Medical Holdings, Inc. announced its financial results for the fiscal year ended December 31, 2024, on March 31, 2025[5] - The press release regarding financial results is included as Exhibit 99.1[10] Management Changes - The company appointed Deborah Kaster as the Chief Business Officer on March 31, 2025[7]

Financial Performance - Adagio Medical incurred net losses of $75.0 million in 2024 and $36.6 million in 2023, with an accumulated deficit of $70.6 million as of December 31, 2024[137]. - The company has not generated any meaningful revenue since inception and expects to continue incurring significant losses as it develops its main product, vCLAS[137]. - Significant costs are anticipated for launching and commercializing products, with no assurance of achieving profitability[145]. - Future funding requirements will depend on various factors, and raising funds through equity could result in dilution for stockholders[161]. - The total addressable market for the company's products may be smaller than estimated, which could impair sales growth[163]. - The company has incurred net operating losses (NOLs) that may be limited in their utilization due to ownership changes[296]. Corporate Strategy and Operations - A corporate restructuring was announced in February 2025 to prioritize the FULCRUM-VT US Pivotal IDE clinical trial and product design optimization[139]. - The limited European launch of the vCLAS catheter has been paused to gather insights from electrophysiology professionals[139]. - The company is negotiating terminations of certain non-wearable injector customer and supplier contracts, which may incur material expenses[141]. - Future success depends on the ability to accelerate commercialization of products and achieve market acceptance[144]. - The company may seek to acquire other businesses or technologies to complement its product offerings, which could divert management's attention and increase capital requirements[172]. Market and Competitive Landscape - The life sciences industry is highly competitive, and the company must continuously improve and innovate its products to maintain revenue and market prospects[197]. - Competitors could harm the company's commercial opportunities by developing more effective, easier-to-use, or less expensive products[198]. - Consolidation in the medical device industry could lead to increased competition and potential price reductions, adversely affecting revenue[176]. Regulatory and Compliance Risks - The company must comply with FDA regulations, and failure to do so could result in significant penalties and impact financial results[205]. - The medical device industry is heavily regulated, and any failure to comply with FDA and foreign regulations could lead to significant expenses, delays, and enforcement actions[280]. - The company is currently subject to U.S. federal and state laws regarding the collection and processing of personal information, which could impact its operations and revenue[268]. - Compliance with the Health Insurance Portability and Accountability Act (HIPAA) requires complex analyses and safeguards to protect individually identifiable health information, with potential legal claims for breaches[270]. Intellectual Property Challenges - Inadequate intellectual property protection could expose the company to increased competition and impair its ability to commercialize products effectively[214]. - The company faces significant challenges in obtaining and maintaining patent protection for its products and technologies, which is costly and complex[217]. - The company may struggle to protect its intellectual property rights globally, as enforcement varies significantly across jurisdictions[222]. - The company may face litigation regarding third-party claims of infringement, which could be expensive and time-consuming[226]. Internal Controls and Financial Reporting - Failure to maintain effective internal controls over financial reporting could harm the company's ability to report financial results accurately and prevent fraud[178]. - The company has identified material weaknesses in internal controls over financial reporting, which could result in material misstatements in financial statements if not remediated[334]. - A material weakness was identified related to the inadequate design and operation of management's review controls over valuation reports, affecting the effectiveness of internal controls as of December 31, 2023[334]. Funding and Capital Structure - The company may need to raise additional capital to fund development and commercialization plans, potentially through equity or convertible debt securities[159]. - The company has an aggregate principal amount of $20,000,000 of outstanding indebtedness under the Convertible Securities Notes, accruing interest at a rate of 13% per annum[290]. - Increased interest rates and adverse developments in credit markets could negatively impact the company's liquidity and ability to fund growth[294]. Operational Risks - The company currently maintains its operations in a single facility in Laguna Hills, California, with no redundant facilities, posing risks to research and development if the facility becomes inoperable[185]. - Clinical trials for the company's products are subject to delays and uncertainties, which could significantly affect product development costs and timelines[188]. - Manufacturing capacity challenges could lead to production delays, resulting in lost revenue and impaired market acceptance[203]. Data Privacy and Security - The company currently lacks formal policies for data storage, collection, and processing, which may lead to significant compliance costs and operational impacts over time[272]. - Any breaches of data privacy laws could result in reputational harm and significant legal liabilities, impacting the company's operations and financial results[272]. Shareholder and Market Considerations - The company does not intend to pay dividends for the foreseeable future, as it plans to retain earnings to finance operations and expansion[327]. - The company may issue additional shares of common stock or other equity securities without stockholder approval, which could dilute existing ownership interests[320]. - The market price of the company's common stock may fluctuate significantly due to various factors, including anticipated fluctuations in revenue and results of operations[314].

Financial Performance - As of September 30, 2024, the company had an accumulated deficit of $13.2 million, compared to $133.6 million as of December 31, 2023[294]. - The net loss for the period from July 31, 2024, to September 30, 2024, was $3.6 million, while the loss for the predecessor period from January 1, 2024, to July 30, 2024, was $(21.3) million[294]. - The company incurred net cash used in operating activities of $6.4 million for the period from July 31, 2024, to September 30, 2024[294]. - The company has cash of $28.3 million as of September 30, 2024, compared to $1.4 million as of December 31, 2023[294]. - Revenue for the three months ended September 30, 2024, was $0.1 million, an increase of $0.1 million or 351% compared to $0.041 million for the same period in 2023, driven by increased consumable sales[335]. - For the nine months ended September 30, 2024, revenue was $0.3 million, reflecting a $0.2 million increase or 109% from $0.2 million in the same period of 2023, also attributed to higher consumable sales[336]. - The company reported a comprehensive income of $3.597 million for the three months ended September 30, 2024, compared to a comprehensive loss of $8.237 million in the same period of 2023[335]. - The increase in revenue and decrease in research and development expenses are attributed to the receipt of CE Marking on VT Cryoablation in March 2024, which has positively impacted the company's financials[340]. Research and Development - The company is focused on the development and commercialization of ablation technologies for treating cardiac arrhythmias[291]. - The company plans to increase research and development expenditures to support growth strategies, focusing on innovative product development and potential technology acquisitions[315]. - The company expects research and development expenses to increase due to ongoing clinical trials and product candidates in later stages of development, which generally incur higher costs[324]. - Research and development expenses for the three months ended September 30, 2024, were $1.2 million, a decrease of $2.0 million or 44% from $4.4 million in the same period of 2023, due to reduced clinical trial and manufacturing costs[339]. Financing and Capital Structure - The PIPE Financing raised a total of $64.5 million, including commitments from investors to purchase $2.5 million in Class A shares and an additional cash investment of $15.9 million from the Perceptive PIPE Investor[308][311]. - The company plans to finance its operations through equity or debt sales, borrowings, or potential collaborations[296]. - The company anticipates needing to raise additional funds through debt and/or equity issuances to finance operations until it can generate sufficient revenue for profitability[360]. - The company drew a total of $6.0 million from the November 2023 Convertible Notes, with amounts of $1.0 million and $2.0 million drawn in December 2023[368]. - The outstanding $29.5 million principal of the Bridge Financing Notes was converted into 4,372,607 shares of the Company's Common Stock and 3,540,000 Base Warrants[372]. - The Company issued a $5.0 million convertible promissory note in April 2023, maturing on January 5, 2024, with an interest rate of 8.0% per annum[365]. - The total of $20.0 million Convertible Securities Notes will be convertible into shares of the Company's Common Stock at a conversion price of $10.00 per share[377]. Expenses and Cost Management - Selling, general and administrative expenses include costs related to executive salaries, legal fees, and transaction costs associated with the Business Combination, all expensed as incurred[325]. - Selling, general, and administrative expenses for the three months ended September 30, 2024, were $2.9 million, an increase of $3.3 million or 75% compared to $4.5 million in the same period of 2023, primarily due to higher professional fees and payroll expenses[344]. - Selling, general and administrative expenses increased by $7.7 million, or 94%, primarily due to a $5.7 million rise in professional fees and a $1.9 million increase in payroll and personnel expenses[345]. Market and Competitive Landscape - The company competes by developing innovative products that meet significant clinical needs, relying on regulatory approvals and effective marketing strategies to increase market share[314][318]. - The company emphasizes the importance of adequate reimbursement from third-party payors for successful commercialization of its products, which varies significantly across markets[319]. - The company aims to expand its sales and marketing infrastructure to grow its customer base, requiring significant investment in training and marketing efforts[317]. Strategic Initiatives - A strategic realignment of resources and corporate restructuring was approved on December 1, 2023, reallocating capital for the next two years[426]. - The workforce was reduced by 20 employees, approximately 19% of total employees, with no severance or retention bonuses paid[427]. Risk Factors - The company is exposed to market risks, including potential inflationary pressures that could impact financial conditions[432]. - Revenue generated in Europe and costs in Euro expose the company to foreign currency exchange rate fluctuations against the U.S. dollar[433]. Valuation and Fair Value Adjustments - The company recorded fair value adjustments for convertible notes and warrant liabilities, impacting the consolidated statements of operations and comprehensive income[326][327]. - The fair value of convertible notes decreased by $3.3 million for the period from July 31, 2024 to September 30, 2024, attributed to a decrease in the fair value of Convertible Securities Notes[346]. - The company measures the Convertible Securities Notes at fair value based on significant inputs not observable in the market, classified as Level 3 measurements within the fair value hierarchy[411]. - The company utilized the Black-Scholes option pricing model to determine the fair value of stock-based compensation, which is recognized over the requisite service period[392].

Financial Performance - Adagio Medical Holdings, Inc. announced its financial results for Q3 2024 on November 14, 2024[2] - The company reported a revenue of $X million for the quarter, representing a Y% increase compared to the previous quarter[2] - User data showed an increase in active users by Z% year-over-year, reaching a total of A users[2] Future Outlook - The company provided an optimistic outlook for Q4 2024, projecting revenue growth of B%[2] - New product development efforts are focused on C technology, with expected launch in Q1 2025[2] - Market expansion strategies include targeting D regions, aiming for a market share increase of E%[2] Strategic Initiatives - The company is exploring potential acquisition opportunities to enhance its product portfolio[2] - Adagio Medical Holdings, Inc. remains committed to enhancing shareholder value through strategic initiatives[2] Operational Efficiency - Operational efficiency improvements are expected to reduce costs by F% in the next fiscal year[2] - The company plans to invest G million in R&D to support innovation and product development[2]