Alliance Entertainment Holding Corp 10-Q for FY2023 Q1

Alliance Entertainment Holding Corp (AENT)

10-Q 2022-11-10 For: 2022-09-30

Added on April 07, 2026

About this 10-Q

Alliance Entertainment Holding Corp filed this 10-Q on November 10, 2022, covering the quarter ended September 30, 2022 (FY2023 Q1).

Headline figures

Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $290.49K; compared with net income of $1.04M a year earlier

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A Common Stock and one-half of one Redeemable Warrant	ADRA.U	NYSE American LLC
Class A Common Stock, par value $0.0001 per share	ADRA	NYSE American LLC
Warrants, each exercisable for one share Class A Common Stock for $11.50 per share	ADRA WS	NYSE American LLC

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒


		Page
Part I. Financial Information
Item 1.	Condensed Financial Statements
	Condensed Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021	1
	Condensed Statements of Operations for Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)	2
	Condensed Statements of Changes in Stockholders’ Deficit for Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)	3
	Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 (Unaudited)	4
	Notes to Condensed Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27
Part II. Other Information
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
Part III. Signatures		30


	September 30, 2022		December 31, 2021
	(Unaudited)
ASSETS
Current assets
Cash	$	29,502	$	724,410
Prepaid expenses		53,333		199,166
Total Current Assets		82,835		923,576
Marketable securities held in Trust Account		116,831,001		116,160,281
TOTAL ASSETS	$	116,913,836	$	117,083,857

LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION, AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accrued expenses	$	1,050,428	$	440,245
Income taxes payable		69,477		—
Promissory note		436,077		—
Total Current Liabilities		1,555,982		440,245
Warrant Liabilities		1,884,800		4,860,800
TOTAL LIABILITIES		3,440,782		5,301,045

Commitments and Contingencies

Class A common stock subject to possible redemption, $0.0001 par value; 11,500,000 shares at $10.12 and $10.10 redemption value at September 30, 2022 and December 31, 2021, respectively		116,411,474		116,150,000

STOCKHOLDERS’ DEFICIT
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—		—
Class A common stock, $0.0001 par value; 100,000,000 shares authorized		—		—
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 2,875,000 shares issued and outstanding at September 30, 2022 and December 31, 2021		288		288
Additional paid-in capital		—		—
Accumulated deficit		(2,938,708)		(4,367,476)
TOTAL STOCKHOLDERS’ DEFICIT		(2,938,420)		(4,367,188)
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION, AND STOCKHOLDERS’ DEFICIT	$	116,913,836	$	117,083,857


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Operating and formation costs	$	634,642	$	217,525	$	1,887,001	$	632,695
Loss from operations		(634,642)		(217,525)		(1,887,001)		(632,695)

Other income (expense):
Interest earned on marketable securities held in Trust Account		512,825		2,928		670,720		7,352
Transaction costs incurred in connection with IPO		—		—		—		(86,544)
Change in fair value of warrants liabilities		(99,200)		1,256,100		2,976,000		3,801,300
Other income, net		413,625		1,259,028		3,646,720		3,722,108

Income (loss) before provision for income taxes		(221,017)		1,041,503		1,759,719		3,089,413
Provision for income taxes		(69,477)		—		(69,477)		—

Net (loss) income	$	(290,494)	$	1,041,503	$	1,690,242	$	3,089,413

Weighted average shares outstanding, Class A common stock		11,500,000		11,500,000		11,500,000		9,772,894

Basic and diluted net (loss) income per share, Class A common stock	$	(0.02)	$	0.07	$	0.12	$	0.25

Weighted average shares outstanding, Class B common stock		2,875,000		2,875,000		2,875,000		2,817,308

Basic and diluted net (loss) income per share, Class B common stock	$	(0.02)	$	0.07	$	0.12	$	0.25


				Additional				Total
	Class B Common Stock			Paid-in		Accumulated		Stockholders’
	Shares	Amount		Capital		Deficit		Deficit
Balance - January 1, 2022	2,875,000	$	288	$	—	$	(4,367,476)	$	(4,367,188)

Net income	—		—		—		1,122,187		1,122,187

Balance - March 31, 2022	2,875,000		288		—		(3,245,289)		(3,245,001)

Net income	—		—		—		858,549		858,549

Balance - June 30, 2022	2,875,000		288		—		(2,386,740)		(2,386,452)

Change in value of Class A common stock subject to possible redemption	—		—		—		(261,474)		(261,474)

Net loss	—		—		—		(290,494)		(290,494)

Balance – September 30, 2022	2,875,000	$	288	$	—	$	(2,938,708)	$	(2,938,420)


	Class B			Additional				Total
	Common Stock			Paid-in		Accumulated		Stockholders’
	Shares	Amount		Capital		Deficit		Equity (Deficit)
Balance - January 1, 2021	2,875,000	$	288	$	24,712	$	(5,476)	$	19,524

Accretion for Class A common stock to redemption	—		—		(313,212)		(7,606,206)		(7,919,418)

Cash paid in excess of fair value of private warrants	—		—		288,400		—		288,400

Issuance of Representative Warrants	—		—		100		—		100

Net income	—		—		—		3,853,881		3,853,881

Balance – March 31, 2021	2,875,000		288		—		(3,757,801)		(3,757,513)

Net loss	—		—		—		(1,805,971)		(1,805,971)

Balance - June 30, 2021	2,875,000		288		—		(5,563,772)		(5,563,484)

Net income	—		—		—		1,041,503		1,041,503

Balance – September 30, 2021	2,875,000	$	288	$	—	$	(4,522,269)	$	(4,521,981)


Gross proceeds	$	115,000,000
Less:
Proceeds allocated to Public Warrants		(5,290,000)
Class A common stock issuance at cost		(1,479,418)
Plus:
Accretion of carrying value to redemption value		7,919,418
Class A common stock subject to possible redemption, December 31, 2021		116,150,000
Plus:
Accretion of carrying value to redemption value		261,474
Class A common stock subject to possible redemption, September 30, 2022	$	116,411,474


		September 30,	December 31,
Description	Level	2022	2021
Assets:
Marketable Securities held in Trust Account – U.S. Treasury Securities Money Market Fund	1	116,831,001	116,160,281

Liabilities:
Warrant Liability – Public Warrants	1	1,092,500	2,817,500
Warrant Liability – Private Placement Warrants	2	773,300	1,994,300
Warrant Liability – Representative Warrants	3	19,000	49,000


	March 31, 2022						June 30, 2022					September 30, 2022
	Representative			Private			Representative			Private		Representative			Private
Input	Warrants			Warrants			Warrants			Warrants		Warrants			Warrants
Market price of public stock	$	9.88		$	—		$	9.89		$	—	$	9.95		$	—
Risk-free rate		2.44	%		—	%		2.98	%		—		4.12	%		—
Dividend Yield		0.00	%		—	%		0.00	%		—		0.00	%		—
Exercise price	$	11.50		$	—		$	11.50		$	—	$	11.50		$	—
Effective expiration date		6/23/26			—			6/23/26			—		8/26/26			—
One-touch hurdle	$	—		$	—		$	—		$	—	$	—		$	—


	Private Placement		Public		Representative		Warrant Liabilities

Fair value as of January 1, 2021	$	—	$	—	$	—	$	—
Initial measurement on February 11, 2021		3,785,100		5,290,000		36,500		9,111,600
Change in valuation inputs or other assumptions		(1,587,300)		(1,437,500)		17,500		(3,007,300)
Transfer to Level 1		—		(3,852,500)		—		(3,852,500)
Transfer to Level 2		(2,197,800)		—		—		(2,197,800)
Fair value as of September 30, 2021	$	—	$	—	$	54,000	$	54,000


	Representative		Warrant Liabilities

Fair value as of January 1, 2022	$	49,000	$	49,000
Change in valuation inputs or other assumptions		(17,000)		(17,000)
Fair value as of March 31, 2022		32,000		32,000
Change in valuation inputs or other assumptions		(14,000)		(14,000)
Fair value as of June 30, 2022		18,000		18,000
Change in valuation inputs or other assumptions		1,000		1,000
Fair value as of September 30, 2022	$	19,000	$	19,000


No.		Description of Exhibit
31.1*		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit)

	ADARA ACQUISITION CORP.

Date: November 10, 2022	By:	/s/ Thomas Finke
	Name:	Thomas Finke
	Title:	Chief Executive Officer
		(Principal Executive Officer)

Date: November 10, 2022	By:	/s/ Paul G. Porter
	Name:	Paul G. Porter
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)


Dated: November 10, 2022	/s/ Thomas Finke
	Thomas Finke
	Chief Executive Officer
	(Principal Executive Officer)