Alliance Entertainment Holding Corp 10-Q for FY2022 Q1

Alliance Entertainment Holding Corp (AENT)

10-Q 2021-11-12 For: 2021-09-30

Added on April 07, 2026

About this 10-Q

Alliance Entertainment Holding Corp filed this 10-Q on November 12, 2021, covering the quarter ended September 30, 2021 (FY2022 Q1).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $1.04M

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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, 2021 (Unaudited) and December 31, 2020	1
	Condensed Statements of Operations for Three and Nine Months Ended September 30, 2021 (Unaudited) and for the Period from August 5, 2020 (Inception) through September 30, 2020	2
	Condensed Statements of Changes in Stockholders’ Equity (Deficit) for Three and Nine Months Ended September 30, 2021 (Unaudited) and for the Period from August 5, 2020 (Inception) through September 30, 2020	3
	Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2021 (Unaudited) and for Period from August 5, 2020 (Inception) through September 30, 2020	4
	Notes to Condensed Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21
Part II. Other Information
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	23
Part III. Signatures		24


	September 30, 2021		December 31, 2020
	(Unaudited)
ASSETS
Current assets
Cash	$	844,946	$	102,296
Prepaid expenses		237,712		400,000
Total Current Assets		1,082,658		502,296

Deferred offering costs		—		122,110
Investments held in Trust Account		116,157,352		—
TOTAL ASSETS	$	117,240,010	$	624,406

LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION, AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accrued expenses	$	255,191	$	4,882
Promissory note – related party		—		600,000
Total Current Liabilities		255,191		604,882
Warrant Liabilities		5,356,800		—
Total Liabilities		5,611,991		604,882

Commitments and Contingencies

Class A common stock subject to possible redemption, $0.0001 par value; 11,500,000 and no shares at redemption value at September 30, 2021 and December 31, 2020, respectively		116,150,000		—

Stockholders’ Equity (Deficit)
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding		—		—
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 2,875,000 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		288		288
Additional paid-in capital		—		24,712
Accumulated deficit		(4,522,269)		(5,476)
Total Stockholders’ Equity (Deficit)		(4,521,981)		19,524
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION, AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	117,240,010	$	624,406


					For the
					Period from
					August 5,
					2020
					(Inception)
	Three Months Ended		Nine Months Ended		through
	September 30,		September 30,		September 30,
	2021		2021		2020
Operating and formation costs	$	217,525	$	632,695	$	835
Loss from operations		(217,525)		(632,695)		(835)

Other income (expense):
Interest earned on investments held in Trust Account		2,928		7,352		—
Transaction costs allocated to warrant liabilities		—		(86,544)		—
Change in fair value of warrants		1,256,100		3,801,300		—
Total other income, net		1,259,028		3,722,108		—

Net income (loss)	$	1,041,503	$	3,089,413	$	(835)

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

Basic and diluted net income per share, Class A common stock	$	0.07	$	0.25	$	—

Weighted average shares outstanding, Class B common stock		2,875,000	$	2,817,308		2,500,000

Basic and diluted net income per share, Class B common stock	$	0.07		0.25	$	—


				Additional				Total
	Class B 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 amount	—		—		(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 (unaudited)	2,875,000	$	288	$	—	$	(3,757,801)	$	(3,757,513)

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

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

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

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


	Class B			Additional				Total
	Common Stock			Paid-in		Accumulated		Stockholders’
	Shares	Amount		Capital		Deficit		Equity
Balance - August 5, 2020 (inception)	—	$	—	$	—	$	—	$	—

Issuance of Class B common stock to Sponsor	2,875,000		288		24,712		—		25,000

Net loss	—		—		—		(835)		(835)

Balance - September 30, 2020	2,875,000	$	288	$	24,712	$	(835)	$	24,165


			For The Period From
			August 5, 2020
	Nine Months Ended		(Inception) Through
	September 30,		September 30,
	2021		2020
Cash Flows from Operating Activities:
Net income	$	3,089,413	$	(835)
Adjustments to reconcile net income to net cash used in operating activities:
Change in fair value of warrant liabilities		(3,801,300)		—
Transaction costs incurred in connection with IPO		86,544		—
Interest earned on investments held in Trust Account		(7,352)		—
Changes in operating assets and liabilities:
Prepaid expenses		162,288		—
Accrued expenses		250,309		761
Net cash used in operating activities		(220,098)		(74)

Cash Flows from Investing Activities:
Investment of cash in Trust Account		(116,150,000)		—
Net cash used in investing activities		(116,150,000)		—

Cash Flows from Financing Activities:
Proceeds from issuance of Class B common stock to Sponsor		—		25,000
Proceeds from sale of Units, net of underwriting discounts paid		114,000,000		—
Proceeds from sale of Private Placements Warrants		4,120,000		—
Proceeds from sale of Unit Purchase Option		100		—
Proceeds from promissory note - related party		—		100,000
Repayment of promissory note – related party		(600,000)		—
Payment of offering costs		(407,352)		(50,000)
Net cash provided by financing activities		117,112,748		75,000

Net Change in Cash		742,650		74,926
Cash – Beginning of period		102,296		—
Cash – End of period	$	844,946		74,926

Non-Cash investing and financing activities:
Offering costs included in accrued offering costs	$	—	$	35,000


	As Previously
	Reported		Adjustment		As Revised
Balance Sheet as of February 11, 2021 (Audited)
Class A common stock subject to possible redemption	$	103,452,012	$	12,697,988	$	116,150,000
Class A common stock	$	126	$	(126)	$	—
Additional paid-in capital	$	5,091,656	$	(5,091,656)	$	—
Accumulated deficit	$	(92,060)	$	(7,606,206)	$	(7,698,266)
Total Stockholders’ Equity	$	5,000,010	$	(12,697,988)	$	(7,697,978)


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	$	116,150,000


		September 30,
Description	Level	2021
Assets:
Investments held in Trust Account – U.S. Treasury Securities Money Market Fund	1	$	116,157,352

Liabilities:
Warrant Liability – Public Warrants	1		3,105,000
Warrant Liability – Private Placement Warrants	2		2,197,800
Warrant Liability – Representative Warrants	3		54,000


	February 11, 2021
	(Initial Measurement)									September 30, 2021
	Public			Private			Representative			Representative			Private
Input	Warrants			Warrants			Warrants			Warrants			Warrants
Market price of public stock	$	9.54		$	9.54		$	9.54		$	9.80		$	9.80
Risk-free rate		0.52	%		0.52	%		0.36	%		0.92	%		0.92	%
Dividend Yield		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Exercise price	$	11.50		$	11.50		$	11.50		$	11.50		$	11.50
Effective expiration date		6/26/26			6/26/26			5/11/25			6/23/26			6/23/26
One-touch hurdle	$	18.15		$	—		$	—		$	—		$	—


	Private Placement		Public		Representative		Warrant Liabilities

Fair value as of January 1, 2021	$	—	$	—	$	—	$	—
Initial measurement on February 11th, 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


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 12, 2021	By:	/s/ Martin A. Sumichrast
	Name:	Martin A. Sumichrast
	Title:	Chief Executive Officer
		(Principal Executive Officer)

Date: November 12, 2021	By:	/s/ Paul G. Porter
	Name:	Paul G. Porter
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)