Alliance Entertainment Holding Corp 10-Q, filed Aug 13, 2021

Alliance Entertainment Holding Corp (AENT)

10-Q 2021-08-13 For: 2021-06-30

Added on April 07, 2026

About this 10-Q

Alliance Entertainment Holding Corp filed this 10-Q on August 13, 2021, covering the quarter ended June 30, 2021.

Headline figures

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

Net loss: $1.81M

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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 June 30, 2021 (unaudited) and December 31, 2020	1
	Condensed Statements of Operations for three and six months ended June 30, 2021 (unaudited)	2
	Condensed Statement of Changes in Stockholders’ Equity for three and six months ended June 30, 2021 (unaudited)	3
	Condensed Statement of Cash Flows for the six months ended June 30, 2021 (unaudited)	4
	Notes to Condensed Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures Regarding Market Risk	20
Item 4.	Controls and Procedures	21
Part II. Other Information
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	22
Item 5.	Other Information	22
Item 6.	Exhibits	23
Part III. Signatures		24


	June 30, 2021		December 31, 2020
	(Unaudited)		(Audited)
ASSETS
Current assets
Cash	$	941,686	$	102,296
Prepaid expenses		295,986		400,000
Total Current Assets		1,237,672		502,296

Deferred offering costs		—		122,110
Investments held in Trust Account		116,154,424		—
TOTAL ASSETS	$	117,392,096	$	624,406

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accrued expenses	$	187,680	$	4,882
Accrued offering costs		5,000		—
Promissory note – related party		—		600,000
Total Current Liabilities		192,680		604,882
Warrant Liabilities		6,612,900		—
Total Liabilities		6,805,580		604,882

Commitments

Class A common stock subject to possible redemption, 10,454,110 and no shares at redemption value at June 30, 2021 and December 31, 2020, respectively		105,586,511		—

Stockholders’ Equity
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding		—		—
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 1,045,890 and no shares issued and outstanding (excluding 10,454,110 and no shares subject to possible redemption) at June 30, 2021 and December 31, 2020, respectively		105		—
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 2,875,000 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		288		288
Additional paid-in capital		2,957,178		24,712
Retained earnings/(Accumulated deficit)		2,042,434		(5,476)
Total Stockholders’ Equity		5,000,005		19,524
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	117,392,096	$	624,406


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2021		2021
Operating and formation costs	$	247,167	$	415,170
Loss from operations		(247,167)		(415,170)

Other (expense) income:
Interest earned on investments held in Trust Account		2,896		4,424
Transaction costs allocated to warrant liabilities		—		(86,544)
Change in fair value of warrants		(1,561,700)		2,545,200
Other (expense) income, net		(1,558,804)		2,463,080

(Loss) Income before provision for income taxes		(1,805,971)		2,047,910
(Provision) Benefit for income taxes		—		—
Net (loss) income	$	(1,805,971)	$	2,047,910

Weighted average shares outstanding, Class A redeemable common stock		11,500,000		11,500,000
Basic and diluted net income (loss) per share, Class A redeemable common stock	$	0.00	$	0.00

Weighted average shares outstanding, Class A and Class B non-redeemable common stock		2,875,000		2,787,983
Basic and diluted net income (loss) per share, Class A and Class B non-redeemable common stock	$	(0.63)	$	0.73


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

Sale of 11,500,000 Units, Units, net of underwriting discounts, offering costs related to Class A common stock and initial fair value of Public Warrants	11,500,000		1,150	—		—		108,229,432		—		108,230,582

Cash paid in excess of fair value for Private Placement Units	—		—	—		—		288,400		—		288,400

Purchase of Representative Warrants	—		—	—		—		100		—		100

Common stock subject to possible redemption	(10,632,919)		(1,063)	—		—		(107,391,419)		—		(107,392,482)

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

Balance — March 31, 2021	867,081	$	87	2,875,000	$	288	$	1,151,225	$	3,848,405	$	5,000,005

Change in value of common stock subject to possible redemption	178,809		18	—		—		1,805,953		—		1,805,971

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

Balance – June 30, 2021	1,045,890	$	105	2,875,000	$	288	$	2,957,178	$	2,042,434	$	5,000,005


Cash Flows from Operating Activities:
Net income	$	2,047,910
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of warrant liabilities		(2,545,200)
Transaction costs incurred in connection with IPO		86,544
Interest earned on investments held in Trust Account		(4,424)
Changes in operating assets and liabilities:
Prepaid expenses		104,014
Accrued expenses		182,798
Net cash used in operating activities		(128,358)

Cash Flows from Investing Activities:
Investment of cash in Trust Account		(116,150,000)
Cash withdrawn from Trust Account to pay for franchise and income taxes		—
Net cash used in investing activities		(116,150,000)

Cash Flows from Financing Activities:
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
Repayment of promissory note – related party		(600,000)
Payment of offering costs		(402,352)
Net cash provided by financing activities		117,117,748

Net Change in Cash		839,390
Cash – Beginning of period		102,296
Cash – End of period	$	941,686

Non-Cash investing and financing activities:
Offering costs included in accrued offering costs	$	5,000
Initial classification of Class A common stock subject to possible redemption	$	103,452,012
Initial classification of warrant liabilities	$	9,158,100
Change in value of Class A common stock subject to possible redemption	$	2,134,499


		June 30,
Description	Level	2021
Assets:
Investments held in Trust Account – U.S. Treasury Securities Money Market Fund	1	$	116,154,424

Liabilities:
Warrant Liability – Public Warrants	1		3,852,500
Warrant Liability – Private Placement Warrants	3		2,726,900
Warrant Liability – Representative Warrants	3		33,500


	February 11, 2021
	(Initial Measurement)									June 30, 2021
	Public			Private			Representative			Representative			Private
Input	Warrants			Warrants			Warrants			Warrants			Warrants
Market price of public stock	$	9.54		$	9.54		$	9.54		$	9.72		$	9.72
Risk-free rate		0.52	%		0.52	%		0.36	%		0.64	%		0.87	%
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			5/11/25			6/26/26
One-touch hurdle	$	18.15		$	—			—		$	—		$	—


	Private Placement		Public		Representative		Warrant Liabilities

Fair value as of January 1, 2021	$	—	$	—	$	—	$	—
Initial measurement on February 11^th, 2021		3,785,100		5,290,000		36,500		9,158,100
Change in valuation inputs or other assumptions		(1,058,200)		(1,437,500)		(3,000)		(2,545,200)
Transfer to Level 1				(3,852,500)				(3,852,500)
Fair value as of June 30, 2021		2,726,900		—		33,500		2,760,400


No.		Description of Exhibit
3.1		Amended and Restated Certificate of Incorporation. ⁽¹⁾
3.2		By Laws ⁽²⁾
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: August 13, 2021	By:	/s/ Martin A. Sumichrast
	Name:	Martin A. Sumichrast
	Title:	Chief Executive Officer
		(Principal Executive Officer)

Date: August 13, 2021	By:	/s/ Paul G. Porter
	Name:	Paul G. Porter
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)