1150000011500000115000009772894287500028750002875000281730800287500028750000011500000287500097728942817308287500028750001150000011500000115000002875000115000002875000102082190028750002875000000001823584falseS-4/A0.020.070.120.250.020.070.120.25P10D232395580998332022083010.020.020.070.07135219433804823980956913180.120.120.250.250.5P3D158730014375003007300170001700014000140002875000287500028750000.250.00P10D0.250.250.000.000.51150000000001823584adra:CommonClassaSubjectToRedemptionMember2020-12-310001823584adra:CommonClassaSubjectToRedemptionMember2022-09-300001823584adra:CommonClassaSubjectToRedemptionMember2021-12-310001823584adra:RepresentativeWarrantsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-09-300001823584adra:PublicWarrantsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-09-300001823584adra:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-09-300001823584adra:WarrantLiabilitiesMemberus-gaap:FairValueInputsLevel3Member2022-09-300001823584adra:RepresentativeWarrantsMemberus-gaap:FairValueInputsLevel3Member2022-09-300001823584adra:WarrantLiabilitiesMemberus-gaap:FairValueInputsLevel3Member2022-06-300001823584adra:RepresentativeWarrantsMemberus-gaap:FairValueInputsLevel3Member2022-06-300001823584adra:WarrantLiabilitiesMemberus-gaap:FairValueInputsLevel3Member2022-03-310001823584adra:RepresentativeWarrantsMemberus-gaap:FairValueInputsLevel3Member2022-03-310001823584adra:RepresentativeWarrantsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001823584adra:PublicWarrantsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001823584adra:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001823584adra:WarrantLiabilitiesMemberus-gaap:FairValueInputsLevel3Member2021-12-310001823584adra:RepresentativeWarrantsMemberus-gaap:FairValueInputsLevel3Member2021-12-310001823584adra:WarrantLiabilitiesMember2021-12-310001823584adra:WarrantLiabilitiesMemberus-gaap:FairValueInputsLevel3Member2021-09-300001823584adra:RepresentativeWarrantsMemberus-gaap:FairValueInputsLevel3Member2021-09-300001823584adra:WarrantLiabilitiesMember2020-12-310001823584adra:RepresentativeWarrantsMember2020-12-310001823584adra:PublicWarrantsMember2020-12-310001823584adra:PrivatePlacementWarrantsMember2020-12-310001823584us-gaap:IPOMember2022-09-300001823584us-gaap:IPOMember2021-12-310001823584us-gaap:OverAllotmentOptionMember2021-02-110001823584us-gaap:IPOMember2021-02-110001823584adra:PublicWarrantsMemberus-gaap:CommonClassAMember2022-09-300001823584adra:AdministrativeSupportAgreementMember2022-07-012022-09-300001823584adra:AdministrativeSupportAgreementMember2021-07-012021-09-300001823584adra:AdministrativeSupportAgreementMember2021-01-012021-09-300001823584us-gaap:PrivatePlacementMember2021-02-112021-02-110001823584adra:PrivatePlacementWarrantsMemberus-gaap:PrivatePlacementMember2021-01-012021-12-310001823584adra:PromissoryNoteWithRelatedPartyMember2022-09-300001823584adra:AdministrativeSupportAgreementMember2022-09-300001823584adra:PromissoryNoteWithRelatedPartyMember2021-12-310001823584adra:AdministrativeSupportAgreementMember2021-12-310001823584adra:WorkingCapitalLoansWarrantMemberadra:RelatedPartyLoansMember2020-12-310001823584adra:PromissoryNoteWithRelatedPartyMember2020-12-310001823584adra:WorkingCapitalLoansWarrantMemberadra:RelatedPartyLoansMember2020-09-300001823584adra:PromissoryNoteWithRelatedPartyMember2020-09-300001823584adra:WorkingCapitalLoansWarrantMemberadra:RelatedPartyLoansMember2020-08-310001823584adra:PromissoryNoteWithRelatedPartyMember2020-08-310001823584adra:PromissoryNoteWithRelatedPartyMemberadra:ThomasFinkeLlcMember2022-09-300001823584adra:PromissoryNoteWithRelatedPartyMemberadra:BlystoneDonaldsonLlcMember2022-09-300001823584us-gaap:RetainedEarningsMember2022-07-012022-09-300001823584us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001823584us-gaap:RetainedEarningsMember2022-04-012022-06-300001823584us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-3000018235842022-04-012022-06-300001823584us-gaap:RetainedEarningsMember2022-01-012022-03-310001823584us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-3100018235842022-01-012022-03-310001823584us-gaap:RetainedEarningsMember2021-07-012021-09-300001823584us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001823584us-gaap:RetainedEarningsMember2021-04-012021-06-300001823584us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-3000018235842021-04-012021-06-300001823584us-gaap:RetainedEarningsMember2020-08-052020-12-310001823584us-gaap:AdditionalPaidInCapitalMember2020-08-052020-12-310001823584adra:WarrantLiabilitiesMemberus-gaap:FairValueInputsLevel3Member2021-02-112021-02-110001823584adra:RepresentativeWarrantsMemberus-gaap:FairValueInputsLevel3Member2021-02-112021-02-110001823584adra:PublicWarrantsMemberus-gaap:FairValueInputsLevel3Member2021-02-112021-02-110001823584adra:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel3Member2021-02-112021-02-110001823584adra:WarrantLiabilitiesMember2021-02-112021-02-110001823584adra:RepresentativeWarrantsMember2021-02-112021-02-110001823584adra:PublicWarrantsMember2021-02-112021-02-110001823584adra:PrivatePlacementWarrantsMember2021-02-112021-02-110001823584adra:PublicWarrantsMember2022-07-012022-09-300001823584adra:WarrantLiabilitiesMemberus-gaap:FairValueInputsLevel3Member2022-07-012022-09-300001823584adra:RepresentativeWarrantsMemberus-gaap:FairValueInputsLevel3Member2022-07-012022-09-300001823584adra:WarrantLiabilitiesMemberus-gaap:FairValueInputsLevel3Member2022-04-012022-06-300001823584adra:RepresentativeWarrantsMemberus-gaap:FairValueInputsLevel3Member2022-04-012022-06-300001823584adra:WarrantLiabilitiesMemberus-gaap:FairValueInputsLevel3Member2022-01-012022-03-310001823584adra:RepresentativeWarrantsMemberus-gaap:FairValueInputsLevel3Member2022-01-012022-03-310001823584adra:RepresentativeWarrantsMemberus-gaap:FairValueInputsLevel3Member2021-01-012021-09-300001823584adra:PublicWarrantsMemberus-gaap:FairValueInputsLevel3Member2021-01-012021-09-3000018235842022-07-012022-09-3000018235842021-07-012021-09-300001823584us-gaap:CommonClassBMember2022-07-012022-09-300001823584adra:CommonClassB1Member2022-07-012022-09-300001823584adra:CommonClassaSubjectToRedemptionMember2022-07-012022-09-300001823584adra:CommonClassA1Member2022-07-012022-09-300001823584adra:CommonClassB1Member2022-01-012022-09-300001823584adra:CommonClassaSubjectToRedemptionMember2022-01-012022-09-300001823584adra:CommonClassA1Member2022-01-012022-09-300001823584us-gaap:CommonClassBMember2021-07-012021-09-300001823584adra:CommonClassB1Member2021-07-012021-09-300001823584adra:CommonClassaSubjectToRedemptionMember2021-07-012021-09-300001823584adra:CommonClassA1Member2021-07-012021-09-300001823584us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-01-012021-12-310001823584us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-01-012021-12-310001823584us-gaap:CommonClassAMember2021-01-012021-12-310001823584us-gaap:CommonClassBMember2021-01-012021-09-300001823584adra:CommonClassB1Member2021-01-012021-09-300001823584adra:CommonClassaSubjectToRedemptionMember2021-01-012021-09-300001823584adra:CommonClassA1Member2021-01-012021-09-300001823584us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-08-052020-12-310001823584us-gaap:CommonClassBMember2020-08-052020-12-310001823584us-gaap:CommonClassAMember2020-08-052020-12-310001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2022-09-300001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputExpectedDividendRateMember2022-09-300001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputExercisePriceMember2022-09-300001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputCommodityMarketPriceMember2022-09-300001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2022-06-300001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputExpectedDividendRateMember2022-06-300001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputExercisePriceMember2022-06-300001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputCommodityMarketPriceMember2022-06-300001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2022-03-310001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputExpectedDividendRateMember2022-03-310001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputExercisePriceMember2022-03-310001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputCommodityMarketPriceMember2022-03-310001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2021-12-310001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputExpectedDividendRateMember2021-12-310001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputExercisePriceMember2021-12-310001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputCommodityMarketPriceMember2021-12-310001823584adra:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2021-12-310001823584adra:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputExpectedDividendRateMember2021-12-310001823584adra:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputExercisePriceMember2021-12-310001823584adra:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputCommodityMarketPriceMember2021-12-310001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2021-02-110001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputExpectedDividendRateMember2021-02-110001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputExercisePriceMember2021-02-110001823584adra:RepresentativeWarrantsMemberus-gaap:MeasurementInputCommodityMarketPriceMember2021-02-110001823584adra:PublicWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2021-02-110001823584adra:PublicWarrantsMemberus-gaap:MeasurementInputExpectedDividendRateMember2021-02-110001823584adra:PublicWarrantsMemberus-gaap:MeasurementInputExercisePriceMember2021-02-110001823584adra:PublicWarrantsMemberus-gaap:MeasurementInputCommodityMarketPriceMember2021-02-110001823584adra:PublicWarrantsMemberadra:OnetouchhurdleMember2021-02-110001823584adra:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2021-02-110001823584adra:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputExpectedDividendRateMember2021-02-110001823584adra:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputExercisePriceMember2021-02-110001823584adra:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputCommodityMarketPriceMember2021-02-110001823584adra:PrivatePlacementWarrantsMember2022-09-300001823584adra:PrivatePlacementWarrantsMember2021-12-310001823584us-gaap:CommonClassAMemberus-gaap:PrivatePlacementMember2022-09-300001823584us-gaap:CommonClassAMemberus-gaap:PrivatePlacementMember2021-12-310001823584adra:PublicWarrantsMemberus-gaap:IPOMember2021-02-110001823584us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-09-300001823584us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2021-12-310001823584us-gaap:RetainedEarningsMember2021-01-012021-12-310001823584us-gaap:AdditionalPaidInCapitalMember2021-01-012021-12-310001823584us-gaap:RetainedEarningsMember2021-01-012021-03-310001823584us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-3100018235842021-01-012021-03-310001823584us-gaap:OverAllotmentOptionMember2021-02-112021-02-110001823584adra:SponsorMemberus-gaap:CommonClassBMember2022-01-012022-09-300001823584adra:SponsorMemberus-gaap:CommonClassBMember2021-01-012021-12-310001823584us-gaap:CommonClassBMemberus-gaap:CommonStockMember2022-09-300001823584us-gaap:RetainedEarningsMember2022-09-300001823584us-gaap:AdditionalPaidInCapitalMember2022-09-300001823584us-gaap:CommonClassBMemberus-gaap:CommonStockMember2022-06-300001823584us-gaap:RetainedEarningsMember2022-06-300001823584us-gaap:AdditionalPaidInCapitalMember2022-06-3000018235842022-06-300001823584us-gaap:CommonClassBMemberus-gaap:CommonStockMember2022-03-310001823584us-gaap:RetainedEarningsMember2022-03-310001823584us-gaap:AdditionalPaidInCapitalMember2022-03-3100018235842022-03-310001823584us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-12-310001823584us-gaap:RetainedEarningsMember2021-12-310001823584us-gaap:AdditionalPaidInCapitalMember2021-12-310001823584us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-09-300001823584us-gaap:RetainedEarningsMember2021-09-300001823584us-gaap:AdditionalPaidInCapitalMember2021-09-3000018235842021-09-300001823584us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-06-300001823584us-gaap:RetainedEarningsMember2021-06-300001823584us-gaap:AdditionalPaidInCapitalMember2021-06-3000018235842021-06-300001823584us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-03-310001823584us-gaap:RetainedEarningsMember2021-03-310001823584us-gaap:AdditionalPaidInCapitalMember2021-03-3100018235842021-03-310001823584us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-12-310001823584us-gaap:RetainedEarningsMember2020-12-310001823584us-gaap:AdditionalPaidInCapitalMember2020-12-310001823584us-gaap:RetainedEarningsMember2020-08-040001823584us-gaap:AdditionalPaidInCapitalMember2020-08-040001823584adra:RepresentativeWarrantsMember2022-09-300001823584adra:RepresentativeWarrantsMember2021-12-310001823584adra:PrivatePlacementWarrantsMember2022-01-012022-09-300001823584adra:AdministrativeSupportAgreementMember2022-01-012022-09-300001823584adra:AdministrativeSupportAgreementMember2021-01-012021-12-310001823584adra:CommonClassaSubjectToRedemptionMember2021-01-012021-12-310001823584adra:RedemptionOfWarrantsWhenPricePerShareOfClassCommonStockEqualsOrExceeds18.00Memberadra:PublicWarrantsMemberus-gaap:CommonClassAMember2022-01-012022-09-300001823584adra:RedemptionOfWarrantsWhenPricePerShareOfClassCommonStockEqualsOrExceeds18.00Memberadra:PublicWarrantsMemberus-gaap:CommonClassAMember2021-01-012021-12-310001823584adra:FounderSharesMemberadra:SponsorMemberus-gaap:CommonClassBMember2020-08-012020-08-310001823584adra:PublicWarrantsMemberus-gaap:CommonClassAMember2022-01-012022-09-300001823584adra:FounderSharesMemberus-gaap:CommonClassBMemberus-gaap:OverAllotmentOptionMember2020-08-310001823584adra:FounderSharesMemberadra:SponsorMemberus-gaap:CommonClassBMember2020-08-310001823584us-gaap:PrivatePlacementMember2022-01-012022-09-300001823584adra:RepresentativeWarrantsMember2022-01-012022-09-300001823584adra:PublicWarrantsMemberus-gaap:IPOMember2021-02-112021-02-110001823584us-gaap:PrivatePlacementMember2021-01-012021-12-310001823584adra:RepresentativeWarrantsMember2021-01-012021-12-310001823584adra:PublicWarrantsMember2021-12-310001823584adra:PublicWarrantsMember2022-09-300001823584adra:PromissoryNoteWithRelatedPartyMemberadra:ThomasFinkeLlcMember2022-06-220001823584adra:PromissoryNoteWithRelatedPartyMemberadra:BlystoneDonaldsonLlcMember2022-06-220001823584adra:PromissoryNoteWithRelatedPartyMember2020-08-050001823584us-gaap:IPOMember2021-02-112021-02-1100018235842021-01-012021-09-3000018235842020-08-052020-12-310001823584adra:PublicWarrantsMember2021-07-012021-09-300001823584adra:WarrantLiabilitiesMember2021-01-012021-12-310001823584adra:PrivatePlacementWarrantsMember2021-01-012021-12-310001823584adra:WarrantLiabilitiesMemberus-gaap:FairValueInputsLevel3Member2021-01-012021-09-300001823584adra:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel3Member2021-01-012021-09-300001823584adra:PublicWarrantsMember2021-01-012021-09-300001823584us-gaap:CommonClassBMember2022-01-012022-09-300001823584us-gaap:CommonClassBMember2021-01-012021-12-310001823584adra:TriggeringEventIMemberadra:BusinessCombinationAgreementMember2022-06-220001823584adra:TriggeringEventIiMemberadra:BusinessCombinationAgreementMember2022-06-220001823584adra:TriggeringEventIiiMemberadra:BusinessCombinationAgreementMember2022-06-2200018235842021-01-012021-12-3100018235842022-09-3000018235842022-01-012022-09-300001823584us-gaap:CommonClassBMember2022-09-300001823584us-gaap:CommonClassAMember2022-09-300001823584us-gaap:CommonClassBMember2021-12-310001823584us-gaap:CommonClassAMember2021-12-310001823584us-gaap:CommonClassBMember2020-12-310001823584us-gaap:CommonClassAMember2020-12-310001823584adra:PublicWarrantsMemberus-gaap:CommonClassAMember2021-01-012021-12-310001823584adra:WorkingCapitalLoansWarrantMemberadra:RelatedPartyLoansMember2022-09-300001823584us-gaap:PrivatePlacementMember2022-09-300001823584adra:WorkingCapitalLoansWarrantMemberadra:RelatedPartyLoansMember2021-12-310001823584us-gaap:PrivatePlacementMember2021-12-310001823584us-gaap:PrivatePlacementMember2021-02-110001823584adra:RedemptionOfWarrantsWhenPricePerShareOfClassCommonStockEqualsOrExceeds18.00Memberadra:PublicWarrantsMember2022-01-012022-09-300001823584adra:RedemptionOfWarrantsWhenPricePerShareOfClassCommonStockEqualsOrExceeds18.00Memberadra:PublicWarrantsMember2021-01-012021-12-310001823584adra:PublicWarrantsMember2022-01-012022-09-300001823584adra:PublicWarrantsMember2021-01-012021-12-310001823584adra:BusinessCombinationAgreementMember2022-06-222022-06-220001823584adra:BusinessCombinationAgreementMember2022-03-172022-03-1700018235842021-12-3100018235842020-12-31iso4217:USDxbrli:pureiso4217:USDxbrli:sharesadra:Voteadra:Dadra:itemxbrli:shares

Table of Contents

As filed with the Securities and Exchange Commission on November 23, 2022

Registration No. 333-266098

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 3

to

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

ADARA ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

Delaware

6770

85-2373325

(State or other jurisdiction of
incorporation or organization)

(Primary Standard Industrial
Classification Code Number)

(I.R.S. Employer
Identification Number)

Adara Acquisition Corp.

211 East Blvd.

Charlotte, NC 28203

(704) 315-5290

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Adara Acquisition Corp.

211 East Blvd.

Charlotte, NC 28203

Attention: Thomas Finke

(704) 315-5290

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Brad L. Shiffman, Esq.
Kathleen A. Cunningham, Esq.
Blank Rome LLP
1271 Avenue of the Americas
New York, New York 10020
(212) 885-5000
Brad.shiffman@blankrome.com
Kathleen.cunningham@blankrome.com

    

Mitchell S. Nussbaum, Esq.

Tahra Wright, Esq.

Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
(212) 407-4000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and after all conditions under the Business Combination Agreement to consummate the proposed merger are satisfied or waived.

If the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated file  

Accelerated filer  

Non-accelerated filer  

Smaller reporting company  

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer  

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary proxy statement/prospectus is not complete and may be changed. This preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. These securities may not be issued until the registration statement filed with the Securities and Exchange Commission is effective.

Table of Contents

PRELIMINARY PROXY STATEMENT AND PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION, DATED NOVEMBER 23, 2022

ADARA ACQUISITION CORP.

211 East Blvd.
Charlotte, NC 28203

Dear Adara Acquisition Corp. Stockholders:

Adara Acquisition Corp., a Delaware corporation (“Adara” or the “Company”), Adara Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Adara (“Merger Sub”), and Alliance Entertainment Holding Corporation, a Delaware corporation (“Alliance”), have entered into a Business Combination Agreement and Plan of Reorganization (the “Business Combination Agreement”) pursuant to which Merger Sub will merge with and into Alliance, with Alliance surviving the merger and becoming a wholly-owned direct subsidiary of Adara (collectively with the other transactions described in the Business Combination Agreement, the “Business Combination”). At the closing of the Business Combination, each of the then issued and outstanding shares of Alliance common stock will be cancelled and automatically convert into the right to receive the number of shares of Adara Class A common stock (the “Adara Common Stock”) equal to the exchange ratio (determined in accordance with the Business Combination Agreement and as further described herein). Based on the anticipated exchange ratio of [•], Adara will issue 47,500,000 shares of Adara Common Stock to the stockholders of Alliance. The exchange ratio is equal to the quotient obtained by dividing (i) 6 by (ii) the number of shares of Alliance Class A common stock outstanding on a fully diluted basis. The 47,500,000 shares of Adara Common Stock have a value equal to $479,750,000 based on a price of $10.16, the per share amount held in Adara’s trust account on [], 2022, the record date for the special meeting of the stockholders, or approximately $[·] based on the closing sale price of the Adara Common Stock of $[·] on the NYSE American on [·], 2022, the record date for the special meeting of stockholders. In addition, the holders of Alliance common stock immediately prior to such closing will receive 60,000,000 shares of a new Class E common stock which will be placed in escrow until the achievement of certain triggering events. Upon the release of the Class E common Stock from the escrow account, such shares will automatically convert into the same number of shares of Adara Common Stock. In the event a triggering event does not occur during the respective triggering event period, the respective shares of Class E common stock relating to such triggering event shall be forfeited and returned to the Company for cancellation.

Upon completion of the Business Combination, it is anticipated that (i) (a) Alliance’s stockholders will own approximately 77.9% of the total outstanding shares of Class A common stock of the combined company, and (b) the Adara stockholders will own approximately 22.1% of the total outstanding shares of Class A common stock of the combined company, assuming that none of the public stockholders exercise their redemption rights, the Adara sponsor forfeits 875,000 shares (as described more fully in the proxy statement/prospectus) and no shares of Class E common stock of the Company are released from escrow to the Alliance stockholders, or that (ii) (a) Alliance's stockholders will own approximately 93.2% of the total outstanding common stock of the combined company, and (b) Adara’s stockholders will own approximately 6.8% of the outstanding common stock of the combined company, assuming that Adara’s public stockholders exercise their redemption rights as to 10,026,413 shares of Class A common stock, the maximum extent permitted under the Business Combination Agreement, the Adara sponsor forfeits 875,000 shares, and no shares of Adara Class E common stock are released from escrow to the Alliance stockholders. See the section titled “The Business Combination” on page 104 of the attached proxy statement/prospectus for further information on the consideration being paid to the stockholders of Alliance.

Adara’s units, common stock and warrants are currently listed on the NYSE American under the symbols “ADRA,” “ADRA.UN,” and “ADRA.WS,” respectively. Adara has applied to list the shares of common stock and the warrants of Adara on the NYSE American under the symbols “AENT” and “AENT.WS,” respectively, upon the closing of the Business Combination. At the closing of the Business Combination, each Adara unit will be separated into its components, which consists of one share of common stock and one-half of one warrant, and such units will no longer exist. Upon closing, Adara intends to change its name from “Adara Acquisition Corp.” to “Alliance Entertainment Holding Corporation.

Adara is holding a special meeting of its stockholders in order to obtain the stockholder approvals necessary to complete the Business Combination. At the Adara special meeting of stockholders, which will be held on                , 2022, at 10:00 a.m., Eastern time, via live webcast at the following address: [•], unless postponed or adjourned to a later date, Adara will ask its stockholders to adopt the Business Combination Agreement thereby approving the Business Combination and approve the other proposals described in this proxy statement/prospectus.

Table of Contents

After careful consideration, Adara’s board of directors has unanimously approved the Business Combination Agreement and the other proposals described in this proxy statement/prospectus, and Adara’s board of directors has determined that it is advisable to consummate the Business Combination. The board of directors of Adara recommends that its stockholders vote “FOR” each of the proposals described in this proxy statement/prospectus.

The existence of financial and personal interests of Adara’s sponsor and directors may result in a conflict of interest on the part of one or more of Adara’s directors between what he, she or they may believe is in the best interests of Adara and its stockholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that stockholders vote for the proposals. See the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Adara Sponsor, Directors and Officers in the Business Combination” in the proxy statement/prospectus for a further discussion.

More information about Adara, Alliance and the Business Combination is contained in this proxy statement/prospectus. Adara and Alliance urges you to read the accompanying proxy statement/prospectus, including the financial statements and annexes and other documents referred to herein, carefully and in their entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 42 OF THIS PROXY STATEMENT/PROSPECTUS.

On behalf of our board of directors, I thank you for your support and look forward to the successful completion of the Business Combination.

Sincerely,

Thomas Finke

Chairman and Chief Executive Officer

                       , 2022

The accompanying proxy statement/prospectus is dated              , 2022 and is first being mailed to the stockholders of Adara on or about that date.

Your vote is very important. Whether or not you plan to attend the special meeting of Adara’s stockholders online, please submit your proxy by completing, signing, dating and mailing the enclosed proxy card in the pre-addressed postage paid envelope or by using the telephone or Internet procedures provided to you by your broker or bank. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting of Adara’s stockholders and vote online, you must obtain a proxy from your broker or bank.

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE BUSINESS COMBINATION DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS OR ANY OF THE SECURITIES TO BE ISSUED IN THE BUSINESS COMBINATION, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

F-i

Table of Contents

ADARA ACQUISITION CORP.

211 East Blvd.
Charlotte, NC 28203

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON              , 2022

To the Stockholders of Adara Acquisition Corp.:

NOTICE IS HEREBY GIVEN that a special meeting of stockholders (the “special meeting”) of Adara Acquisition Corp., a Delaware corporation (“Adara,” “we,” “our” or “us”), will be held on              , 2022, at 10:00 a.m., Eastern time, via live webcast at the following address:

You are cordially invited to attend the special meeting for the following purposes:

The Business Combination Proposal — To consider and vote upon a proposal to approve and adopt the Business Combination Agreement, dated as of June 22, 2022 (as may be amended from time to time, the “Business Combination Agreement”), by and among Adara, Alliance Entertainment Holding Corporation, a Delaware corporation (“Alliance”), and Adara Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and the transactions contemplated thereby, pursuant to which Adara will issue (i) shares of Class A common stock of Adara (“Combined Company Common Stock”) to holders of common stock of Alliance (“Alliance Common Stock”) and (ii) shares of Class E Common stock of Adara (“Combined Company Class E Common Stock”) to the Alliance Stockholders which will be placed in an escrow account to be released to the Alliance stockholders and converted into Combined Company Common Stock upon the occurrence of certain Triggering Events and Merger Sub will merge with and into Alliance, with Alliance surviving the merger and becoming a wholly-owned direct subsidiary of Adara (collectively with the other transactions described in the Business Combination Agreement, the “Business Combination”);
The Charter Proposals — To consider and vote upon amendments to Adara’s amended and restated certificate of incorporation. The proposed amendments detailed below will be voted on separately and are collectively referred to as the “Charter Proposals”:
Changing the Name — Changing Adaras name to Alliance Entertainment Holding Corporation (the combined company following the closing of the Business Combination is referred to as the Combined Company);
Changes to Authorized Capital Stock — the existing certificate of incorporation of Adara authorizes the issuance of 111,000,000 total shares, consisting of (a) 110,000,000 shares of common stock, of which (i) 100,000,000 shares are Class A common stock, and (ii) 10,000,000 shares are Class B common stock, and (b) 1,000,000 shares of preferred stock. The proposed certificate of incorporation will authorize the issuance of 551,000,000 total shares, consisting of (a) 490,000,000 shares of Class A common stock, (b) 60,000,000 of Class E common stock and (c) 1,000,000 shares of preferred stock, and eliminate the Class B common stock and any rights of holders thereof;
Required Vote to Amend the Certificate of Incorporation — require an affirmative vote of holders of at least two-thirds (66-%) of the voting power of the then outstanding shares of voting stock of the Combined Company, voting together as a single class, to amend, alter, repeal or rescind, in whole or in part, certain provisions of the Proposed Certificate of Incorporation;
Required Vote to Amend the Bylaws — require an affirmative vote of holders of at least two-thirds (66-%) of the voting power of the then outstanding shares of voting stock of the Combined Company entitled to vote generally in an election of directors to adopt, amend, alter, repeal or rescind the Combined Companys bylaws;
Classified Board — divide the Combined Companys board of directors into three classes with only one class of directors being elected each year and each class (except for those directors appointed prior to the first annual meeting of stockholders) serving a three-year term;

F-i

Table of Contents

Director Removal — provide for the removal of directors with cause only by stockholders voting at least two-thirds (66-%) of the voting power of all of the then outstanding shares of voting stock of the Combined Company entitled to vote at an election of directors; and
Removal of Blank Check Company Provisions — eliminate various provisions applicable only to blank check companies, including business combination requirements that will no longer be relevant following the closing of the Business Combination (the Closing).
The Equity Incentive Plan Proposal — To consider and vote upon the adoption of the Alliance Entertainment Holding Corporation 2022 Equity Incentive Plan (the “2022 Plan”) established to be effective after the Closing to assist the Combined Company in retaining the services of eligible employees, directors and consultants, to secure and retain the services of new employees, directors and consultants and to provide incentives for such persons to exert maximum efforts for the Combined Company’s success;
The NYSE American Proposal — To consider and vote upon a proposal to issue (i) Combined Company Common Stock and Combined Company Class E Common Stock to Alliance’s stockholders as a result of the Merger pursuant to the Business Combination Agreement, including the Combined Company Common Stock issuable upon conversion of the Combined Company Class E Common Stock; and (ii) issue equity awards under the 2022 Plan if such plan is approved in accordance with Proposal No. 3 (Equity Incentive Plan Proposal); and
The Adjournment Proposal — a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote.

In light of the ongoing health concerns relating to the COVID-19 pandemic and to best protect the health and welfare of Adara’s stockholders and personnel, the special meeting will be held completely virtually, conducted only via webcast at the following address: www.[·]. There will be no physical meeting location. Stockholders are nevertheless urged to vote their proxies by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope.

Only holders of record of shares of Adara Common Stock and Adara’s Class B common stock (“Adara Class B Common Stock”) at the close of business on [·], 2022 (the “Record Date”) are entitled to notice of the virtual special meeting and to vote at the virtual special meeting and any adjournments or postponements thereof. A complete list of Adara’s stockholders of record entitled to vote at the virtual special meeting will be available at the virtual special meeting and for ten days before the virtual special meeting at Adara’s principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the virtual special meeting.

Pursuant to Adara’s amended and restated certificate of incorporation, Adara is providing the holders of shares of Adara Class A common stock (the “Adara Common Stock”) originally sold as part of the units issued in our initial public offering (the “IPO” and such holders, the “Public Stockholders”) with the opportunity to redeem, upon the Closing, shares of Adara Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the trust account (the “Trust Account”) that holds the proceeds (including interest not previously released to Adara to pay its income taxes or any other taxes payable) from the IPO and a concurrent private placement of warrants to the initial stockholders of Adara listed on Schedule C of the Business Combination Agreement (“Adara Initial Stockholders”). For illustrative purposes, based on the fair value of cash and marketable securities held in the Trust Account as of [·], 2022, the Record Date, of approximately $116.8 million, the estimated per share redemption price would have been approximately $10.16. Public Stockholders may elect to redeem their shares whether or not they are holders as of the record date and whether or not they vote for the Business Combination Proposal. A Public Stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined in Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the Adara Common Stock. Holders of Adara’s outstanding warrants sold in the IPO and a concurrent private placement, which are exercisable for shares of Adara Common Stock under certain circumstances, do not have redemption rights in connection with the Business Combination. In connection with the IPO, the Initial Stockholders agreed for no additional consideration to waive their redemption rights in connection with the consummation of the Business Combination with respect to their respective Initial Stockholder shares (but not with respect to any shares of Adara Common Stock purchased in the open market), and such Initial Stockholder Shares will be excluded from the pro rata calculation used to determine the per share redemption price. As of the Record Date the Adara Initial Stockholders, including Adara’s sponsor, officers and directors, own approximately 20% of outstanding Adara Common Stock. The Adara Initial Stockholders, including Adara’s sponsor, officers and directors, have agreed to vote any shares of Adara Common Stock owned by them in favor of the Business Combination.

Table of Contents

Adara may not consummate the Business Combination unless the Business Combination Proposal, each of the Charter Proposals, the Equity Incentive Plan Proposal and the NYSE American Proposal are approved at the special meeting, each of which is conditioned upon all such proposals having been approved at the special meeting. The approval of the Business Combination Proposal and the NYSE American Proposal requires the affirmative vote (virtually in person or by proxy) of holders as of the Record Date of a majority of the then outstanding shares of Adara Common Stock and Adara Class B Common Stock entitled to vote thereon at the special meeting, voting together as a single class. Approval of each of the Charter Proposals requires the affirmative vote of the holders of a majority of the outstanding shares of the Adara Common Stock and Adara Class B Common Stock, voting together as a single class, and the affirmative vote of the holders of a majority of the Adara Class B Common Stock then outstanding, voting separately as a single class. The approval of the Equity Incentive Plan Proposal and the Adjournment Proposal requires that the holders of a majority of the shares of Adara Common Stock and the Adara Class B Common Stock represented in person online or by proxy and voted thereon at the special meeting vote “FOR” each such proposal, voting together as a single class. The Adjournment Proposal is not conditioned on the approval of any other Stockholder Proposal set forth in the accompanying proxy statement/prospectus.

Your attention is directed to the proxy statement/prospectus accompanying this notice (including the financial statements and annexes attached thereto) for a more complete description of the proposed Business Combination and related transactions and each of our proposals. We encourage you to read this proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, Morrow Sodali LLC at (800) 662-5200.

By Order of the Board of Directors,

Thomas Finke

Chairman and Chief Executive Officer

          , 2022

Table of Contents

TABLE OF CONTENTS

Page

ABOUT THIS PROXY STATEMENT/PROSPECTUS

1

FREQUENTLY USED TERMS

2

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

6

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

21

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ALLIANCE

35

SELECTED HISTORICAL FINANCIAL INFORMATION OF ADARA

36

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

37

COMPARATIVE SHARE INFORMATION

38

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

39

RISK FACTORS

42

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

85

COMBINED COMPANY UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF SEPTEMBER 30, 2022

88

COMBINED COMPANY UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT THREE MONTHS ENDED SEPTEMBER 30, 2022

90

COMBINED COMPANY UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT TWELVE MONTHS ENDED DECEMBER 31, 2021

92

COMBINED COMPANY UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT YEAR ENDED DECEMBER 31, 2021

93

THE SPECIAL MEETING OF ADARA’S STOCKHOLDERS

98

PROPOSAL NO. 1  —  THE BUSINESS COMBINATION PROPOSAL

104

THE BUSINESS COMBINATION

104

THE BUSINESS COMBINATION AGREEMENT

121

CERTAIN AGREEMENTS RELATED TO THE BUSINESS COMBINATION

133

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE REDEMPTION AND THE BUSINESS COMBINATION

134

PROPOSAL NO. 2 —  THE CHARTER PROPOSALS

143

PROPOSAL NO. 3 — THE EQUITY INCENTIVE PLAN PROPOSAL

146

PROPOSAL NO. 4 — THE NYSE AMERICAN PROPOSAL

151

PROPOSAL NO. 5 — THE ADJOURNMENT PROPOSAL

153

INFORMATION ABOUT ALLIANCE

154

ALLIANCE’S EXECUTIVE COMPENSATION

166

ALLIANCE MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

169

CERTAIN ALLIANCE RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

181

INFORMATION ABOUT ADARA

183

ADARA MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

198

CERTAIN ADARA RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

203

MANAGEMENT AFTER THE BUSINESS COMBINATION

206

DESCRIPTION OF SECURITIES

210

SHARES ELIGIBLE FOR FUTURE SALE

226

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

228

PRICE RANGE OF SECURITIES AND DIVIDENDS

231

ADDITIONAL INFORMATION

232

HOUSEHOLDING INFORMATION

233

TRANSFER AGENT; WARRANT AGENT AND REGISTRAR

234

WHERE YOU CAN FIND MORE INFORMATION

235

TRADEMARK NOTICE

236

INDEX TO FINANCIAL STATEMENTS

F-1

ANNEX A: BUSINESS COMBINATION AGREEMENT

A-1

ANNEX B: PROPOSED CERTIFICATE OF INCORPORATION

B-1

ANNEX C: ALLIANCE ENTERTAINMENT HOLDING CORPORATION 2022 EQUITY INCENTIVE PLAN

C-1

ANNEX D: OPINION OF THINKEQUITY LLC

D-1

i

Table of Contents

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the SEC, by Adara Acquisition Corp. (File No. 333-266098) (the “Registration Statement”), constitutes a prospectus of Adara under Section 5 of the Securities Act, with respect to the shares of Combined Company Common Stock to be issued if the Business Combination described herein is consummated. This document also constitutes a notice of meeting and a proxy statement/prospectus under Section 14(a) of the Exchange Act with respect to the special meeting of Adara’s stockholders at which Adara’s stockholders will be asked to consider and vote upon a proposal to approve the Business Combination by the approval and adoption of the Business Combination Agreement, among other matters.

1

Table of Contents

FREQUENTLY USED TERMS

In this document:

“2022 Plan” means the Alliance Entertainment Holding Corporation 2022 Equity Incentive Plan.

“Adara” means Adara Acquisition Corp., a Delaware corporation.

“Adara Class B Common Stock” means Adara’s Class B common stock, par value $0.0001 per share.

“Adara Common Stock” means Adara’s Class A common stock, par value $0.0001 per share.

“Adara Initial Stockholders” means the initial stockholders of Adara, consisting of the Sponsor, Adara’s officers and Adara’s directors and ThinkEquity and its designees, listed on Schedule C of the Business Combination Agreement.

“Adara Stockholders” means the holders of Adara Common Stock and/or Adara Class B Common Stock.

“Adara Unit” means one share of Adara Common Stock and one-half of one Adara Warrant.

“Adara Warrant Agreement” means the warrant agreement, dated as of February 8, 2022, by and between Adara and Continental Stock Transfer & Trust Company, governing the Adara Warrants.

“Adara Warrants” means warrants to purchase shares of Adara Common Stock as contemplated under the Adara Warrant Agreement, with each warrant exercisable for one share of Adara Common Stock at an exercise price of $11.50.

“Adjournment Proposal” means a proposal to adjourn the special meeting of the stockholders of Adara to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote at such special meeting.

“Alliance” means Alliance Entertainment Holding Corporation, a Delaware corporation.

“Alliance Common Stock” means Alliance’s common stock, par value $0.001 per share.

“Alliance Requisite Approval” means the affirmative vote of the holders of at least a majority of the shares of Alliance Common Stock.

“Alliance Stockholders” means holders of Alliance Common Stock.

“Broker non-vote” means the failure of an Adara stockholder, who holds his or her shares in “street name” through a broker or other nominee, to give voting instructions to such broker or other nominee.

“Business Combination” means the transactions contemplated by the Business Combination Agreement.

“Business Combination Agreement” means the Business Combination Agreement, dated as of June 22, 2022, as may be amended from time to time, by and among Adara, Alliance and Merger Sub.

“Business Combination Proposal” means the proposal to approve the adoption of the Business Combination Agreement and the Business Combination.

“Charter Proposals” means the proposals to consider and vote upon each of the amendments to Adara’s amended and restated certificate of incorporation listed on the enclosed proxy card to amend certain provisions in connection with the Business Combination.

“Closing” means the consummation of the Business Combination.

“Closing Date” means the date on which the Closing occurs.

2

Table of Contents

“Code” means the Internal Revenue Code of 1986, as amended.

“Combined Company” means Adara, immediately upon consummation of the Business Combination.

“Combined Company Class E Common Stock” means the Class E Common Stock of the Combined Company, immediately upon consummation of the Business Combination.

“Combined Company Common Stock” means the Adara Common Stock, immediately upon consummation of the Business Combination.

“Combined Company Stockholders” means the holders of Adara Common Stock, immediately upon consummation of the Business Combination.

“Contingent Consideration Period” means the period commencing on the Closing and ending on (i) the five-year anniversary of the Closing with respect to a Triggering Event I, (ii) the seven-year anniversary of the Closing with respect to a Triggering Event II and (iii) the ten-year anniversary of the Closing with respect to a Triggering Event III.

“Contingent Consideration Shares” means the 60,000,000 shares of Combined Company Class E Common Stock issuable to the Alliance Stockholders and placed into the Contingent Consideration Escrow Account.

“Contingent Consideration Agreement” means the agreement among Adara and the Alliance Stockholders who receive shares of Combined Company Class E Common Stock.

“Contingent Consideration Escrow Account” means the escrow account to be established pursuant to the Contingent Consideration Agreement to hold the Contingent Consideration Shares.

“Credit Facility” means that certain Loan and Security Agreement, dated as of February 21, 2017, by and among Alliance, Bank of America, N.A. and the other parties thereto, as amended, restated, supplemented, included or otherwise modified in writing from time to time.

“DGCL” means the Delaware General Corporation Law.

“Equity Incentive Plan Proposal” means the proposal to approve the adoption of the Alliance Entertainment Holding Corporation 2022 Equity Incentive Plan.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Exchange Ratio” means the following ratio (rounded to four decimal places): the quotient obtained by dividing (a) 47,500,000 by (b) 900, the number of shares of Alliance Common Stock issued and outstanding on a fully-diluted basis.

“Existing Certificate of Incorporation” means the amended and restated Certificate of Incorporation of Adara as in effect prior to the adoption of the Charter Proposals.

“GAAP” means United States generally accepted accounting principles.

“Initial Stockholder Shares” means the 2,875,000 shares of Adara’s Class B common stock, initially purchased by the Sponsor in a private placement in connection with the IPO of which (i) 50,000 shares were transferred to ThinkEquity and its designees and (ii) between 875,000 and 1,375,000 of such shares are subject to forfeiture by the Sponsor upon consummation of the Business Combination, the exact number to be determined by Alliance, which will automatically convert to Combined Company Common Stock upon consummation of a business combination by Adara.

“IPO” means Adara’s initial public offering of units, consummated on February 11, 2021.

“JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended.

3

Table of Contents

“Merger” means the merging of Merger Sub with and into Alliance, with Alliance surviving the Merger as a wholly-owned subsidiary of Adara.

“Merger Sub” means Adara Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Adara.

“Merger Sub Common Stock” means Merger Sub’s common stock, par value $0.001 per share.

“NYSE American” means the NYSE American, LLC stock exchange.

“The NYSE American Proposal ” means to consider and vote upon a proposal to (i) issue Combined Company Common Stock to the Alliance Stockholders as a result of the Merger pursuant to the Business Combination Agreement, including the Contingent Consideration Shares and the Combined Common Stock issuable upon conversion of the Consideration Condition Shares; and (ii) issue equity awards under the 2022 Plan if such plan is approved in accordance with Proposal No. 3 (Equity Incentive Plan Proposal).

“PCAOB” means the Public Company Accounting Oversight Board.

“PCAOB Audited Financials” means the audited consolidated balance sheets of Alliance as of June 30, 2021, 2020 and 2019, and the related audited consolidated statements of operations and comprehensive loss, convertible preferred stock and shareholders’ deficit and cash flows of Alliance for the three years ended June 30, 2021,and the related notes to the consolidated financial statements, each audited in accordance with the auditing standards of PCAOB.

“PCAOB Reviewed Financials” means the reviewed unaudited condensed consolidated balance sheet of Alliance as of March 31, 2022, and the related unaudited condensed consolidated statements of operations and cash flows of Alliance for the nine-month periods ended March 31, 2022 and 2021, and the related notes to the unaudited condensed consolidated financial statements, each reviewed in accordance with the auditing standards of the PCAOB.

“Private Warrants” means the warrants to purchase shares of Adara Common Stock purchased in a private placement in connection with the IPO.

“Promissory Notes” means (i) the $250,000 principal amount non-interest bearing promissory note issued to Blystone & Donaldson, LLC, an affiliate of Thomas Donaldson, a director of Adara, and (ii) the $250,000 principal amount non-interest bearing promissory note issued to Thomas Finke, Adara's Chief Executive Officer and a director of Adara, each dated June 22, 2022, and due and payable on the earlier of the Closing Date and February 11, 2023.

“Proposed Certificate of Incorporation” means the amended and restated certificate of incorporation of Adara, giving effect to the Charter Proposals.

“Proposed Transactions” means the Business Combination and the transactions related thereto.

“Public Shares” means shares of Adara Common Stock issued as a component of the Adara units sold in the IPO.

“Public Stockholders” means the holders of shares of Adara Common Stock.

“Public Warrants” means the warrants included as a component of the Adara units sold in the IPO. Each whole warrant is exercisable for one share of Adara Common Stock, in accordance with its terms.

“Record Date” means [·], 2022, the record date for the special meeting of Adara Stockholders.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Sponsor” means Adara Sponsor LLC, a Delaware limited liability company.

4

Table of Contents

“Stockholder Proposals” means, individually or collectively as context requires, the Business Combination Proposal, the Charter Proposals, the Equity Incentive Plan Proposal, the NYSE American Proposal and/or the Adjournment Proposal.

“Subsequent Transaction” means any sale, merger, liquidation, exchange offer or similar transaction the Combined Company consummates after the Merger.

“Surviving Corporation” means the entity surviving the Merger as a wholly-owned subsidiary of Adara.

“ThinkEquity” means ThinkEquity LLC, who acted as financial advisor to Adara’s Board of Directors, and as underwriter of Adara’s initial public offering.

“Triggering Event I” means the first date on which the Combined Company Common Stock closing price over any twenty trading days within a thirty consecutive trading day period during the Contingent Consideration Period is greater than or equal to $20.00 (which shall be equitably adjusted to reflect stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to the Combined Company Common Stock occurring on or after the Closing).

“Triggering Event II” means the first date on which the Combined Company Common Stock closing price over any twenty trading days within a thirty (30) consecutive trading day period during the Contingent Consideration Period is greater than or equal to $30.00 (which shall be equitably adjusted to reflect stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to the Combined Company Common Stock occurring on or after the Closing).

“Triggering Event III” means the first date on which the Combined Company Common Stock closing price over any twenty trading days within a thirty consecutive trading day period during the Contingent Consideration Period is greater than or equal to $50.00 (which shall be equitably adjusted to reflect stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to the Combined Company Common Stock occurring on or after the Closing).

“Triggering Event Period” means the period commencing upon the closing and ending on (i) the five-year anniversary of the Closing with respect to Triggering Event 1; (ii) the seven-year anniversary of the Closing with respect to Triggering Event II; and (iii) the ten-year anniversary of the Closing with respect to Triggering Event III.

“Trust Account” means the trust account that holds a portion of the proceeds of the IPO and the concurrent sale of the Private Warrants.

“Written Consent” means the irrevocable written consent, in form and substance reasonably acceptable to Adara, of holders of Alliance Common Stock Requisite Approval (including the Key Company Stockholders (as defined in the Business Combination Agreement)) in favor of the approval and adoption of the Business Combination Agreement and the Merger and all other transactions relating to the Business Combination.

5

Table of Contents

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the special meeting of stockholders, including with respect to the proposed Business Combination. The following questions and answers may not include all the information that is important to Adara’s stockholders. Stockholders are urged to read carefully this entire proxy statement/prospectus, including the financial statements and annexes attached hereto and the other documents referred to herein.

Q.Why am I receiving this proxy statement/prospectus?

A.Adara has entered into the Business Combination Agreement with Alliance and Merger Sub pursuant to which Merger Sub will be merged with and into Alliance, with Alliance surviving the Merger as a wholly-owned subsidiary of Adara. A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A, and Adara encourages its stockholders to read it in its entirety. Adara’s stockholders are being asked to consider and vote upon the Business Combination Proposal to approve and adopt the Business Combination and the Business Combination Agreement, among other Stockholder Proposals. See the section titled “Proposal No. 1 — The Business Combination Proposal.”

The Adara Common Stock, Adara Warrants and Adara Units are currently listed on the NYSE American under the symbols “ADRA,” “ADRA.WS” and “ADRA.UN,” respectively. Adara has applied to list the shares of common stock and the warrants of the Combined Company on the NYSE American under the symbols “AENT” and “AENT.WS,” respectively, upon the Closing. All outstanding Adara Units will be separated into their component securities immediately prior to the Closing. Accordingly, Adara will no longer have any units following consummation of the Business Combination, and therefore Adara will instruct the NYSE American to remove the listing of the Adara Units immediately following the consummation of the Business Combination. Upon Closing, Adara intends to change its name from “Adara Acquisition Corp.” to “Alliance Entertainment Holding Corporation.”

This proxy statement/prospectus and its annexes contain important information about the proposed Business Combination and the proposals to be acted upon at the special meeting. You should read this proxy statement/prospectus and its annexes carefully and in their entirety. This document also constitutes a prospectus of Adara with respect to the Combined Company Common Stock issuable in connection with the Business Combination.

Q.What matters will stockholders consider at the special meeting?

A.At the Adara special meeting of stockholders, Adara will ask its stockholders to vote in favor of the following Stockholder Proposals:
1.The Business Combination Proposal  —  To consider and vote upon a proposal to approve and adopt the Business Combination Agreement and the resulting Business Combination.
2.The Charter Proposals  —  To consider and vote upon amendments to the Existing Certificate of Incorporation. The proposed amendments detailed below are collectively referred to as the “Charter Proposals”:
Changing the Name — Changing Adaras name to Alliance Entertainment Holding Corporation;
Changes to Authorized Capital Stock — the Existing Certificate of Incorporation of Adara authorizes the issuance of 111,000,000 total shares, consisting of (a) 110,000,000 shares of common stock, of which (i) 100,000,000 shares are Class A common stock, and (ii) 10,000,000 shares are Class B common stock, and (b) 1,000,000 shares of preferred stock. The Proposed Certificate of Incorporation will authorize the issuance of 551,000,000 total shares, consisting of (a) 490,000,000 shares of Class A common stock, (b) 60,000,000 of Class E common stock and (c) 1,000,000 shares of preferred stock, and eliminate the Class B common stock and any rights of holders thereof;
Required Vote to Amend the Certificate of Incorporation — require an affirmative vote of holders of at least two-thirds (66%) of the voting power of the then outstanding shares of voting stock of the Combined Company, voting together as a single class, to amend, alter, repeal or rescind, in whole or in part, certain provisions of the Proposed Certificate of Incorporation;

6

Table of Contents

Required Vote to Amend the Bylaws — require an affirmative vote of holders of at least two-thirds (66%) of the voting power of the then outstanding shares of voting stock of the Combined Company entitled to vote generally in an election of directors to adopt, amend, alter, repeal or rescind the Combined Companys bylaws;
Classified Board — divide the Combined Companys board of directors into three classes with only one class of directors being elected each year and each class (except for those directors appointed prior to the first annual meeting of shareholders) serving a three-year term;
Director Removal — provide for the removal of directors with cause only by stockholders voting at least two-thirds (66%) of the voting power of all of the then outstanding shares of voting stock of the Combined Company entitled to vote at an election of directors; and
Removal of Blank Check Company Provisions — eliminate various provisions applicable only to blank check companies, including business combination requirements that will no longer be relevant following the Business Combination.
3.The Equity Incentive Plan Proposal  —  To consider and vote upon the adoption of the 2022 Plan established to be effective after the Closing to assist the Combined Company in retaining the services of eligible employees, directors and consultants, to secure and retain the services of new employees, directors and consultants and to provide incentives for such persons to exert maximum efforts for the Combined Company’s success.
4.The NYSE American Proposal  —  To consider and vote upon a proposal to (i) issue Combined Company Common Stock to the Alliance Stockholders as a result of the Merger pursuant to the Business Combination Agreement, including the Combined Common Stock issuable upon conversion of the Contingent Consideration Shares; and (ii) issue equity awards under the 2022 Plan if such plan is approved in accordance with Proposal No. 3 (Equity Incentive Plan Proposal).
5.The Adjournment Proposal  —  a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote.

The approval of the Business Combination Proposal requires the affirmative vote (virtually in person or by proxy) of the holders of a majority of the then outstanding shares of Adara Common Stock and Adara Class B Common Stock entitled to vote thereon at the special meeting, voting together as a single class. Accordingly, an Adara stockholder’s failure to vote by proxy or to vote online at the virtual special meeting of stockholders, an abstention from voting or a broker non-vote will have the same effect as a vote against this Stockholder Proposal.

Approval of each of the Charter Proposals requires the affirmative vote of the holders of a majority of the outstanding shares of the Adara Common Stock and Adara Class B Common Stock, voting together as a single class, and the affirmative vote of the holders of a majority of the Adara Class B Common Stock then outstanding, voting separately as a single class. Accordingly, an Adara stockholder’s failure to vote by proxy or to vote online at the virtual special meeting of stockholders, an abstention from voting or a broker non-vote will have the same effect as a vote against these Stockholder Proposals.

The approval of the Equity Incentive Plan Proposal, NYSE American Proposal and Adjournment Proposal requires the affirmative vote (virtually in person or by proxy) of the holders of a majority of the shares of Adara Common Stock and Adara Class B Common Stock, that are voted at the special meeting of stockholders, voting together as a single class. Accordingly, an Adara stockholder’s failure to vote by proxy or to vote online at the virtual special meeting of stockholders, an abstention from voting, or a broker non-vote will have no effect on the outcome of any vote on these Stockholder Proposals.

As of the Record Date, the Adara Initial Stockholders beneficially owned an aggregate of 2,875,000 shares of Adara Class B Common Stock, constituting all of the outstanding shares of Adara Class B Common Stock and approximately 20.0% of the outstanding shares of Adara Common Stock and Adara Class B Common Stock in the aggregate. Pursuant to the Sponsor Support Agreement, the Adara Initial Stockholders have agreed to vote all of their Initial Stockholder Shares and any Public Shares acquired by them in favor of the Business Combination and each of the Stockholder Proposals.

Adara will hold a special meeting of its stockholders to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the proposed Business Combination and the other matters to be acted upon at the special meeting. Stockholders should read it carefully.

7

Table of Contents

The vote of stockholders is important. Stockholders are encouraged to vote by submitting their proxy as soon as possible after carefully reviewing this proxy statement/prospectus.

Q.I am an Adara warrant holder. Why am I receiving this proxy statement/prospectus?

A.Upon consummation of the Business Combination, the Adara Warrants shall, by their terms, entitle the holders in the aggregate to purchase 9,920,000 shares of Combined Company Common Stock in lieu of 9,920,000 shares of Adara Common Stock at a purchase price of $11.50 per share. This proxy statement/prospectus includes important information about Alliance and the business of Alliance following consummation of the Business Combination. Adara and Alliance urge you to read the information contained in this proxy statement/prospectus carefully.

Q.

Are any of the proposals conditioned on one another?

A.Adara may not consummate the Business Combination unless the Business Combination Proposal, each of the Charter Proposals, the Equity Incentive Plan Proposal, and the NYSE American Proposal are approved at the special meeting, each of which is conditioned upon all such proposals having been approved at the special meeting. The Adjournment Proposal is not conditioned on the approval of any other Stockholder Proposal set forth in this proxy statement/prospectus.

It is important for you to note that in the event that the Business Combination Proposal is not approved, then Adara will not consummate the Business Combination. If Adara does not consummate the Business Combination and fails to complete an initial business combination by February 11, 2023 or obtain the approval of Adara’s stockholders to extend the deadline for Adara to consummate an initial business combination, then Adara will be required to dissolve and liquidate.

Q.What will happen upon the consummation of the Business Combination?

A.On the Closing Date, Alliance will merge into Merger Sub, whereupon Merger Sub will cease to exist and Alliance will continue as the surviving entity and become a direct wholly-owned subsidiary of Adara. The Merger will have the effects specified under Delaware law. At the Closing, all of the then outstanding shares of Alliance Common Stock will be cancelled and automatically converted into up to an aggregate of 47,500,000 shares of Combined Company Common Stock and the 60,000,000 Contingent Consideration Shares which will be issued and placed into the Contingent Consideration Shares Escrow Account and shall be released to the Alliance Shareholders upon the achievement of certain Triggering Events and such release shall automatically convert into up to 60,000,000 shares of Combined Company Common Stock. For more information about Adara Business Combination Agreement and the Business Combination, see the section entitled “The Business Combination.”

Q.

Why is Adara proposing the Business Combination Proposal?

A.Adara was organized for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. Adara is not limited to a particular industry or geographic region.

Adara received $119.12 million from its IPO and sale of the Private Warrants, of which $116.15 million was placed into the Trust Account immediately following the IPO. In accordance with the Existing Certificate of Incorporation, holders of Public Shares may redeem such shares for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account upon the consummation of the Business Combination. See the question titled “What happens to the funds held in the Trust Account upon consummation of the Business Combination?” for more information.

There are currently 11,500,000 shares of Adara Common Stock and 2,875,000 shares of Adara Class B Common Stock issued and outstanding. In addition, there are currently 9,920,000 Adara Warrants issued and outstanding, consisting of 5,750,000 Public Warrants, 4,120,000 Private Warrants and 50,000 Underwriter Warrants. Each whole Adara Warrant entitles the holder thereof to purchase one share of Adara Stock at a price of $11.50 per share. The Adara Warrants will become exercisable 30 days after the completion of a business combination, and expire at 5:00 p.m., New York City time, five years after the completion of a business combination or earlier upon redemption or liquidation.

Under the Existing Certificate of Incorporation, all holders of Public Shares have the opportunity to have their Public Shares redeemed upon the consummation of a business combination. The Private Warrants are non-redeemable so long as they are held by their initial purchasers or their permitted transferees.

8

Table of Contents

Q.

Did Adara’s board of directors obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

A.In connection with its determination to recommend the Business Combination, the Adara board of directors obtained a written opinion from ThinkEquity LLC as to the fairness from a financial point of view to Adara’s Stockholders, as of the date of such opinion, of the aggregate closing consideration to be issued by Adara in the Business Combination, which opinion was based on and subject to the assumptions made, procedures followed, matters considered and limitations and qualifications set forth in such opinion as more fully described above under the caption “Proposal No. 1 — The Business Combination Proposal — Opinion of Financial Advisor to the Adara Board of Directors.

Q.

Do I have redemption rights?

A.If you are a holder of Public Shares, you may redeem your Public Shares for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account, which holds the proceeds of the IPO and a concurrent private placement of warrants to the Sponsor, as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to Adara to pay its income taxes or any other taxes payable, upon the consummation of the Business Combination. The per share amount Adara will distribute to holders who properly redeem their shares will not be reduced by the deferred underwriting commissions Adara will pay to the underwriters of its IPO if the Business Combination is consummated. Holders of the outstanding Public Warrants do not have redemption rights with respect to such warrants in connection with the Business Combination. Notwithstanding the foregoing, a holder of Adara Common Stock, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption with respect to more than 15% of the Adara Common Stock. Accordingly, no shares of Adara Common Stock in excess of 15% held by a Public Stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will be redeemed.

In connection with the IPO, all of the Adara Initial Stockholders agreed for no additional consideration to waive their redemption rights with respect to their Initial Stockholder Shares and any Public Shares that they may have acquired during or after the IPO in connection with the completion of Adara’s business combination. The Initial Stockholder Shares will be excluded from the pro rata calculation used to determine the per share redemption price. For illustrative purposes, based on funds in the Trust Account of approximately $116.8 million on the Record Date, the estimated per share redemption price would have been approximately $10.16 Additionally, Public Shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise, holders of such shares will only be entitled to a pro rata portion of the Trust Account, including interest (which interest shall be net of taxes payable by Adara), in connection with the liquidation of the Trust Account.

Q.Will my vote affect my ability to exercise redemption rights?

A.No. You may exercise your redemption rights whether you vote your Public Shares for or against the Business Combination Proposal and other Stockholder Proposals or do not vote your shares. As a result, the Business Combination Proposal can be approved by stockholders who will redeem their Public Shares and no longer remain stockholders, leaving stockholders who choose not to redeem their Public Shares holding shares in a company with a less liquid trading market, fewer stockholders, less cash and the potential inability to meet the listing standards of the NYSE American.

Q.

How do I exercise my redemption rights?

A.In order to exercise your redemption rights, you must, prior to 4:30 p.m. Eastern time on          , 2022 (two business days before the special meeting of stockholders), (i) submit a written request to Adara’s transfer agent that Adara redeem your Public Shares for cash, and (ii) deliver your stock to Adara’s transfer agent physically or electronically through The Depository Trust Company (“DTC”). For the address of Continental Stock Transfer & Trust Company, Adara’s transfer agent, see the question “Who can help answer my questions?” below. Adara requests that any requests for redemption include the identity as to the beneficial owner making such request. Electronic delivery of your shares generally will be faster than delivery of physical stock certificates.

A physical stock certificate will not be needed if your stock is delivered to Adara’s transfer agent electronically. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and Adara’s transfer agent will need to act to facilitate the request. It is Adara’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because Adara does not have any control over this process or over the brokers or

9

Table of Contents

DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. Under Adara’s bylaws, Adara is required to provide at least 10 days’ advance notice of any stockholder meeting, which would be the minimum amount of time a stockholder would have to determine whether to exercise redemption rights. Accordingly, if it takes longer than anticipated for stockholders to deliver their shares, stockholders who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their shares. In the event that a stockholder fails to comply with the various procedures that must be complied with in order to validly tender or redeem Public Shares, its shares may not be redeemed.

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with Adara’s consent, until the vote is taken with respect to the Business Combination. If you delivered your shares for redemption to Adara’s transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that Adara’s transfer agent return the shares (physically or electronically). You may make such request by contacting Adara’s transfer agent at the phone number or address listed under the question, “Who can help answer my questions?”.

Q.Do I have appraisal rights if I object to the proposed Business Combination?

A.No. There are no appraisal rights available to holders of shares of Adara Common Stock, Adara Public Warrants or Adara Class B Common Stock in connection with the Business Combination.

Q.

What happens to the funds held in the Trust Account upon consummation of the Business Combination?

A.If the Business Combination is consummated, the funds held in the Trust Account will be released to pay (i) Adara’s stockholders who properly exercise their redemption rights and (ii) expenses incurred by Alliance and Adara in connection with the Business Combination, to the extent not otherwise paid prior to the Closing. The remaining funds available for release from the Trust Account will be used for general corporate purposes of the Combined Company following the Business Combination.

Q.

Will Adara obtain new financing in connection with the Business Combination?

A.Adara has not obtained any equity financing in connection with the Business Combination. As of the Record Date, Alliance has $[·] of outstanding financing and an additional $[·] of availability under the Credit Facility.

Q.

What happens if a Public Stockholders holding a substantial number of shares of Adara Common Stock vote in favor of the Business Combination Proposal and exercise their redemption rights?

A.Public Stockholders may vote in favor of the Business Combination and still exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Stockholders are reduced as a result of redemptions by Public Stockholders.

In no event will Adara redeem Public Shares in an amount that would cause its net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the exercise of redemption rights and the Business Combination. If enough Public Stockholders exercise their redemption rights such that Adara cannot satisfy the net tangible asset requirement, Adara would not proceed with the redemption of our Public Shares or the Business Combination, and instead may search for an alternate business combination.

As a result of redemptions, the trading market for the Combined Company’s common stock may be less liquid than the market for Adara Common Stock was prior to the Business Combination and the Combined Company may not be able to meet the listing standards of the NYSE American or any other national securities exchange.

Additionally, with fewer funds available from the Trust Account, the capital infusion from the Trust Account into the Combined Company will be reduced and it may not be able to achieve its business plan and may require additional financing sooner than currently anticipated.

Q.What happens if the Business Combination is not consummated?

A.There are certain circumstances under which the Business Combination Agreement may be terminated. See the section titled “The Business Combination Agreement  —  Termination” for information regarding the parties’ specific termination rights.

10

Table of Contents

If Adara does not complete the business combination with Alliance for whatever reason, Adara would search for another target business with which to complete a business combination. If Adara does not complete a business combination with Alliance or another target business by February 11, 2023, Adara must redeem 100% of the outstanding Public Shares, at a per share price, payable in cash, equal to the amount then held in the Trust Account divided by the number of then outstanding Public Shares. The Adara Initial Stockholders have no redemption rights in the event a business combination is not consummated in the required time period, and, accordingly, their Initial Stockholder Shares will be worthless. Additionally, in the event of such a liquidation, as described above, there will be no distribution with respect to outstanding Adara Warrants and, accordingly, the Adara Warrants will expire and be worthless.

Q.What is Alliance?

A.Alliance is a leading global wholesaler, direct-to-consumer (“DTC”) distributor and e-commerce provider for the entertainment industry. Alliance serves as the gateway between well-known international branded manufacturers of entertainment content, such as Universal Pictures, Universal Music Group, Warner Brothers Home Video, Walt Disney Studios, Sony Music, Sony Pictures, Microsoft, Nintendo, and others, and leading retailer customers in the United States and internationally, including Walmart, Amazon, Best Buy, Barnes & Noble, Wayfair, Costco and Target, among others. Alliance distributes its physical media, entertainment products, hardware and accessories through an established multi-channel strategy. Alliance currently sells its products that they are allowed to export in more than 77 countries around the world. For more information, see the section titled “Information About Alliance.”

Q.

What factors did Adara’s Board of Directors consider in determining to enter into the Business Combination Agreement?

A.In approving the Business Combination, the Adara board of directors considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the Business Combination Agreement and the transactions contemplated therein, including, but not limited to, the following:
Alliance’s industry leading market share;
Alliance’s organic growth potential;
Consolidation opportunities in the industry and opportunities for acquisitions of complimentary business for Alliance;
Alliance’s significant growth potential;
Adara’s due diligence of Alliance;
Alliance’s financial condition (see “— Certain Alliance Projected Financial Information”);
Alliance’s strong strategic partners;
Other alternative targets; and
The compelling valuation and other negotiated terms of the Business Combination.

The Adara board of directors also considered a variety of uncertainties and risk and other potentially negative factors concerning the Business Combination including, but not limited to, the following:

Macro-economic uncertainty and the effects it could have on the Combined Company’s operating results;
The risk of redemption by Adara’s stockholders;
The risk that Adara’s stockholders may fail to provide the respective votes necessary to effect the Business Combination;
Closing conditions that are not within Adara’s control;

11

Table of Contents

The possibility of litigation challenging the Business Combination;
The risks that the potential benefits of the Business Combination may not be achieved;
The fact that Adara’s stockholders will hold a minority position in the Combined Company;
Potential conflicts of interest of Adara’s Directors and Officers (see “— Interests of Adara’s Directors and Officers in the Business Combination”); and
Various other risks associated with the business of Alliance, as described in the section titled “Risk Factors” appearing elsewhere in this proxy statement/prospectus.

The Adara board of directors also considered the Business Combination in light of the investment criteria set forth in Adara’s final prospectus for its IPO including, without limitation, that based upon Adara’s analyses and due diligence, Alliance has the potential to be a market leader and has substantial future growth opportunities, all of which the Adara board of directors believes have a strong potential to create meaningful stockholder value following the consummation of the Business Combination.

The above discussion of the material factors considered by the Adara board of directors is not intended to be exhaustive but does set forth the principal factors considered by the Adara board of directors. For more information, see the section titled “The Background of the Business Combination — Adara’s Board of Directors’ Reasons for the Approval of the Business Combination.

Q.

What factors did Alliance’s Board of Directors consider in determining to enter into the Business Combination Agreement?

A.In approving the Business Combination, the Alliance board of directors considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the Business Combination Agreement and the transactions contemplated therein, including, but not limited to, increased access to the capital markets, increased liquidity for its stockholders and other equity holders and other benefits of being a public reporting company. The Alliance board of directors also considered a variety of uncertainties and risk and other potentially negative factors concerning the Business Combination, including the costs to the Combined Company that will be incurred as a public reporting company.

Q.

What equity stake will current Adara’s stockholders and Alliance’s stockholders have in the Combined Company after the Closing?

A.The equity stake of the Adara’s Public Stockholders will depend on the number of shares of Adara Common Stock which are redeemed in connection with the Business Combination. Adara’s Public Stockholders may vote in favor of the Business Combination Proposal and still exercise their redemption rights, although they are not required to vote either for or against the Business Combination, or vote at all, or to be holders on the Record Date, in order to exercise such redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the trust account and the number of Public Stockholders are substantially reduced as a result of redemption by Public Stockholders, subject to the requirements that (i) Adara has a minimum of $15,000,000 of cash on hand after distribution of the Trust Account (for the avoidance of doubt, such cash shall be determined prior to the payment of any transaction fees, costs and expenses paid or required to be paid by Adara and Alliance prior to Closing and repayment of up to $500,000 of loans to certain affiliates of Adara and the payment of such fees, costs, expenses and loans shall be paid or payable out of such cash on hand) and (ii) the Combined Company have at least $5,000,001 of net tangible assets immediately prior to or upon the consummation of the Business Combination.

A Public Stockholder may exercise its redemption rights, which will not result in the loss of any Warrants that the Public Stockholders may hold. Accordingly, even if the maximum number of shares was redeemed, there would still be 5,750,000 Public Warrants and 4,120,000 Private Warrants and 50,000 Underwriter Warrants outstanding. Further, if the Combined Company Common Stock is trading above the exercise price of $11.50 per warrant, the warrants are considered to be “in the money” and are therefore more likely to be exercised by the holders thereof (when they become exercisable). This in turn increases the risk to non-redeeming stockholders that the warrants will be exercised, which would result in immediate dilution to the non-redeeming stockholders. As of the Record Date, the closing price of the warrants was $[·] per warrant.

12

Table of Contents

The potential impact of different redemption levels is illustrated below through a comparison of a no redemption, illustrative redemption, contractual maximum redemption and minimum cash condition waiver scenarios (as described below). In the sensitivity table below, the residual equity value owned by non-redeeming stockholders, taking into account the respective redemption amounts, is assumed to remain the deemed value of approximately $10.16 per share. As a result of such redemption amounts and the assumed approximately $10.16 per share value, the implied total equity value of the Combined Company, assuming no dilution from any of the Public Warrants, Private Warrants, Underwriter Warrants or Contingent Consideration Shares (“Additional Dilution Sources”), would be (a) $619,712,420 in the no redemption scenario, (b) $561,296,905 in the illustrative redemption scenario, and (c) $517,851,885, in the contractual maximum redemption scenario. Additionally, the sensitivity table below sets forth the potential additional dilutive impact of each of the Additional Dilution Sources in each redemption scenario. Increasing levels of redemption will increase the dilutive effects of these issuances on non-redeeming stockholders.

Redemption Sensitivity Analysis Table

Contractual

Illustrative

Maximum

No Redemption

% of

Redemption

% of

Redemption

% of

Holders

    

Scenario(1)

    

Total

    

Scenario(2)

    

Total

    

Scenario(3)

    

Total

 

Adara Public Stockholders

11,500,000

18.8

%  

5,750,000

10.4

%  

1,473,587

2.9

%

Adara Initial Stockholders(4)

2,000,000

3.3

%  

2,000,000

3.6

%  

2,000,000

3.9

%

Alliance Stockholders(5)

47,500,000

77.9

%  

47,500,000

86.0

%  

47,500,000

93.2

%

Total Shares Outstanding Excluding Contingent Consideration Shares and Adara Warrants

61,000,000

100.0

%  

55,250,000

100.0

%  

50,973,587

100.0

%

Total Equity Value Post- Redemptions

$

619,712,420

$

561,296,905

  

$

517,851,885

  

Assumed Per Share Value (approximate)

$

10.16

$

10.16

  

$

10.16

  

Contractual

Illustrative

Maximum

No Redemption

% of

Redemption

% of

Redemption

% of

Additional Dilution Sources(8)

    

Scenario(1)

    

Total(7)

    

Scenario(7)

    

Total(6)

    

Scenario(3)

    

Total(7)

Contingent Consideration Shares(8)

60,000,000

49.6

%  

60,000,000

52.1

%  

60,000,000

54.0

%

Adara Warrants

Public Warrants(9)

5,750,000

8.6

%  

5,750,000

9.4

%  

5,750,000

10.1

%

Private Warrants(10)

4,120,000

6.3

%  

4,120,000

6.9

%  

4,120,000

7.8

%

Underwriter Warrants(11)

50,000

0.1

%  

50,000

0.1

%  

50,000

0.1

%

Total Additional Dilutive Sources(12)

69,920,000

53.4

%  

69,920,000

55.6

%  

69,920,000

57.8

%

(1)This scenario assumes that no shares of Adara Common Stock are redeemed by the Public Stockholders
(2)This scenario assumes that approximately 5,750,000 shares of Adara Common Stock are redeemed by the Public Stockholders.
(3)This scenario assumes that 10,026,413 shares of Adara Common Stock are redeemed by the Public Stockholders, which, based on the amount of approximately $116.8 million in the Trust Account as of September 30, 2022, represents the maximum amount of redemptions that would still enable Adara to have sufficient cash to satisfy the minimum cash condition in the Business Combination Agreement.
(4)This row assumes that the Sponsor forfeits 875,000 Initial Stockholder Shares. Up to an additional 500,000 Initial Stockholder Shares are subject to forfeiture by the Sponsor at the discretion of Alliance. If such additional shares are forfeited by the Sponsor, the Adara Initial Stockholders would own 1,500,000 shares, or 3.0% of the Total Shares Outstanding Excluding Contingent Condition Shares and Warrants.
(5)This row excludes an aggregate of up to 60,000,000 shares of Combined Company Common Stock which would become issuable upon the conversion of the Contingent Consideration Shares upon the occurrence of the Triggering Events.
(6)All share numbers and percentages for the Additional Dilution Sources are presented without the potential reduction of any amounts paid by the holders of the given Additional Dilution Sources and therefore may overstate dilution.

13

Table of Contents

(7)The Percentage of Total with respect to each Additional Dilution Source, including the Total Additional Dilutive Sources, includes the full number of shares issued with respect to the applicable Additional Dilution Source (but not the other Applicable Dilution Sources) in both the numerator and denominator. For example, in the no redemption scenario, the Percentage of Total with respect to the Contingent Consideration Shares would be calculated as follows: (a) 60,000,000 shares; divided by (b) (i) 61,000,000 shares (the number of shares outstanding prior to any issuance of any such shares plus (ii) 60,000,000 shares.
(8)This row assumes an aggregate of up to 60,000,000 shares of Combined Company Common Stock which would become issuable upon the conversion of the Contingent Consideration Shares upon the occurrence of the Triggering Events.
(9)This row assumes exercise of all Public Warrants for cash.
(10)This row assumes exercise of all Private Warrants for cash.
(11)This row assumes exercise of all Underwriter Warrants for cash.
(12)This row assumes the issuance of all shares of Combined Company Common Stock in connection with each of the Additional Dilution Sources, as described in Notes 8 through 11 above.

Q.

Who will be the executive officers and directors of the Combined Company if the Business Combination is consummated?

A.

The executive officers of Combined Company will be:

Bruce Ogilvie, Executive Chairman of the Board;
Jeffrey Walker, Chief Executive Officer;
John Kutch, Chief Financial Officer;
Paul Eibler, Chairman of COKeM Subsidiary;and
Ben Mean, President, Distribution Solutions
A.Upon the consummation of the Business Combination, the board of directors of the Combined Company (the “Combined Company Board”) will be comprised of seven persons divided into three separate classes, as follows:
the Class I directors will be [·] and [·] and their terms will expire at the first annual meeting to be held after the consummation of the Business Combination;
the Class II directors will be [·], [·], and [·] and their terms will expire at the second annual meeting to be held after the consummation of the Business Combination; and
the Class III directors will be Bruce Ogilvie and Jeffrey Walker and their terms will expire at the third annual meeting to be held after the consummation of the Business Combination.

Such directors will be appointed, effective as of the consummation of the Business Combination, by the Adara board of directors in accordance with Adara’s organizational documents.

Immediately following the consummation of the Business Combination, we expect that the following will be the officers of the Combined Company: Bruce Ogilvie, Executive Chairman, Jeffrey Walker, Chief Executive Officer, John Kutch, Chief Financial Officer, and [·]. See the section titled “Management After the Business Combination” for information about such officers and the Combined Company’s other executive officers.

14

Table of Contents

Q.What conditions must be satisfied to complete the Business Combination?

A.There are a number of closing conditions in the Business Combination Agreement, including that Adara’s stockholders have approved and adopted the Business Combination Agreement. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, see the section titled “The Business Combination Agreement  —  Conditions to Closing.”

Q.

What happens if I sell my shares of Adara Common Stock before the special meeting of stockholders?

A.The Record Date for the special meeting of stockholders will be earlier than the date that the Business Combination is expected to be completed. If you transfer your shares of Adara Common Stock after the Record Date, but before the special meeting of stockholders, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting of stockholders.

However, you will not become a Combined Company Stockholder following the Closing because only Adara’s stockholders on the date of the Closing will become Combined Company Stockholders.

Q.

May Adara or Adara’s directors, officers or advisors, or their affiliates, purchase shares in connection with the Business Combination?

A.In connection with the stockholder vote to approve the proposed Business Combination, the Adara Initial Stockholders and Adara’s board of directors, officers, advisors or their affiliates may privately negotiate transactions to purchase shares prior to the Closing from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per share pro rata portion of the Trust Account without the prior written consent of Alliance. None of the Adara Initial Stockholders, directors, officers or advisors, or their respective affiliates, will make any such purchases when they are in possession of any material non-public information not disclosed to the seller of such shares. Such a purchase would include a contractual acknowledgement that such stockholder, although still the record holder of such shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Adara Initial Stockholders, directors, officers or advisors, or their affiliates, purchase shares in privately negotiated transactions from Public Stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are in excess of the per share pro rata portion of the Trust Account. The purpose of these purchases would be to increase the amount of cash available to Adara for use in the Business Combination.

Q.

How many votes do I have at the special meeting of stockholders?

A.Adara’s stockholders are entitled to one vote at the special meeting for each share of Adara Common Stock and Adara Class B Common Stock held of record as of the Record Date. As of the close of business on the Record Date, there were 11,500,000 shares of Adara Class A common stock, par value $0.0001 per share, held by [·] holders of record, including holders of record of Adara Units, and 2,875,000 shares of Adara Class B common stock, par value $0.0001 per share, held by Common Stockholders of record.

Q.

What interests do Adara’s current officers and directors have in the Business Combination?

A.Adara’s board of directors and executive officers may have interests in the Business Combination that are different from, in addition to, or in conflict with, yours. These interests include:
the beneficial ownership of Adara’s board of directors and officers and their affiliates of an aggregate of 1,950,000 shares (giving effect to the forfeiture of 875,000 Initial Stockholder Shares by the Sponsor) of Adara Class B Common Stock and 4,120,000 Adara Warrants, which shares and warrants would become worthless if Adara does not complete a business combination within the applicable time period, as our directors and officers have waived any right to redemption with respect to these shares. Such shares and warrants have an aggregate market value of approximately $[·] million based on the closing prices of Adara Common Stock and warrants of $[·] and $[·], respectively on the NYSE American on the Record Date, giving effect to the forfeiture of 875,000 Initial Stockholder Shares by the Sponsor. Based on such market values, Adara’s board of directors and officers will have an unrealized gain of approximately $[·] million on their Adara securities;

15

Table of Contents

The repayment of up to an aggregate of $500,000 of loans made by certain directors and their affiliates under the Promissory Notes (under which $[     ] principal amount was outstanding as of the Record Date) to the extent such outstanding amounts exceed the amount not required to be returned in the Trust Account, unless a business combination is consummated, which Adara does not anticipate being able to repay if the Business Combination is not consummated;
the fact that the Adara Initial Stockholders, including our officers and directors have agreed not to redeem any of the shares of our common stock held by them in connection with a stockholder vote to approve the Business Combination;
Adara’s board of directors will not receive reimbursement for any out-of-pocket expenses incurred by them on Adara’s behalf incident to identifying, investigating and consummating the Business Combination, to the extent such expenses exceed the amount not required to be retained in the Trust Account, unless the Business Combination is consummated;
the anticipated continuation of Thomas Finke and W. Tom Donaldson III as directors of the Combined Company following the Closing;
the fact that the Adara Initial Stockholders who hold Initial Stockholder Shares and Private Warrants may experience a positive rate of return on their investment, even if the Public Stockholders experience a negative rate of return on their investment;
If Adara is unable to complete a business combination within the required time period, an affiliate of the Sponsor will be personally liable under certain circumstances described herein to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Adara for services rendered or contracted for or products sold to Adara. If Adara consummates a business combination, on the other hand, Adara will be liable for all such claims; and
the continued indemnification of the current directors and officers of Adara following the Business Combination and the continuation of directors’ and officers’ liability insurance following the Business Combination.

Accordingly, our board of directors and officers and their affiliates will hold securities of Adara (directly or indirectly) with an aggregate value of approximately $[·] million based on the closing prices of Adara Common Stock and warrants of $[·] and $[·], respectively on the NYSE American on the Record Date giving effect to the forfeiture of 875,000 Initial Stockholder Shares by the Sponsor. For these reasons, our board of directors and officers and their affiliates will receive a benefit from the completion of the Business Combination. These interests may incentivize our directors and officers to complete a business combination of a less favorable target company or on terms less favorable to stockholders rather than liquidate and to vote in favor of approval of the Stockholder Proposals.

These interests may influence Adara’s board of directors in making their recommendation that you vote in favor of the approval of the Stockholder Proposals. You should also read the section titled “The Business Combination  —  Interests of Adara’s Directors and Officers in the Business Combination.”

Q.

What interests do the Adara Initial Stockholders and their affiliates have at risk if the Business Combination is not completed?

A.The Adara Initial Stockholders (including our directors and officers) and their affiliates have the following interests in Adara and/or the Business Combination which may become worthless or not received if the Business Combination is not completed:
The Adara Initial Stockholders (including our officers and directors) and their affiliates, beneficially own 2,875,000 shares of Class B Common Stock and 9,920,000 Adara Warrants, which shares and warrants would become worthless if Adara does not complete a business combination within the applicable time period, as the Adara Initial Stockholders (including our directors and officers) and their affiliates have waived any right to redemption with respect to these shares. Such shares and warrants have an aggregate market value of approximately $[·] million based on the closing prices of Adara Common Stock and warrants of $[·] and $[·], respectively on the NYSE American on the Record Date.
ThinkEquity, an Adara Initial Stockholder, will receive a financial advisory fee for serving as Adara’s financial advisor in connection with the Business Combination in an amount equal to 3.5% of the net funds held in the Trust Account after giving effect to redemptions by Adara Public Stockholders, which shall be due and payable in immediately available funds on the

16

Table of Contents

Closing Date. If none of the Adara Public Stockholders exercise their redemption rights, the fee payable to ThinkEquity will be approximately $4.1 million. If Adara public stockholders exercise redemption rights as to 5,750,000 shares of Class A common stock (representing 50% of the shares of Class A common stock subject to redemption), the fee payable to ThinkEquity will be approximately $2.5 million. If Adara Public Stockholders exercise their redemption rights as to 10,026,413 shares of Class A common stock (the maximum extent permitted under the Business Combination Agreement) the fee payable to ThinkEquity will be approximately $525,000. In the event the Business Combination is not consummated, ThinkEquity would not receive these fees. These fees are in addition to a $300,000 fee we paid to ThinkEquity as condition to the delivery of a fairness opinion.
Blystone & Donaldson LLC and Thomas Finke, LLC, affiliates of our directors, have loaned to us an aggregate of $[    ] as of the Record Date pursuant to the Promissory Notes and may make additional loans to us in an amount equal to $[    ] under the Promissory Notes to fund our working capital expenses. The Promissory Notes are due and payable on the earlier of the Closing Date and February 11, 2023. If the Business Combination is not consummated, we do not expect to be able to repay the amounts due under the Promissory Notes.

Accordingly, our Initial Stockholders (including our directors and officers and their affiliates) will hold securities of Adara (directly or indirectly) based on the closing prices of Adara Common Stock and warrants of $[•] and $[•], respectively on the NYSE American on the Record Date, giving effect to the forfeiture of 875,000 Initial Stockholder Shares by the Sponsor with an aggregate value of approximately $[•] million, receive cash fees of approximately $4.4 million if none of the Adara Public Stockholders exercise their redemption rights (approximately $2.5 million if Adara Public Stockholders exercise their redemption rights as to 575,000 shares of Class A common stock (representing 50% of the shares of Class A common stock subject to redemption) or approximately $525,000 if Adara Public Stockholders exercise their redemption rights as to 10,104,851 shares of Class A common stock (the maximum amount permitted under the Business Combination Agreement) and will be repaid all amounts outstanding under the $500,000 aggregate amount Promissory Notes ($[    ] as of the Record Date) on the Closing Date. Additionally, any reimbursable expenses of the Adara Initial Stockholders will be paid from our available cash prior to the consummation of the Business Combination and will not be dependent upon the consummation of the Business Combination.

For these reasons, the Adara Initial Stockholders (including our directors and officers) and their affiliates will receive a financial and business benefit from the completion of the Business Combination. These interests may incentivize the Adara Initial Stockholders (including our directors and officers) to complete a business combination of a less favorable target company or on terms less favorable to stockholders rather than liquidate and to vote in favor of approval of the Stockholder Proposals

These interests may influence Adara’s board of directors in making their recommendation that you vote in favor of the approval of the Stockholder Proposals. You should also read the section titled “The Business Combination — Interests of Adara’s Directors and Officers in the Business Combination.

Q.What are the U.S. federal income tax consequences of exercising my redemption rights?

A.The U.S. federal income tax consequences of a redemption depend on a holder’s particular facts and circumstances. See the section titled “Certain U.S. Federal Income Tax Considerations of the Redemption and the Business Combination.” We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights and to rely solely upon their advice.

Q.

If I hold Adara Warrants, can I exercise redemption rights with respect to my warrants?

A.No. Holders of Adara Warrants have no redemption rights with respect to the Adara Warrants.

Q.

When is the Business Combination expected to be completed?

A.It is currently anticipated that the Business Combination will be consummated promptly following the special meeting of stockholders, provided that all other conditions to the consummation of the Business Combination have been satisfied or waived. For a description of the conditions to the completion of the Business Combination, see the section titled “The Business Combination Agreement  —  Conditions to Closing.

17

Table of Contents

Q.

What do I need to do now?

A.You are urged to carefully read and consider the information contained in this proxy statement/prospectus, including the financial statements and annexes attached hereto, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

Q.

How do I vote?

A.If you were a holder of record of Adara Common Stock and/or Adara Class B Common Stock on the Record Date, you may vote on the Stockholder Proposals online at the virtual special meeting of stockholders or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to virtually attend the special meeting of stockholders and vote online, obtain a proxy from your broker, bank or nominee.

Q.

What will happen if I abstain from voting or fail to vote at the special meeting?

A.At the special meeting of stockholders, Adara will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, an abstention or failure to vote will have the same effect as a vote against each of the Business Combination Proposal and the individual Charter Proposals, and will have no effect on any of the other Stockholder Proposals.

Q.

What will happen if I sign and return my proxy card without indicating how I wish to vote?

A.Signed and dated proxies received by Adara without an indication of how the stockholder intends to vote on a proposal will be voted in favor of each of the Stockholder Proposals.

Q.

Do I need to attend the special meeting of stockholders to vote my shares?

A.No. You are invited to virtually attend the special meeting to vote on the proposals described in this proxy statement/prospectus. However, you do not need to attend the special meeting of stockholders to vote your shares. Instead, you may submit your proxy by signing, dating and returning the applicable enclosed proxy card(s) in the pre-addressed postage-paid envelope. Your vote is important. Adara encourages you to vote as soon as possible after carefully reading this proxy statement/prospectus.

Q.

If I am not going to attend the special meeting of stockholders in person, should I return my proxy card instead?

A.Yes. After carefully reading and considering the information contained in this proxy statement/prospectus, please submit your proxy, as applicable, by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

18

Table of Contents

Q.

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

A.Because none of the proposals to be voted on at the Special Meeting is a routine matter for which brokers may have discretionary authority to vote without instructions from the beneficial owner of the shares, Adara does not expect any broker non-votes at the Special Meeting. As a result, failure to provide instructions to your bank, brokerage firm or other nominee on how to vote will result in your shares not being counted as present in determining the presence of a quorum. No. If your broker holds your shares in its name and you do not give the broker voting instructions, under the applicable stock exchange rules, your broker may not vote your shares on any of the Stockholder Proposals. If you do not give your broker voting instructions and the broker does not vote your shares, this is referred to as a “broker non-vote.” Broker non-votes will be counted for purposes of determining the presence of a quorum at the special meeting of stockholders. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide. However, in no event will a broker non-vote have the effect of exercising your redemption rights for a pro rata portion of the Trust Account, and therefore no shares as to which a broker non-vote occurs will be redeemed in connection with the proposed Business Combination.

Q.

May I change my vote after I have mailed my signed proxy card?

A.Yes. You may change your vote by sending a later-dated, signed proxy card to Adara’s secretary at the address listed below prior to the vote at the special meeting of stockholders, or attend the virtual special meeting and vote online. You also may revoke your proxy by sending a notice of revocation to Adara’s secretary, provided such revocation is received prior to the vote at the special meeting. If your shares are held in street name by a broker or other nominee, you must contact the broker or nominee to change your vote.

Q.

What happens if I fail to take any action with respect to the special meeting?

A.If you fail to take any action with respect to the special meeting and the Business Combination is approved by stockholders and consummated, you will become a stockholder of the Combined Company and/or your warrants will entitle you to purchase common stock of the Combined Company. As a corollary, failure to vote either for or against the Business Combination proposal means you will not have any redemption rights in connection with the Business Combination to exchange your shares of common stock for a pro rata share of the aggregate amount of funds held in the Trust Account as of two business days prior to the Closing, including any interest thereon but net of any income or other taxes payable. If you fail to take any action with respect to the special meeting and the Business Combination is not approved, you will continue to be a stockholder and/or warrant holder of Adara.

Q.

What should I do if I receive more than one set of voting materials?

A.You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

Q.

What is the quorum requirement for the special meeting of stockholders?

A.A quorum of Adara’s stockholders is necessary to hold a valid meeting. A quorum will be present at the special meeting of stockholders if a majority of the aggregate shares of Adara Common Stock and Adara Class B Common Stock outstanding, and entitled to vote at the meeting is virtually represented in person or by proxy, and, with respect to the separate vote by other Adara Class B Common Stock for other Charter Proposals if a majority of the shares of Adara Class B Common Stock outstanding and entitled to vote at the meeting is virtually represented in person or by proxy. Abstentions will count as present for the purposes of establishing a quorum.

As of the Record Date for the special meeting, 7,187,501 shares of Adara Common Stock and Adara Class B Common Stock will be required to achieve a quorum.

Your shares will be counted towards the quorum only if you submit a valid proxy (or your broker, bank or other nominee submits one on your behalf) or if you vote online at the virtual special meeting of stockholders. Abstentions and broker non-votes will be

19

Table of Contents

counted towards the quorum requirement. If there is no quorum, a majority of the shares represented by stockholders virtually present at the special meeting or by proxy may authorize adjournment of the special meeting to another date.

Q.

What happens to the Adara Warrants I hold if I vote my shares of Adara Common Stock against approval of the Business Combination Proposal and validly exercise my redemption rights?

A.Properly exercising your redemption rights as an Adara stockholder does not result in either a vote “FOR” or “AGAINST” the Business Combination Proposal. If the Business Combination is not completed, you will continue to hold your Adara Warrants, and if Adara does not otherwise consummate an initial business combination by February 11, 2023 or obtain the approval of Adara’s Stockholders to extend the deadline for Adara to consummate an initial business combination, Adara will be required to dissolve and liquidate, and your Adara Warrants will expire worthless.

Q.

Who will solicit and pay the cost of soliciting proxies?

A.Adara will pay the cost of soliciting proxies for the special meeting of stockholders. Adara has engaged Morrow Sodali LLC to assist in the solicitation of proxies for the special meeting. Adara has agreed to pay Morrow Sodali LLC a fee of $[·]. Adara will reimburse Morrow Sodali LLC for reasonable out-of-pocket expenses and will indemnify Morrow Sodali LLC and its affiliates against certain claims, liabilities, losses, damages and expenses. Adara also will reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of Adara Common Stock for their expenses in forwarding soliciting materials to beneficial owners of Adara Common Stock and in obtaining voting instructions from such beneficial owners. Adara’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Q.

Who can help answer my questions?

A.

If you have questions about the Stockholder Proposals, or if you need additional copies of this proxy statement/prospectus, the proxy card or the consent card you should contact our proxy solicitor at:

Morrow Sodali LLC

333 Ludlow Street, 5th Floor, South Tower

Stamford, CT 06902

Telephone: (800) 662-5200

(Banks and brokers can call collect at: (203) 658-9400)

Email: ADRA.info@investor.morrowsodali.com

You may also contact Adara at:

Adara Acquisition Corp.

211 East Blvd.

Charlotte, NC 28203

Telephone: (704) 315-5290

Attention: CEO

To obtain timely delivery, Adara’s stockholders and warrant holders must request the materials no later than five business days prior to the special meeting.

You may also obtain additional information about Adara from documents filed with the SEC by following the instructions in the section titled, “Where You Can Find More Information.”

If you intend to seek redemption of your Public Shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to Adara’s transfer agent prior to 4:30 p.m., New York time, on the second business day prior to the special meeting of stockholders. If you have questions regarding the certification of your position or delivery of your shares, please contact:

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, New York 10004

Attention: Mark Zimkind

E-mail: mzimkind@continentalstock.com

20

Table of Contents

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the Business Combination Proposal and the other Stockholder Proposals to be considered at the special meeting of stockholders, you should read this entire proxy statement/prospectus carefully, including the annexes. See also the section titled, “Where You Can Find More Information.”

Parties to the Business Combination

Adara

Adara is a Delaware corporation and was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Adara was formed to purse an initial business combination target in any industry or geographic location (subject to certain limitations described in this prospectus),

Adara Common Stock, Adara Warrants and Adara Units (each Adara Unit comprising one share of Adara Common Stock and one-third of an Adara Warrant) are currently listed and trading on the NYSE American under the ticker symbols “ADRA,” “ADRA.WS” and “ADRA.UN,” respectively. We have applied to continue the listing of the Adara Common Stock and Adara Warrants on the NYSE American under the symbols “AENT” and “AENT.WS,” respectively, upon the Closing. The Adara Units will automatically separate into their component securities (one share of Adara Common Stock and one-third of an Adara Warrant) upon Closing and, as a result, will no longer exist. Upon Closing, Adara intends to change its name from “Adara Acquisition Corp.” to “Alliance Entertainment Holding Corporation.”

The mailing address of Adara’s principal executive office is 211 East Blvd., Charlotte, NC 28203, and its telephone number is (704) 315-5290.

Merger Sub

Merger Sub is a wholly-owned subsidiary of Adara, formed on September 2, 2021 to consummate the Business Combination. Following the Business Combination, Merger Sub will have merged with and into Alliance with Alliance surviving the Merger. As a result, Alliance will become a wholly-owned subsidiary of Adara.

Alliance

Alliance is a leading global wholesaler, direct-to-consumer (“DTC”) distributor and e-commerce provider for the entertainment industry. Alliance serves as the gateway between well-known international branded manufacturers of entertainment content, such as Universal Pictures, Universal Music Group, Warner Brothers Home Video, Walt Disney Studios, Sony Music, Sony Pictures, Microsoft, Nintendo, and others, and leading retailer customers in the United States and internationally, including Walmart, Amazon, Best Buy, Barnes & Noble, Wayfair, Costco and Target, among others. Alliance distributes its physical media, entertainment products, hardware and accessories through an established multi-channel strategy. Alliance currently sells its products that they are allowed to export in more than 77 countries around the world.

Alliance’s mailing address is 1401 NW 136th Ave., Suite 100, Sunrise FL 33323, and its telephone number is (954) 255-4000.

For more information about Alliance, see the sections titled “Information About Alliance” and “Alliance Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The Business Combination

The Business Combination Agreement

On June 22, 2022, Adara, Merger Sub and Alliance entered into the Business Combination Agreement, pursuant to which Adara and Alliance will consummate the Business Combination. The Business Combination Agreement contains customary representations and warranties, covenants, closing conditions, termination fee provisions and other terms relating to the Merger and the other transactions contemplated thereby.

21

Table of Contents

The Merger is to become effective by the filing of a certificate of merger with the Secretary of State of the State of Delaware, in accordance with the relevant provisions of the DGCL and mutually agreed by the parties and will be effective immediately upon such filing or upon such later time as may be agreed by the parties and specified in such certificate of merger (such time, “Effective Time”). The parties will hold the Closing immediately prior to such filing of a certificate of merger, on the Closing Date.

The Effective Time shall occur as promptly as practicable but in no event later than three business days after the satisfaction or, if permissible, waiver of the conditions to the completion of the Business Combination set forth in the Business Combination Agreement (other than those conditions that by their nature are to be satisfied at Closing, provided that the occurrence of the Closing shall remain subject to the satisfaction or, if permissible, waiver at the Closing).

At the Effective Time, by virtue of the Merger and without any action on the part of Adara, Merger Sub, Alliance or the holders of any of Alliance’s securities:

Each share of Alliance Common Stock issued and outstanding immediately prior to the Effective Time will be cancelled and automatically converted into the right to receive the number of shares of Combined Company Common Stock equal to the Exchange Ratio;
No certificates or scrip or shares representing fractional shares of Combined Company Common Stock shall be issued upon the exchange of Alliance Common Stock and such fractional share interests will not entitle the owner thereof to vote or to have any rights of a stockholder of Adara or a holder of shares of Combined Company Common Stock. In lieu of any fractional share of Combined Company Common Stock to which each holder of Alliance Common Stock would otherwise be entitled, the fractional share shall be rounded up or down to the nearest whole share of Combined Company Common Stock, with a fraction of 0.5 rounded up. No cash settlements shall be made with respect to fractional shares eliminated by rounding.

Contingent Consideration Shares

At the Closing, the Company will also issue to the Alliance Stockholders Contingent Consideration Shares which shall be placed into the Contingent Consideration Shares Escrow Account pursuant to the Contingent Consideration Shares Agreement and shall not be released from escrow over a ten-year period unless and until they are earned as a result of the occurrence of the applicable Triggering Event as follows: 20,000,000 Contingent Consideration Shares will be earned upon the occurrence of Triggering Event I prior to the five-year anniversary of the Closing; 20,000,000 Contingent Consideration Shares will be earned upon the occurrence of Triggering Event II prior to the seven-year anniversary of the Closing; and 20,000,000 Contingent Consideration Shares will be earned upon the occurrence of Triggering Event III prior to the ten-year anniversary of the Closing.

Upon the occurrence of a Triggering Event, the Contingent Consideration Shares released from the Contingent Consideration Shares Escrow shall automatically convert into an equal number of shares of Combined Company Common Stock.

In the event that a Triggering Event does not occur during the respective Triggering Event Period, the Contingent Consideration Shares issuable upon the occurrence of the respective Triggering Event shall be forfeited to the Combined Company for cancellation.

Under the Contingent Consideration Escrow Agreement, each Alliance Stockholder owning Contingent Consideration Shares will have all rights with respect to the Contingent Consideration Shares attributable to ownership of such Combined Company Class E Common Stock except (1) the right of possession thereof, (2) the right to sell, assign, pledge, hypothecate or otherwise dispose of or encumber such shares or any interest therein, and (3) the right to be paid dividends with respect to such shares (other than non-taxable stock dividends, which shall remain in and become part of the Contingent Consideration Shares). Additionally, the Alliance Stockholders will have the right to vote such Contingent Consideration Shares, provided that during the escrow period they have contractually agreed to vote their shares of Combined Company Class E Common Stock in the same manner and proportion as the Combined Company Common Stock votes.

22

Table of Contents

Conditions to Closing

Mutual

The obligations of Alliance, Adara and Merger Sub to consummate the Business Combination, including the Merger, are subject to the satisfaction or waiver (where permissible) at or prior to the Closing of the following conditions:

The Alliance Requisite Approval in favor of the adoption of the Business Combination Agreement and the Merger and all other transactions contemplated by the Business Combination Agreement, shall have been obtained;
The Stockholder Proposals shall have been approved and adopted by the requisite affirmative vote of Adara’s stockholders in accordance with the proxy statement/prospectus, the DGCL, the Adara organizational documents and the rules and regulations of NYSE;
The Registration Statement shall have become effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement shall be in effect and no proceedings for that purpose shall be pending before or threatened by the SEC;
No governmental authority shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, judgment, decree, executive order or award which is then in effect and has the effect of making the Business Combination, including the Merger, illegal or otherwise prohibiting consummation of the Business Combination, including the Merger;
All required filings under the HSR Act shall have been completed and any waiting period (and any extension thereof) applicable to the consummation of the Business Combination under the HSR Act shall have expired or been terminated;
All consents, approvals and authorizations set forth in the Business Combination Agreement shall have been obtained from and made with all governmental authorities; and
The listing of shares of Combined Company Common Stock on NYSE American, or another national securities exchange mutually agreed to by the parties, as of the Closing Date.

23

Table of Contents

Adara and Merger Sub

The obligations of Adara and Merger Sub to consummate the Business Combination are subject to the satisfaction or waiver (where legally permissible) at or prior to the Closing of the following additional conditions:

Certain of the representations and warranties of Alliance contained in the sections titled (a) “Organization and Qualification; Subsidiaries,” (b) “Capitalization,” (c) “Authority Relative to the Business Combination Agreement” and (d) “Brokers” in the Business Combination Agreement shall each be true and correct in all material respects as of the date of the Business Combination Agreement and the Effective Time, except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier specified date. Certain of the representations and warranties of Alliance contained in the section titled “Absence of Certain Changes or Events” in the Business Combination Agreement shall be true and correct in all respects as of the date of the Business Combination Agreement and the Effective Time. Certain of the representations and warranties in the section titled “Capitalization” in the Business Combination Agreement shall be true and correct in all respects as of the date of the Business Combination Agreement and as of the Effective Time as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such specified date), except where the failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, be reasonably expected to result in more than de minimis additional cost, expense or liability to Alliance, Adara, Merger Sub or any of their respective affiliates. The other representations and warranties of Alliance contained in the Business Combination Agreement shall be true and correct in all respects (without giving effect to any “materiality,” “Company Material Adverse Effect” or similar qualifiers contained in any such representations and warranties) as of the date of the Business Combination Agreement and as of the Effective Time as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failures of any such representations and warranties to be so true and correct, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect;
Alliance shall have performed or complied in all material respects with all agreements and covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Effective Time;
Alliance shall have delivered to Adara a customary officer’s certificate, dated the date of the Closing, certifying as to the satisfaction of certain conditions;
No Company Material Adverse Effect shall have occurred during the Interim Period;
Other than those persons identified as continuing directors in the Business Combination Agreement, all members of the Alliance’s board of directors, as required pursuant to the Business Combination Agreement, shall have executed written resignations effective as of the Effective Time;
All parties to the Registration Rights Agreement (other than Adara and the Adara Initial Stockholders party thereto) shall have delivered, or cause to be delivered, to Adara copies of the Registration Rights Agreement duly executed by all such parties;
The stockholders of Alliance shall have delivered, or cause to be delivered, to Adara copies of the Lock-up Agreements duly executed by all such parties;
All parties to the employment agreements (other than Adara) shall have delivered, or caused to be delivered, to Adara copies of the Employment Agreements duly executed by such parties;
On or prior to the Closing, Alliance shall have delivered to Adara in a form reasonably acceptable to Adara, dated as of the Closing Date, a properly executed certification that shares of Alliance are not “U.S. real property interests” within the meaning of Section 897 of the Code, in accordance with Treasury Regulation Section 1.1445-2(c)(3), together with an executed notice to the IRS (which shall be filed by Adara with the IRS following the Closing) in accordance with the provisions of Section 1.897-2(h)(2) of the Treasury Regulations;

24

Table of Contents

All loans between Alliance and any person who shall serve as a director or officer of the Combined Company shall have been paid off in full; and
Alliance shall have delivered to Adara the PCAOB Audited Financials and PCAOB Reviewed Financials.

Alliance

The obligations of Alliance to consummate the Business Combination are subject to the satisfaction or waiver (where permissible) at or prior to Closing of the following additional conditions:

Certain of the representations and warranties of Adara and Merger Sub contained in the sections titled (a) “Corporate Organization,” (b) “Capitalization,” (c) “Authority Relative to the Business Combination Agreement” and (d) “Brokers” in the Business Combination Agreement shall each be true and correct in all material respects as of the date of the Business Combination Agreement and the Effective Time, except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier specified date. Certain of the representations and warranties of Adara and Merger Sub contained in the section titled “Absence of Certain Changes or Events” in the Business Combination Agreement shall be true and correct in all respects as of the date of the Business Combination Agreement and the Effective Time. Certain of the representations and warranties in the section titled “Capitalization” in the Business Combination Agreement shall be true and correct in all respects as of the date of the Business Combination Agreement and as of the Effective Time as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such specified date), except where the failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, be reasonably expected to result in more than de minimis additional cost, expense or liability to Alliance, Adara, Merger Sub or any of their respective affiliates. The other representations and warranties of Adara and Merger Sub contained in the Business Combination Agreement shall be true and correct in all respects (without giving effect to any “materiality,” “Adara Material Adverse Effect” or similar qualifiers contained in any such representations and warranties) as of the date of the Business Combination Agreement and as of the Effective Time as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failures of any such representations and warranties to be so true and correct, individually or in the aggregate, would not reasonably be expected to have an Adara Material Adverse Effect; and
Adara and Merger Sub shall have performed or complied in all material respects with all agreements and covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Effective Time;
Adara shall have delivered to Alliance a customary officer’s certificate (signed by the Chief Executive Officer of Adara), dated the date of the Closing, certifying as to the satisfaction of certain conditions;
No Adara Material Adverse Effect shall have occurred during the Interim Period;
Adara shall have delivered or caused to be delivered a copy of the Registration Rights Agreements duly executed by Adara and the Adara Initial Stockholders party thereto;
Adara shall have delivered or caused to be delivered a copy of the Amended and Restated Adara Insider Agreements duly executed by Adara and the Adara Initial Stockholders party thereto;
Adara shall, as of immediately following the Closing have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act;
Adara shall have made all necessary and appropriate arrangements with the trustee to have all of the funds from the Trust Account disbursed to Adara immediately prior to the Effective Time, and all such funds released from the Trust Account shall be available to Adara in respect of all or a portion of the payment obligations set forth in the Business Combination Agreement and the payment of Adara’s fees and expenses incurred in connection with the Business Combination Agreement and the Business Combination; and

25

Table of Contents

As of the Closing, after distribution of the Trust Account, deducting all amounts to be paid pursuant to the exercise of redemption rights, Adara shall have cash on hand equal to or in excess of $15,000,000 (for the avoidance of doubt, such cash shall be determined prior to the payment of any transaction fees, costs and expenses paid or required to be paid by Adara prior to Closing and the payment of such fees, costs and expenses shall be paid or payable out of such cash on hand).

For more information about the Business Combination Agreement, see the section titled “The Business Combination Agreement.”

Regulatory Matters

The Business Combination is subject to the requirements of the HSR Act, which prevents Adara and Alliance from completing the Business Combination until required information and materials are furnished to the Antitrust Division of the Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) and specified waiting period requirements have been satisfied.

For more information, see the section titled “The Business Combination — Regulatory Approvals Required for the Business Combination.”

Termination Rights

The Business Combination Agreement is subject to termination prior to the Effective Time of the Business Combination as follows:

by the mutual written consent of Adara and Alliance;
by Adara or Alliance, if (i) the Effective Time will not have occurred prior to the date that is 240 days after the date of the Business Combination Agreement (the “Outside Date”); provided, however, that the Business Combination Agreement may not be terminated pursuant to this provision by or on behalf of any party that is in breach or violation of any representation, warranty, covenant, agreement or obligation contained in the Business Combination Agreement and such breach or violation is the principal cause of the failure of a condition to the Merger on or prior to the Outside Date, and, in the event that any law is enacted after the execution of the Business Combination Agreement extending the applicable waiting period under the HSR Act, the Outside Date will be automatically extended by the length of any such extension; or (ii) any governmental authority in the United States has enacted, issued, promulgated, enforced or entered any law, injunction, order, decree or ruling (whether temporary, preliminary or permanent) which has become final and non-appealable and has the effect of making consummation of the Business Combination transactions, including the Merger, illegal or otherwise preventing or prohibiting consummation of the Business Combination transactions, including the Merger; or (iii) any of the Stockholder Proposals fail to receive the requisite vote for approval by Adara’s stockholders;
by Alliance if there is an occurrence of a breach of any representation, warranty, covenant or agreement on the part of Adara or Merger Sub set forth in the Business Combination Agreement, or if any representation or warranty of Adara or Merger Sub has become untrue, in either case such that the conditions set forth in representations and warranties and the agreements and covenants of Merger Sub and Adara specified in the conditions to the Merger section of the Business Combination Agreement would not be satisfied (“Terminating Adara Breach”); provided that Alliance has not waived such Terminating Adara Breach and Alliance is not then in material breach of its representations, warranties, covenants or agreements in the Business Combination Agreement; provided, however, that, if such Terminating Adara Breach is curable by Adara and Merger Sub, Alliance may not terminate the Business Combination Agreement under this section for so long as Adara and Merger Sub continue to exercise their reasonable efforts to cure such breach, unless such breach is not cured within thirty days after notice of such breach is provided by Alliance to Adara; and

26

Table of Contents

by Adara if (i) Alliance has failed to deliver the approval of holders of the Alliance Requisite Approval in favor of the adoption of the Merger to Adara within ten days of the Registration Statement becoming effective; or (ii) there is an occurrence of a breach of any representation, warranty, covenant or agreement on the part of Alliance set forth in the Business Combination Agreement, or if any representation or warranty of Alliance has become untrue, in either case such that the conditions set forth in representations and warranties and the agreements and covenants of Alliance specified in the conditions to the Merger section of the Business Combination Agreement would not be satisfied (“Terminating Alliance Breach”); provided that Adara has not waived such Terminating Alliance Breach and Adara and Merger Sub are not then in material breach of their representations, warranties, covenants or agreements in the Business Combination Agreement; provided further that, if such Terminating Alliance Breach is curable by Alliance, Adara may not terminate the Business Combination Agreement under this provision for so long as Alliance continues to exercise its reasonable efforts to cure such breach, unless such breach is not cured within thirty days after notice of such breach is provided by Adara to Alliance.

If the Business Combination Agreement is terminated, the agreement will forthwith become void, and there will be no liability under the Business Combination Agreement on the part of any party to the Business Combination Agreement, except as set forth in the Business Combination Agreement or in the case of termination subsequent to a willful material breach of the Business Combination Agreement by a party thereto.

Except as set forth in the Business Combination Agreement, all expenses incurred in connection with the Business Combination Agreement and the Business Combination transactions shall be paid by the party incurring such expenses, whether or not the Business Combination transactions are consummated. The filing, listing, and registration fees contemplated by the Business Combination Agreement shall be paid one half by each of the parties thereto; provided, that each party shall be responsible for the fees and expenses payable by such party to its respective representatives with respect to such matters.

For more information about the Business Combination Agreement, see the section titled “The Business Combination Agreement.”

Amendments to the Charter

Pursuant to the Business Combination Agreement, at the Effective Time of the Business Combination, the Existing Certificate of Incorporation of Adara will be amended and restated to:

change Adara’s name to “Alliance Entertainment Holding Corporation;”
create a new Class E common stock and eliminate the Class B Common Stock classification and provide for a single class of common stock;
change the number of authorized shares to 551,000,000 total shares, consisting of (i) 550,000,000 shares of common stock, consisting of 490,000,000 shares of Class A common stock and 60,000,000 shares of Class E common stock and (ii) 1,000,000 shares of preferred stock; and
make certain other changes to the amended and restated Existing Certificate of Incorporation, including eliminating certain provisions related to special purpose acquisition corporations that will no longer be relevant following the Closing.

For more information about these amendments to the Certificate of Incorporation, see the section titled “Proposal No. 2 — The Charter Proposals.”

Opinion of Financial Advisor to Adara, ThinkEquity LLC

Adara retained ThinkEquity to act as its financial advisor in connection with the Business Combination. Adara selected ThinkEquity to act as its financial advisor based on ThinkEquity’s qualifications, expertise and reputation, its knowledge of, and involvement in, recent transactions in the industry in which Adara operates and its knowledge of Adara’s business and affairs. On June 21, 2022, ThinkEquity rendered its oral opinion to the board of directors of Adara (which was confirmed in writing by delivery of ThinkEquity’s written opinion dated such date), and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by ThinkEquity, as set forth in ThinkEquity’s written opinion, the aggregate closing consideration to be issued by Adara in connection with the Business Combination pursuant to the Business Combination Agreement was fair, from a financial point of view, to Adara.

27

Table of Contents

The full text of the written opinion of ThinkEquity delivered to Adara’s board of directors, dated June 21, 2022, is attached as Annex D and incorporated by reference into this proxy statement/prospectus in its entirety. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by ThinkEquity in rendering its opinion. All stockholders of Adara are urged to, and should, read the opinion carefully and in its entirety. ThinkEquity’s opinion was directed to the Adara board of directors and addressed only the fairness from a financial point of view to Adara, as of the date of the opinion, of the aggregate consideration to be paid by Adara pursuant to the Business Combination Agreement. ThinkEquity’s opinion did not address any other aspect or implications of the Business Combination and does not constitute an opinion, advice or recommendation as to how any stockholder of Adara should vote at the stockholders’ meeting to be held in connection with the Business Combination. In addition, ThinkEquity’s opinion did not in any manner address the prices at which the Adara common stock would trade following the consummation of the Business Combination or at any time. The summary of ThinkEquity’s opinion set forth in this proxy solicitation/prospectus statement is qualified in its entirety by reference to the full text of ThinkEquity’s written opinion attached as Annex D hereto.

For a further discussion of ThinkEquity’s opinion, see the section titled “Opinion of Financial Advisor to Adara, ThinkEquity LLC” beginning on page 108 of this proxy statement/prospectus and the full text of the written opinion of ThinkEquity attached as Annex D to this proxy statement/prospectus.

Other Agreements Related to the Business Combination Agreement

Adara Insider Agreements, Lock-Up Agreements and Registration Rights

In connection with the Closing, the Sponsor agreed to forfeit between 875,000 and 1,375,000 Initial Stockholder Shares at the Closing, the exact number to be determined by Alliance. In connection with the Closing, the Adara Initial Stockholders and certain stockholders of Alliance will agree, subject to certain exceptions, not to (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder, with regards to any shares of Combined Company Common Stock held by them immediately after the Effective Time, or issuable upon the exercise of options to purchase shares of Combined Company Common Stock held by them immediately after the Effective Time, or securities convertible into or exercisable or exchangeable for Combined Company Common Stock held by them immediately after the Effective Time (the “Lock-up Shares”), (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Lock-up Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii). The Lock-Up Period (as defined in the Lock-Up Agreement and Adara Insider Agreements) shall terminate six months after the Closing.

The Lock-up Shares consist of the 2,000,000 shares of Combined Company Common Stock held by the Adara Initial Stockholders assuming 875,000 Initial Stockholder Shares are forfeited (1,500,000 shares of Combined Company Common Stock, if all 1,375,000 Initial Stockholder Shares subject to forfeiture are forfeited) and 47,500,000 shares of Combined Company Common Stock and 60,000,000 Contingent Consideration Shares (and the shares of Combined Company Common Stock issuable upon conversion of the Contingent Consideration Shares) to be issued to the Alliance Stockholders.

In connection with the Closing, that certain registration rights agreement dated February 2, 2021 will be amended and restated and Adara, the Adara Initial Stockholders and certain persons and entities receiving Combined Company Common Stock pursuant to the Business Combination (the “New Holders” and together with the Initial Stockholders, the “Reg Rights Holders”) shall enter into that amended and restated registration rights agreement, a form of which is attached as an exhibit to the Business Combination Agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, Adara will agree that, no later than 30 calendar days after the Closing, Combined Company will file with the SEC (at the Combined Company’s sole cost and expense) a registration statement registering the resale of certain securities held by or issuable to the Reg Rights Holders (the “Resale Registration Statement”), and Combined Company shall use commercially reasonable efforts to have the Resale Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 60th calendar day (or 120th calendar day if the SEC notifies the Combined Company that it will “review” the Resale Registration Statement) following the closing of the Business Combination and (ii) the tenth business day after the date the Combined Company is notified (orally or in writing, whichever is earlier) by the SEC that the Resale Registration Statement will not be “reviewed” or will not be subject to further review. In certain circumstances, the Initial Stockholders and the New Holders may each demand up to two registrations, which may be underwritten offerings, and all of the Reg Rights Holders will be entitled to piggyback registration rights.

28

Table of Contents

For more information about the Lock-Up Agreements and Registration Rights, see the sections titled “Certain Agreements Related to the Business Combination — Lock-Up Agreements” and “Certain Agreements Related to the Business Combination — Registration Rights Agreement.”

Stockholder Support Agreement

On June 22, 2022, Adara, Alliance and certain stockholders of Alliance entered into the Stockholder Support Agreement (the “Stockholder Support Agreement”) pursuant to which such stockholders agreed to vote all of their shares of Alliance Common Stock and Alliance Preferred Stock in favor of the approval and adoption of the Proposed Transactions. Additionally, such stockholders have agreed, among other things, not to (a) transfer any of their shares of Alliance Common Stock (or enter into any arrangement with respect thereto), subject to certain customary exceptions or (b) enter into any voting arrangement that is inconsistent with the Stockholder Support Agreement.

Sponsor Support Agreement

On June 22, 2022, Adara, Alliance and the Founders entered into the Sponsor Support Agreement (the “Sponsor Support Agreement”) pursuant to which the Adara Initial Stockholders agreed to vote all of their shares of Adara Common Stock in favor of the approval and adoption of the Stockholder Proposals. Additionally, such Adara Initial Stockholders have agreed, among other things, not to (a) transfer any of their shares of Adara Common Stock and Adara Class B Common Stock (or enter into any arrangement with respect thereto), subject to certain customary exceptions, (b) enter into any voting arrangement that is inconsistent with the Sponsor Support Agreement or (c) exercise their redemption rights in connection with the Business Combination.

Interests of the Adara Initial Stockholders and Adara Directors and Officers in the Business Combination

In considering the recommendation of Adara’s board of directors to vote in favor of the Business Combination, stockholders should be aware that, aside from their interests as stockholders, our directors and officers have interests in the Business Combination that are different from, in addition to, or in conflict with those of other stockholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include:

the beneficial ownership of Adara’s board of directors and officers and their affiliates of an aggregate of 1,950,000 shares of Adara Class B Common Stock and 4,120,000 Adara Warrants, which shares and warrants would become worthless if Adara does not complete a business combination within the applicable time period, as our directors and officers have waived any right to redemption with respect to these shares. Such shares and warrants have an aggregate market value of approximately $[·] million based on the closing prices of Adara Common Stock and warrants of $[·] and $[·], respectively on the NYSE American on the Record Date, giving effect to the forfeiture of 875,000 Initial Stockholder Shares by the Sponsor. Based on such market values, Adara’s board of directors and officers will have an unrealized gain of approximately $[·] million on their Adara securities;
The repayment of up to an aggregate of $500,000 of loans made by certain directors and their affiliates to the extent such outstanding amounts exceed the amount not required to be returned in the Trust Account, unless a business combination is consummated;
Adara’s board of directors will not receive reimbursement for any out-of-pocket expenses incurred by them on Adara’s behalf incident to identifying, investigating and consummating a business combination to the extent such expenses exceed the amount not required to be retained in the Trust Account, unless a business combination is consummated;
the anticipated continuation of Thomas Finke and W. Tom Donaldson II, as directors of the Combined Company following the Closing;
the fact that the Adara Initial Stockholders who held Initial Stockholder Shares, Private Warrants and Underwriter Warrants may experience a positive rate of return on their investment, even if the Public Stockholders experience a negative rate of return on their investment; and

29

Table of Contents

the continued indemnification of the current directors and officers of Adara following the Business Combination and the continuation of directors’ and officers’ liability insurance following the Business Combination.

These interests may influence Adara’s board of directors in making their recommendation that you vote in favor of the approval of the Business Combination Proposal and the other Stockholder Proposals.

Reasons for the Approval of the Business Combination

After careful consideration, Adara’s board of directors recommends that Adara’s stockholders vote “FOR” each Stockholder Proposal being submitted to a vote of Adara’s stockholders at the Adara special meeting of stockholders.

For a description of Adara’s reasons for the approval of the Business Combination and the recommendation of our board of directors, see the section titled “The Business Combination — Adara’s Board of Directors’ Reasons for the Approval of the Business Combination.”

Redemption Rights

Under the Existing Certificate of Incorporation, holders of Public Shares may elect to have their shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest not previously released to Adara to pay its income taxes or any other taxes payable, by (b) the total number of shares of Public Shares. However, Adara will not redeem any Public Shares to the extent that such redemption would result in Adara having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5.0 million. For illustrative purposes, based on funds in the Trust Account of approximately $[·] million on the Record Date, the estimated per share redemption price would have been approximately $10.16.

If a holder exercises its redemption rights, then such holder will be exchanging its shares of Adara Common Stock for cash and will no longer own shares of Adara Common Stock and will not participate in the future growth of the Combined Company, if any. Such a holder will be entitled to receive cash for its Public Shares only if it properly demands redemption and delivers its shares (either physically or electronically) to Adara’s transfer agent in accordance with the procedures described herein. See the section titled “The Special Meeting of Adara’s Stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

Ownership of the Combined Company After the Closing

The ownership of the Combined Company will vary based on the number of Adara Public Stockholders that exercise their redemption rights. In each of the no redemption, illustrative redemption, and contractual maximum redemption scenarios as described below, the residual equity value owned by non-redeeming stockholders, taking into account the respective redemption amounts, is assumed to remain the deemed value of approximately $10.16 per share. As a result of such redemption amounts and the assumed approximately $10.16 per share value, the implied total equity value of the Combined Company, assuming no dilution from any of the Public Warrants, Private Warrants, Underwriter Warrants or (“Additional Dilution Sources”), would be (a) $619,712,420 in the no redemption scenario, (b) $561,296,905 in the illustrative redemption scenario, and (c) $517,851,885, in the contractual maximum redemption scenario. Additionally, the sensitivity table below sets forth the potential additional dilutive impact of each of the Additional Dilution Sources in each redemption scenario. Increasing levels of redemption will increase the dilutive effects of these issuances on non-redeeming Public Stockholders.

30

Table of Contents

The following table illustrates varying beneficial ownership levels in the Combined Company immediately following the consummation of the Business Combination assuming the levels of redemptions by the public stockholders indicated:

Redemption Sensitivity Analysis Table

Contractual

Illustrative

Maximum

No Redemption

% of

Redemption

% of

Redemption

% of

Holders

    

Scenario(1)

    

Total

    

Scenario(2)

    

Total

    

Scenario(3)

    

Total

 

Adara Public Stockholders

11,500,000

18.8

%  

5,750,000

10.4

%  

1,473,587

2.9

%

Adara Initial Stockholders(4)

2,000,000

3.3

%  

2,000,000

3.6

%  

2,000,000

3.9

%

Alliance Stockholders(5)

47,500,000

77.9

%  

47,500,000

86.0

%  

47,500,000

93.2

%

Total Shares Outstanding Excluding Contingent Consideration Shares and Adara Warrants

61,000,000

100.0

%  

55,250,000

100.0

%  

50,973,587

100.0

%

Total Equity Value Post- Redemptions

$

619,712,420

$

561,296,905

  

$

517,851,885

  

Assumed Per Share Value (approximate)

$

10.16

$

10.16

  

$

10.16

  

Contractual

Illustrative

Maximum

No Redemption

% of

Redemption

% of

Redemption

% of

Additional Dilution Sources(8)

    

Scenario(1)

    

Total(7)

    

Scenario(7)

    

Total(6)

    

Scenario(3)

    

Total(7)

 

Contingent Consideration Shares(8)

60,000,000

49.6

%  

60,000,000

52.1

%  

60,000,000

54.0

%

Adara Warrants

Public Warrants(9)

5,750,000

8.6

%  

5,750,000

9.4

%  

5,750,000

10.1

%

Private Warrants(10)

4,120,000

6.3

%  

4,120,000

6.9

%  

4,120,000

7.8

%

Underwriter Warrants(11)

50,000

0.1

%  

50,000

0.1

%  

50,000

0.1

%

Total Additional Dilutive Sources(12)

69,920,000

53.4

%  

69,920,000

55.6

%  

69,920,000

57.8

%

(1)This scenario assumes that no shares of Adara Common Stock are redeemed by the Public Stockholders
(2)This scenario assumes that approximately 5,750,000 shares of Adara Common Stock are redeemed by the Public Stockholders.
(3)This scenario assumes that 10,026,413 shares of Adara Common Stock are redeemed by the Public Stockholders, which, based on the amount of approximately $116.8 million in the Trust Account as of September 30, 2022, represents the maximum amount of redemptions that would still enable Adara to have sufficient cash to satisfy the minimum cash condition in the Business Combination Agreement.
(4)This row assumes that the Sponsor forfeits 875,000 Initial Stockholder Shares. Up to an additional 500,000 Initial Stockholder Shares are subject to forfeiture by the Sponsor at the discretion of Alliance. If such additional shares are forfeited by the Sponsor, the Adara Initial Stockholders would own 1,500,000 shares, or 3.0% of the Total Shares Outstanding Excluding Contingent Condition Shares and Warrants.
(5)This row excludes an aggregate of up to 60,000,000 shares of Combined Company Common Stock which would become issuable upon the conversion of the Contingent Consideration Shares upon the occurrence of the Triggering Events.
(6)All share numbers and percentages for the Additional Dilution Sources are presented without the potential reduction of any amounts paid by the holders of the given Additional Dilution Sources and therefore may overstate dilution.
(7)The Percentage of Total with respect to each Additional Dilution Source, including the Total Additional Dilutive Sources, includes the full number of shares issued with respect to the applicable Additional Dilution Source (but not the other Applicable Dilution Sources) in both the numerator and denominator. For example, in the no redemption scenario, the Percentage of Total with respect to the Contingent Consideration Shares would be calculated as follows: (a) 60,000,000 shares; divided by (b) (i) 61,000,000 shares (the number of shares outstanding prior to any issuance of any such shares plus (ii) 60,000,000 shares.
(8)This row assumes an aggregate of up to 60,000,000 shares of Combined Company Common Stock which would become issuable upon the conversion of the Contingent Consideration Shares upon the occurrence of the Triggering Events.

31

Table of Contents

(9)This row assumes exercise of all Public Warrants for cash.
(10)This row assumes exercise of all Private Warrants for cash.
(11)This row assumes exercise of all Underwriter Warrants for cash.
(12)This row assumes the issuance of all shares of Combined Company Common Stock in connection with each of the Additional Dilution Sources, as described in Notes 8 through 11 above.

Summary of Risk Factors

In evaluating the Stockholder Proposals, Adara Stockholders should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “Risk Factors.” Some of the risks related to Alliance’s business and industry, the Business Combination and risks of the Combined Company, are summarized below:

If Alliance fails to respond to or capitalize on the rapid technological development in the music, video, gaming, and entertainment industry, including changes in entertainment delivery formats, its business could be harmed.
If Alliance does not successfully optimize and operate its fulfillment network, its business could be harmed.
The markets in which Alliance participates are competitive, and if Alliance does not compete effectively, its operating results could be harmed.
Alliance may not realize the anticipated benefits of acquisitions or investments in its acquisitions or joint ventures, or those benefits may be delayed or reduced in their realization.
Alliance’s expansion into new products, services, technologies, and geographic regions subjects it to additional business, legal, financial, and competitive risks.
Alliance’s international operations expose it to a number of risks.
Alliance’s business will suffer if it is not successful in developing and expanding its partner brands across its consumer base.
Consumer interests change rapidly and acceptance of products and entertainment offerings are influenced by outside factors.
An inability to develop, introduce and ship planned products, product lines and new brands in a timely and cost-effective manner may damage Alliance’s business.
If Alliance is unable to navigate through global supply chain challenges, its business may be harmed.
If Alliance is unable to adapt its business to the continued shift to ecommerce, its business may be harmed.
The concentration of Alliance’s retail customer base and continued shift to ecommerce sales means that economic difficulties or changes in the purchasing or promotional policies or patterns of its major customers could have a significant impact on it.
Alliance’s business, including its costs and supply chain, is subject to risks associated with sourcing, manufacturing, warehousing, distribution and logistics, and the loss of any of its key suppliers or service providers could negatively impact its business.
Alliance faces significant inventory risk.
If Alliance’s third-party suppliers’ labels, studios, and publishers do not comply with applicable laws and regulations, its reputation, business, financial condition, results of operations and prospects could be harmed.

32

Table of Contents

Shipping is a critical part of Alliance’s business and any changes in its shipping arrangements or any interruptions in shipping could adversely affect our operating results.
Alliance is subject to risks related to online payment methods, including third-party payment processing-related risks.
Alliance relies on third-party suppliers, labels, studios, publishers, suppliers, retail and ecommerce partners and other vendors, and they may not continue to produce products or provide services that are consistent with Alliance’s standards or applicable regulatory requirements, which could harm its brand, cause consumer dissatisfaction, and require it to find alternative suppliers of its products or services.
Alliance’s business may be harmed if it is unable to protect its critical intellectual property rights.
Failure to successfully operate Alliance’s information systems and implement new technology effectively could disrupt its business or reduce its sales or profitability.
If Alliance’s electronic data is compromised its business could be significantly harmed.
Alliance’s quarterly and annual operating results may fluctuate due to seasonality in its business.
Changes in foreign currency exchange rates can significantly impact the Combined Company’s reported financial performance.
Alliance’s indebtedness may limit its availability of cash, cause it to divert cash to fund debt service payments or make it more difficult to take certain other actions.
If Alliance were unable to obtain or service its other external financings, or if the restrictions imposed by such financing were too burdensome, its business would be harmed.
Alliance faces additional tax liabilities and collection obligations. Changes in, or differing interpretations of, income tax laws and rules, and changes in its geographic operating results, may impact its effective tax rate.
Alliance is subject to various government regulations, violation of which could subject it to sanctions or otherwise harm its business. In addition, Alliance could be the subject of future product liability suits or merchandise recalls, which could harm its business.

33

Table of Contents

Alliance’s entertainment business involves risks of liability claims for media content, which could adversely affect its business, results of operations and financial condition.
Alliance is involved in litigation, arbitration or regulatory matters where the outcome is uncertain and which could entail significant expense.
Concentration of ownership among the Combined Company’s executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions.
Adara’s executive officers, directors, other Initial Stockholders have agreed to vote in favor of the Business Combination, regardless of how the Public Stockholders vote.
The consummation of the Business Combination is subject to a number of conditions and if those conditions are not satisfied or waived, the Business Combination Agreement may be terminated in accordance with its terms and the Business Combination may not be completed.
Legal proceedings in connection with the Business Combination, the outcomes of which are uncertain, could delay or prevent the completion of the Business Combination.
A significant portion of Adara’s total outstanding shares are restricted from immediate resale but may be sold into the market six months after the Closing. This could cause the market price of Adara Common Stock to drop significantly, even if the Combined Company’s business is doing well.
Adara’s stockholders will have a reduced ownership and voting interests after the Business Combination and will exercise less influence over management.
The adverse impact of inflation and higher interest rates on Alliance.

34

Table of Contents

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ALLIANCE

The selected historical consolidated statements of operations data of Alliance for the three months ended September 30, 2022 and is unaudited. The years ended June 30, 2022 and 2021 and the historical consolidated balance sheet data as of June 30, 2022 and 2021 are derived from Alliance’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus.

The information below is only a summary and should be read in conjunction with the sections entitled “Alliance Entertainment’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements of Alliance, and the notes and schedules related thereto, which are included elsewhere in this proxy statement/prospectus.

Consolidated Statement of Operations Data:

    

For the
Quarter Ended
September 30, 2022

    

For the
Year Ended
June 30, 2022

    

For the
Year Ended
June 30, 2021

 

Total Revenue

$

238,701

$

1,417,377

$

1,323,567

Total Operating Expenses

$

33,261

$

140,285

$

134,775

Net (Loss) Income

$

(7,509)

$

28,619

$

34,178

Net (Loss) Income Per Share Attributable To Common Stockholders – Basic and Diluted

$

(8.34)

$

31.80

$

37.98

    

As of
September 30, 2022

    

As of
June 30, 2022

    

As of
June 30, 2021

 

Consolidated Balance Sheet Data:

Total Assets

$

516,943

$

473,039

$

388,963

Total Liabilities

$

415,524

$

364,111

$

308,661

Retained Earnings

$

64,159

$

71,668

$

43,049

35

Table of Contents

SELECTED HISTORICAL FINANCIAL INFORMATION OF ADARA

The selected historical statement of operations data of Adara for the period from August 5, 2020 (inception) to December 31, 2020 and year ended December 31, 2021 and the historical balance sheet data as of December 31, 2020 are derived from Adara’s audited financial statements included elsewhere in this proxy statement/prospectus. The selected historical condensed consolidated statements of operations data of Adara for the nine months ended September 30, 2022 and the condensed consolidated balance sheet data as of September 30, 2022 are derived from Adara’s unaudited interim condensed consolidated financial statements included elsewhere in this proxy statement/prospectus.

Adara’s historical results are not necessarily indicative of the results that may be expected for any other period. The information below is only a summary and should be read in conjunction with the sections entitled “Adara Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Adara’s financial statements, and the notes and schedules related thereto, which are included elsewhere in this proxy statement/prospectus.

Statement of Operations Data:

For the

period from

For the

August 5,

Nine

2020

Months

For the

(inception)

Ended

Year Ended

through

September 30,

December 31,

December 31,

    

2022

    

2021

    

2020

Operating formation costs

$

1,887,001

$

976,831

$

5,476

Interest earned on marketable securities held in Trust Account

670,720

10,281

Transaction costs incurred in connection with IPO

(86,544)

Change fair value of warrant holders

2,976,000

4,297,300

Net income (loss)

1,690,242

3,244,206

(5,476)

Basic and diluted net (income loss) per share, Class A common stock

0.12

0.25

Basic and diluted net (income loss) per share, Class B common stock

$

0.12

$

0.25

$

(0.00)

As of

As of

As of

September 30,

December 31,

December 31,

    

2022

    

2021

    

2020

Balance Sheet Data:

Total assets

$

116,913,836

$

117,083,857

$

624,406

Total liabilities

3,440,782

5,301,045

604,882

Total redeemable shares of common stock

116,411,474

116,150,000

Total shareholders’ (deficit) equity

$

(2,938,420)

$

(4,367,188)

$

19,524

36

Table of Contents

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial statements present the combination of the financial information of Adara and Alliance adjusted to give effect to the Business Combination. Pursuant to the Business Combination Agreement, Merger Sub, a new subsidiary of Adara, will merge with and into Alliance, with Alliance as the surviving company in the Business Combination and, after giving effect to the Business Combination, Alliance will be a wholly-owned subsidiary of Adara. Notwithstanding the legal form of the Business Combination, the Business Combination is expected to be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, Adara is treated as the acquired company and Alliance is treated as the accounting acquirer for financial statement reporting purposes

The Summary Pro Forma Information has been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information of the Combined Company appearing elsewhere in this proxy statement/prospectus and the accompanying notes to the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical financial statements and related notes of Adara and Alliance for the applicable periods included in this Form S-4. The Summary Pro Forma Information has been presented for informational purposes only and is not necessarily indicative of what the Combined Company’s financial position or results of operations actually would have been had the Business Combination been completed as of the dates indicated. In addition, the Summary Pro Forma Information does not purport to project the future financial position or operating results of the Combined Company.

Description of the Minimum and Maximum Allowable Redemption Scenarios

The unaudited pro forma condensed combined financial statements present two redemption scenarios as follows:

Minimum Redemption: This scenario, which we refer to as the “Minimum Redemption Scenario,” assumes that the only shares of Adara Class A common stock redeemed by the Public Stockholders are those that have already been redeemed prior to September 30, 2022, and Adara Sponsors forfeit 875,000 shares of Adara Class A common stock; and
Maximum Redemption: This scenario, which we refer to as the “Maximum Redemption Scenario,” assumes that 10,026,413 shares of Adara Class A common stock are redeemed for an aggregate payment of approximately $101,860,000 (based on the estimated per share redemption price of approximately $10.16 per share) from the Trust Account in order to satisfy the minimum Aggregate Transaction Proceeds of $15.0 million, and Adara Sponsors forfeit an additional 500,000 shares of Adara Class A common stock at the discretion of Alliance management.

Summary Unaudited Pro Forma Condensed Combined Statement of Operations Data

Year Ended December 31, 2021

    

Pro Forma
Combined
(Assuming No
Redemptions)

    

Pro Forma
Combined
(Assuming
Maximum
Redemptions)

 

Revenue

$

1,441,762

$

1,441,762

Net loss per share – basic and diluted

$

0.68

$

0.88

Weighted-average Common shares outstanding – basic and diluted

61,000,000

50,473,587

Summary Unaudited Pro Forma Condensed Combined Balance Sheet Data as of September 30, 2022

Total assets

$

624,992

$

527,197

Total liabilities

$

417,072

$

417,072

Total stockholders’ equity

$

207,920

$

110,125

37

Table of Contents

COMPARATIVE SHARE INFORMATION

The following table sets forth selected historical comparative unit and share information for Adara and Alliance, and unaudited pro forma condensed combined per share information of Adara after giving effect to the Business Combination, assuming two redemption scenarios as follows:

·Assuming No Redemptions : This presentation assumes that no public shareholders exercise their right to have their Public Shares converted into their pro rata share of the Trust Account.

·Assuming Maximum Redemptions : This presentation assumes that approximately 10,026,413 Public Shares are redeemed, resulting in an aggregate payment of approximately $101.860 million out of the Trust Account, which is derived from the number of shares that could be redeemed in connection with the Merger at an assumed redemption price of approximately $10.16 per share based on the Trust Account balance as of September 30, 2022 in order to satisfy the minimum Aggregate Transaction Proceeds of $15.0 million.

The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical financial statements and related notes of Adara and Alliance for the applicable periods included in this proxy statement. The pro forma condensed combined financial information has been presented for informational purposes only and is not necessarily indicative of what Adara’s or Alliance’s balance sheet or statement of operations actually would have been had the Merger been completed as of the dates indicated, nor does it purport to project the future financial position or operating results of Adara or Alliance. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The pro forma financial information is presented for illustrative purposes only and does not reflect the costs of any integration activities or cost savings or synergies that may be achieved as a result of the Merger.

The unaudited pro forma condensed combined balance sheet combines the Alliance unaudited condensed consolidated balance sheet as of September 30, 2022 and the Adara unaudited historical balance sheet as of September 30, 2022, giving effect to the Merger as if it had been consummated on September 30, 2022. The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2022 and the year ended December 31, 2021 presents the pro forma effect of the Business Combination as if it had been consummated on January 1, 2021.

    

Historical

    

No Redemptions
Scenario

    

Maximum
Redemptions
Scenario

 

As of and For the nine Months Ended September 30, 2022

    

Adara

    

Alliance

Pro Forma
Combined

Pro Forma
Combined

Pro Forma Income Per Share

Weighted Average Shares of Class A Outstanding – Basic and Diluted

11,500,000

61,000,000

50,473,587

Income Per Share Class A – Basic and Diluted

$

0.12

$

(0.15)

$

(0.18)

Weighted Average Shares of Class B Outstanding – Basic and Diluted

2,875,000

Income Per Share Class B – Basic and Diluted

$

0.12

Weighted Average Common Shares Outstanding – Basic and Diluted

900

Income Per Common Share – Basic and Diluted

$

(9,351)

Book Value Per Share

$

(0.20)

$

112,688

$

3.41

$

2.18

    

Historical

No Redemptions
Scenario

Maximum
Redemptions
Scenario

 

For the Year Ending December 31, 2021

    

Adara
(Historical
from 1/1/21
through
12/31/21)

    

Alliance

    

Pro Forma
Combined

    

Pro Forma
Combined

Pro Forma Income Per Share

Weighted Average Shares of Class A Outstanding – Basic and Diluted

11,500,000

61,000,000

50,473,587

Income Per Share Class A – Basic and Diluted

$

0.25

$

$

0.68

$

0.88

Weighted Average Shares of Class B Outstanding – Basic and Diluted

2,875,000

Income Per Share Class B – Basic and Diluted

$

0.25

Weighted Average Common Shares Outstanding – Basic and Diluted

900

Income Per Common Share – Basic and Diluted

$

49,534.44

38

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this proxy statement/prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our, our management team’s, Alliance’s and Alliance’s management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus may include, for example, statements about:

our ability to consummate the Business Combination;
the expected benefits of the Business Combination;
the Combined Company’s financial and business performance following the Business Combination, including financial projections and business metrics; and
expectations regarding Alliance’s strategies and future financial performance, including financial projections and business metrics, its future business plans or objectives, prospective performance and opportunities and competitors, revenues, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures, and Alliance’s ability to invest in growth initiatives and pursue acquisition opportunities.

These forward-looking statements are based on information available as of the date of this proxy statement/prospectus, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

You should not place undue reliance on these forward-looking statements in deciding how to vote your proxy or instruct how your vote should be cast on the proposals set forth in this proxy statement/prospectus. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

the occurrence of any event, change or other circumstances that could delay the Business Combination or give rise to the termination of the Business Combination Agreement;
the outcome of any legal proceedings that may be instituted against Adara following announcement of the proposed Business Combination and transactions contemplated thereby;
the inability to complete the Business Combination due to the failure to obtain approval of the stockholders of Adara or to satisfy other conditions to the Closing in the Business Combination Agreement;
the amount of redemption requests made by Adara Stockholders;
the ability to obtain or maintain the listing of Adara Common Stock on the NYSE American following the Business Combination;
the risk that the proposed Business Combination disrupts current plans and operations of Alliance as a result of the announcement and consummation of the transactions described herein;
risks relating to the uncertainty of the projected financial information with respect to Alliance;
risks relating to the anticipated growth rates and market opportunities of Alliance;

39

Table of Contents

our ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of Alliance to grow and manage growth profitably following the Business Combination;
costs related to the Business Combination;
changes in applicable laws or regulations;
the ability of Alliance to execute its business model, including market acceptance of its systems and related services;
the Combined Company’s ability to raise capital;
Alliance’s reliance on a concentration of suppliers for its products and services;
Changes in Alliance's customers, product mix and pricing strategy;
increases in Alliance’s costs, disruption of supply, or shortage of products and materials;
Alliance’s dependence on a concentration of customers, and failure to add new customers or expand sales to Alliance’s existing customers;
Increased Alliance inventory and risk of obsolescence;
Alliance's significant amount of indebtedness;
Risks and failure by Alliance to meet the covenant requirements of its credit facility;
litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on Alliance’s resources;
Alliance being adversely affected by increased inflation, higher interest rates and other economic, business, and/or competitive factors;
Alliance’s success in retaining or recruiting, or changes required in, our officers, key employees or directors following the completion of the Transactions, and our ability to attract and retain key personnel;
geopolitical risk and changes in applicable laws or regulations;
risk that the COVID-19 pandemic, and local, state, and federal responses to addressing the pandemic may have an adverse effect on our business operations, as well as our financial condition and results of operations;
substantial regulations, which are evolving, and unfavorable changes or failure by Alliance to comply with these regulations;
product liability claims, which could harm Alliance’s financial condition and liquidity if Alliance is not able to successfully defend or insure against such claims;

40

Table of Contents

various environmental and safety laws and regulations that could impose substantial costs upon Alliance and negatively impact Alliance’s ability to operate Alliance’s distribution facilities;
outages and disruptions of Alliance’s services if it fails to maintain adequate security and supporting infrastructure as it scales Alliance’s information technology systems;
availability of additional capital to support business growth;
failure to protect Alliance’s intellectual property;
the inability of Alliance to develop and maintain effective internal controls;
the diversion of management’s attention and consumption of resources as a result of potential acquisitions of other companies;
cyber-attacks and security vulnerabilities;
any changes to U.S. tax laws; and
other risks and uncertainties described in this proxy statement/prospectus, including those under the section titled “Risk Factors.”

In addition, statements that “Alliance believes” or “Adara believes” and similar statements reflect Alliance’s or Adara’s beliefs and opinions on the relevant subject. These statements are based upon information available to Alliance or Adara, as the case may be, as of the date of this prospectus/proxy statement, and while Alliance or Adara, as the case may be, believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and such statements should not be read to indicate that such party has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

41

Table of Contents

RISK FACTORS

The Combined Company will face a market environment that cannot be predicted and that involves significant risks, many of which will be beyond its control. In addition to the other information contained in this proxy statement/prospectus, you should carefully consider the material risks described below before deciding how to vote your shares of stock. In addition, you should read and consider the risks associated with the business of Adara because these risks may also affect the Combined Company. You should also read and consider the other information in this proxy statement/prospectus.

Risks Related to Alliance

Unless the context otherwise requires, any reference in this section of this proxy statement/prospectus to “Alliance,” “we,” “us” or “our” refers to Alliance prior to the Business Combination and the Combined Company and its subsidiaries following the Business Combination.

Risks Related to Alliance’s Business and Industry

If we fail to respond to or capitalize on the rapid technological development in the music, video, gaming, and entertainment industry, including changes in entertainment delivery formats, our business could be harmed.

The music, video, gaming, and entertainment industry continues to experience frequent change driven by technological development, including developments with respect to the formats through which music, films, television programming, games, and other content are delivered to consumers. With rapid technological changes and dramatically expanded digital content offerings, the scale and scope of these changes have accelerated in recent years. For example, consumers are increasingly accessing television, film and other episodic content on streaming and digital content networks, such as Netflix, Amazon Prime Video, Hulu, Disney+ and Apple TV+. Additionally, consumers access music content through Apple Music, Pandora, Amazon Music, Spotify and other providers. Video game services can be accessed through Xbox Game Pass, PlayStation Now, GeForce, Steam, Stadia, xCloud, Shadow, Luna, and Switch Online.

Some entertainment offerings have gone direct to streaming channels and not produced a physical content format. Direct release to streaming channels is likely to continue. Technological as well as other changes caused by the pandemic have caused significant disruption to the retail distribution of music and entertainment offerings and have caused and could in the future cause a negative impact on sales of our products and other forms of monetization of content. We may lose opportunities to capitalize on changing market dynamics, technological innovations or consumer tastes if we do not adapt our content offerings or distribution capabilities in a timely manner. The overall effect that technological development and new digital distribution platforms have on the revenue and profits we derive from our entertainment content, including from merchandise sales derived from such content, and the additional costs associated with changing markets, media platforms and technologies, is unpredictable. If we fail to accurately assess and effectively respond to changes in technology and consumer behavior in the entertainment industry, our business may be harmed.

If we do not successfully optimize and operate our fulfillment network, our business could be harmed.

If we do not adequately predict customer demand or otherwise optimize and operate our fulfillment network successfully, it could result in excess or insufficient fulfillment, or result in increased costs, impairment charges, or both, and harm our business in other ways. As we continue to add fulfillment or add new businesses with different requirements, our fulfillment networks become increasingly complex and operating them becomes more challenging. There can be no assurance that we will be able to operate our networks effectively.

In addition, a failure to optimize inventory in our fulfillment network could result in lost sales from under inventory positions or extra costs of holding excess inventory or write downs on inventory.

Due to tight labor markets, we may be unable to adequately staff our fulfillment network and customer service centers or have to increase wages to attract more employees.

42

Table of Contents

We rely on a limited number of shipping companies to deliver inventory to us and completed orders to our customers. If we are not able to negotiate acceptable terms with these companies or they experience performance problems or other difficulties, it could negatively impact our operating results and customer experience. In addition, our ability to receive inbound inventory efficiently and ship completed orders to customers also may be negatively affected by inclement weather, fire, flood, power loss, earthquakes, labor disputes, acts of war or terrorism, acts of God, and similar factors.

Under some of our commercial agreements, we maintain the inventory of other companies, thereby increasing the complexity of tracking inventory and operating our fulfillment network. Our failure to properly handle such inventory or the inability of these other companies to accurately forecast product demand would result in unexpected costs and other harm to our business and reputation.

The projections are subject to significant risks, assumptions, estimates and uncertainties. As a result, our projected revenues, market share, expenses and profitability may differ materially from our expectations.

The projections are subject to significant risks, assumptions, estimates and uncertainties. Such projections reflect our current views with respect to future events or our future financial performance, are based on assumptions, and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by our projections. We may not actually achieve the plans, expectations or objectives contained in our projections, and the underlying assumptions may prove incorrect. Such deviations may be due to factors outside our control or currently unknown to us. For example, our actual revenues, market share, timing for achieving business milestones, expenses and profitability may differ materially from our expectations. Therefore, in light of the foregoing factors and the uncertainties inherent in the projections, stockholders are cautioned not to place undue, if any, reliance on the projections.

We face competition. If we are unable to compete effectively with existing or new competitors, our revenues, market share and profitability could decline.

Our businesses are rapidly evolving and competitive, and we have many competitors in different industries, including physical, e-commerce, and omni-channel retail, e-commerce services, digital content and electronic devices, web and infrastructure computing services, and transportation and logistics services, and across geographies, including cross-border competition. Some of our current and potential competitors have greater resources, longer histories, more customers, and/or greater brand recognition, They may secure better terms from vendors, adopt more aggressive pricing, and devote more resources to technology, infrastructure, fulfillment, and marketing.

The music, video, gaming and entertainment industry is highly competitive. We compete in the U.S. and internationally with a wide array of large and small distributors, and sellers of vinyl records, CD’s, DVD’s, video games and other entertainment and consumer products. In addition, we compete with companies who are focused on building their brands across multiple product and consumer categories, including through entertainment offerings. Across our business, we face competitors who are constantly monitoring and attempting to anticipate consumer tastes and trends, seeking which will appeal to consumers, and introducing new products that compete with our products for consumer acceptance and purchase.

Competition may intensify, including with the development of new business models and the entry of new and well-funded competitors, and as our competitors enter into business combinations or alliances and established companies in other market segments expand to become competitive with our business. In addition, new and enhanced technologies, including search, digital content, and electronic devices, may increase our competition. The Internet facilitates competitive entry and comparison shopping, and increased competition may reduce our sales and profits.

Disruptions in Alliance's supply chain have increased product expenditures and could result in an adverse impact on results of operations.

For the three months ended September 30, 2022, Alliance’s top five suppliers represent approximately 42% of product expenditures. For the year ended June 30, 2022, Alliance’s top five suppliers represented 40% of all of Alliance’s product expenditures as compared to 25% of product expenditures for previous fiscal year.

The occurrence of one or more natural or human induced disasters, including pandemic diseases or viral contagions such as the COVID-19 pandemic; geopolitical events, such as war, civil unrest attacks in a country in which Alliance's suppliers are located; and the imposition of measures that create barriers to or increase the costs associated with international trade could result in disruption of Alliance's logistics or supply chain network. For example, the outbreak of the COVID-19 pandemic has disrupted and may continue to

43

Table of Contents

disrupt the operations of Alliance and its suppliers and customers. Customer demand for certain products has also fluctuated as the pandemic has progressed, which has challenged Alliance's ability to anticipate and/or procure product to maintain inventory levels to meet that demand.

These factors have resulted in higher product inventory cost positions in certain products as well as delays in delivering those products to Alliance's distribution centers, branches or customers, and similar results may occur in the future. Even when Alliance is able to find alternate sources for certain products, they may cost more or require Alliance to incur higher transportation costs, which could adversely impact Alliance's profitability and financial condition. Any of these circumstances could impair Alliance's ability to meet customer demand for products and result in lost sales, increased supply chain costs, penalties or damage to Alliance's reputation. Any such increased product costs from suppliers disruption could adversely impact results of operations and financial performance.

Inflation could cause Alliance's product costs and operating and administrative expenses to grow more rapidly than net sales, which could result in lower gross margins and lower net earnings.

Market variables, such as inflation of product costs from suppliers, labor rates and fuel, freight and energy costs, have and may continue to increase potentially causing Alliance to be unable to efficiently manage its product costs and operating and administrative expenses in a way that would enable it to leverage its revenue growth into higher net earnings. In addition, Alliance's inability to pass on such increases in product costs to customers in a timely manner, or at all, could cause Alliance's operating and administrative expenses to grow, which could result in lower gross profit margins and lower net earnings.

Weakness in the economy, market trends and other conditions affecting the profitability and financial stability of Alliance's customers could negatively impact Alliance's sales growth and results of operations.

Economic, political and industry trends affect Alliance's business environments. Alliance serves several industries and markets in which the demand for its products and services is sensitive to the production activity, capital spending and demand for products and services of Alliance's customers. Many of these customers operate in markets that are subject to cyclical fluctuations resulting from market uncertainty, trade and tariff policies, costs of goods sold, currency exchange rates, central bank interest rate fluctuations, economic downturns, recessions, foreign competition, offshoring of production, oil and natural gas prices, geopolitical developments, labor shortages, inflation, natural or human induced disasters, extreme weather, outbreaks of pandemic disease such as the COVID-19 pandemic, inflation, deflation, and a variety of other factors beyond Alliance's control. Any of these factors could cause customers to idle or close stores, delay purchases, reduce wholesale purchasing levels, or experience reductions in the demand for their own retail and wholesale products or services.

Any of these events could also reduce the volume of products and services these customers purchase from Alliance or impair the ability of Alliance's customers to make full and timely payments and could cause increased pressure on Alliance's selling prices and terms of sale.

Our expansion places a strain on our management, operational, financial, and other resources.

We are rapidly and significantly expanding operations, including increasing our product and service offerings and scaling our infrastructure to support our retail and services businesses. This expansion increases the complexity of our business and places strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions. We may not be able to manage growth effectively, which could damage our reputation, limit our growth, and negatively affect our operating results.

We may not realize the anticipated benefits of acquisitions or investments in our acquisitions or joint ventures, or those benefits may be delayed or reduced in their realization.

Acquisitions and investments have been a component of our growth and the development of our business, such as our acquisition of COKeM in September 2020. Acquisitions can broaden and diversify our brand holdings and product offerings and allow us to build additional capabilities and competencies of the company.

44

Table of Contents

We cannot be certain that the products and offerings of companies we may acquire, or acquire an interest in, will achieve or maintain popularity with consumers in the future or that any such acquired companies or investments will allow us to more effectively market our products, develop our competencies or grow our business. In some cases, we expect that the integration of the companies that we may acquire into our operations will create production, marketing and other operating, revenue or cost synergies which will produce greater revenue growth and profitability and, where applicable, cost savings, operating efficiencies and other advantages. However, we cannot be certain that these synergies, efficiencies and cost savings will be realized. Even if achieved, these benefits may be delayed or reduced in their realization. In other cases, we may acquire or invest in companies that we believe have strong and creative management, in which case we may plan to operate them more autonomously rather than fully integrating them into our operations. We cannot be certain that the key talented individuals at these companies would continue to work for us after the acquisition or that they would develop popular and profitable products, entertainment or services in the future. We cannot guarantee that any acquisition or investment we may make will be successful or beneficial, and acquisitions can consume significant amounts of management attention and other resources, which may negatively impact other aspects of our business.

Our expansion into new products, services, technologies, and geographic regions subjects us to additional business, legal, financial, and competitive risks.

We may have limited or no experience in our newer market segments, and our customers may not adopt our offerings. These offerings may present new and difficult technology challenges, and we may be subject to claims if customers of these offerings experience service disruptions or failures or other quality issues. In addition, profitability, if any, in our newer activities may be lower than in our older activities, and we may not be successful enough in these newer activities to recoup our investments in them. If any of this were to occur, it could damage our reputation, limit our growth, and negatively affect our operating results.

We may experience significant fluctuations in our operating results and growth rate.

We may not be able to accurately forecast our growth rate. We base our expense levels and investment plans on sales estimates. A significant portion of our expenses and investments is fixed, and we may not be able to adjust our spending quickly enough if our sales are less than expected.

Our revenue growth may not be sustainable, and our percentage growth rates may decrease. Our revenue and operating profit growth depends on the continued growth of demand for the products and services offered by us or our customers, and our business is affected by general economic and business conditions worldwide. A softening of demand, whether caused by changes in customer preferences or a weakening of the U.S. or global economies, may result in decreased revenue or growth.

Our sales and operating results will also fluctuate for many other reasons, including due to risks described elsewhere in this section and the following:

our ability to retain and increase sales to existing customers, attract new customers, and satisfy our customers’ demands;
our ability to retain and expand our network of customers;
our ability to offer products on favorable terms, manage inventory, and fulfill orders;
the introduction of competitive stores, websites, products, services, price decreases, or improvements;
changes in usage or adoption rates of the Internet, e-commerce, electronic devices, and web services, including outside the U.S.;
timing, effectiveness, and costs of expansion and upgrades of our systems and infrastructure;
the success of our geographic, service, and product line expansions;
the extent to which we finance, and the terms of any such financing for, our current operations and future growth;
the outcomes of legal proceedings and claims, which may include significant monetary damages or injunctive relief and could have a material adverse impact on our operating results;

45

Table of Contents

variations in the mix of products and services we sell;
variations in our level of merchandise and vendor returns;
the extent to which we offer free shipping, continue to reduce prices worldwide, and provide additional benefits to our customers;
factors affecting our reputation or brand image;
the extent to which we invest in technology and content, fulfillment, and other expense categories;
increases in the prices of fuel and gasoline, as well as increases in the prices of other energy products and commodities like paper and packing supplies;
the extent to which our equity-method investees record significant operating and non-operating items;
the extent to which operators of the networks between our customers and our stores successfully charge fees to grant our customers unimpaired and unconstrained access to our online services;
our ability to collect amounts owed to us when they become due;
the extent to which use of our services is affected by spyware, viruses, phishing and other spam emails, denial of service attacks, data theft, computer intrusions, outages, and similar events;
terrorist attacks and armed hostilities;
supply chain issues either in chip shortages; and
long lead time in the manufacturing vinyl LP’s.

Our international operations expose us to a number of risks

Our international activities are insignificant to our revenues and profits, and we plan to further expand internationally. In certain international market segments, we have relatively little operating experience and may not benefit from any first-to-market advantages or otherwise succeed. It is costly to establish, develop, and maintain international operations, and promote our brand internationally. Our international operations may not be profitable on a sustained basis.