tm2219568-18_424b3 - none

Filed Pursuant to Rule 424(b)(3)
Registration No. 333-266098

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 approximately 52,777.78, 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 $485,450,000 based on a price of $10.22, the approximate per share amount held in Adara’s trust account on December 8, 2022, the record date for the special meeting of the stockholders, or approximately $477,850,000 based on the closing sale price of the Adara Common Stock of $10.06 on the NYSE American on December 8, 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 January 18, 2023, at 10:00 a.m., Eastern time, via live webcast at the following address: https://www.cstproxy.com/adaraspac/2023, 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 43 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,
				/s/ Thomas Finke Thomas Finke Chairman and Chief Executive Officer

December 12, 2022

The accompanying proxy statement/prospectus is dated December 12, 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.

TABLE OF CONTENTS

ADARA ACQUISITION CORP.

211 East Blvd.
Charlotte, NC 28203

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON JANUARY 18, 2023

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 January 18, 2023, 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 Adara’s 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 (66-2∕3%) 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 (66-2∕3%) 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 Company’s bylaws;

•

Classified Board — divide the Combined Company’s 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;

TABLE OF CONTENTS

•

Director Removal — provide for the removal of directors with cause only by stockholders voting at least two-thirds (66-2∕3%) 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 2023 Equity Incentive Plan (the “2023 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 Exchange Listing 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 2023 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.cstproxy.com/adaraspac/2023. 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 December 8, 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 December 8, 2022, the Record Date, of approximately $117.5 million, the estimated per share redemption price would have been approximately $10.22. 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

TABLE OF CONTENTS

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.

Adara may not consummate the Business Combination unless the Business Combination Proposal, each of the Charter Proposals, the Equity Incentive Plan Proposal and the Exchange Listing 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 Exchange Listing 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

December 12, 2022

TABLE OF CONTENTS

FREQUENTLY USED TERMS

In this document:

“2023 Plan” means the Alliance Entertainment Holding Corporation 2023 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 Bruce Ogilvie, Jr. Trust dated January 20, 1994, Ogilvie Legacy Trust dated September 14th, 2021 and Jeff Walker.

“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.

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

TABLE OF CONTENTS

“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 2023 Equity Incentive Plan.

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

“Exchange Listing 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 2023 Plan if such plan is approved in accordance with Proposal No. 3 (Equity Incentive Plan Proposal).

“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.

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.

“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 December 8, 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.

“Stockholder Proposals” means, individually or collectively as context requires, the Business Combination Proposal, the Charter Proposals, the Equity Incentive Plan Proposal, the Exchange Listing 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.

TABLE OF CONTENTS

“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.

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.

Why am I receiving this proxy statement/prospectus?

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.

What matters will stockholders consider at the special meeting?

At the Adara special meeting of stockholders, Adara will ask its stockholders to vote in favor of the following Stockholder Proposals:

The Business Combination Proposal — To consider and vote upon a proposal to approve and adopt the Business Combination Agreement and the resulting Business Combination.

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 Adara’s 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 (662∕3%) of the voting power of the then outstanding shares of

TABLE OF CONTENTS

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 (662∕3%) 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 Company’s bylaws;

•

Director Removal — provide for the removal of directors with cause only by stockholders voting at least two-thirds (662∕3%) 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

•

The Equity Incentive Plan Proposal — To consider and vote upon the adoption of the 2023 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 Exchange Listing 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 2023 Plan if such plan is approved in accordance with Proposal No.3 (Equity Incentive Plan Proposal).

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, Exchange Listing 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

TABLE OF CONTENTS

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.

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.

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

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.

Are any of the proposals conditioned on one another?

Adara may not consummate the Business Combination unless the Business Combination Proposal, each of the Charter Proposals, the Equity Incentive Plan Proposal, and the Exchange Listing 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.

What will happen upon the consummation of the Business Combination?

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 Stockholders 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.”

Why is Adara proposing the Business Combination Proposal?

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.

TABLE OF CONTENTS

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.

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?

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.”

Do I have redemption rights?

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 $117.5 million on the Record Date, the estimated per share redemption price would have been approximately $10.22. 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.

Will my vote affect my ability to exercise redemption rights?

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,

TABLE OF CONTENTS

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.

How do I exercise my redemption rights?

In order to exercise your redemption rights, you must, prior to 4:30 p.m. Eastern time on January 13, 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 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?”.

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

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.

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

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.

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

Adara has not obtained any equity financing in connection with the Business Combination. As of September 30, 2027, Alliance had approximately $184 million of outstanding financing and an additional $6 million of availability under the Credit Facility based on the borrowing base calculation as of September 30, 2022.

TABLE OF CONTENTS

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?

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.

What happens if the Business Combination is not consummated?

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.

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.

What is 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. For more information, see the section titled “Information About Alliance.”

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

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:

TABLE OF CONTENTS

•

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;

•

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.”

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

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.

TABLE OF CONTENTS

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

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 $0.036 per warrant.

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, the per share value as of September 30, 2022. 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.

TABLE OF CONTENTS

Redemption Sensitivity Analysis Table

Holders	No Redemption Scenario(1)			% of Total		Illustrative Redemption Scenario(2)			% of Total		Contractual Maximum Redemption Scenario(3)			% of 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

Additional Dilution Sources(8)	No Redemption Scenario(1)		% of Total(7)		Illustrative Redemption Scenario(7)		% of Total(6)		Contractual Maximum Redemption Scenario(3)		% of 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)

TABLE OF CONTENTS

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.

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

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 Eibeler, Chairman of COKeM Subsidiary; and

•

Ben Mean, President, Distribution Solutions

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 W. Tom Donaldson III and Chris Nagelson 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 Paul Eibeler, Thomas Finke, and Terilea Wielenga 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 Paul Eibeler, Chairman. See the section titled “Management After the Business Combination” for information about such officers and the Combined Company’s other executive officers.

What conditions must be satisfied to complete the Business Combination?

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.”

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

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

TABLE OF CONTENTS

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.

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

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.

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

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 20 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.

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

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 $20.27 million based on the closing prices of Adara Common Stock and warrants of $10.06 and $0.036, 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 $16.12 million on their Adara securities;

•

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 approximately $500,000 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;

TABLE OF CONTENTS

•

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 $20.27 million based on the closing prices of Adara Common Stock and warrants of $10.06 and $0.036, 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.”

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

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 $20.27 million based on the closing prices of Adara Common Stock and warrants of $10.06 and $0.036, 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 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

TABLE OF CONTENTS

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 $500,000 as of the Record Date pursuant to the Promissory Notes and may make additional loans to us 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 $10.06 and $0.036, 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 $20.27 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 (approximately $500,000 as of the Record Date) on the Closing Date plus any additional amounts loaned to us to fund our working capital needs. 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

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

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.

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

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

When is the Business Combination expected to be completed?

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.”

TABLE OF CONTENTS

What do I need to do now?

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.

How do I vote?

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.

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

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.

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

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.

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

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.

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

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.

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

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

TABLE OF CONTENTS

“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.

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

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.

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

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.

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

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.

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

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 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.

TABLE OF CONTENTS

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?

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.

Who will solicit and pay the cost of soliciting proxies?

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 $27,500. 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.

Who can help answer my questions?

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

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’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

TABLE OF CONTENTS

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.

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 Bruce Ogilvie, Jr. Trust dated January 20, 1994, Ogilvie Legacy Trust dated September 14th, 2021 and Jeff Walker, 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,

TABLE OF CONTENTS

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.

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 American;

•

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.

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

TABLE OF CONTENTS

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;

•

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

TABLE OF CONTENTS

“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

•

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.”

TABLE OF CONTENTS

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

•

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

TABLE OF CONTENTS

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.

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.

TABLE OF CONTENTS

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.

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

TABLE OF CONTENTS

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 $20.27 million based on the closing prices of Adara Common Stock and warrants of $10.06 and $0.036, 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 $16.12 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

•

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.

TABLE OF CONTENTS

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 $117.5 million on the Record Date, the estimated per share redemption price would have been approximately $10.22.

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, the per share value as of September 30, 2022. 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.

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

Holders	No Redemption Scenario(1)		% of Total		Illustrative Redemption Scenario(2)		% of Total		Contractual Maximum Redemption Scenario(3)		% of 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%

TABLE OF CONTENTS

Holders	No Redemption Scenario(1)			% of Total		Illustrative Redemption Scenario(2)			% of Total		Contractual Maximum Redemption Scenario(3)			% of Total
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

Additional Dilution Sources(8)	No Redemption Scenario(1)		% of Total(7)		Illustrative Redemption Scenario(7)		% of Total(6)		Contractual Maximum Redemption Scenario(3)		% of 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)

(4)

(5)

(6)

(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)

(9)

This row assumes exercise of all Public Warrants for cash.

TABLE OF CONTENTS

(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.

•

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.

TABLE OF CONTENTS

•

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.

•

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.

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 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

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 Nine Months Ended September 30, 2022			For the Year Ended December 31, 2021			For the period from August 5, 2020 (inception) through December 31, 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 September 30, 2022			As of December 31, 2021			As of December 31, 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

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

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

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;

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;

•

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.”

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.

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.

TABLE OF CONTENTS

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 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.

TABLE OF CONTENTS

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.

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.;

TABLE OF CONTENTS

•

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;

•

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.

In addition to risks described elsewhere in this section, our international sales and operations are subject to a number of risks, including:

•

local economic and political conditions;

•

government regulation and compliance requirements (such as regulation of our product and service offerings and of competition), restrictive governmental actions (such as trade protection measures, including export duties and quotas and custom duties and tariffs), nationalization, and restrictions on foreign ownership;

•

restrictions on sales or distribution of certain products or services and uncertainty regarding liability for products, services, and content, including uncertainty as a result of less Internet-friendly legal systems, local laws, lack of legal precedent, and varying rules, regulations, and practices regarding the physical and digital distribution of media products and enforcement of intellectual property rights;

•

business licensing or certification requirements, such as for imports, exports, web services, and electronic devices;

TABLE OF CONTENTS

•

limitations on the repatriation and investment of funds and foreign currency exchange restrictions;

•

limited fulfillment and technology infrastructure;

•

shorter payable and longer receivable cycles and the resultant negative impact on cash flow;

•

laws and regulations regarding consumer and data protection, privacy, network security, encryption, payments, and restrictions on pricing or discounts;

•

lower levels of consumer spending and fewer opportunities for growth compared to the U.S.;

•

lower levels of credit card usage and increased payment risk;

•

difficulty in staffing, developing, and managing foreign operations as a result of distance, language, and cultural differences;

•

different employee/employer relationships and the existence of works councils and labor unions;

•

compliance with the U.S. Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties;

•

laws and policies of the U.S. and other jurisdictions affecting trade, foreign investment, loans, and taxes; and

•

geopolitical events, including war and terrorism.

As international physical, e-commerce, and other services grow, competition will intensify, including through adoption of evolving business models. Local companies may have a substantial competitive advantage because of their greater understanding of, and focus on, the local customer, as well as their more established local brand names. We may not be able to hire, train, retain, and manage required personnel, which may limit our international growth.

Our business will suffer if we are not successful in developing and expanding our partner brands across our consumer base.

Our strategy is to focus and expand, larger global brands with an emphasis on developing and expanding those of our key partner brands, which we view as having the largest global potential, across our customer base. As we concentrate our efforts on a more brands, we believe we can gain additional leverage and enhance the consumer experience. This focus means that our success depends disproportionately on our and our new partners’ ability to successfully develop these new brands across our consumer base and to maintain and extend the reach and relevance of these brands to global consumers in a wide array of markets. This strategy has required us to acquire, build, invest in and develop our competencies in music, movies, gaming, consumer products and entertainment products. Acquiring, developing, investing in and growing these competencies has required significant effort, time and money, with no assurance of success. The success of our brand blueprint strategy also requires significant alignment and integration among our business segments. If we are unable to successfully develop, maintain and expand key partner brands across our brand blueprint, our business performance will suffer.

Consumer interests change rapidly and acceptance of products and entertainment offerings are influenced by outside factors.

The interests of families, individuals, fans and audiences evolve extremely quickly and can change dramatically from year to year and by geography. To be successful, we must correctly anticipate the types of entertainment, products and play patterns which will capture consumers’ interests and imagination, and quickly develop and introduce innovative products and engaging entertainment which can compete successfully for consumers’ limited time, attention and spending. This challenge is more difficult with the ever-increasing utilization of technology, social media and digital media in entertainment offerings, and the increasing breadth of entertainment available to consumers. Evolving consumer tastes and shifting interests, coupled with an ever-changing and expanding pipeline of entertainment and consumer properties and products which compete for consumer interest and acceptance, create an environment in which some products and entertainment offerings can fail to achieve consumer acceptance, and other products and entertainment offerings can be popular during a certain period of time but then be rapidly replaced. As a result, our products and entertainment offerings can have short consumer life cycles.

TABLE OF CONTENTS

Consumer acceptance of our or our partners’ entertainment offerings is also affected by outside factors, such as critical reviews, promotions, the quality and acceptance of films and television programs, music, video games, and content released into the marketplace at or near the same time, the availability of alternative forms of entertainment and leisure time activities, general economic conditions and public tastes generally, all of which could change rapidly and most of which are beyond our control. There can be no assurance that television programs and films, video games, video movies we distribute will obtain favorable reviews or ratings, that films, video games, video movies we distribute will be popular with consumers and perform well in our distribution channels.

If we devote time and resources to distributing and marketing products or entertainment that consumers do not accept or do not find interesting enough to buy in sufficient quantities to be profitable to us, our revenues and profits may decline, and our business performance may be harmed. Similarly, if our product offerings and entertainment fail to correctly anticipate consumer interests, our revenues and earnings will be reduced.

An inability to develop, introduce and ship planned products, product lines and new brands in a timely and cost-effective manner may damage our business.

In acquiring new products, product lines and new brands we have anticipated dates for the associated product and brand introductions. When we state that we will introduce, or anticipate introducing, a particular product, product line or brand at a certain time in the future those expectations are based on completing the associated development, implementation, and marketing work in accordance with our currently anticipated development schedule. We cannot guarantee that we will be able to source and ship new or continuing products in a timely manner and on a cost-effective basis to meet constantly changing consumer demands.

The risk is also exacerbated by the increasing sophistication of many of the products we are distributing, providing greater innovation and product differentiation. Unforeseen delays or difficulties in the development process, significant increases in the planned cost of development, or changes in anticipated consumer demand for our products and new brands may cause the introduction date for products to be later than anticipated, may reduce or eliminate the profitability of such products or, in some situations, may cause a product or new brand introduction to be discontinued.

If we are unable to navigate through global supply chain challenges, our business may be harmed.

In 2021 and continuing into 2022, we have faced global supply chain challenges with the production and delivery of some products being delayed due to logistics, including labor, trucking and container shortages, port congestion and other shipping disruptions. We have experienced increases in material costs and shortages for some of our products, due in part to higher wages being paid due to labor shortages in China and Vietnam, as well as periodic and unpredictable manufacturing shut-downs due to COVID-19. While we have taken actions to lessen the impact of these supply chain challenges, such as through the use of alternative ports and air freight, such actions have resulted in higher costs and there can be no assurance that the actions taken will continue to be effective. We have also increased prices in some cases to help offset increased costs. We can provide no assurance that we will be able to increase prices in the future and we cannot assure that price increases we have already taken will offset the entirety of additional costs we have incurred and may incur in the future to mitigate the supply chain disruption. Further, if we are unable to negotiate favorable carrier agreements, deliver products on time or otherwise satisfy demand for our products, our business may be harmed.

If we are unable to adapt our business to the continued shift to ecommerce, our business may be harmed.

Our ecommerce business is accounting for a higher portion of the ultimate sales of our products to consumers than it has historically. In 2021, ecommerce sales represented 35% of overall sales to our key customers as consumers increasingly purchased our products online as compared to through in-store shopping due to the continued transition to ecommerce accelerated by the shutdown and limited access to retail stores during the COVID-19 pandemic. Ecommerce sales have resulted in retailers holding less inventory, which has caused us to adjust our supply chain. This supply chain is further strained by customers desiring faster delivery at reduced costs. Additionally, if our technology and systems used to support ecommerce order

TABLE OF CONTENTS

processing are not effective, our ability to deliver products on time on a cost-effective basis may be adversely affected. Failure to continue to adapt our systems and supply chain and successfully fulfill ecommerce sales could harm our business.

The concentration of our retail customer base and continued shift to ecommerce sales means that economic difficulties or changes in the purchasing or promotional policies or patterns of our major customers could have a significant impact on us.

For the year ended June 30, 2022 and for the quarter ended September 30, 2022, there was one customer that generated over 10% of net sales. For the quarter ended September 30, 2022, our top customer accounted for 24% of our total net sales, purchased a mix of products comprised of 20% games, 50% music, and 31% movies. For the year ended June 30, 2022, our top customer accounted for 24% of our total net sales, purchased a mix of products comprised of 41% games, 39% music, and 20% movies. Due to our customer concentration, if our top customer were to experience difficulties in fulfilling their obligations to us, cease doing business with us, significantly reduce the amount of their purchases from us, favor competitors or new entrants, change their purchasing patterns, impose unexpected fees on us, alter the manner in which they promote our products or the resources they devote to promoting and selling our products, or return substantial amounts of our products, our business may be harmed.

Our customers do not make binding long-term commitments to us regarding purchase volumes and make all purchases by delivering purchase orders. Any customer could reduce its overall purchase of our products and reduce the number and variety of our products that it carries, and the shelf space allotted for our products. In addition, increased concentration among our customers could negatively impact our ability to negotiate higher sales prices for our products and could result in lower gross margins than would otherwise be obtained if there were less consolidation among our customers. Furthermore, the failure or lack of success of a significant retail customer could negatively impact our revenues and profitability.

Our business, including our costs and supply chain, is subject to risks associated with sourcing, manufacturing, warehousing, distribution and logistics, and the loss of any of our key suppliers or service providers could negatively impact our business.

All of the products we offer are manufactured by third-party labels, studios, publishers, and suppliers, and as a result we may be subject to price fluctuations or demand disruptions. Our operating results would be negatively impacted by increases in the costs of the products we offer, and we have no guarantees that costs will not rise. In addition, as we expand into new categories and product types, we expect that we may not have strong purchasing power in these new areas, which could lead to higher costs than we have historically seen in our current categories. We may not be able to pass increased costs on to consumers, which could adversely affect our operating results. Moreover, in the event of a significant disruption in the supply of the materials used in the manufacture of the products we offer, we and the vendors that we work with might not be able to locate alternative suppliers of materials of comparable quality at an acceptable price.

In addition, products, and merchandise we receive from manufacturers and suppliers may not be of sufficient quality or free from damage, or such products may be damaged during shipping, while stored in our warehouse fulfillment centers or with third-party ecommerce or retail customers or when returned by consumers. We may incur additional expenses and our reputation could be harmed if consumers and potential consumers believe that our products do not meet their expectations, are not properly labeled or are damaged.

We purchase significant amounts from a limited number of suppliers with limited supply capabilities. There can be no assurance that our current suppliers will be able to accommodate our anticipated growth or continue to supply current quantities at preferential prices. An inability of our existing suppliers to provide products in a timely or cost-effective manner could impair our growth and have an adverse effect on our business, financial condition, results of operations and prospects. We generally do not maintain long-term supply contracts with any of our suppliers and any of our suppliers could discontinue selling to us at any time.

The loss of any of our other significant suppliers, or the discontinuance of any preferential pricing or exclusive incentives they currently offer to us could have an adverse effect on our business, financial condition, results of operations and prospects.

TABLE OF CONTENTS

We continually seek to expand our base of product suppliers, especially as we identify new markets. We also require our new and existing suppliers to meet our ethical and business partner standards. Suppliers may also have to meet governmental and industry standards and any relevant standards required by our consumers, which may require additional investment and time on behalf of suppliers and us. If any of our key suppliers becomes insolvent, ceases or significantly reduces its operations or experiences financial distress, as a result of the COVID-19 pandemic or otherwise, or if any environmental, economic or other outside factors impact their operations. If we are unable to identify or enter into distribution relationships with new suppliers or to replace the loss of any of our existing suppliers, we may experience a competitive disadvantage, our business may be disrupted and our business, financial condition, results of operations and prospects could be adversely affected.

Our principal suppliers currently provide us with certain incentives such as extended payment terms, volume purchasing, trade discounts, cooperative advertising and market development funds. A reduction or discontinuance of these incentives would increase our costs and could reduce our ability to achieve or maintain profitability. Similarly, if one or more of our suppliers were to offer these incentives, including preferential pricing, to our competitors, our competitive advantage would be reduced, which could have an adverse effect on our business, financial condition, results of operations and prospects.

We face significant inventory risk.

In addition to risks described elsewhere relating to fulfillment network and inventory optimization by us and third parties, we are exposed to significant inventory risks that may adversely affect our operating results as a result of seasonality, new product launches, rapid changes in product cycles and pricing, defective merchandise, changes in consumer demand and consumer spending patterns, changes in consumer tastes with respect to our products, spoilage, and other factors. We endeavor to accurately predict these trends and avoid overstocking or understocking products we manufacture and/or sell. Demand for products, however, can change significantly between the time inventory or components are ordered and the date of sale. In addition, when we begin selling or manufacturing a new product, it may be difficult to establish vendor relationships, determine appropriate product or component selection, and accurately forecast demand. The acquisition of certain types of inventory or components requires significant lead-time and prepayment, and they may not be returnable. We carry a broad selection and significant inventory levels of certain products, and at times we are unable to sell products in sufficient quantities or to meet demand during the relevant selling seasons. If our inventory forecasting and production planning processes result in higher inventory levels exceeding the levels demanded by customers or should our customers decrease their orders with us, our operating results could be adversely affected due to costs of carrying the inventory and additional inventory write-downs for excess and obsolete inventory. Any one of the inventory risk factors set forth above may adversely affect our operating results.

If our third-party suppliers’ labels, studios, and publishers do not comply with applicable laws and regulations, our reputation, business, financial condition, results of operations and prospects could be harmed.

Our reputation and our consumers’ willingness to purchase our products depend in part on our suppliers’ labels, studios, publishers, and other suppliers, and retail partners’ compliance with ethical employment practices, such as with respect to child labor, wages and benefits, forced labor, discrimination, safe and healthy working conditions, and with all legal and regulatory requirements relating to the conduct of their businesses. We do not exercise control over our suppliers, manufacturers, and retail partners and cannot guarantee their compliance with ethical and lawful business practices. If our suppliers, manufacturers, or retail partners fail to comply with applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other obligations, norms, or ethical standards, our reputation and brand image could be harmed, and we could be exposed to litigation, investigations, enforcement actions, monetary liability, and additional costs that would harm our reputation, business, financial condition, results of operations and prospects.

Shipping is a critical part of our business and any changes in our shipping arrangements or any interruptions in shipping could adversely affect our operating results.

We primarily rely on two major vendors for our shipping requirements. If we are not able to negotiate acceptable pricing and other terms with these two vendors or one of the two experiences performance

TABLE OF CONTENTS

problems or other difficulties, it could negatively impact our operating results and our consumer or retail partner experience. Shipping vendors may also impose shipping surcharges from time to time. In addition, our ability to receive inbound inventory efficiently and ship products to consumers and retailers may be negatively affected by inclement weather, fire, flood, power loss, earthquakes, labor disputes, acts of war or terrorism, trade embargoes, customs and tax requirements and similar factors. For example, strikes at major international shipping ports have in the past impacted our supply of inventory from our third-party Labels, Studios, Publishers, and Suppliers, and the escalating trade dispute between the United States and China has and may in the future lead to increased tariffs, the revocation of current tariff exclusions for certain of our products, which may restrict the flow of the goods from China to the United States. We are also subject to risks of damage or loss during delivery by our shipping vendors. If our products are not delivered in a timely fashion or are damaged or lost during the delivery process, our consumers could become dissatisfied and cease shopping on our site or retailer or third-party ecommerce sites, which could have an adverse effect on our business, financial condition, operating results and prospects.

We are subject to risks related to online payment methods, including third-party payment processing-related risks.

We currently accept payments using a variety of methods, including checks, ACH, wire transfers, credit card, debit card, PayPal, and gift cards. As we offer new payment options to consumers, we may be subject to additional regulations, compliance requirements, fraud, and other risks. We also rely on third parties to provide payment processing services, and for certain payment methods, we pay interchange and other fees, which may increase over time and raise our operating costs and affect ability to achieve or maintain profitability. We are also subject to payment card association operating rules and certification requirements, including the Payment Card Industry Data Security Standard, or PCI-DSS, and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we (or a third-party processing payment card transactions on our behalf) suffer a security breach affecting payment card information, we may have to pay onerous and significant fines, penalties and assessments arising out of the major card brands’ rules and regulations, contractual indemnifications or liability contained in merchant agreements and similar contracts, and we may lose our ability to accept payment cards for payment for our goods and services, which could materially impact our operations and financial performance.

Furthermore, as our business changes, we may be subject to different rules under existing standards, which may require new assessments that involve costs above what we currently pay for compliance. As we offer new payment options to consumers, including by way of integrating emerging mobile and other payment methods, we may be subject to additional regulations, compliance requirements and fraud. If we fail to comply with the rules or requirements of any provider of a payment method we accept, if the volume of fraud in our transactions limits or terminates our rights to use payment methods we currently accept, or if a data breach occurs relating to our payment systems, we may, among other things, be subject to fines or higher transaction fees and may lose, or face restrictions placed upon, our ability to accept credit card payments from consumers or facilitate other types of online payments.

We also occasionally receive orders placed with fraudulent data and we may ultimately be held liable for the unauthorized use of a cardholder’s card number in an illegal activity and be required by card issuers to pay charge-back fees. Charge-backs result not only in our loss of fees earned with respect to the payment, but also leave us liable for the underlying money transfer amount. If our charge-back rate becomes excessive, card associations also may require us to pay fines or refuse to process our transactions. To mitigate credit card fraud, we use Kount to score all credit card orders for risk of fraud. In addition, we may be subject to additional fraud risk if third-party service providers or our employees fraudulently use consumer information for their own gain or facilitate the fraudulent use of such information. Overall, we may have little recourse if we process a criminally fraudulent transaction.

If any of these events were to occur, our business, financial condition, results of operations and prospects could be adversely affected.

TABLE OF CONTENTS

We rely 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 our standards or applicable regulatory requirements, which could harm our brand, cause consumer dissatisfaction, and require us to find alternative suppliers of our products or services.

We do not own or operate any manufacturing facilities. We use multiple third-party suppliers and labels, studios, publishers, suppliers based primarily in the United States, China and Mexico and other countries to a lesser extent, to manufacture and supply all of the products we offer and sell.

We engage many of our third-party suppliers and labels, studios, publishers, suppliers on a purchase order basis and in most cases are not party to long-term contracts with them. The ability and willingness of these third parties to supply and manufacture the products we offer, and sell may be affected by competing orders placed by other companies and the demands of those companies. If we experience significant increases in demand or need to replace a significant number of existing suppliers or manufacturers, there can be no assurance that additional supply and manufacturing capacity will be available when required on terms that are acceptable to us, or at all, or that any supplier or manufacturer will allocate sufficient capacity to us in order to meet our requirements. Furthermore, our reliance on suppliers and manufacturers outside of the United States, the number of third parties with whom we transact and the number of jurisdictions to which we sell complicates our efforts to comply with customs duties and excise taxes; any failure to comply could adversely affect our business.

In addition, quality control problems, such as the use of materials and delivery of products that do not meet our quality control standards and specifications or comply with applicable laws or regulations, could harm our business. Quality control problems could result in regulatory action, such as restrictions on importation, products of inferior quality or product stock outages or shortages, harming our sales and creating inventory write-downs for unusable products.

We have also outsourced minute portions of our fulfillment process, as well as certain technology-related functions, to third-party service providers. Specifically, we are dependent on third-party vendors for credit card processing, and we use third-party hosting and networking providers to host our sites. The failure of one or more of these entities to provide the expected services on a timely basis, or at all, or at the prices we expect, or the costs and disruption incurred in changing these outsourced functions to being performed under our management and direct control or that of a third party, could have an adverse effect on our business, financial condition, results of operations and prospects.

We are party to short-term contracts with some of our retail and ecommerce partners, and upon expiration of these existing agreements, we may not be able to renegotiate the terms on a commercially reasonable basis, or at all.

Further, our third-party labels, studios, publishers, suppliers and retail and ecommerce partners may:

•

have economic or business interests or goals that are inconsistent with ours;

•

take actions contrary to our instructions, requests, policies or objectives;

•

be unable or unwilling to fulfill their obligations under relevant purchase orders, including obligations to meet our production deadlines, quality standards, pricing guidelines and product specifications, and to comply with applicable regulations, including those regarding the safety and quality of products;

•

have financial difficulties;

•

encounter raw material or labor shortages;

•

encounter increases in raw material or labor costs which may affect our procurement costs;

•

encounter difficulties with proper payment of custom duties or excise taxes;

•

disclose our confidential information or intellectual property to competitors or third parties;

•

engage in activities or employ practices that may harm our reputation; and

•

work with, be acquired by, or come under control of, our competitors.

TABLE OF CONTENTS

Alliance’s existing and any future indebtedness could adversely affect its ability to operate its business.

On June 30, 2022, the credit line with Bank of America was amended for the current period which ends September 29, 2023 and increased from $175 million to $225 million with a variable annual interest rate equal to the higher of the Prime rate, Federal Funds rate plus .5% or Bank of America SOFR rate plus 2.11% (Libor rate plus 2% is the prior agreement). As of September 30, 2022, the interest rate was 5.07% (SOFR 2.96% plus a spread of 2.11%). As of September 30, 2021, the interest rate was 2.25% (Libor .25% plus a spread of 2%) with borrowing above the contracted Libor at 4.25% (Base Rate 3.25% plus a spread of 1%). The weighted average interest rate on the revolver for quarters ended September 30, 2022, and 2021 was 3.96% and 2.76% respectively.

All assets (with certain capitalized lease exceptions) and interest in assets of the Company are pledged as collateral under the Credit Facility. In addition, the Credit Facility contains certain financial covenants with which the Company is required to comply. Failure to comply with the financial covenants contained in the Credit Facility could result in an event of default. An event of default, if not cured or waived, would permit acceleration of any outstanding indebtedness under the Credit Facility.

Availability under the Credit Facility is limited by the Company’s borrowing base calculation, as defined in the Credit Facility. In addition, there is a commitment fee of 0.25% for unused credit line with fees for year ended June 30, 2022, and 2021 of $100 thousand and $300 thousand, respectively. Availability at September 30, 2022, was $6 million with an outstanding revolver balance of $184 million. Availability on September 30, 2021 was $24 million with an outstanding revolver balance of $126 million.

Revolver Balance consists of the following at:

($ in thousands)	September 30, 2022			June 30, 2022
Bank of America Revolving Credit Facility		$	183,691		$	136,176
Less: Deferred Finance Costs			(167)			(208)
Revolving Credit, Net		$	183,524		$	135,968

Alliance’s outstanding indebtedness, including any additional indebtedness beyond our borrowings from Bank of America, combined with its other financial obligations and contractual commitments could have significant adverse consequences, including:

•

requiring us to dedicate a portion of our cash resources to the payment of interest and principal, reducing money available to fund working capital, capital expenditures, potential acquisitions, international expansion, new product development, new enterprise relationships and other general corporate purposes;

•

increasing our vulnerability to adverse changes in general economic, industry and market conditions;

•

subjecting us to restrictive covenants that may reduce our ability to take certain corporate actions or obtain further debt or equity financing;

•

limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and

•

placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.

Alliance obtained a waiver for non-compliance with one non-financial covenant related to its delivery of the monthly unaudited financial statements and compliance certificates for the periods pertaining to June 30, 2022, July 31, 2022, and August 31, 2022. This non-compliance resulted in events of default under the Revolving Credit Facility. As a result of this non-compliance as of the balance sheet date and periods thereafter, the Company has classified the outstanding balance of the Revolving Credit Facility Net of $135,968 as a current liability as of June 30, 2022. The Company expects that it will comply with this non-financial covenant for a period of at least one year from the issuance of these financial statements. Therefore, the Company reclassified its debt to a non-current liability beginning with its September 30, 2022

TABLE OF CONTENTS

consolidated balance sheet and does not believe that payments will be due under the credit facility for at least the following 12 months.

We intend to satisfy our current and future debt service obligations with our then existing cash and cash equivalents. However, we may not have sufficient funds, and may be unable to arrange for additional financing, to pay the amounts due under the Credit Facility or any other debt instruments. Failure to make payments or comply with other covenants under our existing credit facility or such other debt instruments could result in an event of default and acceleration of amounts due, which would have a material adverse effect on our business.

Government efforts to combat inflation, along with other interest rate pressures arising from an inflationary economic environment, could lead to us to incur even higher interest rates and financing costs.

Inflation has risen on a global basis, the United States has been experiencing historically high levels of inflation, and government entities have taken various actions to combat inflation, such as raising interest rate benchmarks. Government entities may continue their efforts, or implement additional efforts, to combat inflation, which could include among other things continuing to raise interest rate benchmarks and/or maintaining interest rate benchmarks at elevated levels. Such government efforts, along with other interest rate pressures arising from an inflationary economic environment, could lead to us to incur even higher interest rates and financing costs on our credit line with Bank of America and have material adverse effect on our business, financial condition and results of operations.

Our success is dependent on the efforts and dedication of our officers and other employees.

Our officers and employees are at the heart of all our efforts. It is their skill, innovation and hard work that drive our success. We compete with many other potential employers in recruiting, hiring, and retaining our management team and our many other skilled officers and employees around the world. The increasing prevalence of remote work creates further challenges in retaining employees as some employees desire more flexibility in their employment and the ability to work remotely opens up more employment opportunities. The impact of failing to retain key employees can be high due to loss of key knowledge and relationships, loss of creative talent, lost productivity, hiring and training costs, all of which could result in lower profitability. We cannot guarantee that we will recruit, hire or retain the key personnel we need to succeed.

Our future success will depend on the leadership of our key executives such as Mr. Bruce Ogilvie, our Executive Chairman, and Mr. Jeff Walker, our Chief Executive Officer. Mr. Ogilvie and Mr. Walker are executives of other companies, including GameFly Holdings, Inc. GameFly is a customer of Alliance. Alliance uses GameFly’s Lakewood, California warehouse to ship and fulfill products for Alliance’s customers. A Conflict of interest may arise with respect to their allocation of business time and such conflicts may not be resolved in the Combined Company’s favor. Our loss of key management or other employees, inability to drive success through our new leaders, or our inability to retain or hire talented people with the skill sets we need for our diverse and changing business, could significantly harm our business.

If we fail to develop diverse top talent, we may be unable to compete, and our business may be harmed.

To compete successfully, we must continuously develop a diverse group of talented people. We promote a diverse and inclusive work environment. To that end, we have set goals and objectives with respect to hiring and retention of talented, diverse employees, who we believe will foster new ideas and perspectives that will benefit our business. Competition for diverse talent is intense. We cannot guarantee we will achieve our goals or that our actions will result in expected benefits to our business.

Alliance has engaged in transactions with related parties, and such transactions present possible conflicts of interest that could have an adverse effect on our business and results of operations.

Alliance has entered into transactions with related parties, including our two principal stockholders. We have entered into transactions with companies owned by Bruce Ogilvie and Jeffrey Walker, including Gamefly Holdings, LLC. For the three months ended September 30, 2022, and 2021, Alliance made sales of new release movies, video games, and video game consoles to GameFly Holdings LLC in the amount of $0.7 million and $2.0 million respectively. During the years ended June 30, 2022, 2021 and 2020, Alliance

TABLE OF CONTENTS

made sales of new release movies, video games, and video game consoles to GameFly Holdings LLC in the amount of $7.1 million, $5.3 million, and $2.5 million, respectively. GameFly, a customer of Alliance, is equally owned by Bruce Ogilvie and Jeff Walker, the two shareholders of Alliance. Alliance believes the amounts payable to GameFly are at fair market value. Although the agreement between Alliance and GameFly can be terminated by either party at any time, given Mr. Ogilvie’s and Mr. Walker’s positions with Alliance as Executive Chairman and Chief Executive Officer, respectively. We may in the future enter into additional transactions with entities in which majority shareholders, executive officers and members of our board of directors and other related parties hold ownership interests. See “Certain Relationships and Related Party Transactions.”

Transactions with such related parties present potential for conflicts of interest, as the interests of the third-party owned related entity and its shareholders may not align with the interests of our stockholders with respect to the negotiation of, and certain other matters. For example, conflicts of interest may arise in connection with decisions regarding the structure and terms of the GameFly contract, contractual remedies, events of default and dealings with customers.

Pursuant to our related party transactions policy that will be in place after the Business Combination, all additional material related party transactions that we enter into require either (i) the unanimous consent of our audit committee or (ii) the approval of a majority of the members of our board of directors. See “Certain Relationships and Related Party Transactions — Policies and Procedures for Related Party Transactions”. Nevertheless, we may have achieved more favorable terms if such transactions had not been entered into with related parties and these transactions, individually or in the aggregate, may have an adverse effect on our business and results of operations or may result in government enforcement actions or other litigation.

Our business may be harmed if we are unable to protect our critical intellectual property rights.

Our intellectual property, including our trademarks and tradenames, copyrights, patents, and rights under our license agreements and other agreements that establish our intellectual property rights and maintain the confidentiality of our intellectual property, is of critical value. We rely on a combination of trade secret, copyright, trademark, patent and other proprietary rights laws to protect our rights to valuable intellectual property in the U.S. and around the world. From time to time, third parties have challenged, and may in the future try to challenge, our ownership of our intellectual property in the U.S. and around the world. In addition, our business is subject to the risk of third parties counterfeiting our products or infringing on our intellectual property rights, as well as the risk of unauthorized third parties copying and distributing our entertainment content or leaking portions of planned entertainment content. We may need to resort to litigation to protect our intellectual property rights, which could result in substantial costs and diversion of resources. Similarly, third parties may claim ownership over certain aspects of our products, productions or other intellectual property. Our failure to successfully protect our intellectual property rights could significantly harm our business and competitive position.

Failure to successfully operate our information systems and implement new technology effectively could disrupt our business or reduce our sales or profitability.

We rely extensively on various information technology systems and software applications to manage many aspects of our business, including product development, management of our supply chain, sale and delivery of our products, royalty and financial reporting and various other processes and transactions. We are critically dependent on the integrity, security and consistent operations of these systems and related back-up systems. These systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, malware and other cybersecurity breaches, catastrophic events such as hurricanes, fires, floods, earthquakes, tornadoes, acts of war or terrorism and usage errors by our employees or partners. The efficient operation and successful growth of our business depends on these information systems, including our ability to operate them effectively and to select and implement appropriate upgrades or new technologies and systems and adequate disaster recovery systems successfully. The failure of our information systems or third-party hosted technology to perform as designed or our failure to implement and operate them effectively could disrupt our business, require significant capital investments to remediate a problem or subject us to liability.

TABLE OF CONTENTS

If our electronic data is compromised our business could be significantly harmed.

We and our business partners maintain significant amounts of data electronically in locations around the United States and in the cloud. This data relates to all aspects of our business, including current and future products and entertainment under development, and also contains certain customer, consumer, supplier, partner and employee data. We maintain systems and processes designed to protect this data, but notwithstanding such protective measures, there is a risk of intrusion, cyber-attacks or tampering that could compromise the integrity and privacy of this data. Cyber-attacks are increasing in their frequency, sophistication and intensity, and are becoming increasingly difficult to detect. They are often carried out by motivated, well-resourced, skilled and persistent actors, including nation states, organized crime groups, “hacktivists” and employees or contractors acting with malicious intent. Cyber-attacks could include the deployment of harmful malware and key loggers, ransomware, a denial-of-service attack, a malicious website, the use of social engineering and other means to affect the confidentiality, integrity and availability of our technology systems and data. Cyber-attacks could also include supply chain attacks, which could cause a delay in the manufacturing of our products. In addition, we provide confidential and proprietary information to our third-party business partners in certain cases where doing so is necessary to conduct our business. While we obtain assurances from those parties that they have systems and processes in place to protect such data, and where applicable, that they will take steps to assure the protections of such data by third parties, those partners may also be subject to data intrusion or otherwise compromise the protection of such data. Any compromise of the confidential data of our customers, consumers, suppliers, partners, employees or ourselves, or failure to prevent or mitigate the loss of or damage to this data through breach of our information technology systems or other means could substantially disrupt our operations, harm our customers, consumers, employees and other business partners, damage our reputation, violate applicable laws and regulations, subject us to potentially significant costs and liabilities and result in a loss of business that could be material.

The global coronavirus outbreak or other similar outbreaks of communicable infections, diseases, or public health pandemics in the markets in which we and our employees, consumers, customers, partners, licensees, suppliers and manufacturers operate, could substantially harm our business.

The global outbreak of the coronavirus which continues to adversely impact global populations, and any other variants or outbreaks of communicable infections, diseases or other adverse public health conditions in markets in which we, our employees, consumers, customers, partners, licensees, licensors, suppliers and manufacturers operate, could have a significant negative impact on our business, revenues and profitability. The occurrence of these types of events can result, and in the case of the coronavirus has resulted in, disruptions and damage to our business, caused by a number of factors:

•

difficulties in shipping and distributing products due to ongoing port capacity, and labor, shipping container and truck transportation shortages, resulting in higher costs for both ocean and air freight and delays in the availability of products, which can result in delayed sales and in some cases result in lost sales. These and other disruptions are expected to continue in 2022;

•

disruptions in supply of products, due to closures or reductions in operations at third-party manufacturing facilities across several geographies including, but not limited to, China, Vietnam, and the United States;

•

adverse sales impact due to changes in consumer purchasing behavior and availability of products to consumers, resulting from retail store closures, limited reopening of retail stores and limitations on the capacity of ecommerce channels to supply additional products;

•

fluctuations in our performance based on the progress of different countries in controlling the coronavirus and the maturity of e-commerce platforms in those markets;

•

limited production of live-action scripted and unscripted entertainment content due to the hard stop and soft reopening of production studios;

•

delays or postponements of entertainment productions and releases of entertainment content both internally and by our partners;

TABLE OF CONTENTS

•

increases in entertainment production costs due to measures required to minimize COVID-19 risks; and

•

challenges of working remotely.

We have reopened our offices, providing employees flexibility in their return to the office by working partially in the office and partially remote. We have taken measures to safely bring additional workers back to the office, including a return to fully remote work when variants emerge which increase infection rates significantly in areas where we do business. The transition back from fully remote work to partial remote and partial in person may be difficult for some employees. We are actively soliciting feedback and making modifications to provide our employees with a productive and safe environment, and plan to continue to monitor employee efficiency, satisfaction, and morale as we continue to transition. There can be no assurance that employees will not have some disruption in their work due to the transition. Changes in flexible working arrangements could impact employee retention, employees’ productivity and morale, strain our technology resources and introduce operational risks. Additionally, the risk of cyber-attacks or other privacy or data security incidents may be heightened as a result of our moving increasingly towards a remote working environment, which may be less secure and more susceptible to hacking attacks.

The impact of coronavirus outbreak continues to be fluid and uncertain, and while vaccines are being rolled out, it is still difficult to forecast the final impact it could have on our future operations. If our business experiences prolonged occurrence of adverse public health conditions due to the coronavirus or other similar outbreaks, we believe our business could be substantially harmed.

Adverse economic conditions in the markets in which we and our employees, consumers, customers, suppliers and manufacturers operate could negatively impact our ability to produce and ship our products, and lower our revenues, margins and profitability.

Various economic conditions in the markets we, our employees, consumers, customers, suppliers and manufacturers operate, could have a significant negative impact on our revenues, profitability and business. The occurrence of adverse economic conditions can result in manufacturing and other work stoppages, slowdowns and delays; shortages or delays in production or shipment of products or raw materials; delays or reduced purchases from customers and consumers; and other factors that cause increases in costs or delay in revenues. Inflation, such as what consumers in the U.S. and other economies are experiencing, can cause significant increases in the costs of other products which are required by consumers, such as gasoline, home heating fuels, or groceries, may reduce household spending on the discretionary products and entertainment we offer. Weakened economic conditions, higher interest rates, lowered employment levels or recessions may also significantly reduce consumer purchases of our products and spending on entertainment. Economic conditions may also be negatively impacted by terrorist attacks, wars and other conflicts, such as the war in Ukraine, natural disasters, increases in critical commodity prices or labor costs, or the prospect of such events. Such a weakened economic and business climate, as well as consumer uncertainty created by such a climate, could significantly harm our revenues and profitability.

Our success and profitability not only depend on consumer demand for our products, but also on our ability to produce and sell those products at costs which allow for us to make a profit. Rising fuel and raw material prices, due to inflation or otherwise, for paperboard and other components such as resin used in plastics or electronic components, increased transportation and shipping costs, and increased labor costs in the markets in which our products are manufactured all may increase the costs we incur to produce and transport our products, which in turn may reduce our margins, reduce our profitability and harm our business.

Changes in U.S., global or regional economic conditions could harm our business and financial performance.

Our financial performance is impacted by the level of discretionary consumer spending in the markets in which we operate. Reductions in stimulus payments provided to consumers, high inflation and rising interest rates on credit cards could impact discretionary spending. Recessions, credit crises and other economic downturns, or disruptions in credit and financial markets in the U.S. and in other markets in which we operate can result in lower levels of economic activity, lower employment levels, less consumer disposable income, and lower consumer confidence. Similarly, reductions in the value of key assets held by consumers,

TABLE OF CONTENTS

such as their homes or stock market investments, can lower consumer confidence and consumer spending power. Any of these factors can reduce the amount which consumers spend on the purchase of our products and entertainment. This in turn can reduce our revenues and harm our financial performance and profitability.

Our quarterly and annual operating results may fluctuate due to seasonality in our business.

Sales of our music, video movies, video games and other entertainment products are seasonal, with an increase of retail sales occurring during the period from September through December for the holiday season. This seasonality for our consumer products business has increased over time, as retailers become more and more efficient in their control of inventory levels through quick response or just in time inventory management techniques, including the use of automated inventory replenishment programs. Further, ecommerce continues to grow significantly and accounts for a higher portion of the ultimate sales of our products to consumers. Ecommerce retailers tend to hold less inventory and take inventory closer to the time of sale to consumers than traditional retailers. As a result, customers are timing their orders so that they are being filled by suppliers, such as us, closer to the time of purchase by consumers. While these techniques reduce a retailer’s investment in inventory, they increase pressure on suppliers like us to fill orders promptly and thereby shift a significant portion of inventory risk and carrying costs to the supplier. This can also result in our losing significant revenues and earnings if our supply chain is unable to supply product to our customers when they want it.

The level of inventory carried by retailers may also reduce or delay retail sales resulting in lower revenues for us. If we or our customers determine that one of our products is more popular at retail than was originally anticipated, we may not have sufficient time to procure and ship enough additional products to fully meet consumer demand. Additionally, the logistics of supplying more product within shorter time periods increases the risk that we will fail to achieve tight and compressed shipping schedules, which also may reduce our sales and harm our financial performance. These risks have been exacerbated in 2021 and continuing into 2022 due to the global supply chain challenges we have faced due to logistics, including labor, trucking and container shortages, port congestion and other shipping disruptions.

Our entertainment business is also subject to seasonal variations based on the timing of music, television, film, gaming content releases. Release dates are determined by several factors, including the timing of holiday periods, geographical release dates and competition in the market, and more recently, the timing of release dates has been affected by the pandemic.

This seasonal pattern of our business requires significant use of working capital, mainly to purchase inventory during the months prior to the holiday season, and requires accurate forecasting of demand for products during the holiday season in order to avoid losing potential sales of popular products or producing excess inventory of products that are less popular with consumers. Our failure to accurately predict and respond to consumer demand, resulting in under producing popular items and/or overproducing less popular items, would reduce our total sales and harm our results of operations.

As a result of the seasonal nature of our business, we would be significantly and adversely affected, in a manner disproportionate to the impact on a company with sales spread more evenly throughout the year, by unforeseen events such as a natural disaster, a terrorist attack, economic shock or pandemic that harms the retail environment or consumer buying patterns during our key selling season, or by events such as strikes or port delays or other supply chain challenges that interfere with the shipment of goods, particularly from the Far East, during the critical months leading up to the holiday shopping season.

If we incurred any significant impairment charges, our net earnings would be reduced.

Declines in the profitability of acquired brands or our decision to reduce our focus or exit these brands may impact our ability to recover the carrying value of the related assets and could result in an impairment charge. Similarly, declines in our profitability may impact the fair value of our reporting units, which could result in a write-down of our goodwill and consequently harm our net earnings.

Changes in foreign currency exchange rates can significantly impact our reported financial performance.

Our small global operations mean we transact business in many different jurisdictions with many different currencies. As a result, if the exchange rate between the U.S. dollar and a local currency for an international

TABLE OF CONTENTS

market in which we have significant sales or operations changes, our financial results as reported in U.S. dollars, may be meaningfully impacted even if our business in the local currency is not significantly affected. Similarly, our expenses can be significantly impacted, in U.S. dollar terms, by exchange rates, meaning the profitability of our business in U.S. dollar terms can be negatively impacted by exchange rate movements which we do not control. Depreciation in key currencies may have a significant negative impact on our revenues and earnings as they are reported in U.S. dollars.

Our indebtedness may limit our availability of cash, cause us to divert cash to fund debt service payments or make it more difficult to take certain other actions.

We operate the business with an asset-based line of credit to fund working capital to support our Accounts Receivables and our Inventory purchases.

•

make it more difficult and/or costly for us to pay or refinance our debts as they become due, particularly during adverse economic and industry conditions, because a decrease in revenues or increase in costs could cause cash flow from operations to be insufficient to make scheduled debt service payments;

•

require a substantial portion of our available cash to be used for debt service payments, thereby reducing the availability of our cash to fund working capital, capital expenditures, development projects, acquisitions or other strategic opportunities, dividend payments, share repurchases and other general corporate purposes;

•

make it more difficult for us to raise capital to fund working capital, make capital expenditures, pay dividends, pursue strategic initiatives or for other purposes;

•

result in higher interest expense, which could be further increased in case of current or future borrowings subject to variable rates of interest;

•

require that materially adverse terms, conditions, or covenants be placed on us under our debt instruments, which could include, for example, limitations on additional borrowings or limitations on our ability to create liens, pay dividends, repurchase our common stock or make investments, any of which could hinder our access to capital markets or our flexibility in the conduct of our business and make us more vulnerable to economic downturns and adverse competitive industry conditions; and

•

jeopardize our ability to pay our indebtedness if our business experienced a severe downturn.

If we were unable to obtain or service our other external financings, or if the restrictions imposed by such financing were too burdensome, our business would be harmed.

Due to the seasonal nature of our business, in order to meet our working capital needs, particularly those in the second and third quarters, we rely on a revolving credit agreement which provides for a $225,000,000 committed revolving asset-based loan Credit Facility. The Credit Facility contains certain restrictive covenants setting forth leverage and coverage requirements, and certain other limitations typical of an investment grade facility. These restrictive covenants may limit our future actions as well as our financial, operating, and strategic flexibility. Additionally, as disclosed in our consolidated financial statements as of and for the year ending June 30, 2022, the Company received a waiver from the lender for non-compliance with certain non-financial covenants as of June 30, 2022, July 31, 2022, and August 31, 2022. As of September 30, 2022, the Company was in compliance with this non-financial covenant and expects that it will comply for a period of at least one year. Non-compliance with our debt covenants in the future could result in us being unable to utilize borrowings under our revolving credit facility and other bank lines, a circumstance which potentially could occur when operating shortfalls would require supplementary borrowings to enable us to continue to fund our operations.

Not only may our individual financial performance impact our ability to access sources of external financing, but significant disruptions to credit markets in general may also harm our ability to obtain financing. In times of severe economic downturn and/or distress in the credit markets, it is possible that one or more sources of external financing may be unable or unwilling to provide funding to us. In such a

TABLE OF CONTENTS

situation, it may be that we would be unable to access funding under our existing credit facilities, and it might not be possible to find alternative sources of funding.

We also may choose to finance our capital needs, from time to time, through the issuance of debt securities. Our ability to issue such securities on satisfactory terms, if at all, will depend on the state of our business and financial condition, any ratings issued by major credit rating agencies, market interest rates, and the overall condition of the financial and credit markets at the time of the offering. The condition of the credit markets and prevailing interest rates have fluctuated significantly in the past and are likely to fluctuate in the future. Variations in these factors could make it difficult for us to sell debt securities or require us to offer higher interest rates in order to sell new debt securities. The failure to receive financing on desirable terms, or at all, could damage our ability to support our future operations or capital needs or engage in other business activities.

If we are unable to generate sufficient available cash flow to service our outstanding debt, we would need to refinance our outstanding debt or face default. We cannot guarantee that we would be able to refinance debt on favorable terms, or at all.

We face additional tax liabilities and collection obligations. Changes in, or differing interpretations of, income tax laws and rules, and changes in our geographic operating results, may impact our effective tax rate.

We are subject to a variety of taxes and tax collection obligations in the U.S. (federal and state) and numerous foreign jurisdictions. We may recognize additional tax expense and be subject to additional tax liabilities, including other liabilities for tax collection obligations due to changes in laws, regulations, administrative practices, principles, and interpretations related to tax, including changes to the global tax framework, competition, and other laws and accounting rules in various jurisdictions. Such changes could come about as a result of economic, political, and other conditions. An increasing number of jurisdictions are considering or have adopted laws or administrative practices that impose new tax measures, including revenue-based taxes, targeting online commerce and the remote selling of goods and services. These include new obligations to collect sales, consumption, value added, or other taxes on online marketplaces and remote sellers, or other requirements that may result in liability for third party obligations. For example, non-U.S. jurisdictions have proposed or enacted taxes on online marketplace service revenues. Proliferation of these or similar unilateral tax measures may continue unless broader international tax reform is implemented. Our results of operations and cash flows could be adversely affected by additional taxes imposed on us prospectively or retroactively or additional taxes or penalties resulting from the failure to comply with any collection obligations or failure to provide information about our customers, suppliers, and other third parties for tax reporting purposes to various government agencies. In some cases, we also may not have sufficient notice to enable us to build systems and adopt processes to properly comply with new reporting or collection obligations by the effective date.

We are subject to income taxes in the United States and in United Kingdom tax jurisdictions. We also conduct business activities between our operating units, and we are subject to transfer pricing rules in the United Kingdom in which we operate. There is some degree of uncertainty and subjectivity in complying with transfer pricing rules. Our effective tax rate could be impacted by changes in, or the interpretation of, tax laws, such as those being considered by the current United States administration and other jurisdictions in which we do business, or by changes in the amount of revenue and earnings we derive, or are determined to derive by tax authorities, from jurisdictions with differing tax rates.

In addition, we have been and may be subject to tax examinations by federal, state, and international jurisdictions, and these examinations can result in significant tax findings if the tax authorities interpret the application of laws and rules differently than we do or disagree with the intercompany rates we are applying. We assess the likelihood of outcomes resulting from tax uncertainties. While we believe our estimates are reasonable, the ultimate outcome of these uncertain tax benefits, or results of possible current or future tax examinations, may differ from our estimates and may have a significant adverse impact on our business and operating results.

We are subject to various government regulations, violation of which could subject us to sanctions or otherwise harm our business. In addition, we could be the subject of future product liability suits or merchandise recalls, which could harm our business.

We are subject to significant government regulations, including, in the U.S., under The Consumer Products Safety Act, The Federal Hazardous Substances Act, and The Flammable Fabrics Act, as well as

TABLE OF CONTENTS

under product safety and consumer protection statutes in our international markets. In addition, certain of our products are subject to regulation by the Food and Drug Administration or similar international authorities. Advertising to children is subject to regulation by the Federal Trade Commission, the Federal Communications Commission, and a host of other agencies globally, and the collection of information from children under the age of 13 is subject to the provisions of the Children’s Online Privacy Protection Act and other privacy laws around the world. The collection of personally identifiable information from anyone, including adults, is under increasing regulation in many markets, such as the General Data Protection Regulation adopted by the European Union, and data protection laws in the United States and in a number of other counties. While we take all the steps, we believe are necessary to comply with these acts and regulations, we cannot assure you that we will be in compliance and, if we fail to comply with these requirements or other regulations enacted in the future, we could be subject to fines, liabilities or sanctions which could have a significant negative impact on our business, financial condition and results of operations. We may also be subject to involuntary product recalls or may voluntarily conduct a product recall. While costs associated with product recalls have generally not been material to our business, the costs associated with future product recalls individually or in the aggregate in any given fiscal year could be significant. In addition, any product recall, regardless of direct costs of the recall, may harm the reputation of our products and have a negative impact on our future revenues and results of operations.

As a multinational corporation, we are subject to a host of governmental regulations throughout the world, including antitrust, employment, customs and tax requirements, anti-boycott regulations, environmental regulations, and the Foreign Corrupt Practices Act. Complying with these regulations imposes costs on us which can reduce our profitability and our failure to successfully comply with any such legal requirements could subject us to monetary liabilities and other sanctions that could further harm our business and financial condition.

We may face increased costs in achieving our sustainability goals, and, any failure to achieve our goals could result in reputational damage.

We view sustainability challenges as opportunities to innovate and continuously improve our product design and operational efficiencies. We also believe the long-term viability and health of our own operations and our supply chain, and the significant potential for environmental improvements, are critical to our business success. We have set key goals and objectives in this area as described in our business section of this prospectus.

We devote significant resources and expenditures to help achieve these goals. It is possible that we will incur significant expense in trying to achieve these goals with no assurance that we will be successful. Additionally, our reputation could be damaged if we fail to achieve our sustainability goals, or if we or others in our industry do not act, or are perceived not to act, responsibly with respect to the production and packaging of our products.

Our entertainment business involves risks of liability claims for media content, which could adversely affect our business, results of operations and financial condition.

As a distributor of media content, we may face potential liability for defamation, invasion of privacy, negligence, copyright or trademark infringement, and other claims based on the nature and content of the materials distributed. These types of claims have been brought, sometimes successfully, against producers and distributors of media content. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage could have a material adverse effect on our business, results of operation and financial condition.

We are involved in litigation, arbitration or regulatory matters where the outcome is uncertain and which could entail significant expense.

As a larger multinational corporation, we are subject to regulatory investigations, risks related to internal controls, litigation and arbitration disputes, including potential liability from personal injury or property damage claims by the users of products that have been or may be developed by us, claims by third parties that our products infringe upon or misuse such third parties’ property or rights, or claims by former employees for employment related matters. Because the outcome of litigation, arbitration and regulatory

TABLE OF CONTENTS

investigations is inherently difficult to predict, it is possible that the outcome of any of these matters could entail significant cost for us and harm our business. The fact that we operate in a significant number of international markets also increases the risk that we may face legal and regulatory exposures as we attempt to comply with a large number of varying legal and regulatory requirements. Any successful claim against us could significantly harm our business, financial condition and results of operations.

Alliance has identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future. If we fail to remediate the material weakness or if we otherwise fail to establish and maintain effective control over financial reporting, it may adversely affect our ability to accurately and timely report our financial results, and may adversely affect investor confidence and business operations.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

For the period ended September 30, 2022, we corrected a material weakness identified and disclosed in our June 30, 2022 Consolidated Financial Statements. Therefore, the Company reclassified its debt to a non-current liability beginning with its September 30, 2022, consolidated balance sheet and does not believe that payments will be due under the credit facility for at least the following 12 months. The Company expects that it will comply with this non-financial covenant for a period of at least one year.

We identified a material weakness in our internal control over financial reporting related to accounting for the classification of the outstanding balance of the Revolving Credit Facility, Net and a related audit adjustment to properly reflect the outstanding balance as a current liability as of June 30, 2022 in the consolidated financial statements included elsewhere in this registration statement. As further described in Note 8 to the consolidated financial statements, the Company was not in compliance with one non-financial covenant related to its delivery of the monthly unaudited financial statements and compliance certificates for the periods pertaining to June 30, 2022, July 31, 2022 and August 31, 2022. This non-compliance resulted in events of default under the Revolving Credit Facility and in current classification of the debt in accordance with the applicable accounting literature.

Our management has concluded that this material weakness in our internal control over financial reporting is due to the fact that Alliance is a private company with limited resources and did not have the necessary business processes and related internal controls formally designed and implemented to address the accounting and financial reporting requirements related to certain non-routine transactions, such as the accounting implications resulting from covenant violations.

Our management is in the process of developing a remediation plan and is taking steps to remediate the material weakness. The material weakness will be considered remediated when our management designs and implements effective controls that operate for a sufficient period of time and our management has concluded, through testing, that these controls are effective. Our management will continue to monitor the effectiveness of our remediation plan and will make the changes it determines to be appropriate. Although we intend to complete this remediation process as quickly as practicable, we cannot at this time estimate how long it will take, and our initiatives may not prove to be successful in remediating the material weakness.

Furthermore, we cannot assure that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to our material weakness in our internal controls over financial reporting or that they will prevent or avoid potential future material weaknesses. Further, additional weaknesses in our disclosure controls and internal controls over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to the listing requirements of the New York Stock Exchange, investors may lose confidence in our financial reporting and our stock price may decline as a result.

TABLE OF CONTENTS

Risks Related to the Combined Company

Unless the context otherwise requires, all references to “we,” “us,” or “our” in this subsection titled “Risks Related to the Combined Company” refer to the Combined Company.

Concentration of ownership among the Combined Company’s executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions.

Upon completion of the Business Combination:

•

the initial stockholders of Alliance will beneficially own, directly, or indirectly, excluding the Contingent Consideration Shares, approximately 77.9% of the Combined Company’s outstanding common stock and the executive officers, directors of Alliance and their affiliates as a group will beneficially own approximately 77.9% of the Combined Company’s outstanding common stock, assuming no redemption of the Public Shares; or

•

the initial stockholders of Alliance will beneficially own, directly, or indirectly, excluding the Contingent Consideration Shares, approximately 93.2% of the Combined Company’s outstanding common stock and the executive officers, directors of Alliance and their affiliates as a group will beneficially own approximately 93.2% of the Combined Company’s outstanding common stock, assuming that 10,026,413 Public Shares (which represents the maximum number of shares which may be redeemed) are redeemed.

As a result, these stockholders will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors, appointment and removal of officers, any amendment of the Proposed Certificate of Incorporation and approval of mergers and other business combination transactions requiring stockholder approval, including proposed transactions that would result in the Combined Company Stockholders receiving a premium price for their shares and other significant corporate transactions. This control could have the effect of delaying or preventing a change of control or changes in management and will make the approval of certain transactions difficult or impossible without the support of these stockholders.

There can be no assurance that the Combined Company’s common stock or warrants will be approved for listing on the NYSE American, the Nasdaq Stock Market or any other national securities exchange or that the Combined Company will be able to comply with the continued listing standards of the NYSE American, the Nasdaq Stock Market or any other national securities exchange.

Adara’s securities are currently listed on NYSE American and it is anticipated that, following the Business Combination, the Combined Company’s securities will continue to be listed on the NYSE American. In connection with the closing of the Business Combination, we intend to list the Combined Company’s additional common stock and warrants on the NYSE American and change the Combined Company’s trading symbols to “AENT” and “AENT.WS,” respectively. However, there can be no assurance that the Combined Company’s securities will continue to be listed on the NYSE American, the Nasdaq Stock Market or any other national securities exchange in the future. The Combined Company’s continued eligibility for listing may depend on the number of the Public Shares that are redeemed. In order to continue to maintain the listing of the Combined Company’s securities on the NYSE American, the Nasdaq Stock Market or any other national securities exchange, the Combined Company must maintain certain financial, distribution, liquidity and stock price levels. If, after the Business Combination, NYSE American, the Nasdaq Stock Market or any other national securities exchange delists the Combined Company’s shares from trading on its exchange for failure to meet the listing standards, the Combined Company and its stockholders could face significant negative consequences including:

•

limited availability of market quotations for the Combined Company’s securities;

•

a determination that the Combined Company’s common stock is a “penny stock” which will require brokers trading in the Combined Company’s common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of the Combined Company’s common stock;

•

a limited amount of analyst coverage; and

TABLE OF CONTENTS

•

a decreased ability to issue additional securities or obtain additional financing in the future.

If the Business Combination’s benefits do not meet the expectations of investors or securities analysts, the market price of Adara’s securities or, following the Closing, the Combined Company’s securities, may decline.

If the perceived benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of Adara’s securities prior to the Closing may decline. The market values of the Combined Company’s securities at the time of the Business Combination may vary significantly from their prices on the date the Business Combination Agreement was executed, the date of this proxy statement/prospectus, or the date on which Adara’s stockholders vote on the Business Combination.

In addition, following the Business Combination, fluctuations in the price of the Combined Company’s securities could contribute to the loss of all or part of your investment. Prior to the Business Combination, there has not been a public market for Alliance’s securities. Accordingly, the valuation ascribed to Alliance may not be indicative of the price that will prevail in the trading market following the Business Combination. If an active market for the Combined Company’s securities develops and continues, the trading price of the Combined Company’s securities following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond the Combined Company’s control. Any of the factors listed below could have a negative impact on your investment in the Combined Company’s securities and the Combined Company’s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of the Combined Company’s securities may not recover and may experience a further decline.

Factors affecting the trading price of the Combined Company’s securities may include:

•

actual or anticipated fluctuations in the Combined Company’s quarterly financial results or the quarterly financial results of companies perceived to be similar to it;

•

changes in the market’s expectations about the Combined Company’s operating results;

•

success of competitors;

•

failure to attract analyst coverage for the Combined Company’s stock or one or more analysts ceases coverage of the Combined Company or fails to publish reports on the Combined Company regularly;

•

the Combined Company’s operating results failing to meet the expectation of securities analysts or investors in a particular period;

•

changes in financial estimates and recommendations by securities analysts concerning the Combined Company or the transportation industry in general;

•

operating and share price performance of other companies that investors deem comparable to the Combined Company;

•

the Combined Company’s ability to market new and enhanced products and technologies on a timely basis;

•

changes in laws and regulations affecting the Combined Company’s business;

•

the Combined Company’s ability to meet compliance requirements;

•

commencement of, or involvement in, litigation involving the Combined Company;

•

changes in the Combined Company’s capital structure, such as future issuances of securities or the incurrence of additional debt;

•

the volume of the Combined Company’s shares of common stock available for public sale;

•

any major change in the Combined Company’s board of directors or management;

•

sales of substantial amounts of the Combined Company’s shares of common stock by the Combined Company’s directors, executive officers or significant stockholders or the perception that such sales could occur; and

TABLE OF CONTENTS

•

general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of the Combined Company’s securities irrespective of the Combined Company’s operating performance. The stock market in general, and NYSE American in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of the Combined Company’s securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to the Combined Company could depress the Combined Company’s share price regardless of the Combined Company’s business, prospects, financial conditions or results of operations. A decline in the market price of the Combined Company’s securities also could adversely affect the Combined Company’s ability to issue additional securities and the Combined Company’s ability to obtain additional financing in the future.

Adara has accounted for its outstanding warrants as a warrant liability and will be required to determine the value warrant liability quarterly, which could have a material impact on Adara’s financial position and operating results.

On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants.

As a result, included on our balance sheet as of December 31, 2021, contained elsewhere in this proxy statement/prospectus are derivative liabilities related to embedded features contained within our warrants. Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”) provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statements of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly based on factors which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material.

Following completion of the business combination, the Combined Company will be required to recognize the changes in the fair value of the Warrants from the prior period, if any, in its operating results for the current period, which could have a material impact on the Combined Company’s financial position and operating results.

We may face litigation and other risks as a result of the material weaknesses in our internal control over financial reporting and may report additional material weaknesses in our internal control over financial reporting in the future.

We have previously recorded a portion of our Class A common stock subject to possible redemption in permanent equity. Notwithstanding the presence of maximum redemption thresholds or charter provisions common in SPACs that provide a limitation on redemptions that would cause a SPAC’s net tangible assets to be less than $5,000,001, in accordance with SEC Staff guidance on redeemable equity instruments, ASC 480-10-S99, “Distinguishing Liabilities from Equity”, and EITF Topic D-98, “Classification and Measurement of Redeemable Securities”, redemption provisions not solely within the control of the issuing company requires common stock subject to redemption to be classified outside of permanent equity. Although we did not specify a maximum redemption threshold in our Current Articles, our Current Articles provide that we will not redeem our Public Shares in an amount that would cause our net tangible assets to be less than $5,000,001. Management re-evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2021. Based upon that evaluation, we concluded that the misclassification of the Class A

TABLE OF CONTENTS

common stock was quantitatively material to individual line items within the balance sheet. This resulted in a restatement of the initial carrying value of the Class A common stock subject to possible redemption, with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and common stock.

The foregoing represents a material weakness in our internal controls over financial reporting. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. In light of the material weakness identified and the resulting restatement, although we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects or that other material weaknesses and control deficiencies will not be discovered in the future.

We cannot assure you that there will not be additional material weaknesses in our internal control over financial reporting now or in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines that we have a material weakness in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of Combined Company Common Stock could decline, and it could be subject to sanctions or investigations by NYSE American, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

Following the consummation of the Business Combination, the Combined Company will incur significant increased expenses and administrative burdens as a public company, which could negatively impact its business, financial condition, and results of operations.

Following the consummation of the Business Combination, the Combined Company will face increased legal, accounting, administrative and other costs, and expenses as a public company that Alliance does not incur as a private company. The Sarbanes-Oxley Act, including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the PCAOB and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain activities more time-consuming. A number of those requirements will require the Combined Company to carry out activities Alliance has not done previously. For example, the Combined Company will create new board committees and adopt new internal controls and disclosure controls and procedures. In addition, expenses associated with SEC reporting requirements will be incurred. Furthermore, if any issues in complying with those requirements are identified (for example, if the auditors identify a material weakness or significant deficiency in the internal control over financial reporting), the Combined Company could incur additional costs rectifying those issues, and the existence of those issues could adversely affect the Combined Company’s reputation or investor perceptions of it. It may also be more expensive to obtain director and officer liability insurance. Risks associated with the Combined Company’s status as a public company may make it more difficult to attract and retain qualified persons to serve on the Combined Company’s board of directors or as executive officers. The additional reporting and other obligations imposed by these rules and regulations will increase legal and financial compliance costs and the costs of related legal, accounting, and administrative activities. These increased costs will require the Combined Company to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic

TABLE OF CONTENTS

objectives. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

The Combined Company’s failure to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act that will be applicable to it after the Business Combination is consummated could negatively impact its business.

Alliance is currently not subject to Section 404 of the Sarbanes-Oxley Act. However, following the consummation of the Business Combination, the Combined Company will be required to provide management’s attestation on internal controls. The standards required for a public company under Section 404(a) of the Sarbanes-Oxley Act are significantly more stringent than those required of Alliance as a privately held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable after the Business Combination. If the Combined Company is not able to implement the additional requirements of Section 404(a) in a timely manner or with adequate compliance, it may not be able to assess whether its internal controls over financial reporting are effective, which may subject it to adverse regulatory consequences and could harm investor confidence and the market price of its securities.

The Combined Company will continue to qualify as an “emerging growth company” and “smaller reporting company” within the meaning of the Securities Act, and if it takes advantage of certain exemptions from disclosure requirements available to emerging growth companies, it could make the Combined Company’s securities less attractive to investors and may make it more difficult to compare the Combined Company’s performance to the performance of other public companies.

The Combined Company will continue to qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act immediately following the Closing. As such, the Combined Company will be eligible for and intends to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as it continues to be an emerging growth company, including (a) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, (b) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (c) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements. The Combined Company will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of Combined Company Common Stock that is held by non-affiliates exceeds $700 million as of June 30 of that fiscal year, (ii) the last day of the fiscal year in which it has total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which it has issued more than $1 billion in non- convertible debt in the prior three-year period or (iv) December 31, 2026. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as the Combined Company is an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

Even after the Combined Company no longer qualifies as an emerging growth company, it may still qualify as a “smaller reporting company,” which would allow it to continue to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements, Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements. Moreover, smaller reporting companies may choose to present only the two most recent fiscal years of audited financial statements in their Annual Reports on Form 10-K. The Combined Company does not expect to continue to qualify as an emerging growth company or smaller reporting company following its December 31, 2022 fiscal year end.

Investors may find Combined Company Common Stock less attractive because the Combined Company will rely on these exemptions, which may result in a less active trading market for the Combined Company Common Stock and its price may be more volatile.

TABLE OF CONTENTS

Alliance’s management has limited experience in operating a public company.

Alliance’s executive officers have limited experience in the management of a publicly traded company. Alliance’s management team may not successfully or effectively manage its transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to the management and growth of the Combined Company. Alliance may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States. The development and implementation of the standards and controls necessary for the Combined Company to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected. It is possible that the Combined Company will be required to expand its employee base and hire additional employees to support its operations as a public company which will increase its operating costs in future periods.

If, following the Business Combination, securities or industry analysts do not publish or cease publishing research or reports about the Combined Company, its business, or its market, or if they change their recommendations regarding the Combined Company’s securities adversely, the price and trading volume of the Combined Company’s securities could decline.

The trading market for the Combined Company’s securities will be influenced by the research and reports that industry or securities analysts may publish about the Combined Company, its business, market or competitors. Securities and industry analysts do not currently, and may never, publish research on the Combined Company. If no securities or industry analysts commence coverage of the Combined Company, the Combined Company’s share price and trading volume would likely be negatively impacted. If any of the analysts who may cover the Combined Company change their recommendation regarding the Combined Company’s shares of common stock adversely, or provide more favorable relative recommendations about its competitors, the price of the Combined Company’s shares of common stock would likely decline. If any analyst who may cover the Combined Company were to cease coverage of the Combined Company or fail to regularly publish reports on it, the Combined Company could lose visibility in the financial markets, which in turn could cause its share price or trading volume to decline.

If the Combined Company’s security holders use their registration rights to sell under the Combined Company’s resale registration statement, it may negatively impact the market price of the Combined Company’s shares of common stock.

In connection with the Closing, Adara’ existing registration rights agreement will be amended and restated to: (i) provide that Adara will file a registration statement within 30 calendar days following the Closing to register for resale (A) the Initial Stockholder Shares, Private Warrants, Underwriter Shares and shares of Combined Company Common Stock issuable upon exercise of the Private and Underwriter Warrants (B) the shares of the Combined Company Common Stock to be issued to Alliance’s stockholders in the Business Combination; (ii) provide the Adara Initial Stockholders and Alliance’s stockholders with demand registration rights; (iii) provide Alliance’s stockholders and the Adara Initial Stockholders customary underwritten takedown rights (subject to customary priorities, minimums, frequency, and quantity limits, cutbacks, deferrals and other terms); and (iv) afford each of Alliance’s stockholders and the Adara Initial Stockholders, on a pari passu basis, “piggy back” registration rights with respect to any underwritten offerings by the other stockholders and by the Combined Company.

The sale or possibility of sale of these additional securities trading in the public market may negatively impact the market price of the Combined Company’s securities.

Because we have no current plans to pay cash dividends on the Combined Company’s common stock for the foreseeable future, you may not receive any return on investment unless you sell the Combined Company’s common stock for a price greater than that which you paid for it.

The Combined Company may retain future earnings, if any, for future operations, expansion and debt repayment and has no current plans to pay any cash dividends for the foreseeable future. Any decision to

TABLE OF CONTENTS

declare and pay dividends as a public company in the future will be made at the discretion of the Combined Company’s board of directors and will depend on, among other things, the Combined Company’s results of operations, financial condition, cash requirements, contractual restrictions and other factors that the Combined Company’s board of directors may deem relevant. In addition, the Combined Company’s ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness it or its subsidiaries incur. As a result, you may not receive any return on an investment in the Combined Company’s common stock unless you sell your shares of common stock for a price greater than that which you paid for it.

The Combined Company may issue additional shares of common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of the Combined Company’s common stock.

Upon consummation of the Business Combination, the Combined Company will have warrants outstanding to purchase an aggregate of 9,920,000 shares of common stock. Pursuant to the 2023 Plan, following the consummation of the Proposed Transactions, the Combined Company may issue an aggregate of up to 15,516,760 shares of common stock, which amount may be subject to increase from time to time. For additional information about this plan, please read the discussion under the headings “Proposal No. 3 — The Equity Incentive Plan Proposal,” and “Alliance’s Executive Compensation — Employee Benefit Plans.” The Combined Company may also issue additional shares of common stock or other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions or repayment of outstanding indebtedness, without stockholder approval, in a number of circumstances.

The issuance of additional shares or other equity securities of equal or senior rank would have the following effects:

•

existing stockholders’ proportionate ownership interest in the Combined Company will decrease;

•

the amount of cash available per share, including for payment of dividends in the future, may decrease;

•

the relative voting strength of each previously outstanding common stock may be diminished; and

•

the market price of the Combined Company’s common stock may decline.

Anti-takeover provisions in the Proposed Certificate of Incorporation and under Delaware law could make an acquisition of the Combined Company, which may be beneficial to its stockholders, more difficult and may prevent attempts by its stockholders to replace or remove the Combined Company’s then current management.

The Proposed Certificate of Incorporation contains provisions that may delay or prevent an acquisition of the Combined Company or a change in its management. These provisions may make it more difficult for stockholders to replace or remove members of its board of directors. Because the board of directors is responsible for appointing the members of the management team, these provisions could in turn frustrate or prevent any attempt by its stockholders to replace or remove its current management. In addition, these provisions could limit the price that investors might be willing to pay in the future for shares of Combined Company Common Stock. Among other things, these provisions include:

•

the limitation of the liability of, and the indemnification of, its directors and officers;

•

a prohibition on actions by its stockholders except at an annual or special meeting of stockholders;

•

a prohibition on actions by its stockholders by written consent; and

•

the ability of the board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by the board of directors.

Moreover, because the Combined Company is incorporated in Delaware, it is governed by the provisions of Section 203 of the DGCL, which prohibits a person who owns 15% or more of its outstanding voting stock from merging or combining with the Combined Company for a period of three years after the date of the

TABLE OF CONTENTS

transaction in which the person acquired 15% or more of the Combined Company’s outstanding voting stock, unless the merger or combination is approved in a prescribed manner. This could discourage, delay or prevent a third party from acquiring or merging with the Combined Company, whether or not it is desired by, or beneficial to, its stockholders. This could also have the effect of discouraging others from making tender offers for the Combined Company’s common stock, including transactions that may be in its stockholders’ best interests. Finally, these provisions establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings. These provisions would apply even if the offer may be considered beneficial by some stockholders. For more information, see the section titled “Description of Securities — Certain Anti-Takeover Provisions of Delaware Law and the Existing Certificate of Incorporation and Bylaws.”

The Proposed Certificate of Incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will, subject to certain exceptions, be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders.

The Proposed Certificate of Incorporation requires, to the fullest extent permitted by law, that derivative actions brought in the name of the Combined Company, actions against our directors, officers, other employees or stockholders for breach of a fiduciary duty owed by any officer, director or other employee of the Combined Company or the Combined Company’s shareholders, any action asserting a claim against the Combined Company, its directors, officers or other employees arising pursuant to any provision of the DGCL or the Proposed Certificate of Incorporation or By-laws and certain other actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or (C) for which the Court of Chancery does not have subject matter jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in the Proposed Certificate of Incorporation. This choice of forum provision may limit or make more costly a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in the Proposed Certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm Adara’s or the Combined Company’s business, operating results and financial condition.

The Proposed Certificate of Incorporation provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. In addition, The Proposed Certificate of Incorporation provides that, unless the Combined Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, or the rules and regulations promulgated thereunder. Adara notes, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

TABLE OF CONTENTS

Risks Related to Adara

Unless the context otherwise requires, all references to “we,” “us,” or “our” in this subsection titled “Risks Related to Adara” refer to Adara.

Adara’s Annual Report on Form 10-K for the year ended December 31, 2021, contains an explanatory paragraph that expresses substantial doubt about Adara’s ability to continue as a “going concern.” As of September 30, 2022, Adara had $29,502 in cash and working capital of $82,835. The date for mandatory liquidation and subsequent dissolution of Adara raises substantial doubt about Adara’s ability to continue as a going concern. Further, Adara has incurred and expects to continue to incur significant costs in pursuit of its finance and acquisition plans. It cannot be assured that Adara’s plans to raise capital or to consummate an initial business combination will be successful. The condensed consolidated financial statements contained in Adara’s Annual Report on Form 10-K do not include any adjustments that might result from Adara’s inability to continue as a going concern.

Adara’s executive officers, directors, other Adara Initial Stockholders have agreed to vote in favor of the Business Combination, regardless of how the Public Stockholders vote.

Unlike many other blank check companies in which the executive officers, directors and other initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the Public Stockholders in connection with an initial business combination, Adara’s executive officers, directors, the Sponsor and the other Adara Initial Stockholders have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with Adara, to vote any shares of Adara Common Stock and Adara Class B Common Stock held by them in favor of the Business Combination. Adara’s executive officers, directors, the Sponsor and other Adara Initial Stockholders (and their permitted transferees) own at least approximately 20% of the issued and outstanding shares of Adara Common Stock as of the Record Date. Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if such persons agreed to vote their Initial Stockholder Shares in accordance with the majority of the votes cast by the Public Stockholders.

The exercise of Adara’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in Adara’s stockholders’ best interest.

In the period leading up to the closing of the Business Combination, events may occur that, pursuant to the Business Combination Agreement, would require Adara to agree to amend the Business Combination Agreement, to consent to certain actions taken by Alliance or to waive rights that Adara is entitled to under the Business Combination Agreement. Such events could arise because of changes in the course of Alliance’s business, a request by Alliance to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on Alliance’s business and would entitle Adara to terminate the Business Combination Agreement. In any of such circumstances, it would be at Adara’s discretion, acting through its board of directors, to grant its consent or waive those rights. The existence of the financial and personal interests of the directors described in the preceding risk factors may result in a conflict of interest on the part of one or more of the directors between what he or they may believe is best for Adara and what he or they may believe is best for himself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, Adara does not believe there will be any material changes or waivers that Adara’s directors and officers would be likely to make after the mailing of this proxy statement/prospectus. Adara will circulate a new or amended proxy statement/prospectus if changes to the terms of the Business Combination that would have a material impact on its stockholders are required prior to the vote on the Business Combination Proposal.

Adara may not be able to complete its initial business combination within the prescribed time frame, in which case it would cease all operations except for the purpose of winding up and we would redeem the Public Shares and liquidate, in which case the Public Stockholders may only receive $10.10 per share, or less than such amount in certain circumstances, and the Adara Warrants will expire worthless.

The Existing Certificate of Incorporation provides that we must complete our initial business combination by February 11, 2023. We may not be able to find a suitable target business and complete our

TABLE OF CONTENTS

initial business combination within such time period. If we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) above to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, the Public Stockholders may only receive $10.10 per share, and the Adara Warrants will expire worthless. In certain circumstances, the Public Stockholders may receive less than $10.10 per share on the redemption of their shares. See “Risk Factors — If third parties bring claims against Adara, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by Public Stockholders may be less than $10.10 per share.” and other risk factors below.

For illustrative purposes, based on funds in the Trust Account of approximately $117.5 million on the Record Date, the estimated per share redemption price would have been approximately $10.22.

The Sponsor, Adara’s directors, officers, and their affiliates may elect to purchase shares or warrants from Public Stockholders, which may influence a vote on a proposed initial business combination and reduce the public “float” of our Class A common stock.

At any time prior to the special meeting of stockholders, during which they are not aware of material non-public information about Adara, the Sponsor, Adara’s directors, officers or their affiliates may Purchase Shares or Public Warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase shares or Public Warrants in such transactions.

Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, Adara’s directors, officers 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. The purpose of such purchases could be to vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining stockholder approval of the Business Combination, or to satisfy a closing condition in the Business Combination Agreement that requires Adara to have a minimum net worth or certain amount of certain cash at the Closing, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of Public Warrants could be to reduce the number of Public Warrants outstanding. Any such purchases of our securities may result in the completion of the Business Combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.

In addition, if such purchases are made, the public “float” of the Common Stock or Public Warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange.

Adara’s ability to successfully effect the Business Combinat

	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		22
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		40
RISK FACTORS		43
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION		88
COMBINED COMPANY UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF SEPTEMBER 30, 2022		91
COMBINED COMPANY UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT THREE MONTHS ENDED SEPTEMBER 30, 2022		94
COMBINED COMPANY UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT TWELVE MONTHS ENDED DECEMBER 31, 2021		96
COMBINED COMPANY UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT YEAR ENDED DECEMBER 31, 2021		97
THE SPECIAL MEETING OF ADARA’S STOCKHOLDERS		102
PROPOSAL NO. 1 – THE BUSINESS COMBINATION PROPOSAL		108
THE BUSINESS COMBINATION		108
THE BUSINESS COMBINATION AGREEMENT		126
CERTAIN AGREEMENTS RELATED TO THE BUSINESS COMBINATION		138
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE REDEMPTION AND THE BUSINESS COMBINATION		139
PROPOSAL NO. 2 – THE CHARTER PROPOSALS		148
PROPOSAL NO. 3 – THE EQUITY INCENTIVE PLAN PROPOSAL		151
PROPOSAL NO. 4 – THE EXCHANGE LISTING PROPOSAL		157
PROPOSAL NO. 5 – THE ADJOURNMENT PROPOSAL		159
INFORMATION ABOUT ALLIANCE		160
ALLIANCE’S EXECUTIVE COMPENSATION		172
ALLIANCE MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		175
CERTAIN ALLIANCE RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		188
INFORMATION ABOUT ADARA		190
ADARA MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		206
CERTAIN ADARA RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		212
MANAGEMENT AFTER THE BUSINESS COMBINATION		216
DESCRIPTION OF SECURITIES		220

	Page
SHARES ELIGIBLE FOR FUTURE SALE		238
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		240
PRICE RANGE OF SECURITIES AND DIVIDENDS		243
ADDITIONAL INFORMATION		244
HOUSEHOLDING INFORMATION		245
TRANSFER AGENT; WARRANT AGENT AND REGISTRAR		246
WHERE YOU CAN FIND MORE INFORMATION		247
TRADEMARK NOTICE		248
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 2023 EQUITY INCENTIVE PLAN		C-1
ANNEX D: OPINION OF THINKEQUITY LLC		D-1