Alliance Entertainment Holding Corporation completed the acquisition of Adara Acquisition Corp. from Adara Sponsor LLC and others in a reverse merger transaction.
The transaction is subject to approval by Adara's stockholders and other customary closing conditions, including any applicable regulatory approvals. The transaction is also subject to the approval of the requisite stockholders of Alliance Entertainment; the Proxy Statement shall have become effective under the Securities Act and no stop order suspending the effectiveness of the Proxy Statement shall be in effect; all required filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act), have been completed and any applicable waiting period (and any extension thereof) applicable to the consummation of the Proposed Transactions under the HSR Act has expired or been terminated; the shares of Adara Class A Common Stock and Class E Common Stock are listed on the NYSE American, or another national securities exchange mutually agreed to by the parties to the Business Combination Agreement, as of the Closing Date; Other than those persons identified as continuing directors in the Business Combination Agreement, all members of the board of directors of Alliance have executed written resignations effective as of the Effective Time; All parties to the Registration Rights Agreement (other than Adara and the Adara Stockholders party thereto) shall have delivered, or caused to be delivered, to Adara copies of the Registration Rights Agreement duly executed by all such parties; All parties to the Lock-Up Agreements proposed to be entered into in connection with Closing have delivered, or caused 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; As of immediately following the Closing, Adara had at least $5,000,001 of net tangible assets. The transaction has been unanimously approved by Alliance Entertainment's and Adara's boards of directors. The registration statement has been declared effective with respect to the transaction on December 12, 2022. The Extraordinary General Meeting of Adara Shareholders to approve the transaction will be held on January 18, 2023. In connection with the proposed stockholder meeting, stockholders of Adara have submitted redemption requests to redeem approximately 11.39 million shares of Class A common stock of Adara. As a result, it is unlikely that Adara will be able to satisfy the NYSE American Stock Exchange initial listing requirements to list the common stock and warrants of the Surviving Corporation upon closing of the Business Combination. The transaction is expected to close in the fourth quarter of 2022.
ThinkEquity LLC acted as the financial advisor, and Brad L. Shiffman and Kathleen A. Cunningham of Blank Rome LLP acted as legal advisors to Adara Acquisition Corp. John Frankenheimer, Mitchell Nussbaum, Jessica Isokawa and David Flemming of Loeb & Loeb LLP acted as legal advisor to Alliance Entertainment Holding Corporation. ThinkEquity LLC acted as fairness opinion provider with a service fee of $0.3 million to the board of directors of Adara. Morrow & Co., LLC acted as information agent while ThinkEquity LLC and FTI Consulting, Inc. acted as due diligence providers to Adara Acquisition Corp. Adara has agreed to pay Morrow Sodali LLC a fee of $27,500. ThinkEquity will receive a financial advisory fee of $4.1 million. Continental Stock Transfer & Trust Company acted as the transfer agent to Adara.
Alliance Entertainment Holding Corporation completed the acquisition of Adara Acquisition Corp. (NYSEAM:ADRA) from Adara Sponsor LLC and others on February 10, 2023. Beginning on February 13, 2023, Alliance Entertainment's shares and warrants will be quoted on the OTC under the ticker symbols ADRA and ADRA WS, respectively. Following the consummation of the Merger on the closing date of the Business Combination, Adara changed its name from Adara Acquisition Corp. to Alliance Entertainment Holding Corporation.