UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-40014

ADARA ACQUISITION CORP.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

85-2373325

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

211 East Blvd.

Charlotte, NC 28203

(Address of principal executive offices)

(704) 315-5290

(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A Common Stock and one-half of one Redeemable Warrant	ADRA.U	NYSE American LLC
Class A Common Stock, par value $0.0001 per share	ADRA	NYSE American LLC
Warrants, each exercisable for one share Class A Common Stock for $11.50 per share	ADRA WS	NYSE American LLC

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of November 9, 2022, there were 11,500,000 shares of Class A common stock, $0.0001 par value and 2,875,000 shares of Class B common stock, $0.0001 par value, issued and outstanding.

Table of Contents

ADARA ACQUISITION CORP.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS


		Page
Part I. Financial Information
Item 1.	Condensed Financial Statements
	Condensed Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021	1
	Condensed Statements of Operations for Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)	2
	Condensed Statements of Changes in Stockholders’ Deficit for Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)	3
	Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 (Unaudited)	4
	Notes to Condensed Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27
Part II. Other Information
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
Part III. Signatures		30

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

ADARA ACQUISITION CORP.

CONDENSED BALANCE SHEETS


	September 30, 2022		December 31, 2021
	(Unaudited)
ASSETS
Current assets
Cash	$	29,502	$	724,410
Prepaid expenses		53,333		199,166
Total Current Assets		82,835		923,576
Marketable securities held in Trust Account		116,831,001		116,160,281
TOTAL ASSETS	$	116,913,836	$	117,083,857

LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION, AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accrued expenses	$	1,050,428	$	440,245
Income taxes payable		69,477		—
Promissory note		436,077		—
Total Current Liabilities		1,555,982		440,245
Warrant Liabilities		1,884,800		4,860,800
TOTAL LIABILITIES		3,440,782		5,301,045

Commitments and Contingencies

Class A common stock subject to possible redemption, $0.0001 par value; 11,500,000 shares at $10.12 and $10.10 redemption value at September 30, 2022 and December 31, 2021, respectively		116,411,474		116,150,000

STOCKHOLDERS’ DEFICIT
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—		—
Class A common stock, $0.0001 par value; 100,000,000 shares authorized		—		—
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 2,875,000 shares issued and outstanding at September 30, 2022 and December 31, 2021		288		288
Additional paid-in capital		—		—
Accumulated deficit		(2,938,708)		(4,367,476)
TOTAL STOCKHOLDERS’ DEFICIT		(2,938,420)		(4,367,188)
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION, AND STOCKHOLDERS’ DEFICIT	$	116,913,836	$	117,083,857

The accompanying notes are an integral part of the unaudited condensed financial statements.

Table of Contents

ADARA ACQUISITION CORP.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Operating and formation costs	$	634,642	$	217,525	$	1,887,001	$	632,695
Loss from operations		(634,642)		(217,525)		(1,887,001)		(632,695)

Other income (expense):
Interest earned on marketable securities held in Trust Account		512,825		2,928		670,720		7,352
Transaction costs incurred in connection with IPO		—		—		—		(86,544)
Change in fair value of warrants liabilities		(99,200)		1,256,100		2,976,000		3,801,300
Other income, net		413,625		1,259,028		3,646,720		3,722,108

Income (loss) before provision for income taxes		(221,017)		1,041,503		1,759,719		3,089,413
Provision for income taxes		(69,477)		—		(69,477)		—

Net (loss) income	$	(290,494)	$	1,041,503	$	1,690,242	$	3,089,413

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

Basic and diluted net (loss) income per share, Class A common stock	$	(0.02)	$	0.07	$	0.12	$	0.25

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

Basic and diluted net (loss) income per share, Class B common stock	$	(0.02)	$	0.07	$	0.12	$	0.25

The accompanying notes are an integral part of the unaudited condensed financial statements.

Table of Contents

ADARA ACQUISITION CORP.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022

Additional

Total

Class B Common Stock

Paid-in

Accumulated

Stockholders’

Shares

Amount

Capital

Deficit

Balance - January 1, 2022

SEC Form 10-Q filed by Adara Acquisition Corp.