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, 2023

☐ 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

ALLIANCE ENTERTAINMENT HOLDING CORPORATION

(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.)

8201 Peters Road, Suite 1000

Plantation, FL 33324

(Address of principal executive offices)

(954) 255-4000

(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
Class A common stock, par value $0.0001 per share	AENT	The Nasdaq Stock Market LLC
Redeemable warrants, exercisable for shares of Class A common stock at an exercise price of $11.50 per share	AENTW	The Nasdaq Stock Market 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 the definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting 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, 2023, there were 50,965,970 shares of Class A common stock, $0.0001 par value, issued and outstanding.*

*Does not include up to 60 million shares of Class E contingent common stock which automatically convert into shares of Class A common in three equal tranches when the price of the Class A common stock reaches $20, $30, and $50 per share, and under a variety of conditions within five, seven and ten years.

Table of Contents

ALLIANCE ENTERTAINMENT HOLDING CORPORATION

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2023

TABLE OF CONTENTS


		Page
Part I. Financial Information		1
Item 1.	Consolidated Financial Statements	1
	Condensed Consolidated Balance Sheets as of September 30, 2023 (Unaudited) and June 30, 2023	1
	Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended September 30, 2023 and 2022	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the Three Months Ended September 30, 2023 and 2022	3
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended September 30, 2023 and 2022	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
Part II. Other Information		32
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
Part III. Signatures		34

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements.

ALLIANCE ENTERTAINMENT HOLDING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS


($ in thousands)	September 30, 2023		June 30, 2023
	(Unaudited)
Assets
Current Assets
Cash	$	1,225	$	865
Trade Receivables, Net		93,504		104,939
Inventory, Net		159,432		146,763
Other Current Assets		7,054		8,299
Total Current Assets		261,215		260,866
Property and Equipment, Net		12,831		13,421
Operating Lease Right-of-Use Assets		3,971		4,855
Goodwill		89,116		89,116
Intangibles, Net		16,306		17,356
Other Long-Term Assets		1,019		1,017
Deferred Tax Asset, Net		4,132		2,899
Total Assets	$	388,590	$	389,530
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable	$	154,745	$	151,622
Accrued Expenses		5,962		9,340
Current Portion of Operating Lease Obligations		3,699		3,902
Current Portion of Finance Lease Obligations		2,494		2,449
Revolving Credit Facility, Net		125,684		133,281
Shareholder Loan (subordinated), Current		10,000		—
Contingent Liability		50		150
Promissory Note		—		495
Total Current Liabilities		302,634		301,239

SEC Form 10-Q filed by Adara Acquisition Corp.