Item 1. Business.
Introduction
We are a blank check company formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). We intend to effectuate our Business Combination using cash from the proceeds of the IPO and the sale of the private placement warrants, our capital stock, debt or a combination of cash, stock and debt. While our efforts to identify a target business may span many industries and regions worldwide, we intend to focus our search for businesses in the consumer products industry and related sectors, including those consumer industry businesses in the health and wellness, e-commerce, discretionary spending, and information technology sectors and related channels of distribution.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Company History
Adara Acquisition Corp. was incorporated in Delaware on August 5, 2020. The Company is a blank check company formed for the purpose of entering into Business Combination.
The Company is an early stage and emerging growth company and, as such, the Company is subject to all the risks associated with early stage and emerging growth companies.
In August 2020, we issued an aggregate of 2,875,000 shares of our common stock (the “founder shares”) for an aggregate purchase price of $25,000, or approximately $0.009 per share, to our sponsor. In September 2020, our sponsor sold 50,000 founder shares to ThinkEquity LLC, the representative of the underwriters for the IPO (“ThinkEquity”), for an aggregate purchase price of $5,000. In addition, our sponsor sold 50,000 founder shares to each of Messrs. Finke, Sumichrast, and Porter for a purchase price of $5,000 and sold 25,000 shares to each of Messrs. Donaldson, Quintero and Glenn and Ms. Beatriz Acevedo-Greiff for a purchase price of $2,500.
The registration statement for the Company’s IPO was declared effective on February 8, 2021. On February 11, 2021, the Company consummated the IPO of 11,500,000 units (the “units” and, with respect to the shares of Class A common stock included in the units sold, the “public shares”) at $10.00 per unit including 1,500,000 units issued as a result of the exercise of the underwriters’ overallotment option in full, generating gross proceeds of $115,000,000.
Simultaneously with the closing of the IPO, the Company consummated the sale of 4,120,000 warrants (the “private warrants”) at a price of $1.00 per private warrant in a private placement to the Company’s sponsor, generating gross proceeds of $4,120,000.
Following the closing of the IPO on February 11, 2021, an amount of $116,150,000 ($10.10 per unit) from the net proceeds of the sale of the units in the IPO and the sale of the private warrants was placed in a trust account (the “trust account”), and will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting certain conditions of Rule 2a-7 of the Investment Company Act of 1940, as amended (the “Investment Company Act”), as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the trust account to the Company’s stockholders, as described below, except that interest earned on the trust account can be released to the Company to pay its tax obligations (“permitted withdrawals”).
Our activities since February 8, 2021, have consisted of the search and evaluation of potential targets in contemplation of a business combination. All activity for the period from August 5, 2020 (inception) through February 8, 2021 relates to the Company’s formation and the IPO, which is described below. The Company will not generate any operating revenues until after the completion of