Item 4.02. Non-Reliance on Previously issued Financial Statements or a Related
Audit Report or Completed Interim Review
On April 12, 2021, the staff of the Securities and Exchange Commission (the "SEC
Staff") issued a public statement entitled "Staff Statement on Accounting and
Reporting Considerations for Warrants issued by Special Purpose Acquisition
Companies ("SPACs")" (the "SEC Staff Statement"). In the SEC Staff Statement,
the SEC Staff expressed its view that certain terms and conditions common to
SPAC warrants may require the warrants to be classified as liabilities on a
SPAC's financial statements as opposed to equity. Adara Acquisition Corp. (the
"Company") previously accounted for its public and private warrants
(collectively, "Warrants") as equity in the Company's audited balance sheet as
of February 11, 2021, filed as an exhibit to its Current Report on Form 8-K
filed on February 18, 2021 (the "Initial 8-K").
The Company reassessed its accounting for its Warrants issued in May 2021 in
light of the SEC Staff's published views. Based on this reassessment, management
determined that the Warrants should be classified as liabilities measured at
fair value upon issuance, with subsequent changes in fair value reported in the
Company's statement of operations each reporting period. Therefore, on May 20,
2021, the Audit Committee of the Board of Directors of the Company (the "Audit
Committee"), concluded that the Company's previously issued balance sheet as of
February 11, 2021 should be restated because of a misapplication in the guidance
around accounting for the Warrants and should no longer be relied upon. The
previously issued audited balance sheet will be corrected in the Company's Form
10-Q for the quarterly period ended March 31, 2021. The Audit Committee and
management have discussed the matters disclosed in this Item 4.02 with
WithumSmith+Brown, PC, the Company's independent registered public accounting
firm.
© Edgar Online, source Glimpses
ADAA ACQU 
