ALLIANCE ENTERTAINMENT HOLDING CORP

Disclosure Controls and Procedures

Our management, under the direction of and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act) as of June 30, 2025. Based on the evaluation of our disclosure controls and procedures, our management concluded that, as of June 30, 2025, our disclosure controls and procedures were effective. The material weaknesses previously identified in our internal control over financial reporting have been fully remediated. The Company has implemented the necessary business processes and related internal controls to provide reasonable assurance regarding the reliability of the financial reporting and the preparation of our financial statements in accordance with U.S. generally accepted accounting principles.

Remediation of Previously Identified Material Weaknesses in Internal Control Over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual consolidated financial statements will not be prevented or detected on a timely basis.

As previously disclosed in our Annual Report for the fiscal year ended June 30, 2024, management identified material weaknesses in the Company’s internal control over financial reporting related to (i) the control environment and certain entity-level controls, (ii) information technology general controls, and (iii) certain financial close and reporting processes. These material weaknesses arose primarily due to insufficient qualified personnel, ineffective segregation of duties, and a lack of appropriately designed and documented control activities.

Remediation of Material Weaknesses

As of June 30, 2025, management has completed the remediation of all previously identified material weaknesses. The following actions were taken to remediate the deficiencies:

These remediation activities were overseen by management and the Audit Committee, which received regular updates on progress and testing outcomes. Management tested the design and operating effectiveness of the remediated controls, which had been in place and operating for a sufficient period, and concluded that, as of June 30, 2025, the controls were operating effectively. As a result, management has concluded that the previously reported material weaknesses have been fully remediated.

Ongoing Commitment to Internal Control Excellence

Although we have remediated the identified material weaknesses, we remain committed to maintaining a strong internal control environment. We will continue to monitor the effectiveness of our internal controls, address evolving risks, and make enhancements as necessary to support the reliability of our financial reporting and promptly address any future risks that may arise.

Management’s Report on Internal Controls Over Financial Reporting

As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external reporting purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our consolidated financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act, and due to our non-accelerated filer status.

Changes in Internal Control over Financial Reporting

During the fiscal year ended June 30, 2025, the Company completed the implementation and testing of certain controls that had been operating for a sufficient period to demonstrate effectiveness, as part of the remediation efforts for previously identified material weaknesses in internal control over financial reporting. These changes did not materially affect our internal control over financial reporting.

As discussed in “Remediation of Previously Identified Material Weaknesses,” these changes included enhancements to entity-level controls, the implementation of new user access and IT general controls, and improvements to our financial close and reporting processes. Management’s evaluation of internal control over financial reporting, conducted in accordance with the criteria established in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and pursuant to Rules 13a-15(d) and 15d-15(d) under the Exchange Act, concluded that, as of June 30, 2025, these controls were operating effectively. As a result, the previously reported material weaknesses have been fully remediated.