NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
Note
1 — Organization and Business Operations
Organization
and General
Alberton
Acquisition Corporation (the “Company”or “Alberton”) is a blank check company incorporated on February
16, 2018, under the laws of British Virgin Islands for the purpose of entering into a merger, share exchange, asset acquisition,
stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities
(a “Business Combination”). The Company’s efforts to identify a prospective target business are not limited
to an industry or geographic location.
As
of June 30, 2021, the Company had not yet commenced any operations. The Company previously had until April 26, 2021 to consummate
a Business Combination. On March 26, 2021, the Company filed a definitive proxy statement in Form 14A for the purposes of seeking
its shareholder approval to extend the date before which the Company must complete an initial Business Combination until October
26, 2021 or such earlier date as determined and related matters at a special meeting in lieu of the 2020 Annual Meeting in order
to be compliance with Annual Meeting Requirement. On April 23, 2021, at the 2020 Annual Meeting, the Company’s shareholders
approved to amend the Company’s memorandum and articles of association to extend the date before which the Company must
complete a business combination (the “Termination Date”) from April 26, 2021 (the “Current Termination Date”)
to October 26, 2021 or such earlier date as determined by the Board.
The
Company has one subsidiary, Alberton Merger Subsidiary Inc., a wholly owned subsidiary of the Company incorporated in Nevada on
October 16, 2020 (“Merger Sub”). The Merger Sub was established for the purpose of the potential Business Combination
with SolarMax Technology, Inc. (“SolarMax”), a Nevada corporation. Alberton will re-domesticate from a British Virgin
Islands corporation into a Nevada corporation so as to continue as a Nevada corporation immediately prior to the closing of the
Business Combination with SolarMax, if consummated by October 26, 2021.
Going
Concern
In
connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard
Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s
Ability to Continue as a Going Concern,” management has determined that the mandatory liquidation and subsequent dissolution
raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the
carrying amounts of assets or liabilities should the Company be required to liquidate after October 26, 2021.
Financing
The
registration statement for the Company’s initial public offering (the “Initial Public Offering” as described in Note
4) was declared effective by the United States Securities and Exchange Commission (“SEC”) on October 23, 2018. On October
26, 2018, the Company consummated the Initial Public Offering of 10,000,000 units at $10.00 per unit (“Units” or “Public
Units” and, with respect to the ordinary shares included in the Public Units offered, the “Public Shares”), generating
gross proceeds of $100,000,000, which is described in Note 4.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 300,000 units (the “Private Units”)
at a price of $10.00 per Unit in a private placement to the Company’s sponsor, Hong Ye Hong Kong Shareholding Co., Limited (the
“Sponsor”), generating gross proceeds of $3,000,000, which is described in Note 5.
On
November 20, 2018, the underwriters exercised the over-allotment option in part and purchased 1,487,992 Public Units, which were
sold at an offering price of $10.00 per Unit, generating gross proceeds of $14,879,920. Simultaneously with the sale of the over-allotment
Public Units, the Company consummated the private placement of an additional 29,760 Private Units at a price of $10.00 per Unit,
generating total additional gross proceeds of $297,600.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
Trust
Account
Following
the closing of the Initial Public Offering on October 26, 2018, an amount of $100,000,000 ($10.00 per Unit) from the net proceeds
of the sale of the Public Units in the Initial Public Offering and the Private Units was placed in a trust account (“Trust
Account”). Following the closing of underwriters’ exercise of over-allotment option on November 20, 2018, an additional
$14,879,920 of net proceeds ($10.00 per Unit) was placed in the Trust Account, bringing the aggregate proceeds held in the Trust
Account to $114,879,920.
On
April 23, 2020, the Company filed an amendment to its Articles of Association with the Registrar of the British Virgin Islands
to extend the time that it needs to complete an initial Business Combination from April 27, 2020 to October 26, 2020 or such an
earlier date as determined by its board of directors (the “Extension”). In connection with the Extension, shareholders
holding 10,073,512 public shares exercised their right to redeem such shares for a pro rata portion of fund held in the Trust
Account. As a result, an aggregate of $105,879,118 (or $10.51 per share) was removed from the Trust Account to pay such shareholders.
On
October 26, 2020, the Company filed an amendment to its Articles of Association with the Registrar of the British Virgin Islands
to extend the time that it needs to complete an initial Business Combination from October 26, 2020 to April 26, 2021 or such an
earlier date as determined by its board of directors (the “Second Extension”). In connection with the Second Extension,
shareholders holding 1,000 public shares exercised their right to redeem such shares for a pro rata portion of fund held in the
Trust Account. As a result, an aggregate of $10,770 (or $10.77013 per share) was removed from the Trust Account to pay such shareholders.
On
April 23, 2021, at the 2020 Annual Meeting, the Company’s shareholders approved to amend the Company’s memorandum
and articles of association to extend the date before which the Company must complete a business combination from April 26, 2021
to October 26, 2021 or such earlier date as determined by the Board (the “Third Extension). In connection with the Third
Extension, shareholders holding 135,069 public shares exercised their right to redeem such shares for a pro rata portion of fund
held in the Trust Account. As a result, an aggregate of $1,495,303.45 (or $11.07 per share) was released from the Trust Account
to pay such shareholders.
The
funds in the Trust Account are invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the
Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or
in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment
Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the Company’s
failure to consummate a Business Combination by April 27, 2020 (the “Combination Period”), and extended to October
26, 2021. Placing funds in the Trust Account may not protect those funds from third party claims against the Company. Although
the Company will seek all vendors, service providers, prospective target businesses or other entities it engages, to execute agreements
with the Company waiving any claim of any kind in or to any monies held in the Trust Account, there is no guarantee that such
persons will execute such agreements. The remaining net proceeds (not held in the Trust Account) may be used to pay for business,
legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. Additionally,
the interest earned on the Trust Account balance may be released to the Company to pay the Company’s tax obligations.
Business
Combination
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public
Offering and the Private Units, although substantially all the net proceeds are intended to be generally applied toward consummating
a Business Combination. The Company’s Business Combination must be with one or more target businesses that together have
a fair market value equal to at least 80% of the balance in the Trust Account (excluding any deferred underwriter’s fees
and taxes payable on the income earned on the Trust Account), which the Company refers to as the 80% test, at the time of the
signing of an agreement to enter into a Business Combination. However, the Company will only complete a Business Combination if
the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise
acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under
the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.
If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction
company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% test.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
The
Company will provide its shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion
of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii)
by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or
conduct a tender offer will be made by the Company, solely in its discretion. The shareholders will be entitled to redeem their
shares for a pro rata portion of the amount then on deposit in the Trust Account ($10.00 per share, plus any pro rata interest
earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations).
The
Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation
of a Business Combination and a majority of the issued and outstanding shares voted are voted in favor of the Business Combination. If
a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons,
the Company will, pursuant to Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender
offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents with the SEC prior to completing
a Business Combination. If, however, a shareholder approval of the transaction is required by law, or the Company decides to obtain shareholder
approval for business or other legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant
to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with a Business
Combination, the Initial Shareholders (defined in Note 6 - Related Party Transactions) have agreed to vote their initial shares and private
shares, as well as any Public Shares acquired in or after the Initial Public Offering, in favor of any proposed Business Combination.
Additionally, each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed
transaction.
The
amount in the Trust Account (less the aggregate nominal par value of the shares of the Company’s public shareholders) under
the Companies Law will be treated as share premium which is distributable under the Companies Law provided that immediately following
the date on which the proposed distribution is proposed to be made, the Company is able to pay the debts as they fall due in the
ordinary course of business. If the Company is forced to liquidate the Trust Account, the public shareholders would be distributed
the amount in the Trust Account calculated as of the date that is two days prior to the distribution date (including any accrued
interest).
The
Initial Shareholders have agreed to (i) vote their insider shares (as well as any Public Shares acquired in or after the Initial
Public Offering) in favor of any proposed Business Combination, (ii) waive their conversion rights with respect to their initial
share (as well as any other shares acquired in or after the Initial Public Offering) in connection with the consummation of a
Business Combination, (iii) waive their rights to liquidating distributions from the Trust Account with respect to their initial
shares if the Company fails to consummate a Business Combination within the Combination Period, and (iv) not propose an amendment
to the Company’s Amended and Restated Memorandum and Articles of Association that would affect the substance or timing of
the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless
the Company provides the public shareholders with the opportunity to redeem their shares in conjunction with any such amendment.
Agreement
and Plan of Merger with SolarMax
On
October 27, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Merger Sub
and SolarMax. SolarMax is an integrated solar energy company. It was founded in 2008 to conduct business in the U.S. and subsequently
commenced operation in China following two acquisitions in 2015. Through its subsidiaries, it is primarily engaged selling and
installing integrated photovoltaic systems for residential and commercial customers in the United States which is its original
business, identifying and procuring solar farm system projects for resale to third party developers and related services in China;
providing engineering, procuring and construction services, which are referred to in the industry as EPC services, for solar farms
in China, financing the sale of its photovoltaic systems and servicing installment sales by its customers in the United States
and providing exterior and interior light-emitting diodes, known as LED, lighting sales and retrofitting services for governmental
and commercial applications.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
Pursuant
to the Merger Agreement, among other things, Merger Sub will merge with and into SolarMax, with SolarMax continuing as the surviving
entity and a wholly-owned subsidiary of the Company (the “Merger”). The Merger will become effective at such time
on the date of closing, pursuant to the Merger Agreement, as the articles of merger is duly filed with the Secretary of State
of the State of Nevada or such later time as may be specified in the articles of merger (the “Effective Time”). The
transactions contemplated in the Merger Agreement are referred to as “Business Combination”. The closing of the Merger
Agreement shall be upon the consummation of the Business Combination (the “Closing”). At the Closing, the Company
will change its name to “SolarMax Technology Holdings, Inc.” (the “Successor”). The Closing is contingent
upon shareholder approval and other customary Closing conditions.
On
April 23, 2021, the Company’s shareholders approved to amend the Company’s memorandum and articles of association
to extend the date before which the Company must complete a business combination from April 26, 2021 to October 26, 2021 or such
earlier date as determined by the Board. If the Company is unable to complete its initial business combination by October 26,
2021 or such longer period that its shareholders may approve, the Company will (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares,
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
earned on the Trust Account not previously released to the Company for its tax obligations, divided by the number of then outstanding
public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right
to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption,
seek to dissolve and liquidate subject to its obligations under British Virgin Islands law to provide for claims of creditors
in all cases subject to and the other requirements of applicable law. This redemption of public shares from the Trust Account
shall be effected as required by function of its amended and restated memorandum and articles of association and prior to any
voluntary winding up, although at all times subject to the Companies Act.
Following
the redemption of public shares, the Company intends to enter “voluntary liquidation” which is the statutory process
for formally closing and dissolving a company under the laws of the British Virgin Islands. Given that the Company intends to
enter voluntary liquidation following the redemption of public shareholders from the Trust Account, the Company does not expect
that the voluntary liquidation process will cause any delay to the payment of redemption proceeds from its Trust Account. In connection
with such a voluntary liquidation, the liquidator would give notice to creditors inviting them to submit their claims for payment,
by notifying known creditors (if any) who have not submitted claims and by placing a public advertisement in at least one newspaper
published in the British Virgin Islands and in at least one newspaper circulating in the location where the Company has its principal
place of business, and taking any other steps the liquidator considers appropriate to identify its creditors, after which its
remaining assets would be distributed. As soon as its affairs are fully wound-up, the liquidator must complete his statement of
account and make a notice filing with the registrar. The Company would be dissolved once the registrar issues a Certificate of
Dissolution.
Liquidation
The
Company initially had until October 26, 2019 to consummate a Business Combination, however, if the Company anticipated that it
would not be able to consummate a Business Combination by such deadline, it could extend the period to consummate a Business Combination
by an additional six months (for a total of up to 18 months to complete a Business Combination). Pursuant to the terms of the
Company’s Amended and Restated Memorandum and Articles of Association and the trust agreement entered into between the Company
and Continental Stock Transfer& Trust Company, in order to extend the time available for the Company to consummate the Business
Combination, the Company’s insiders or their affiliates or designees, upon five days advance notice prior to each applicable
deadline, must deposit into the Trust Account $1,148,799 on or prior to the date of such applicable deadline.
On
October 18, 2019, the Company deposited $1,148,799 into its Trust Account (the “Extension Funds”) to extend the period to
consummate a Business Combination until January 24, 2020. The Extension Funds were proceeds of a note in the principal amount of $1,148,800
(the “GN Note 1”) the Company issued to Global Nature Investment Holdings Limited (“Global Nature”), a company
incorporated under the laws of the Cayman Islands, its registered assignees or successor in interest (the “Payee”). The GN
Note 1 was issued in connection with a non-binding letter of intent entered into by and between Alberton and Global Nature on September
13, 2019, to consummate a potential Business Combination with Global Nature (the “GN LOI”) (see Note 7).
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
On
January 23, 2020, the Company deposited an additional $1,148,800 into the Trust Account to further extend the time available for the
Company to complete a Business Combination from January 24, 2020 to April 27, 2020 (the “Extension”). The Extension was partially
funded from a $780,000 loan provided by the Sponsor and $368,800 from the Company’s working capital. In connection with the loan
provided by the Sponsor, the Company issued a promissory note (the “Sponsor Note”) to the Sponsor in the aggregate principal
amount of $780,000 (see Note 6).
On
April 23, 2020, the Company held a special meeting pursuant to which the Company’s shareholders approved extending the Extension
from April 27, 2020 to October 26, 2020 (the “Extended Date”). In connection with the approval of the extension, shareholders
elected to redeem an aggregate of 10,073,512 of the Company’s ordinary shares. As a result, an aggregate of $105,879,118
(or $10.51 per share) was released from the Company’s Trust Account to pay such shareholders. On the same day, in connection
with the Extension, the Company filed with the Registrar of the British Virgin Islands an amendment to Regulation 47 of its Articles
of Association., and entered into an amendment to the trust agreement with the trust agent to extend the final liquidation date
of the Trust Account to the 24-month anniversary of the closing of its Initial Public Offering, which is October 26, 2020.
The
Company agreed to contribute, or cause to be contributed on its behalf (the “Cash Contribution”), $60,000 for the
aggregate number of Public Shares that did not convert in connection with the Extension (the “Remaining Public Shares”)
for each monthly period or portion thereof that is needed to complete a Business Combination (commencing on April 27, 2020 until
the earlier of the consummation of a Business Combination and the expiry of the Extension). The Cash Contribution will be deposited
as additional interest on the proceeds in the Trust Account and will be distributed pro rata as a part of the redemption amount
to each Remaining Public Share in connection with a future redemption. In addition, at the earlier date (the “Issuance Date”)
of the consummation of its initial Business Combination and the expiry of the Extension, the Company will issue a dividend of
one warrant to purchase one-half of one ordinary share for each Remaining Public Share. Each such warrant will be identical to
the warrants included in the Units sold in the Company’s Initial Public Offering (the “Dividend”, collectively
with the Cash Contribution, the “Contribution”).
On
October 26, 2020, the Company held a special meeting pursuant to which the Company’s shareholders approved extending the
Extended Date from October 26, 2020 to April 26, 2021 or such earlier date as determined by the Board was voted on and approved
(the “Second Extended Date”). In connection with the approval of the extension (the “Second Extension”),
shareholders elected to redeem an aggregate of 1,000 of the Company’s ordinary shares. As a result, an aggregate of $10,770
(or $10.77013 per share) was released from the Company’s Trust Account to pay such shareholders. On the same day, in connection
with the Second Extension, the Company filed with the Registrar of the British Virgin Islands another amendment to Regulation
47 of its Articles of Association and entered into another amendment to the trust agreement with the trust agent to extend the
final liquidation date of the Trust Account to the 30-month anniversary of the closing of its Initial Public Offering, which is
April 26, 2021.
The
Company agreed to contribute, or cause to be contributed on its behalf (the “Second Cash Contribution”), $0.05 per
share for the aggregate number of Public Shares that did not convert in connection with the Second Extension (the “Remaining
Public Shares Post Second Extension”) for each monthly period or portion thereof that is needed to complete a Business Combination
(commencing on October 26, 2020 until the earlier of the consummation of a Business Combination and the expiry of the Second Extension).
The Second Cash Contribution will be deposited as additional interest on the proceeds in the Trust Account and will be distributed
pro rata as a part of the redemption amount to each Remaining Public Share in connection with a future redemption.
On
April 15, 2021, the Company announced that it has agreed that if the Extension is approved, for the aggregate public shares that
are not redeemed by the Company’s shareholders in connection with the Extension (collectively, the “Remaining Shares”,
each, a “Remaining Share”), for each monthly period, or portion thereof, that is needed by the Company to complete
an initial business combination during the Extension, it will deposit $0.06 per Remaining Share. If no shares are redeemed, the
monthly payment to the trust account as additional interest will be $84,808.80, based on a commitment from its sponsor (the “Cash
Contribution”).
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
The
per-share pro rata portion of the trust account on March 18, 2021 (the “Record Date”) after taking into account taxes
owed but not paid by such date (which is expected to be the same approximate amount two business days prior to the meeting) was
approximately $10.97. If the Extension is approved and the Company takes the full six months to complete its initial business
combination, the redemption amount per share at the meeting for such business combination or the Company’s subsequent liquidation
will be approximately $11.33, in comparison to the current redemption amount of $10.97 (solely based on redemption price as of
the current Record Date).
On
April 23, 2021, the Company held its special meeting in lieu of the 2020 annual meeting of the shareholders. At the Special Meeting,
the Company’s shareholders approved to amend the Company’s memorandum and articles of association to extend the date
before which the Company must complete a business combination from April 26, 2021 to October 26, 2021.
Any
additional loans that may be made to the Company to fund the Contribution will not bear interest and will be repayable by the
Company upon consummation of a Business Combination. The Company’s officers, directors or affiliates will have the sole
discretion whether to continue extending additional loans for additional calendar months until the Extended Date and if the officers,
directors or affiliates determine not to continue extending additional loans for additional calendar months, their obligation
to extend additional loans following such determination will terminate.
Through
June 30, 2021, the Company deposited an aggregate of $937,453 into the Trust Account to fund the Extension. The Extension was partially
funded from a $140,000 advance provided by the Sponsor (see Note 6), $100,000 from the AMC Note (defined below) and $697,453 from the
SolarMax Notes (see Note 7).
NASDAQ
Delisting Notifications and Regaining Compliance
On
September 1, 2020, the Company received a notice from the Listing Qualifications Department of The NASDAQ Stock Market (“Nasdaq”)
indicating that the Company was not in compliance with Listing Rule 5550(a)(3) (the “Minimum Public Holders Rule”),
which requires the Company to have at least 300 public holders for continued listing on the NASDAQ Capital Market. The Company
had until October 15, 2020 to provide NASDAQ with a plan to regain compliance with the Minimum Public Holders Rule. The notice
is a notification of deficiency, not of imminent delisting, and had no current effect on the listing or trading of the Company’s
securities on NASDAQ.
The
Company submitted its plan of compliance on October 16, 2020. On October 29, 2020, the Company received a notification letter
from NASDAQ stating that the Nasdaq Staff had determined to grant the Company an extension of time through March 1, 2021 to regain
compliance with Minimum Public Holders Rule. On February 18, 2021, the Company received a letter from NASDAQ, advising the Company
that the Company had regained compliance with the Minimum Public Holders Rule based on the Company’s submissions to NASDAQ
of shareholder records dated January 20, 2021.
On
January 4, 2021, NASDAQ advised the Company that it no longer complies with Nasdaq Listing Rule 5620(a) due to the Company’s
failure to hold an annual meeting of shareholders within twelve months of the end of the Company’s fiscal year ended December
31, 2019 (the “Annual Meeting Requirement”).
On
March 16, 2021, after the Company’s submission of a plan to regain compliance with Annual Meeting Requirement, the Company
received a notification letter from NASDAQ stating that the Nasdaq Staff had determined to grant the Company an extension of time
through June 29, 2021 to regain compliance with the Annual Meeting Requirement.
On
March 26, 2021, the Company filed a definitive proxy statement in Form 14A for the purposes of seeking its shareholder approval
to extend the date before which the Company must complete an initial Business Combination until October 26, 2021 or such earlier
date as determined and related matters at a special meeting in lieu of the 2020 Annual Meeting in order to be compliance with
Annual Meeting Requirement.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
On
May 3, 2021, the Company received a letter from Nasdaq, advising the Company that the Company had regained compliance with the
Annual Meeting Requirement based on the Company’s Form 8-K filed on April 26, 2021, indicating that the Company’s
proxy was distributed on April 15, 2021 and its annual meeting of shareholders was held on April 23, 2021.
On
June 9, 2021, the Company received a notice from Nasdaq notifying the Company that, because its Form 10-Q for the period ended
March 31, 2021 was not filed with the SEC by the required due date of May 17, 2021, the Company is therefore not in compliance
with the periodic filing requirements for continued listing set forth in NASDAQ Listing Rule 5250(c)(1). This Notice received
has no immediate effect on the listing or trading of the Company’s shares. Nasdaq has provided the Company with 60 calendar
days, until August 9, 2021 to submit a plan to regain compliance. If Nasdaq accepts the Company’s plan, then Nasdaq may
grant the Company up to 180 days from the prescribed due date for the filing of the 2021 10-Q, or November 22, 2021, to regain
compliance.
On
June 23, 2021, the Company received a written notification from the Nasdaq Stock Market Listing Qualifications Staff, indicating
that the Company has regained compliance with the periodic filing requirement for continued listing on the Nasdaq Capital Market
pursuant to Nasdaq Listing Rule 5250(c), based on the Company’s filing of its Quarterly Report on Form 10-Q for the period
ended March 31, 2021 on June 22, 2021.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the
“Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and
it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its
periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive
compensation and shareholder approval of any golden parachute payments not previously approved.
Further,
Section 102(b) (1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and
comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The
Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised, and
it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the
new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s
financial statements with another public company which is neither an emerging growth company nor an emerging growth company which
has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
Note
2 — Restatement of Previously Issued Financial Statements
In
the Company’s previously issued financial statements, a portion of the public shares were classified as permanent equity to maintain
shareholders’ equity greater than $5,000,000 on the basis that the Company will consummate its initial Business Combination
only if the Company has net tangible assets of at least $5,000,001. Thus, the Company can only complete a merger and continue to exist
as a public company if there is sufficient Public Shares that do not redeem at the merger and so it is appropriate to classify the portion
of its public shares required to keep its shareholders’ equity above the $5,000,000 threshold as “shares not subject
to redemption.”
However,
in light of recent comment letters issued by the Securities & Exchange Commission (“SEC”) to several special purpose
acquisition companies, management re-evaluated the Company’s application of ASC 480-10-99 to its accounting classification of public
shares. Upon re-evaluation, management determined that the Public Shares issued during the initial public offering and pursuant to the
exercise of the underwriters’ overallotment can be redeemed or become redeemable subject to the occurrence of future events considered
outside the Company’s control under ASC 480-10-S99. Therefore, management concluded that all of the Public Shares should be classified
as temporary equity in its entirety. As a result, management has noted a reclassification adjustment related to temporary equity and
permanent equity. This resulted in an adjustment to the initial carrying value of the Public Shares with the offset recorded to additional
paid-in capital (to the extent available), accumulated deficit and ordinary shares.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
In
connection with the change in presentation for the Public Shares, the Company also restated its earnings per share calculation to allocate
net income (loss) evenly to redeemable and nonredeemable ordinary shares. This presentation contemplates a Business Combination as the
most likely outcome, in which case, both classes of ordinary shares pro rata in the income (loss) of the Company.
In
accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering
the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements;” the Company evaluated
the changes and has determined that the related impacts were material to any previously presented financial statements. Therefore,
the Company, in consultation with its Audit Committee, concluded that its previously issued financial statements impacted should be restated
to report all public shares as temporary equity.
The
impact to the previously presented financial statements is presented below:
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Balance
Sheet as of December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary
shares subject to possible redemption
|
|
$
|
2,149,607
|
|
|
$
|
13,215,384
|
|
|
$
|
15,364,991
|
|
Ordinary
shares
|
|
$
|
2,410,382
|
|
|
$
|
(2,410,382
|
)
|
|
$
|
-
|
|
Retained
earnings (accumulated deficit)
|
|
$
|
2,589,624
|
|
|
$
|
(10,805,002
|
)
|
|
$
|
(8,215,378
|
)
|
Total
shareholders’ equity (deficit)
|
|
$
|
5,000,006
|
|
|
$
|
(13,215,384
|
)
|
|
$
|
(8,215,378
|
)
|
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Balance
Sheet as of June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary
shares subject to possible redemption
|
|
$
|
373,063
|
|
|
$
|
13,933,476
|
|
|
$
|
14,306,539
|
|
Ordinary
shares
|
|
$
|
3,327,998
|
|
|
$
|
(2,916,071
|
)
|
|
$
|
411,927
|
|
Retained
earnings (accumulated deficit)
|
|
$
|
1,672,011
|
|
|
$
|
(11,017,405
|
)
|
|
$
|
(9,345,394
|
)
|
Total
shareholders’ equity (deficit)
|
|
$
|
5,000,009
|
|
|
$
|
(13,933,476
|
)
|
|
$
|
(8,933,467
|
)
|
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Statement
of Operations for the Three Months Ended June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(115,707
|
)
|
|
$
|
-
|
|
|
$
|
(115,707
|
)
|
Less:
income attributable to ordinary shares subject to possible redemption
|
|
$
|
(3,920
|
)
|
|
$
|
3,920
|
|
|
$
|
-
|
|
Adjusted
net loss
|
|
$
|
(119,627
|
)
|
|
$
|
119,627
|
|
|
$
|
-
|
|
Basic
and diluted weighted average redeemable ordinary shares outstanding
|
|
|
-
|
|
|
|
3,960,532
|
|
|
|
3,960,532
|
|
Basic
and diluted net loss per redeemable ordinary share
|
|
$
|
-
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
Basic
and diluted weighted average non-redeemable ordinary shares outstanding
|
|
|
4,374,169
|
|
|
|
(1,172,411
|
)
|
|
|
3,201,758
|
|
Basic
and diluted net loss per non-redeemable ordinary share
|
|
$
|
(0.03
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.04
|
)
|
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Statement
of Operations for the Six Months Ended June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
286,851
|
|
|
$
|
-
|
|
|
$
|
286,851
|
|
Less:
income attributable to ordinary shares subject to possible redemption
|
|
$
|
(90,220
|
)
|
|
$
|
90,220
|
|
|
$
|
-
|
|
Adjusted
net income
|
|
$
|
196,631
|
|
|
$
|
(196,631
|
)
|
|
$
|
-
|
|
Basic
and diluted weighted average redeemable ordinary shares outstanding
|
|
|
-
|
|
|
|
7,724,262
|
|
|
|
7,724,262
|
|
Basic
and diluted net loss per redeemable ordinary share
|
|
$
|
-
|
|
|
$
|
(0.14
|
)
|
|
$
|
(0.14
|
)
|
Basic
and diluted weighted average non-redeemable ordinary shares outstanding
|
|
|
4,318,920
|
|
|
|
(1,117,162
|
)
|
|
|
3,201,758
|
|
Basic
and diluted net income (loss) per non-redeemable ordinary share
|
|
$
|
0.05
|
|
|
$
|
(0.19
|
)
|
|
$
|
(0.14
|
)
|
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Statement
of Operations for the Three Months Ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(111,078
|
)
|
|
$
|
-
|
|
|
$
|
(111,078
|
)
|
Less:
income attributable to ordinary shares subject to possible redemption
|
|
$
|
(10
|
)
|
|
$
|
10
|
|
|
$
|
-
|
|
Adjusted
net loss
|
|
$
|
(111,088
|
)
|
|
$
|
111,088
|
|
|
$
|
-
|
|
Basic
and diluted weighted average redeemable ordinary shares outstanding
|
|
|
-
|
|
|
|
1,312,549
|
|
|
|
1,312,549
|
|
Basic
and diluted net loss per redeemable ordinary share
|
|
$
|
-
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.07
|
)
|
Basic
and diluted weighted average non-redeemable ordinary shares outstanding
|
|
|
4,435,615
|
|
|
|
(1,233,857
|
)
|
|
|
3,201,758
|
|
Basic
and diluted net loss per non-redeemable ordinary share
|
|
$
|
(0.03
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.07
|
)
|
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Statement
of Operations for the Six Months Ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(281,238
|
)
|
|
$
|
-
|
|
|
$
|
(281,238
|
)
|
Less:
income attributable to ordinary shares subject to possible redemption
|
|
$
|
(19
|
)
|
|
$
|
19
|
|
|
$
|
-
|
|
Adjusted
net loss
|
|
$
|
(281,257
|
)
|
|
$
|
281,257
|
|
|
$
|
-
|
|
Basic
and diluted weighted average redeemable ordinary shares outstanding
|
|
|
-
|
|
|
|
1,362,736
|
|
|
|
1,362,736
|
|
Basic
and diluted net loss per redeemable ordinary share
|
|
$
|
-
|
|
|
$
|
(0.16
|
)
|
|
$
|
(0.16
|
)
|
Basic
and diluted weighted average non-redeemable ordinary shares outstanding
|
|
|
4,426,599
|
|
|
|
(1,224,841
|
)
|
|
|
3,201,758
|
|
Basic
and diluted net loss per non-redeemable ordinary share
|
|
$
|
(0.06
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.16
|
)
|
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Statement
of Cash Flows for the Six Months Ended June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Non-cash Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
in value of ordinary shares subject to possible redemption
|
|
$
|
286,858
|
|
|
$
|
(286,858
|
)
|
|
$
|
-
|
|
Accretion
of carrying value to redemption value
|
|
$
|
-
|
|
|
$
|
1,827,439
|
|
|
$
|
1,827,439
|
|
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Statement
of Cash Flows for the Six Months Ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Non-cash Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
in value of ordinary shares subject to possible redemption
|
|
$
|
281,241
|
|
|
$
|
(281,241
|
)
|
|
$
|
-
|
|
Accretion
of carrying value to redemption value
|
|
$
|
-
|
|
|
$
|
436,851
|
|
|
$
|
436,851
|
|
Note
3 — Significant Accounting Policies
Basis
of Presentation
The
accompanying unaudited condensed financial statements of the Company are presented in U.S. dollars in conformity with accounting
principles generally accepted in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure
rules and regulations of the SEC. In the opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with
the audited financial statements and notes thereto for the fiscal years ended December 31, 2020 and 2019. Operating results for
the six month periods ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending
December 31, 2021.
Use
of Estimates
The
preparation of unaudited condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those
estimates.
Cash
and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of June 30, 2021 and December 31, 2020.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
Investments
Held in Trust Account
At
June 30, 2021 and December 31, 2020, the assets held in the Trust Account were held in money market funds, which are invested
in U.S. Treasury securities.
Warrants
Liabilities
The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815,
“Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding
financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet
all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s
own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance
outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the
use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date
while the warrants are outstanding.
For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded
as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the
criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the
date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as
a non-cash gain or loss on the statements of operations.
Ordinary
Shares Subject to Possible Redemption
The
Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards
Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory
redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including
ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon
the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other
times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption
rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.
Accordingly, ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’
equity section of the Company’s unaudited condensed balance sheets.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
Income
Taxes
The
Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an
asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities
are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future
taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.
ASC
Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement
of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company’s management determined that the British Virgin Islands
is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits, if any, as income tax expense. There were no unrecognized tax benefits as of June 30, 2021 and December 31, 2020
and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result
in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by
major taxing authorities since inception.
The
Company is considered an exempted British Virgin Islands Company and is presently not subject to income taxes or income tax filing
requirements in the British Virgin Islands or the United States. As such, the Company’s tax provision is zero for the periods
presented.
Net
Loss per Ordinary Share (As Restated)
The
Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings per Share.” In order to determine the
net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed
income (loss) allocable to both the redeemable ordinary shares and non-redeemable ordinary shares and the undistributed income (loss)
is calculated using the total net income (loss) less any dividends paid. The Company then allocated the undistributed income (loss) ratably
based on the weighted average number of shares outstanding between the redeemable and non-redeemable ordinary shares. Any remeasurement
of the accretion to redemption value of the ordinary shares subject to possible redemption was considered to be deemed dividends and
to reduce from net income (loss) in arriving at income (loss) available to common shareholders. At June 30, 2021 and 2020, the Company
has not considered the effect of the warrants sold in the Initial Public Offering and the dividend warrants issued in April 2021 to purchase
an aggregate of 6,616,116 shares and 5,908,876 shares in the calculation of diluted loss per share, since the exercise of the warrants
is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive for the three and six months
ended June 30 2021 and 2020, respectively. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary
share for the periods presented.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these
accounts and management believes the Company is not exposed to significant risks on such accounts.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair
Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their
short-term nature.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
The
fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company
would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an
orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets
and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and
to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable
inputs used in order to value the assets and liabilities:
|
●
|
Level
1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical
assets or liabilities in active markets.
|
|
●
|
Level
2 - inputs to the valuation methodology include quoted prices for similar assets and
liabilities in active markets, and inputs that are observable for the assets or liability,
either directly or indirectly, for substantially the full term of the financial instruments.
|
|
●
|
Level
3 - inputs to the valuation methodology are unobservable and significant to the fair
value.
|
The
following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring
basis at June 30, 2021 and December 31, 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized
to determine such fair value:
|
|
Level
|
|
June
30,
2021
|
|
|
December 31,
2020
|
|
Warrant liabilities –
Private Warrants
|
|
3
|
|
$
|
439,299
|
|
|
$
|
522,579
|
|
The
change in the fair value of warrant liabilities regarding Level 3 fair value measurements is summarized as follows
Warrant liabilities at
December 31, 2019
|
|
$
|
533,319
|
|
Change in
fair value of warrants liabilities for the year ended December 31, 2020
|
|
|
(10,740
|
)
|
Warrant liabilities at December 31,
2020
|
|
|
522,579
|
|
Change in
fair value of warrants liabilities for the six months ended June 30, 2021
|
|
|
(83,280
|
)
|
Warrant liabilities
at June 30, 2021
|
|
$
|
439,299
|
|
The
Private Warrants are accounted for as liabilities in accordance with ASC 815-40 as the Company concluded that its Private Warrants
are not indexed to the Company’s ordinary shares because the holder of the instrument is not an input into the pricing of
a fixed-for-fixed option on equity shares and are presented within warrant liabilities on the Company’s accompanying balance
sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented
within change in fair value of warrant liabilities in the statement of operations.
The
fair value of the Private Warrants was estimated using the Black-Scholes option-pricing model. The application of the Black-Scholes
option-pricing model requires the use of a number of inputs and significant assumptions including volatility. Significant judgment
is required in determining the expected volatility of the ordinary shares. Due to the limited history of trading of the Company’s
ordinary shares, the Company determined expected volatility based on a peer group of publicly traded companies. The following
reflects the inputs and assumptions used:
|
|
June
30,
2021
|
|
|
December 31,
2020
|
|
Stock price
|
|
$
|
11.18
|
|
|
$
|
11.41
|
|
Exercise price
|
|
$
|
11.50
|
|
|
$
|
11.50
|
|
Risk-free interest rate
|
|
|
0.91
|
%
|
|
|
0.40
|
%
|
Expected term (in years)
|
|
|
5.25
|
|
|
|
5.25
|
|
Expected dividend yield
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
Expected volatility
|
|
|
40.86
|
%
|
|
|
41.59
|
%
|
Merger probability adjustment
|
|
|
65.00
|
%
|
|
|
75.00
|
%
|
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
Recent
Accounting Pronouncements
Management
does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material
effect on the Company’s financial statements.
Note
4 — Initial Public Offering
Public
Unit
Pursuant
to the Initial Public Offering on October 26, 2018, the Company sold 10,000,000 Units at a purchase price of $10.00 per Unit. On November
20, 2018, in connection with the underwriters’ exercise of their over-allotment option, the Company consummated the sale of an
additional 1,487,992 Public Units at $10.00 per Unit. Each Unit consists of one ordinary share, one redeemable warrant (“Public
Warrant”), and one right (“Public Right”). Each whole redeemable warrant entitles the holder to purchase one half of
one ordinary share at an exercise price of $11.50 (see Note 11). Every 10 Public Rights will convert automatically into one ordinary
share upon consummation of a Business Combination (see Note 11).
If
the Company does not complete its Business Combination within the necessary time period described in Note 1, the Public Warrants
and Public Rights will expire and be worthless. Since the Company is not required to net cash settle the Public Warrants and Public
Rights, and the Public Warrants and Public Rights are convertible upon the consummation of the Business Combination, management
determined that the Public Warrants and Public Rights are classified within shareholders’ equity as “Additional paid-in
capital” upon their issuance in accordance with ASC 815-40. The proceeds from the sale are allocated to Public Shares and
Public Warrants and Public Rights based on the relative fair value of the securities in accordance with ASC 470-20-30. The value
of the Public Shares, Public Warrants and Public Rights was based on the closing price paid by investors.
At
the closing of the Initial Public Offering and over-allotment option, the Company paid an upfront underwriting discount of $2,000,000
and $297,598, 2.0% of the per unit offering price to the underwriter, respectively, with an additional fee of $3,500,000 and $520,797
(the “Deferred Discount”), 3.5% of the gross offering proceeds payable upon the completion of the Business Combination,
respectively. The Deferred Discount will become payable to the underwriter from the amounts held in the Trust Account solely in
the event the Company completes its Business Combination. In the event that the Company does not close a Business Combination,
the underwriter has waived its right to receive the Deferred Discount. The underwriter is not entitled to any interest accrued
on the Deferred Discount. Total offering costs were $3,060,924, which consisted of $2,297,598 of underwriter’s commissions
and $763,326 of other offering costs.
Purchase
Option
On
October 26, 2018, the Company sold the underwriter (and its designees), for $100, an option to purchase up to 500,000 Units exercisable
at $11.50 per Unit (or an aggregate exercise price of $5,750,000) commencing on the consummation of a Business Combination. The
purchase option may be exercised for cash or on a cashless basis, at the holder’s option, and expires five years from the
effective date of the registration statement related to the Initial Public Offering. The Units issuable upon exercise of this
option are identical to those offered in the Initial Public Offering, with 500,000 ordinary shares, warrants to purchase 250,000
shares and rights to receive 50,000 ordinary shares that may be issued upon exercise of the option.
The
Company accounted for the unit purchase option, inclusive of the receipt of $100 cash payment, as an expense of the Initial Public
Offering resulting in a charge directly to shareholders’ equity. The Company estimated the fair value of this unit purchase
option to be approximately $1,603,060 (or $3.206 per Unit) using the Black-Scholes option-pricing model. The fair value of the
unit purchase option granted to the underwriters was estimated as of the date of grant using the following assumptions: (1) expected
volatility of 38%, (2) risk-free interest rate of 2.29% (the interest rate on a three-month US Treasury Bill on October 26, 2018)
and (3) expected life of five years.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
Note
5 — Private Placements
Simultaneously
with the Initial Public Offering, the Company’s Sponsor purchased an aggregate of 300,000 Private Units at $10.00 per Unit
(for a total purchase price of $3,000,000). On November 20, 2018, in connection with the underwriters’ partial exercise
of their over-allotment option, the Company consummated the sale of additional 29,760 Private Units, generating gross proceeds
of $297,600. The proceeds from the Private Units were added to the proceeds from the Initial Public Offering held in the Trust
Account.
The
Private Units are identical to the units sold in the Initial Public Offering except the Private Units are non-redeemable and may
be exercised on a cashless basis, in each case so long as they continue to be held by the Sponsor or its permitted transferees.
The purchasers of the Private Units have agreed not to transfer, assign or sell any of the Private Units or underlying securities
(except to the same permitted transferees as the founder shares) until the completion of the Business Combination.
If
the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Units
will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law).
Note
6 — Related Party Transactions
Founder
Shares
In
August 2018, the Company issued 1,725,000 Class B ordinary shares to its initial shareholders as founder shares, of which an aggregate
of 1,650,000 Class B ordinary shares were issued for an aggregate purchase price of $17,250 or $0.010454545 per share, and an
aggregate of 75,000 Class B ordinary shares were issued for services rendered. On September 10, 2018, the Company issued an additional
1,150,000 Class B ordinary shares to its initial shareholders as founder shares, of which an aggregate of 1,135,000 Class B ordinary
shares were issued for an aggregate purchase price of $2,300 or approximately $0.00202643 per share, and an aggregate of 15,000
Class B ordinary shares were issued for services rendered. On September 14, 2018, the Company’s initial shareholders converted
all of their Class B ordinary shares, constituting all of the outstanding Class B ordinary shares of the Company, into Class A
ordinary shares and, immediately thereafter, the Company amended and restated its Memorandum and Articles of Association to eliminate
the Class B ordinary shares and re-designate the Class A ordinary shares as “ordinary shares.” As a result, prior
to the Initial Public Offering, the Company’s initial shareholders held 2,875,000 founder shares. The 2,875,000 founder
shares included an aggregate of up to 375,000 ordinary shares subject to forfeiture to the extent that the over-allotment option
was not exercised by the underwriters in full or in part. On November 20, 2018, as a result of the underwriters’ partial
exercise of their over-allotment option, 3,002 founder shares were forfeited.
The
founder shares are identical to the ordinary shares included in the units sold in the Initial Public Offering. However, the Initial
Shareholders have agreed to (A) to vote any shares owned by them in favor of any proposed Business Combination, (B) not to convert
any shares in connection with a shareholder vote to approve a proposed initial Business Combination or any amendment to the Company’s
charter documents prior to consummation of an initial Business Combination, or sell any shares to the Company in a tender offer
in connection with a proposed initial Business Combination and (C) that the founder shares shall not participate in any liquidating
distribution from the Trust Account upon winding up if a Business Combination is not consummated.
Additionally,
subject to certain limited exceptions, the Initial Shareholders have agreed not to transfer, assign or sell any of the founder
shares (except to certain permitted transferees) until, with respect to 50% of the founder shares, the earlier of (i) six months
after the date of the consummation of a Business Combination, or (ii) the date on which the closing price of the Company’s
ordinary shares equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations)
for any 20 trading days within any 30-trading day period commencing after a Business Combination, and with respect to the remaining
50% of the founder shares, upon six months after the date of the consummation of a Business Combination, or earlier, in each case,
if, subsequent to a Business Combination, the Company consummates a subsequent liquidation, merger, stock exchange or other similar
transaction which results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash,
securities or other property.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
Related
Party Advances
During
the year ended December 31, 2020, the Company received an aggregate of $273,640 in advances from the Company’s Chief
Executive Officer for working capital purposes, of which $140,000 was used to partially fund the Extension. The advances
are non-interest bearing and due on demand. At June 30, 2021 and December 31, 2020, advances of $273,640 were outstanding
which are included in due to related parties in the accompanying unaudited condensed balance sheets.
From
December 2020 to April 2021, SolarMax made a series of non-interest bearing loans to the Sponsor in the aggregate principal amount
of $429,634, to enable the Sponsor to provide the Company with funds to pay for the Company’s operating costs. Upon the
completion of the Business Combination, these notes are to be satisfied by the delivery of the Sponsor shares having a value equal
to the principal amount of the notes. Otherwise, the due date will be upon the earlier of the date on which the Merger Agreement
is terminated or the date an Event of Default shall occur. At June 30, 2021 and December 31, 2020, advances of $429,634 and
$301,168 were outstanding and included in due to related parties in the accompanying unaudited condensed balance sheets.
Related
Party Loans
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the
Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may
be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the
Working Capital Loans out of the proceeds of the Trust Account released to the Company. The Working Capital Loans would either
be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000
of such Working Capital Loans may be converted into units of the post Business Combination entity at a price of $10.00
per unit. The units would be identical to the Private Units. In the event that a Business Combination does not close, the Company
may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust
Account would be used to repay the Working Capital Loans.
On
July 6, 2018, the Sponsor loaned the Company $300,000 under a promissory note (the “Sponsor Note 1”), a portion of
which was used to pay for costs associated with the Initial Public Offering. The loan is non-interest bearing, unsecured and due
at the closing of a Business Combination. As of June 30, 2021 and December 31, 2020, there was $300,000 outstanding under the
Sponsor Note 1.
On
January 24, 2020, the Sponsor loaned the Company an additional $780,000 under a promissory note (the “Sponsor Note 2”)
in order to partially fund the amount required to be deposited into the Trust Account to extend the period of time required by
the Company to complete a Business Combination. The loan is non-interest bearing, unsecured and due at the closing of a Business
Combination. The Sponsor Note 2 may also be converted, at the Sponsor’s discretion, into units of the post Business Combination
entity at a purchase price of $10.00 per unit. The units would be identical to the Private Units. As of June 30, 2021 and December
31, 2020, there was $780,000 outstanding under the Sponsor Note 2.
Administrative
Service Fee
The
Company has agreed, commencing on August 1, 2018, to pay the Sponsor, a monthly fee of an aggregate of $1,000 for general and
administrative services including office space, utilities and secretarial support, due before the first day of each month. This
arrangement will terminate upon the completion of a Business Combination or a distribution of the Trust Account to the public
shareholders. For each of the three months ended June 30, 2021 and 2020, the Company incurred $3,000 of administrative fees. For
each of the six months ended June 30, 2021 and 2020, the Company incurred $6,000 of administrative fees. At June 30, 2021 and
December 31, 2020, $12,000 and $6,000, respectively, of such fees are included in accounts payable and accrued expenses in the
accompanying unaudited condensed balance sheets.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
Other
than the $1,000 per month administrative fee and the $1,080,000 of non-interest bearing loans described above, no compensation
or fees of any kind, including finder’s fee, consulting fees and other similar fees, will be paid to our initial shareholders,
members of our management team or their respective affiliates, for services rendered prior to, or in order to effectuate the consummation
of, our initial Business Combination (regardless of the type of transaction that it is). However, such individuals will receive
reimbursement for any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying
potential target businesses, performing business due diligence on suitable target businesses and Business Combination as well
as traveling to and from the offices, plants or similar locations of prospective target businesses to examine their operations.
There is no limit on the amount of out-of-pocket expenses reimbursable by us.
Note
7 — Promissory Notes
Promissory
notes are comprised of the following as of June 30, 2021 and December 31, 2020:
|
|
June
30,
2021
|
|
|
December
31,
2020
|
|
GN
Note 1
|
|
$
|
1,148,800
|
|
|
$
|
1,148,800
|
|
GN
Note 2
|
|
|
500,000
|
|
|
|
500,000
|
|
AMC
Note
|
|
|
100,000
|
|
|
|
100,000
|
|
SolarMax
Notes 1
|
|
|
261,348
|
|
|
|
261,348
|
|
SolarMax
Notes 2
|
|
|
212,022
|
|
|
|
-
|
|
SolarMax
Notes 3
|
|
|
224,083
|
|
|
|
-
|
|
Total
|
|
$
|
2,446,253
|
|
|
$
|
2,010,148
|
|
On
September 18, 2019, the Company issued an unsecured promissory note in the aggregate principal amount of $1,148,800 to Global
Nature (the “GN Note 1”). The GN Note 1 was issued in connection with the GN LOI entered into by and between Global
Nature and the Company on September 13, 2019, to consummate a potential Business Combination with Global Nature.
The
GN Note 1 is non-interest bearing and is payable on the date on which the Company consummates its initial Business Combination with
Global Nature or another qualified target company (a “Qualified Business Combination” and such date, the “Maturity
Date”), subject to certain mandatory repayment arrangement set forth in the GN Note 1. The principal balance may be prepaid
at any time without penalty. As of June 30, 2021 and December 31, 2020, there was $1,148,800 outstanding under the GN Note
1.
Pursuant
to the GN Note 1, in the event that Global Nature notifies the Company that it does not wish to proceed with the Qualified Business
Combination (the “Withdrawal Request”), the Company shall only be obligated to repay the GN Note 1 as follows: (i)
50% of the principal amount of the GN Note 1 as soon as possible with best efforts but no later than 5 business days after a Business
Combination with another target if the Withdrawal Request is given from after October 18, 2019; or (ii) the full principal amount
of the GN Note 1 as soon as possible with best efforts but no later than 5 business days after a Business Combination or the date
of expiry of the term of the Company (whichever is earlier), if the parties have not entered into a definitive agreement with
regard to the Qualified Business Combination within 45 days from the date of the GN Note 1 as a result of the disagreement on
the valuation of the Qualified Business Combination. On March 12, 2020, the Company received the Withdrawal Request from Global
Nature that it did not wish to proceed with the Qualified Business Combination. The parties agreed that the GN Note 1 which shall
be repaid as soon as possible with best efforts but no later than 5 business days after the Company’s Business Combination
or the date of the expiry of the term of the Company (whichever is earlier).
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
All
amounts owed by the Company under the GN Note 1 become immediately due and payable upon an event of default, which includes the
Company’s failure to pay the principal amount due within 5 business days of the Maturity Date and the Company’s voluntary
or involuntary bankruptcy.
On
December 3, 2019, the Company issued an unsecured promissory note in the aggregate principal amount of $500,000 to Global
Nature (the “GN Note 2”). The GN Note 2 was issued in order to fund the Company’s working capital needs. The
GN Note 2 is non-interest bearing and is payable as soon as possible but in any event no later than 5 business days after the
Company’s initial Business Combination or the date of the expiry of the term of the Company, whichever is earlier. The principal
balance may be prepaid at any time without penalty. As of June 30, 2021 and December 31, 2020, there was $500,000 outstanding
under the GN Note 2.
On
April 17, 2020, the Company issued an unsecured promissory note in the aggregate principal amount of $500,000 (the “AMC
Note”) to Qingdao Zhongxin Huirong Distressed Asset Disposal Co., Ltd. (“AMC Sino”), a PRC company based in
Qingdao, China, its registered assignees or successor in interest (the “AMC Payee”). The AMC Note was issued in connection
with a non-binding letter of intent entered (“AMC LOI”) into by and between the Company and Zhongxin AmcAsset Limited
(“AmcAsset”), a holding company incorporated in the British Virgin Islands, to consummate a potential business combination
with AmcAsset. AmcAsset is a transnational distressed asset management company with foothold in the U.S. and China, and undergoing
global expansion. AmcAsset holds 100% equity interest of Quest Mark Capital Inc., a California corporation located in Los
Angeles, and Qingdao Zhongbiao Distressed Asset Management Co., Ltd (“Zhongbiao”), to which AMC Sino is related. The
principal of the AMC Note of $500,000 will be paid in installments according to the needs of the Company. The AMC Note is
non-interest bearing and is payable on the date on which the Company consummates its initial business combination with
AMC Payee or another qualified target company, subject to certain mandatory repayment arrangement set forth in the AMC Note. The
principal balance may be prepaid at any time without penalty. On May 5, 2020, the Company received first installment of $100,000
under the AMC Note.
From
September 2020 to December 2020, the Company issued unsecured promissory notes in the aggregate principal amount of $261,348 to
SolarMax (the “SolarMax Notes 1”) to finance the extension of the period that the Company must complete a Business
Combination. The SolarMax Notes 1 are non-interest bearing and payable on the earlier of (i) the consummation of a Business Combination,
(ii) the Second Extended Date, or (iii) the date on which either (x) the letter of intent dated September 3, 2020 (the “LOI”)
or (y) the Acquisition Agreement, as defined in the LOI, are terminated for any reason. At June 30, 2021 and December 31, 2020,
there was $261,348 outstanding under the SolarMax Notes 1.
From
January to March 2021, the Company issued additional unsecured promissory notes in the aggregate principal amount of $212,022
to SolarMax (the “SolarMax Notes 2”) to finance the extension of the period that the Company must complete a Business
Combination to April 26, 2021. SolarMax Notes 2 are non-interest bearing, unsecured and payable upon the first to occur of (i)
the Closing Date, as defined in the Merger Agreement, or (ii) the date on which, pursuant to the organization documents of Alberton,
Alberton must complete a Business Combination, which date is presently October 26, 2021, or (iii) the date on which the Merger
Agreement is terminated or (iv) the date an Event of Default shall occur. At March 31, 2021, there was $212,022 outstanding under
the SolarMax Notes 2.
From
April to June 2021, the Company issued additional unsecured promissory notes in the aggregate principal amount of $224,083 to
SolarMax (the “SolarMax Notes 3”) to finance the extension of the period that the Company must complete a Business
Combination to October 26, 2021. SolarMax Notes 3 are non-interest bearing, unsecured and payable upon the first to occur of (i)
the Closing Date, as defined in the Merger Agreement, or (ii) the date on which, pursuant to the organization documents of Alberton,
Alberton must complete a Business Combination, which date is presently October 26, 2021, or (iii) the date on which the Merger
Agreement is terminated or (iv) the date an Event of Default shall occur. At June 30, 2021, there was $224,083 outstanding under
the SolarMax Notes 3.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
Note
8 — Cash and Investments Held in Trust Account
As
of June 30, 2021 and December 31, 2020, assets held in the Trust Account were comprised of $14,306,539 and $15,364,991, respectively,
in money market funds which are invested in U.S. Treasury Securities.
The
following table presents information about the Company’s assets that are measured at fair value on a recurring basis at
June 30, 2021 and December 31, 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine
such fair value:
Description
|
|
Level
|
|
June
30,
2021
|
|
|
December
31,
2020
|
|
Assets:
|
|
|
|
|
|
|
|
|
Trust Account - U.S.
Treasury Securities Money Market Fund
|
|
1
|
|
$
|
14,306,539
|
|
|
$
|
15,364,991
|
|
Note 9
— Commitments and Contingencies
Risks
and Uncertainties
Management
continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus
could have a negative effect on the Company’s financial position, results of its operations and/or complete the SolarMax
Business Combination, the specific impact is not readily determinable as of the date of these financial statements. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration
Rights
Pursuant
to a registration rights agreement entered into on October 23, 2018, the holders of the founder shares, Private Units (and underlying
securities) and units that may be issued in payment of Working Capital Loans (and all underlying securities) are entitled to registration
rights. The holders of a majority-in-interest of these securities are entitled to make up to two demands that the Company register
such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration
statements filed subsequent to the consummation of a Business Combination. The registration rights agreement does not contain
liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The
Company will bear the expenses incurred in connection with the filing of any such registration statements.
Note
10 — Deferred Underwriter Compensation
The
Company is obligated to pay the underwriters a deferred underwriting discounts and commissions equal to 3.5% of the gross
proceeds of the Initial Public Offering. Upon completion of the Business Combination, $4,020,797 (with consideration of the
underwriters’ exercise of their over-allotment option on November 20, 2018) will be paid to the underwriters from the funds
held in the Trust Account. No discounts or commissions will be paid with respect to the purchase of the Private Units.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
Note
11 — Shareholders’ Deficit (As Restated)
Preferred
Shares - The Company is authorized to issue 100,000,000 shares of no par value preferred shares, with such
designation, rights and preferences as may be determined from time to time by the Company’s board of directors. As of June
30, 2021 and December 31, 2020, there are no preferred shares designated, issued or outstanding.
Ordinary
Shares - The Company is authorized to issue 300,000,000 ordinary shares, no par value. As of June 30, 2021 and December
31, 2020, the Company had issued an aggregate of 3,201,758 and 3,201,758 ordinary shares, excluding 1,278,411 and 1,413,480
shares of ordinary shares subject to possible redemption, respectively.
Warrants -
Each warrant entitles the registered holder to purchase one-half (1/2) of one ordinary share at a price of $11.50 per whole
ordinary share, subject to adjustment as discussed below, at any time commencing on the later of the completion of the Business
Combination or 12 months from the date of the effective date of the registration statement. However, no warrants will be exercisable
for cash unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise
of the warrants. Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable upon exercise
of the Public Warrants is not effective within a specified period following the consummation of the Company’s Business Combination,
warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall
have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided
by Section 3(a)(9) of the Securities Act, provided that such exemption is available. In such event, each holder would pay the
exercise price by surrendering the warrants for that number of ordinary shares equal to the quotient obtained by dividing (x)
the product of the number of ordinary shares underlying the warrants, multiplied by the difference between the exercise price
of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value”
for this purpose will mean the average reported last sale price of the ordinary shares for the 20 trading days ending on the third
trading day immediately prior to the date of exercise. If that exemption, or another exemption, is not available, holders will
not be able to exercise their warrants on a cashless basis. The warrants will expire on the fifth anniversary of the closing of
the initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The
warrants issued in the Private Units (“Private Warrants”) are identical to the Public Warrants sold in the Initial
Public Offering except the Private Warrants will be non-redeemable and may be exercised on a cashless basis, in each case so long
as they continue to be held by the initial purchasers or their permitted transferees.
The
Company may call the warrants for redemption (excluding the Private Warrants and any warrants issued to its initial shareholders,
officers or directors in payment of working capital loans made to the Company, but including outstanding warrants issued upon
exercise of the unit purchase option issued to Chardan Capital Markets LLC), in whole and not in part, at a price of $0.01 per
warrant,
|
●
|
at
any time after the warrants become exercisable,
|
|
●
|
upon
not less than 30 days’ prior written notice of redemption to each warrant holder,
|
|
●
|
if,
and only if, the reported last sale price of the ordinary shares equals or exceeds $16.00
per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations),
for any 20 trading days within a 30 trading day period ending on the third business day
prior to the notice of redemption to warrant holders; and
|
|
●
|
if,
and only if, there is a current registration statement in effect with respect to the
ordinary shares underlying such warrants
|
The
right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption.
On and after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price
for such holder’s warrant upon surrender of such warrant.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
If
the Company calls the warrants for redemption as described above, management will have the option to require all holders that
wish to exercise warrants to do so on a “cashless basis.”
On
January 19, 2021, the board of the Company approved the issuance of 1,414,480 dividend warrants to those public shareholders who
were shareholders on April 21, 2020 and did not exercise their right of redemption in connection with the April 2020 extension,
and the Company instructed such issuance. The dividend warrants were issued on April 8, 2021. The dividend warrants are identical
to the warrants included in the units sold in the Company’s Initial Public Offering, for which one dividend warrant has
the right to purchase one-half of one ordinary share at an exercise price of $11.50 per whole share. The Company accounted for
the fair value of the dividend warrants using the closing market price of the Company’s Public Warrants on April 8, 2021
and determined the aggregate fair value of $636,375. The dividend warrants were recorded as a reduction of retained earnings and
an additional to ordinary shares capital of the Company.
As
of June 30, 2021 and December 31, 2020, the Company has outstanding warrants of 13,232,232 and 11,817,752 to purchase an aggregate
of 6,616,116 shares and 5,908,876 shares of the Company’s ordinary shares, respectively, with a weighted average exercise
of $11.50 per whole share.
Rights -
Each holder of a right will receive one-tenth (1/10) of one ordinary share upon consummation of a Business Combination, even if
a holder of such right converted all ordinary shares held by it in connection with a Business Combination. No fractional shares
will be issued upon exchange of the rights. No additional consideration will be required to be paid by a holder of rights to receive
its additional shares upon consummation of a Business Combination as the consideration related thereto has been included in the
Unit purchase price paid for by investors in the Initial Public Offering. If the Company enters into a definitive agreement for
a Business Combination in which the Company will not be the surviving entity, the definitive agreement will provide for the holders
of rights to receive the same per share consideration the holders of the ordinary shares will receive in the transaction on an
as-converted into ordinary shares basis and each holder of rights will be required to affirmatively covert its rights in order
to receive 1/10 of a share underlying each right (without paying additional consideration). The shares issuable upon exchange
of the rights will be freely tradable (except to the extent held by affiliates of the Company).
If
the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held
in the Trust Account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive
any distribution from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights
will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the rights
upon consummation of a Business Combination. Additionally, in no event will the Company be required to net cash settle the rights.
Accordingly, the rights may expire worthless.
The
rights included in the Private Units sold in the private placement are identical to the rights included in the Units sold in the Initial
Public Offering, except that, among others, the rights including the shares issuable upon exchange of such rights, are being purchased
pursuant to an exemption from the registration requirements of the Securities Act and will become tradable only after certain conditions
are met or the resale of such rights (including underlying securities) is registered under the Securities Act. Refer to Note 5 Private
Placement for more details.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
Note
12 — Reconciliation of Basic and Diluted Net Loss per Ordinary Share (As Restated)
In
order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered
the undistributed income (loss) allocable to both the redeemable ordinary shares and non-redeemable ordinary shares and the undistributed
income (loss) is calculated using the total net income (loss) less any dividends paid. The Company then allocated the undistributed income
(loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable ordinary shares.
Any remeasurement of the accretion to redemption value of the ordinary shares subject to possible redemption was considered to be deemed
dividends and to reduce from net income (loss) in arriving at net income (loss) available to common shareholders. Accordingly, basic
and diluted adjusted net loss per ordinary share is as follows:
|
|
Three
Months Ended
June 30,
|
|
|
Six
Months Ended
June 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Net
(loss) income
|
|
$
|
(111,078
|
)
|
|
$
|
(115,707
|
)
|
|
$
|
(281,238
|
)
|
|
$
|
286,851
|
|
Accretion
of carrying value to redemption value
|
|
|
(224,448
|
)
|
|
|
(144,271
|
)
|
|
|
(436,851
|
)
|
|
|
(1,827,439
|
)
|
Net
loss including accretion of carrying value to redemption value
|
|
$
|
(335,526
|
)
|
|
$
|
(259,978
|
)
|
|
$
|
(718,089
|
)
|
|
$
|
(1,540,588
|
)
|
|
|
Three
Months Ended
|
|
|
Three
Months Ended
|
|
|
|
June
30, 2021
|
|
|
June
30, 2020
|
|
|
|
Redeemable
|
|
|
Non-Redeemable
|
|
|
Redeemable
|
|
|
Non-Redeemable
|
|
|
|
Ordinary
Shares
|
|
|
Ordinary
Shares
|
|
|
Ordinary
Shares
|
|
|
Ordinary
Shares
|
|
Basic
and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation
of net loss including carrying value to redemption value
|
|
$
|
(97,555
|
)
|
|
$
|
(237,971
|
)
|
|
$
|
(143,760
|
)
|
|
$
|
(116,218
|
)
|
Denominators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding
|
|
|
1,312,549
|
|
|
|
3,201,758
|
|
|
|
3,960,532
|
|
|
|
3,201,758
|
|
Basic
and diluted net loss per share
|
|
$
|
(0.07
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
|
|
Six
Months Ended
|
|
|
Six
Months Ended
|
|
|
|
June
30, 2021
|
|
|
June
30, 2020
|
|
|
|
Redeemable
|
|
|
Non-Redeemable
|
|
|
Redeemable
|
|
|
Non-Redeemable
|
|
|
|
Ordinary
Shares
|
|
|
Ordinary
Shares
|
|
|
Ordinary
Shares
|
|
|
Ordinary
Shares
|
|
Basic
and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation
of net loss including carrying value to redemption value
|
|
$
|
(214,386
|
)
|
|
$
|
(503,703
|
)
|
|
$
|
(1,089,135
|
)
|
|
$
|
(451,453
|
)
|
Denominators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding
|
|
|
1,362,736
|
|
|
|
3,201,758
|
|
|
|
7,724,262
|
|
|
|
3,201,758
|
|
Basic
and diluted net loss per share
|
|
$
|
(0.16
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.14
|
)
|
Note
13 — Subsequent Events (As Restated)
The
Company’s management reviewed all material events that have occurred after the balance sheet date through the date which these
financial statements were issued. Based upon this review, other than as described below, the Company did not identify any subsequent
events that would have required adjustment or disclosure in the financial statements.
Related
Party Advances
From July 2021 to November 2021, SolarMax made
non-interest bearing loans to the Sponsor in the aggregate principal amount of $221,735, to enable the Sponsor to provide the Company
with funds to pay for the Company’s operating costs. Upon the completion of the Business Combination, these notes are to be satisfied
by the delivery of the Sponsor shares having a value equal to the principal amount of the notes. Otherwise, the due date will be upon
the earlier of the date on which the Merger Agreement is terminated or the date an Event of Default shall occur as defined in the notes.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
Promissory Notes
In September 2021, the Company issued additional
unsecured promissory notes in the aggregate principal amount of $230,114 to SolarMax (the “SolarMax Notes 4”) to finance
the extension of the period that the Company must complete a Business Combination to October 26, 2021. SolarMax Notes 4 are non-interest
bearing, unsecured and payable upon the first to occur of (i) the Closing Date, as defined in the Merger Agreement, or (ii) the date
on which, pursuant to the organization documents of Alberton, Alberton must complete a Business Combination, which date is presently
April 26, 2022, or (iii) the date on which the Merger Agreement is terminated or (iv) the date an Event of Default shall occur.
In October 2021, the Company issued additional
unsecured promissory notes in the aggregate principal amount of $76,704 to SolarMax (the “SolarMax Notes 5”) to finance the
extension of the period that the Company must complete a Business Combination to October 26, 2021. SolarMax Notes 5 are non-interest
bearing, unsecured and payable upon the first to occur of (i) the Closing Date, as defined in the Merger Agreement, or (ii) the date
on which, pursuant to the organization documents of Alberton, Alberton must complete a Business Combination, which date is presently
April 26, 2022, or (iii) the date on which the Merger Agreement is terminated or (iv) the date an Event of Default shall occur.
In November 2021, the Company issued additional
unsecured promissory notes in the aggregate principal amount of $243,482 to SolarMax (the “SolarMax Notes 6”) to finance
the extension of the period that the Company must complete a Business Combination to April 26, 2022. SolarMax Notes 6 are non-interest
bearing, unsecured and payable upon the first to occur of (i) the Closing Date, as defined in the Merger Agreement, or (ii) the date
on which, pursuant to the organization documents of Alberton, Alberton must complete a Business Combination, which date is presently
April 26, 2022, or (iii) the date on which the Merger Agreement is terminated or (iv) the date an Event of Default shall occur.
The October 2021 Extension
On October 22, 2021, the Company held a special
meeting of the shareholders pursuant to which its shareholders approved extending the Extension from October 26, 2021 to April 26, 2022
(the “October 2021 Extension”). In connection with the approval of the October 2021 Extension, shareholders elected to redeem
an aggregate of 50 of the Company’s ordinary shares. As a result, an aggregate of $571.56 (or $11.43 per share) was released from
the Trust Account to pay such shareholders.
NASDAQ Delisting Notification
On October 28, 2021,
the Company received notice from the staff of the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”)
indicating that, unless the Company timely requests a hearing before the Nasdaq Hearings Panel (the “Panel”), the Company’s
securities (common stock, warrants, units and rights) would be subject to suspension and delisting from The Nasdaq Capital Market due
to the Company’s non-compliance with Nasdaq IM-5101-2, which requires that a special purpose acquisition company must complete
one or more business combinations within 36 months of the effectiveness of its IPO registration statement. Following the submission of
a hearing request by the Company, a hearing is scheduled to be held on December 16, 2021. The hearing request results in a stay of any
suspension or delisting action pending the hearing and the expiration of any additional extension period granted by the Panel following
the hearing. In that regard, pursuant to the Nasdaq Listing Rules, the Panel has the authority to grant the Company an additional extension
not to exceed April 26, 2022.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
As previously announced, the Company has entered
into a binding definitive agreement to merge with SolarMax. The Company filed its most recent amendment to the Proxy Statement/Registration
Statement on Form S-4 (the “S-4”) for the merger on October 8, 2021. The Company intends to mail the S-4 to shareholders
promptly follow completion of the Securities and Exchange Commission review process and to hold the shareholder meeting at which it will
seek approval for the merger transaction as soon as possible. The Company believes that the combined company will satisfy all requirements
for initial listing upon completion of the merger; however, there can be no assurance that the Panel will grant the Company the required
extension, the merger will be successfully completed or that the combined company will meet all applicable requirements for initial listing
on The Nasdaq Capital Market.
Amendments to the Merger Agreement
On August 11, 2021,
September 10, 2021, and October 4, 2021, the Company, Merger Sub and SolarMax entered into a third amendment, a fourth amendment, and
a fifth amendment to the Merger Agreement. Pursuant to these amendments: (i) the number of ordinary shares of the Company to be issued
to the SolarMax shareholders was changed to provide that the number of shares is determined by dividing $300,000,000 by $10.50 rather
than the Redemption Price; (ii) SolarMax, which, as of October 4, 2021 had made Extension Loans totaling of $927,567.30, agreed, if the
Extension Amendment is approved by SolarMax’ shareholders, to make up to additional six Extension Loans, and all of the Extension
Loans will be paid at the Closing; (iii) the requirement that the Company satisfy its obligation to settle Chardan’s deferred underwriting
compensation, which is $4,020,797, through the delivery of Sponsor Shares was eliminated, and the deferred underwriting compensation
is to be paid in cash; (iv) the requirement that the notes outstanding at September 3, 2020 be settled through the delivery of Founder
Shares was eliminated and these notes will be paid at the closing, (v) 800,000 Founder Shares will be canceled immediately prior to the
closing, (vi) all outstanding Private Warrants, each exercisable for one-half of one ordinary shares of the Company (or Common Stock
of the Company following Redomestication), including all rights to receive additional Private Warrants which may be issued upon conversion
of any notes or other advances made to Purchaser, shall be cancelled, and the Company shall issue to the holder of the Private Warrants
(including any right to receive additional Private Warrants) a total of 44,467 ordinary shares of the Company immediately prior to the
closing, (vii) pursuant to loan agreements with the Sponsor, SolarMax had made loans to the Sponsor for payment of obligations of the
Company of $651,369.01 and agreed to make additional advances of up to $12,233.61. These loans will be paid at the closing; (viii) on
October 4, 2021, the Company entered into securities purchase agreement with two investors who agreed to purchase convertible notes in
the principal amount of $10 million. The notes are automatically converted at the closing into shares of common stock with
a conversion price equal to ten times the average price of the Company’s rights for the 25 trading days ending on the 2nd trading
day before the proxy statement is mailed to the Company’s shareholders, (ix) at the closing, the Company shall issue, under the
incentive plan, to each of William Walter Young, Qing S. Huang and Peng Gao 30,000 shares of common stock as the compensation shares
for their service as independent directors of the Company until the closing and to Citiking International Limited, a company organized
under the laws of Hong Kong (“Citiking”), 200,000 shares pursuant to certain consulting agreement between the Company and
Citiking, among which 50,000 shares shall vest immediately upon the Closing, 50,000 shares shall vest upon the first anniversary of the
Closing, 50,000 shares shall vest on the second anniversary of the closing and remaining 50,000 shares shall vest on the third anniversary
of the Closing, provided that Citiking remains as an advisor to the Company at each vesting date; and (x) the Company agreed that the
Company would assume the Sponsor’s obligation to make a $50,000 payment to the Company’s former chief executive officer immediately
prior to the closing.
The Sponsor consented
to these amendments.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(UNAUDITED)
In conjunction with the Merger Agreement including
its amendments, the Company currently have the following pending agreements with various parties:
Share Forfeiture Agreement
On August 11, 2021,
the Company entered into a certain share forfeiture agreement (the “Forfeiture Agreement”) with SolarMax and certain initial
shareholders of the Company including Hong Ye, Bin (Ben) Wang and Keqing (Kevin) Liu (collectively, the “Initial Shareholders”),
pursuant to which the Initial Shareholders have agreed to forfeit an aggregate of 800,000 Ordinary Shares upon the closing of the merger
pursuant to the terms of the Forfeiture Agreement and the Company shall pay Bin (Ben) Wang $50,000 immediately prior to the closing of
the merger.
Backstop and Private Placement
On August 11, 2021 and
on October 4, 2021, the Company entered into certain backstop agreements (collectively, the “Backstop Agreements”) with four
backstop investors (collectively, the “Backstop Investors”), pursuant to which the Backstop Investors shall commit to purchase
an aggregate of no less than $18 million of Ordinary Shares in open market or private transactions from time to time, or from holders
of public shares of the Company who have exercised their redemption rights pursuant to the Company’s organization documents, pursuant
to the terms of the Backstop Agreements.
On August 11, 2021,
the Company also entered into certain stock purchase agreement (the “PIPE SPA”) with JSDC Investment LLC (the “PIPE
Investor”) who is a minority existing shareholder of SolarMax, pursuant to which the PIPE Investor shall purchase ordinary shares
of the Company at the amount equal to (i) $6 million divided by (ii) a price per share equal to the price at which each share of the
Company is redeemed pursuant to the redemption by public shareholders in connection with the merger.
Note Purchase Agreement
and Convertible Notes
On October 4, 2021,
the Company entered into certain securities purchase agreement (the “Note Purchase Agreement”) with certain investors (“Note
Investors”), pursuant to which the Company shall issue notes (the “New Notes”) in the aggregate amount of $10,000,000
with no interest to the Note Investors at the effectiveness of Form S-4. The New Notes shall be converted automatically into the number
of fully paid and non-assessable common stock,of the Company after redomestication, upon the closing of the Merger at a price equal to
ten (10) times the average trading price of the rights of the Company, during a period of twenty-five (25) trading days ending on the
second trading day prior to mailing of the prospectus to the Company’s shareholders in connection with the special meeting to approve
the Merger Agreement. The proceeds of $10,000,000 of the sale of the New Notes shall be used to pay off the indebtedness of the Company
as of the closing and any remaining shall be released to the company as working capital. The proceeds from the sale of the New Notes
are to be used to pay the Company’s indebtedness as of the Closing and as working capital if there is any remaining fund.
Investor Relations Consulting Agreement
On August 11, 2021, the Company entered into
a certain letter agreement (the “IR Agreement”) with Citiking, pursuant to which Citiking shall render investor relations
services to the Company and to generally act as its investor relations consultant for the Asian market pursuant to the terms of the IR
Agreement upon and following the Closing. Under the terms of the IR Agreement, the Company has agreed to issue an aggregate of 200,000
Ordinary Shares or Common Stock to Citiking as consideration for its services, subject to certain vesting provisions described in the
IR Agreement.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking
Statements
This
Quarterly Report on Form 10-Q includes forward-looking statements. We have based these forward-looking statements on our current
expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties
and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different
from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.
In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,”
“would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,”
“continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to
such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”)
filings. References to “we”, “us”, “our” or the “Company” are to Alberton
Acquisition Corporation, except where the context requires otherwise. The following discussion should be read in conjunction
with our condensed financial statements and related notes thereto included elsewhere in this report.
Restatement
This
Management’s Discussion and Analysis of Financial Condition and Results of Operations has been amended and restated to give effect
to the restatement of our unaudited financial statements as of and for the period ended June 30, 2021 (the “Restatement”).
In the Original Report, our public shares were not accurately described and recorded in the notes to our financial statements.
The
Restatement is more fully described in Notes 2 and 3 to the Notes to Financial Statements contained herein.
Overview
We
were incorporated on February 16, 2018 under the laws of British Virgin Islands for the purpose of entering into a merger, share
exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar Business Combination with one or
more businesses or entities. The Company’s efforts to identify a prospective target business are not limited to a particular
industry or geographic location. We have not selected any target business for our initial Business Combination.
We
presently have no revenue, have had losses since inception from incurring formation and operating costs and have had no operations
other than identifying and evaluating suitable acquisition transaction candidates. We have relied upon the sale of our securities
and loans from Hong Ye Hong Kong Shareholding Co., Limited (our “Sponsor”) to fund our operations.
On
October 26, 2018, we consummated our Initial Public Offering of 10,000,000 Units. Each Unit consists of one ordinary share, one
redeemable warrant to purchase one-half of one ordinary share and one right to receive 1/10 of an ordinary share upon the consummation
of our initial Business Combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of
$100,000,000. On October 26, 2018, simultaneously with the consummation of the Initial Public Offering, we consummated a private
placement with our Sponsor of 300,000 Private Units at a price of $10.00 per Private Unit, generating total proceeds of $3,000,000.
On November 20, 2018, the underwriters exercised the over-allotment option in part and purchased 1,487,992 over-allotment option
Units at an offering price of $10.00 per Unit, generating gross proceeds of $14,879,920. On November 20, 2018, simultaneously
with the sale of the over-allotment units, the Company consummated the private sale of an additional 29,760 Private Units to our
Sponsor, generating gross proceeds of $297,600. On November 20, 2018, the underwriters waived their right to exercise the reminder
of the over-allotment option. In connection with such waiver, an aggregate of 3,002 founder shares held by our initial shareholders
were forfeited.
A
total of $114,879,920 of the net proceeds from the Initial Public Offering (including the partial exercise of the over-allotment
option) and the private placements were deposited in a Trust Account established for the benefit of the Company’s public
shareholders.
Our
management has broad discretion with respect to the specific application of the net proceeds of Initial Public Offering and the
private placements, although substantially all of the net proceeds are intended to be applied generally towards consummating a
Business Combination.
Recent
Developments
April
2020 Special Shareholder Meeting
We
initially had until October 25, 2019 to consummate a Business Combination. However, as we anticipated that we may not be able
to consummate a Business Combination by October 25, 2019, we extended the period of time to consummate a Business Combination
until October 26, 2020 or such an earlier date as determined by our board. On April 23, 2020, we held a special meeting pursuant
to which our shareholders approved extending the Extension from April 27, 2020 to October 26, 2020 (the “Extended Date”).
In connection with the approval of the extension, shareholders elected to redeem an aggregate of 10,073,512 of our ordinary shares.
As a result, an aggregate of $105,879,118 (or $10.51 per share) was released from our Trust Account to pay such shareholders.
On the same day, we entered into an amendment to the trust agreement to extend the final liquidation date of the trust account
to the 24-month anniversary of the closing of its Initial Public Offering.
We
agreed to contribute, or cause to be contributed on our behalf (the “Cash Contribution”), $60,000 for the aggregate
number of Public Shares that did not convert in connection with the extension (the “Remaining Public Shares”) for
each monthly period or portion thereof that is needed to complete a Business Combination (commencing on April 27, 2020 until the
earlier of the consummation of a Business Combination and the expiry of the Extension). The Cash Contribution will be deposited
as additional interest on the proceeds in the Trust Account and will be distributed pro rata as a part of redemption amount to
each Remaining Public Share in connection with a future redemption. In addition, at the earlier date (the “Issuance Date”)
of the consummation of its initial Business Combination and the expiry of the Extension, we will issue a dividend of one warrant
to purchase one-half of one ordinary share for each Remaining Public Share. Each such warrant will be identical to the warrants
included in the Units sold in our Initial Public Offering (the “Dividend”, collectively with the Cash Contribution,
the “Contribution”).
The
Cash Contribution is subject to the following deposit schedule (the “Deposit Schedule”): the aggregate amount of the
Cash Contribution of first two months of $120,000 will be deposited into the Trust Account within 7 business days of April 27,
2020 and the Cash Contribution of each subsequent month of $60,000 will be deposited into the Trust Account with 7 business days
of 27th day of such month. We deposited the proceeds of AMC Note into the Trust Account as the Cash Contribution pursuant to the
Deposit Schedule. Through June 30, 2021, we deposited an aggregate of $937,453 into the trust account to fund the Extension. The
Extension was partially funded from an $140,000 advance provided by the Sponsor, $100,000 from the AMC Note and $697,453 from
the SolarMax Notes.
Any
additional loans that may be made to us to fund the Contribution, will not bear interest and will be repayable by us upon consummation
of a Business Combination. Our officers, directors or affiliates will have the sole discretion whether to continue extending
additional loans for additional calendar months until the Extended Date and if the officers, directors or affiliates determine
not to continue extending additional loans for additional calendar months, their obligation to extend additional loans following
such determination will terminate.
Agreement
and Plan of Merger with SolarMax
On
September 3, 2020, we entered into a certain letter of intent for the business combination with SolarMax (the “SolarMax
LOI”) and formally started to discuss the related matters for the business combination.
On
October 27, 2020, we entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company,
Alberton Merger Subsidiary Inc., a wholly owned subsidiary of the Company incorporated in Nevada on October 16, 2020 (“Merger
Sub”), and SolarMax. The Merger Agreement provides for the merger of Merger Sub with and into SolarMax (the “Merger”),
with SolarMax continuing as the surviving corporation in the Merger. Subject to the terms and conditions set forth in the Merger
Agreement, at the effective time of the Merger (the “Effective Time”): (i) all shares of SolarMax common stock (the
“SolarMax Stock”) issued and outstanding immediately prior to the Effective Time will be converted into the right
to receive the Stockholder Merger Consideration (as defined below); (ii) each outstanding option to acquire SolarMax Stock (whether
vested or unvested) shall be assumed by combined entity and automatically converted into an option to acquire shares of combined
entity’s common stock, with its price and number of shares equitably adjusted based on the conversion ratio, which is the
number of shares of Alberton common stock issuable in respect of one share of SolarMax Stock (each, an “Assumed Option”)
and (iii) each outstanding convertible notes of SolarMax shall become convertible into shares of Alberton common stock determined
by dividing the conversion price of such notes at the Effective Time by the applicable conversion ratio.
The
Merger Agreement also provides that, immediately prior to the Closing, we will re-domesticate from a British Virgin Islands corporation
into a Nevada corporation so as to continue as a Nevada corporation (the “Redomestication”). At the closing of the
Merger (the “Closing”), we will change its name to “SolarMax Technology Holdings, Inc.” In connection
with the Redomestication, the provision in Alberton’s amended and restated memorandum and articles of association which
provides that we have net tangible assets of at least US$5,000,001 upon such consummation of the business combination is to be
amended to require that the net tangible asset test be met “prior to or upon” consummation of the business combination.
Prior
to the Closing, we will continue out of the British Virgin Islands and domesticate as a Nevada corporation and will no longer
be considered a company incorporated in the British Virgin Islands.
As
consideration for the Merger, SolarMax shareholders as of immediately prior to the Effective Time (but excluding holders of SolarMax
options) collectively will receive from us, in the aggregate, a number of Alberton common stock equal to: (i) $300,000,000, divided
by (ii) the Redemption Price (defined below) (such shares of Alberton common stock is referred as the “Stockholder Merger
Consideration”). The holders of SolarMax options shall receive Assumed Options to purchase the number of shares of Alberton
common stock as described above in accordance with the terms and conditions set forth in the Merger Agreement. For the purpose
of the Merger Agreement, Redemption Price means a price per share equal to the price at which each share of Alberton common stock
is redeemed pursuant to the redemption by our public stockholders in connection with our initial business combination, as required
by its amended and restated certificate of incorporation immediately prior to the Effective Time (the “Redemption”).Consummation
of the transactions contemplated by the Merger Agreement is subject to the satisfaction or waiver by the respective parties of
a number of conditions, including the approval of the Merger Agreement and the transactions contemplated thereby by SolarMax’s
and the Company’s respective stockholders. Other closing conditions include, among others: (i) the respective representations
of the parties to each other being true and correct; (ii) receipt of requisite regulatory approvals; (iii) no law or order preventing
or prohibiting the Merger or the other transactions contemplated by the Merger Agreement; (iv) no pending litigation to enjoin
or restrict the consummation of the Closing; (v) we having at least $5,000,001 in net tangible assets as of the Closing, after
giving effect to the completion of the Redemption, consummation of the Merger and any private financings; (vi) the Redomestication,
(vii) the election or appointment of members to the our board of directors as described above; (vii) the effectiveness of the
Registration Statement (as defined in the Merger Agreement), and (viii) being advised by Nasdaq that upon consummation of the
Merger, we shall continue to be listed and all outstanding deficiencies have been addressed to the satisfaction of Nasdaq.
On
October 27, 2020, Alberton, Merger Sub and SolarMax entered into an amendment to the Merger Agreement (the “First Amendment”)
to increase certain Extension Loans (as defined in the Merger Agreement) to be provided by SolarMax from $60,000 monthly to $70,674
monthly. As a result, the First Amendment (i) amends Section 5.12(a) of the Merger Agreement by changing clause (x) to read as
follows: “(x) $60,000 per month prior to the date of this Amendment and $70,674 commencing with payments made on or after
the date of this Amendment or” (“Section 5.12 Amendment”); and (ii) provides that, to the extent that the payments
made by SolarMax exceed the amount of the Extension Loans (as defined in the Merger Agreement) to be made by Alberton pursuant
to the Section 5.12(a) prior to Section 5.12 Amendment, Alberton shall, at the Closing (as defined in the Merger Agreement), cause
to be delivered to the Surviving Corporation (as defined in the Merger Agreement) for cancellation, such number of Sponsor Shares
as have a value, determined as provided in the Merger Agreement, equal to such excess.
On
March 19, 2021, Alberton, Merger Sub and SolarMax entered into an amendment (the “Second Amendment”) to the Merger
Agreement. Pursuant to the Second Amendment, Alberton agreed to make up to two additional Extension Loans (“Additional Loans”)
in the amount of $70,674 per month.
The
Merger also calls for additional agreements, including, among others, the Lock-Up Agreements and the Voting Agreement, as described
elsewhere in the current report on Form 8-K filed with the Securities and Exchange Commission on October 28, 2020. The First Amendment
and the Second Amendment are incorporated by reference from the current reports on Form 8-K filed with the Securities and Exchange
Commission on November 3, 2020 and March 23, 2021, respectively.
On
August 11, 2021, Alberton, Merger Sub and SolarMax entered into an amendment (the “Third Amendment”) to the
Merger Agreement. Pursuant to the Third Amendment: (i) the number of Alberton ordinary shares to be issued to the SolarMax
shareholders was changed to provide that the number of shares is determined by dividing $300,000,000 by $10.50 rather than by
the Redemption Price; (ii) SolarMax, which had already made Extension Loans totaling $697,453.32, agreed to make up to three
additional Extension Loans each in the amount of $76,704.66, for a total of a maximum of $927,567.30, as compared with a
maximum of $360,000 in the initial Merger Agreement, and SolarMax agreed to the cancelation of all of the Extension Loans at
the Closing. The Extension Loans are loans made by SolarMax to Alberton to provide Alberton with funds to make payments
required to be made by Alberton to the trust which were required in connection with each extension of the last day on which
Alberton must complete a business combination; (iii) the requirement that Alberton satisfies its obligation with respect to
the deferred underwriting compensation of $4,020,797 due to Chardan Capital Markets, LLC, the underwriter of Alberton’s
initial public offering, through the delivery of Sponsor Shares was eliminated, and the deferred underwriting compensation is
to be paid in cash; (iv) the requirement that the notes outstanding at September 3, 2020 be settled through the delivery of
Sponsor Shares was replaced by the agreement that such notes, as well as an additional loan from the Sponsor in the amount of
$273,640, be settled by (a) the issuance by Alberton of ordinary shares valued at the Conversion Loan Valuation Price, which
is ten (10) times the average trading price of the Alberton Rights during a period of twenty-five (25) trading days ending on
the second trading day prior to mailing of the final Proxy Statement to Alberton’s shareholders in connection with the
Special Meeting, in payment of 50% of the loans and, pursuant to an agreement with the noteholders, agreeing to register
those shares and (b) cash payment of the other 50%. The total principal amount of these notes is $3,102,440, of which
notes in the principal amount of $1,353,640 are due to the Sponsor. Pursuant to agreements with the noteholders,
Alberton agreed to register the ordinary shares issued to the noteholders. In the event that the registration statement
covering the shares issued upon conversion of 50% of the principal amount of such notes (the “Conversion
Shares”) has not been declared effective by the SEC within 15 business days after the Closing (other than as a
result of the failure of noteholder to provide required information), the Conversion Shares shall be automatically forfeited
with no action to be taken by the Alberton or the noteholder and Alberton shall, within ten business days of such forfeiture,
pay the 50% of the note with respect to which the shares were issued; (v) 800,000 Sponsor Shares will be canceled; (vi) all
outstanding private warrants, each exercisable for one-half of one Alberton ordinary shares (or Purchaser Common Stock
following Redomestication), including all rights to receive additional private warrants which may be issued upon conversion
of any notes or other advances made to Alberton, shall be cancelled, and Alberton shall issue to the holder of the private
warrants (including any right to receive additional private warrants) a total of 44,467 Alberton ordinary shares; (vii)
pursuant to loan agreements with the Sponsor, SolarMax had made loans to the Sponsor for payment of obligations of Alberton
of $528,602.62 and agreed to make additional advances of up to $1,031.43. These loans will be satisfied by a portion of
the 800,000 shares being delivered for cancellation. The loans from the Sponsor to Alberton are being treated as
contributions to capital and not as a loan; (viii) the provision of the Merger Agreement that provide that, to the extent
that Extension Loans made by SolarMax exceed the amount which SolarMax initially agreed to advance to Alberton ($360,000) was
amended and the Sponsor’s obligation to deliver Sponsor Shares with respect to such excess advances, shall be
satisfied by the delivery of a portion of the 800,000 ordinary shares being delivered for cancellation; (ix) the Sponsor
agreed to provide up to $100,000 to provide Alberton with funds to pay its obligations. Such funds will be treated as a
contribution to capital and not as a loan; (x) Alberton agrees that a $50,000 obligation which the Sponsor had agreed to pay
to Alberton’s former chairman and chief executive officer, will be paid by Alberton, and (xi) at the Closing, Alberton
shall issue, under the Incentive Plan, to each of William Walter Young, Qing S. Huang and Peng Gao 30,000 shares of Common
Stock as the compensation shares for their service as independent directors of Alberton until the Closing and to Citiking
International Limited, a company organized under the laws of Hong Kong (“Citiking”), 200,000 shares pursuant to
certain IR Agreement (defined below) between the Purchaser and Citiking, among which 50,000 shares shall vest immediately,
50,000 shares shall vest upon the first anniversary of the Closing, 50,000 shares shall vest on the second anniversary of the
Closing and remaining 50,000 shares shall vest on the third anniversary of the Closing.
In
conjunction with the Third Amendment, Alberton has entered into the following agreements with various parties:
Note
Conversion Agreements
On
August 11, 2021, Alberton entered into certain note conversion agreements (the “Note Conversion Agreements”) with
each of Hong Ye Hong Kong Shareholding Co., Limited (“Hong Ye”), Global Nature Investment Holdings Limited (“Global
Nature”) and Qingdao Zhongxin Huirong Distressed Asset Disposal Co., Ltd. (“AMC Sino” and collectively with
Hong Ye and Global Nature, the “Noteholders”). Pursuant to the terms of the Note Conversion Agreements, Alberton shall
convert 50% of the balance (in the aggregated amount of $1,551,220) of respective note(s) (in the aggregated amount of $3,102,440)
with each of the Noteholder into Ordinary Shares (the “Conversion Shares”), immediately prior to, but subject to the
completion of the closing of the merger pursuant to the Merger Agreement, at a conversion price equal to ten (10) times the average
trading price of the rights of Alberton, during a period of twenty-five (25) trading days ending on the second trading day prior
to mailing of the final proxy statement/prospectus on Form S-4 (file number 333-251825) to Alberton’s shareholders in connection
with the special meeting.
Pursuant
to the terms of the Note Conversion Agreements, Alberton shall register the Conversion Shares on a registration statement on Form
S-1, which will be filed as soon as possible following the filing of an amendment to its proxy statement including SolarMax’s
consolidated financial statements for the six months ended June 30, 2021.
Share
Forfeiture Agreement
On
August 11, 2021, Alberton entered into a certain share forfeiture agreement (the “Forfeiture Agreement”) with SolarMax
and certain initial shareholders of Alberton including Hong Ye, Bin (Ben) Wang and Keqing (Kevin) Liu (collectively, the “Initial
Shareholders”), pursuant to which the Initial Shareholders have agreed to forfeit an aggregate of 800,000 Ordinary Shares
upon the closing of the merger pursuant to the terms of the Forfeiture Agreement.
Backstop
and Private Placement
On
August 11, 2021, Alberton entered into certain backstop agreements (collectively, the “Backstop Agreements”) with
four backstop investors (collectively, the “Backstop Investors”), pursuant to which the Backstop Investors shall commit
to purchase an aggregate of no less than $18 million of Ordinary Shares in open market or private transactions from time to time,
or from holders of public shares of Alberton who have exercised their redemption rights pursuant to Alberton’s organization
documents, pursuant to the terms of the Backstop Agreements.
On
August 11, 2021, Alberton also entered into certain stock purchase agreement (the “PIPE SPA”) with JSDC Investment
LLC (the “PIPE Investor”) who is a minority existing shareholder of SolarMax, pursuant to which the PIPE Investor
shall purchase Ordinary Shares of Alberton at the amount equal to (i) $6 million divided by (ii) a price per share equal to the
price at which each share of Alberton is redeemed pursuant to the redemption by Alberton public shareholders in connection with
the merger.
Investor
Relations Consulting Agreement
On
August 11, 2021, Alberton entered into a certain letter agreement (the “IR Agreement”) with Citiking, pursuant to
which Citiking shall render investor relations services to Alberton and to generally act as its investor relations consultant
for the Asian market pursuant to the terms of the IR Agreement. Under the terms of the IR Agreement, Alberton has agreed to issue
an aggregate of 200,000 Ordinary Shares or Common Stock to Citiking as consideration for its services, subject to certain vesting
provisions described in the IR Agreement.
SolarMax
Notes
From
September 2020 to December 2020, the Company issued unsecured promissory notes in the aggregate principal amount of $261,348 to
SolarMax (the “SolarMax Notes 1”) to finance the extension of the Business Combination. The SolarMax Notes 1 are non-interest
bearing and payable on the earlier of (i) the consummation of a Business Combination, (ii) the Second Extended Date, or (iii)
the date on which either (x) the letter of intent dated September 3, 2020 (the “LOI”) or (y) the Acquisition Agreement,
as defined in the LOI, are terminated for any reason. At June 30, 2021 and December 31, 2020, there was $261,348 outstanding under
the SolarMax Notes 1.
From
January to March 2021, the Company issued additional unsecured promissory notes in the aggregate principal amount of $212,022
to SolarMax (the “SolarMax Notes 2”) to finance the extension of the period that the Company must complete a Business
Combination to April 26, 2021. SolarMax Notes 2 are non-interest bearing, unsecured and payable upon the first to occur of (i)
the Closing Date, as defined in the Merger Agreement, or (ii) the date on which, pursuant to the organization documents of Alberton,
Alberton must complete a Business Combination, which date is presently October 26, 2021, or (iii) the date on which the Merger
Agreement is terminated or (iv) the date an Event of Default shall occur. At June 30, 2021, there was $212,022 outstanding under
the SolarMax Notes 2.
From
April to June 2021, the Company issued additional unsecured promissory notes in the aggregate principal amount of $224,083 to
SolarMax (the “SolarMax Notes 3”) to finance the extension of the period that the Company must complete a Business
Combination to October 26, 2021. SolarMax Notes 3 are non-interest bearing, unsecured and payable upon the first to occur of (i)
the Closing Date, as defined in the Merger Agreement, or (ii) the date on which, pursuant to the organization documents of Alberton,
Alberton must complete a Business Combination, which date is presently October 26, 2021, or (iii) the date on which the Merger
Agreement is terminated or (iv) the date an Event of Default shall occur. At June 30, 2021, there was $224,083 outstanding under
the SolarMax Notes 3.
NASDAQ
Delisting Notifications and Regaining Compliance
On
September 1, 2020, we received a notice from the Nasdaq indicating that we were not in compliance with Listing Rule 5550(a)(3)
(the “Minimum Public Holders Rule”), which required us to have at least 300 public holders for continued listing on
the NASDAQ Capital Market. We had until October 15, 2020 to provide Nasdaq with a plan to regain compliance with the Minimum
Public Holders Rule. The notice is a notification of deficiency, not of imminent delisting, and had no current effect on the listing
or trading of our securities on Nasdaq.
The
Notice stated that we had 45 calendar days to submit a plan to regain compliance with the Minimum Public Holders
Rule. We intended to submit a plan to regain compliance with the Minimum Public Holders Rule within the required timeframe. If
Nasdaq accepted our plan, Nasdaq may grant us an extension of up to 180 calendar days from the date of the Notice to
evidence compliance with the Minimum Public Holders Rule. If Nasdaq did not accept our plan, we would have the opportunity
to appeal the decision in front of a Nasdaq Hearings Panel.
We
submitted its plan of compliance on October 16, 2020 and based on the review of the materials submitted by us. On October 29,
2020, we received a notification letter from the Listing Qualifications Department of The Nasdaq stating that the Nasdaq
Staff had determined to grant us an extension of time through March 1, 2021 to regain compliance with Minimum Public Holders Rule.
On February 18, 2021, the Company received a letter from Nasdaq, advising the Company that the Company had regained compliance
with the Minimum Public Holders Rule based on the Company’s submissions to Nasdaq of shareholder records dated January 20,
2021.
On
January 4, 2021, Nasdaq advised the Company that it no longer complies with Nasdaq Listing Rule 5620(a) due to the Company’s
failure to hold an annual meeting of shareholders within twelve months of the end of the Company’s fiscal year ended December
31, 2019 (the “Annual Meeting Requirement”)On March 16, 2021, after the Company’s submission of a plan
to regain compliance with Annual Meeting Requirement, the Company received a notification letter from Nasdaq stating that the
Nasdaq Staff had determined to grant the Company an extension of time through June 29, 2021 to regain compliance with the
Annual Meeting Requirement.
On
March 26, 2021, the Company filed a definitive proxy statement in Form 14A for the purposes of seeking its shareholder approval
to extend the date before which the Company must complete an initial Business Combination until October 26, 2021 or such earlier
date as determined and related matters at a special meeting in lieu of the 2020 Annual Meeting in order to be compliance with
Annual Meeting Requirement.
On
May 3, 2021, the Company received a letter from Nasdaq, advising the Company that the Company had regained compliance with the
Annual Meeting Requirement based on the Company’s Form 8-K filed on April 26, 2021, indicating that the Company’s
proxy was distributed on April 15, 2021 and its annual meeting of shareholders was held on April 23, 2021.
On
June 9, 2021, the Company received a notice from Nasdaq notifying the Company that, because its Form 10-Q for the period ended
March 31, 2021 was not filed with the SEC by the required due date of May 17, 2021, the Company is therefore not in compliance
with the periodic filing requirements for continued listing set forth in NASDAQ Listing Rule 5250(c)(1). This Notice received
has no immediate effect on the listing or trading of the Company’s shares. Nasdaq has provided the Company with 60 calendar days,
until August 9, 2021 to submit a plan to regain compliance. If Nasdaq accepts the Company’s plan, then Nasdaq may grant the Company
up to 180 days from the prescribed due date for the filing of the 2021 10-Q, or November 22, 2021, to regain compliance.
On
June 23, 2021, the Company received a written notification from the Nasdaq Stock Market Listing Qualifications Staff, indicating
that the Company has regained compliance with the periodic filing requirement for continued listing on the Nasdaq Capital Market
pursuant to Nasdaq Listing Rule 5250(c), based on the Company’s filing of its Quarterly Report on Form 10-Q for the period
ended March 31, 2021 on June 22, 2021.
Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On
October 19, 2020, Mr. John W. Allen resigned from his positions as an independent director and the chairman of the compensation
committee of the Company and Mr. Harry Edelson resigned from his positions as an independent director and the chairman of audit
committee of the Company. Their resignation did not result from a disagreement with the Company on any matter relating to our
operations, policies or practices.
On
October 20, 2020, the Board appointed Mr. William Walter Young as an independent director and the chairman of the compensation
committee and Mr. Qing S. Huang as an independent director and the chairman of the audit committee of the Board of the Company
to fill the vacancies created by Mr. Allen and Mr. Edelson, effective immediately.
On
April 23, 2021, at the special meeting in lieu of the 2020 annual meeting of the shareholders, five directors to the Board were
re-elected, with such directors to serve until the 2021 annual meeting of shareholders.
As
a result, the Board currently have two executive directors and three independent directors. The following table sets forth information
about our directors and executive officers as of the date hereof.