NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
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 September 30, 2021, the Company had not yet commenced any operations. The Company previously had until October 26, 2021 to consummate
a Business Combination. 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”).
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 April 26, 2022.
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 April 26, 2022.
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
SEPTEMBER
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.
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.
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 April 26, 2022. 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
SEPTEMBER
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.
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.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
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.
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, 2021to April 26, 2022. In addition with the extension, the Company adopted the amended and restated memorandum and articles
of association providing the same with regards to the date by which the Company must complete its initial business combination.
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.
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, 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 and agreed to make additional
advances of up to $12,233. 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; 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.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
The
Sponsor consented to these amendments.
In
conjunction with the Merger Agreement including its amendments, the Company currently have the following 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
immediately prior to the closing, ordinary shares of the Company (or common stock of the Company following redomestication) 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 off
the outstanding indebtedness of the Company as of the closing of the Merger 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 of the Merger. 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, of which first 50,000 shares shall
vest at the closing of the Merger, 50,000 shares shall vest at the first anniversary of the closing of the Merger, 50,000 shares shall
vest at the second anniversary and last 50,000 shares shall vest on the third anniversary of the closing of the Merger, provided that
Citiking remains as advisor to the Company at each vesting date.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
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).
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.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
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”).
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.
On
October 22, 2021, the Company held a special meeting of the shareholders pursuant to which the Company’s shareholders approved
extending the Extension from October 26, 2021 to April 26, 2022. In connection with October 2021 Extension, the Company has committed
to deposit $0.10 per share per month into the trust account as additional interests on the proceeds in the trust account based on a commitment
from SolarMax as provided in the Merger Agreement.
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 September 30, 2021, the Company deposited
an aggregate of $1,167,567 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 $927,567 from the SolarMax Notes (see Note 7).
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
SEPTEMBER
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.
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.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
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.
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
|
)
|
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Balance Sheet as of September 30, 2021
|
|
|
|
|
|
|
|
|
|
Ordinary shares subject to possible redemption
|
|
$
|
220,476
|
|
|
$
|
14,316,536
|
|
|
$
|
14,537,012
|
|
Ordinary shares
|
|
$
|
3,480,585
|
|
|
$
|
(3,299,131
|
)
|
|
$
|
181,454
|
|
Retained earnings (accumulated deficit)
|
|
$
|
1,519,418
|
|
|
$
|
(11,017,405
|
)
|
|
$
|
(9,497,987
|
)
|
Total shareholders’ equity (deficit)
|
|
$
|
5,000,003
|
|
|
$
|
(14,316,536
|
)
|
|
$
|
(9,316,533
|
)
|
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Statement of Operations for the Three Months Ended September
30, 2020
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(84,230
|
)
|
|
$
|
-
|
|
|
$
|
(84,230
|
)
|
Less: income attributable to ordinary shares subject to
possible redemption
|
|
$
|
(59
|
)
|
|
$
|
59
|
|
|
$
|
-
|
|
Adjusted net loss
|
|
$
|
(84,289
|
)
|
|
$
|
84,289
|
|
|
$
|
-
|
|
Basic and diluted weighted average redeemable ordinary
shares outstanding
|
|
|
-
|
|
|
|
1,414,480
|
|
|
|
1,414,480
|
|
Basic and diluted net loss per redeemable ordinary share
|
|
$
|
-
|
|
|
$
|
(0.06
|
)
|
|
$
|
(0.06
|
)
|
Basic and diluted weighted average non-redeemable ordinary
shares outstanding
|
|
|
4,387,754
|
|
|
|
(1,185,996
|
)
|
|
|
3,201,758
|
|
Basic and diluted net loss per non-redeemable ordinary
share
|
|
$
|
(0.02
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.06
|
)
|
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Statement of Operations for the Nine Months Ended September
30, 2020
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
202,621
|
|
|
$
|
-
|
|
|
$
|
202,621
|
|
Less: income attributable to ordinary shares subject to
possible redemption
|
|
$
|
(86,089
|
)
|
|
$
|
86,089
|
|
|
$
|
-
|
|
Adjusted net income
|
|
$
|
116,532
|
|
|
$
|
(116,532
|
)
|
|
$
|
-
|
|
Basic and diluted weighted average redeemable ordinary
shares outstanding
|
|
|
-
|
|
|
|
5,605,649
|
|
|
|
5,605,649
|
|
Basic and diluted net loss per redeemable ordinary share
|
|
$
|
-
|
|
|
$
|
(0.20
|
)
|
|
$
|
(0.20
|
)
|
Basic and diluted weighted average non-redeemable ordinary
shares outstanding
|
|
|
4,340,885
|
|
|
|
(1,139,127
|
)
|
|
|
3,201,758
|
|
Basic and diluted net income (loss) per non-redeemable
ordinary share
|
|
$
|
0.03
|
|
|
$
|
(0.23
|
)
|
|
$
|
(0.20
|
)
|
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Statement of Operations for the Three Months Ended September
30, 2021
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(152,593
|
)
|
|
$
|
-
|
|
|
$
|
(152,593
|
)
|
Less: income attributable to ordinary shares subject to
possible redemption
|
|
$
|
(5
|
)
|
|
$
|
5
|
|
|
$
|
-
|
|
Adjusted net loss
|
|
$
|
(152,598
|
)
|
|
$
|
152,598
|
|
|
$
|
-
|
|
Basic and diluted weighted average redeemable ordinary
shares outstanding
|
|
|
-
|
|
|
|
1,278,411
|
|
|
|
1,278,411
|
|
Basic and diluted net loss per redeemable ordinary share
|
|
$
|
-
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.09
|
)
|
Basic and diluted weighted average non-redeemable ordinary
shares outstanding
|
|
|
4,446,830
|
|
|
|
(1,245,072
|
)
|
|
|
3,201,758
|
|
Basic and diluted net loss per non-redeemable ordinary
share
|
|
$
|
(0.03
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.09
|
)
|
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Statement of Operations for the Nine Months Ended September
30, 2021
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(433,831
|
)
|
|
$
|
-
|
|
|
$
|
(433,831
|
)
|
Less: income attributable to ordinary shares subject to
possible redemption
|
|
$
|
(17
|
)
|
|
$
|
17
|
|
|
$
|
-
|
|
Adjusted net loss
|
|
$
|
(433,848
|
)
|
|
$
|
433,848
|
|
|
$
|
-
|
|
Basic and diluted weighted average redeemable ordinary
shares outstanding
|
|
|
-
|
|
|
|
1,334,319
|
|
|
|
1,334,319
|
|
Basic and diluted net loss per redeemable ordinary share
|
|
$
|
-
|
|
|
$
|
(0.24
|
)
|
|
$
|
(0.24
|
)
|
Basic and diluted weighted average non-redeemable ordinary
shares outstanding
|
|
|
4,433,417
|
|
|
|
(1,231,659
|
)
|
|
|
3,201,758
|
|
Basic and diluted net loss per non-redeemable ordinary
share
|
|
$
|
(0.10
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.24
|
)
|
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Statement of Cash Flows for the Nine Months Ended September 30, 2020
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Non-cash Financing Activities:
|
|
|
|
|
|
|
|
|
|
Change in value of ordinary shares subject to possible
redemption
|
|
$
|
202,627
|
|
|
$
|
(202,627
|
)
|
|
$
|
-
|
|
Accretion of carrying value to redemption value
|
|
$
|
-
|
|
|
$
|
2,007,819
|
|
|
$
|
2,007,819
|
|
|
|
As
Previously
Reported
|
|
|
Adjustments
|
|
|
As
Restated
|
|
Statement of Cash Flows for the Nine Months Ended September 30, 2021
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Non-cash Financing Activities:
|
|
|
|
|
|
|
|
|
|
Change in value of ordinary shares subject to possible
redemption
|
|
$
|
433,829
|
|
|
$
|
(433,829
|
)
|
|
$
|
-
|
|
Accretion of carrying value to redemption value
|
|
$
|
-
|
|
|
$
|
667,324
|
|
|
$
|
667,324
|
|
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
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 nine months periods ended September 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 September 30, 2021 and December 31, 2020.
Investments
Held in Trust Account
At
September 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 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
SEPTEMBER
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 September 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 September 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 nine months ended September 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.
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.
|
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
|
●
|
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 September 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
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
Warrant liabilities –
Private Warrants
|
|
3
|
|
$
|
416,516
|
|
|
$
|
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 nine months ended September 30, 2021
|
|
|
(106,063
|
)
|
Warrant liabilities
at September 30, 2021
|
|
$
|
416,516
|
|
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:
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
Stock price
|
|
$
|
11.33
|
|
|
$
|
11.41
|
|
Exercise price
|
|
$
|
11.50
|
|
|
$
|
11.50
|
|
Risk-free interest rate
|
|
|
1.02
|
%
|
|
|
0.40
|
%
|
Expected term (in years)
|
|
|
5.25
|
|
|
|
5.25
|
|
Expected dividend yield
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
Expected volatility
|
|
|
40.72
|
%
|
|
|
41.59
|
%
|
Merger probability adjustment
|
|
|
60.00
|
%
|
|
|
75.00
|
%
|
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.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
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
SEPTEMBER
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
SEPTEMBER
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 September 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 September 2021, SolarMax made a series of non-interest bearing loans to the Sponsor in the aggregate principal amount
of $651,369, to enable the Sponsor to provide the Company with funds to pay for the Company’s operating costs. These notes shall
be paid off in cash upon the closing of the Merger. 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 September 30, 2021 and December 31, 2020, advances of $651,369 and
$128,466 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. As provided in the Merger Agreement, as amended, the Working Capital Loans would
be repaid in cash upon the closing of the Merger. 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 September 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. As
of September 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 September 30, 2021 and 2020, the Company incurred $3,000 of administrative fees. For each of the nine months ended September
30, 2021 and 2020, the Company incurred $9,000 of administrative fees. At September 30, 2021 and December 31, 2020, $15,000 and $6,000,
respectively, of such fees are included in accounts payable and accrued expenses in the accompanying unaudited condensed balance sheets.
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 the Company.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
Note
7 — Promissory Notes
Promissory
notes are comprised of the following as of September 30, 2021 and December 31, 2020:
|
|
September 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
|
|
|
|
-
|
|
SolarMax
Notes 4
|
|
|
230,114
|
|
|
|
-
|
|
Total
|
|
$
|
2,676,367
|
|
|
$
|
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 September 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).
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 September 30, 2021 and December 31, 2020, there was $500,000 outstanding under the GN Note 2.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
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 September 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 September 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 April 26, 2022, or (iii) the date on which the Merger Agreement is terminated or (iv)
the date an Event of Default shall occur. At September 30, 2021, there was $224,083 outstanding under the SolarMax Notes 3.
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. At September 30, 2021, there was $230,114 outstanding under the SolarMax Notes 4.
Note 8 — Cash and Investments Held in
Trust Account
As
of September 30, 2021 and December 31, 2020, assets held in the Trust Account were comprised of $14,537,012 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 September
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
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
Assets:
|
|
|
|
|
|
|
|
|
Trust Account - U.S. Treasury
Securities Money Market Fund
|
|
1
|
|
$
|
14,537,012
|
|
|
$
|
15,364,991
|
|
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
Note 9 — Commitments and Contingencies
From time to time, the Company
is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. When the Company becomes
aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. In accordance with authoritative guidance, the
Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated.
Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability.
If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the specific
claim if the likelihood of a potential loss is reasonably possible and the amount involved is material. The Company continuously assesses
the potential liability related to the Company’s pending litigation and revises its estimates when additional information becomes
available. With respect to the Company’s outstanding legal matters, the Company believe that the amount or estimable range of reasonably
possible loss will not, either individually or in the aggregate, have a material adverse effect on its business, consolidated financial
position, results of operations, or cash flows. However, the outcome of litigation is inherently uncertain. Therefore, if one or more
of these ordinary-course legal matters were resolved against the Company for amounts in excess of management's expectations, the Company’s
results of operations and financial condition, including in a particular reporting period, could be materially adversely affected.
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.
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 September 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 September 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.
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
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.
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 September 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).
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
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.
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
September
30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(152,593
|
)
|
|
$
|
(84,230
|
)
|
|
$
|
(433,831
|
)
|
|
$
|
202,621
|
|
Accretion of carrying value
to redemption value
|
|
|
(230,473
|
)
|
|
|
(180,380
|
)
|
|
|
(667,324
|
)
|
|
|
(2,007,819
|
)
|
Net loss including accretion of
carrying value to redemption value
|
|
$
|
(383,066
|
)
|
|
$
|
(264,610
|
)
|
|
$
|
(1,101,155
|
)
|
|
$
|
(1,805,198
|
)
|
|
|
Three Months Ended
|
|
|
Three Months Ended
|
|
|
|
September 30, 2021
|
|
|
September 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
|
|
$
|
(109,307
|
)
|
|
$
|
(273,759
|
)
|
|
$
|
(81,080
|
)
|
|
$
|
(183,530
|
)
|
Denominators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding
|
|
|
1,278,411
|
|
|
|
3,201,758
|
|
|
|
1,414,480
|
|
|
|
3,201,758
|
|
Basic and diluted net loss per share
|
|
$
|
(0.09
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.06
|
)
|
|
|
Nine Months Ended
|
|
|
Nine Months Ended
|
|
|
|
September 30, 2021
|
|
|
September 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
|
|
$
|
(323,912
|
)
|
|
$
|
(777,243
|
)
|
|
$
|
(1,148,954
|
)
|
|
$
|
(656,244
|
)
|
Denominators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding
|
|
|
1,334,319
|
|
|
|
3,201,758
|
|
|
|
5,605,649
|
|
|
|
3,201,758
|
|
Basic and diluted net loss per share
|
|
$
|
(0.24
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.20
|
)
|
ALBERTON
ACQUISITION CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
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.
Promissory
Notes
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.
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 periods ended September 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
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.
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.
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.
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 September 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 September 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
September 30, 2021, there was $224,083 outstanding under the SolarMax Notes 3.
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. At September 30, 2021, there was $230,114 outstanding under the SolarMax Notes 4.
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 $127,836 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.
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 request of hearing 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.
As
previously announced, the Company has entered into a binding definitive agreement to merge with SolarMax Technology, Inc. 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.
October
2021 Special Shareholder Meeting of the Shareholders
We
had until October 26, 2021 to consummate a Business Combination. However, as we anticipated that we may not be able to consummate a Business
Combination by October 26, 2021, we extended the period of time to consummate a Business Combination until April 26, 2022 or such an
earlier date as determined by our board. On October 22, 2021, we held a special meeting of the shareholders pursuant to which our 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 our ordinary shares. As a result, an
aggregate of $571.56 (or $11.43 per share) was released from our Trust Account to pay such shareholders. In connection with October
2021 Extension, the Company has committed to deposit $0.10 per share per month into the trust account as additional interests on the
proceeds in the trust account based on a commitment from SolarMax as provided in the Merger Agreement.
Results
of Operations
Our
entire activity from inception up to October 26, 2018 was related to the Company’s formation, the Initial Public Offering and general
and administrative activities. Since the Initial Public Offering, our activity has been limited to the evaluation of Business Combination
candidates, and we will not be generating any operating revenues until the closing and completion of our initial Business Combination.
We generate non-operating income in the form of interest income on investments. We are incurring expenses as a result of being a public
company (for legal, financial reporting, accounting and auditing compliance).
For
the three months ended September 30, 2021, we had a net loss of $152,593, consisting of $175,736 of operating costs, consisting mostly
of general and administrative expenses, offset by $360 of interest income from investments in our Trust Account and $22,783 gain on change
in fair value of warrant liabilities.
For
the three months ended September 30, 2020, we had a net loss of $84,230, consisting of 100,347 of operating costs, consisting mostly
of general and administrative expenses, offset by $380 of interest income from investments in our Trust Account, $3 of interest income
from deposits in our corporate bank account and $15,734 gain on change in fair value of warrant liabilities.
For
the nine months ended September 30, 2021, we had a net loss of $433,831, consisting of $541,000 of operating costs, consisting mostly
of general and administrative expenses, offset by $1,106 of interest income from investments in our Trust Account and $106,063 gain on
change in fair value of warrant liabilities.
For
the nine months ended September 30, 2020, we had a net income of $202,621, consisting of $559,019 of interest income from investments
in our Trust Account, $835 of interest income from deposits in our corporate bank account and $38,214 gain on change in fair value of
warrant liabilities, offset by $395,447 of operating costs, consisting mostly of general and administrative expenses.
Liquidity
and Capital Resources
As
of September 30, 2021, we had cash outside the Trust Account of $1,331 available for working capital needs. All remaining cash is held
in the Trust Account and is generally unavailable for our use, prior to an initial Business Combination, and is restricted for use either
in a Business Combination or to redeem ordinary shares. As of September 30, 2021, none of the amount on deposit in the Trust Account
was available to be withdrawn as described above.
Until
consummation of the Business Combination, we will be using the funds not held in the Trust Account, and any additional funding that may
be loaned to us by our Sponsor, for identifying and evaluating prospective acquisition candidates, performing business due diligence
on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing
corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring,
negotiating and consummating the Business Combination.
If
our estimates of the costs of undertaking in-depth due diligence and negotiating Business Combination are less than the actual amount
necessary to do so, we may have insufficient funds available to operate its business prior to the Business Combination and will need
to raise additional capital. In this event, our officers, directors or their affiliates may, but are not obligated to, loan us funds
as may be required. If we consummate an initial Business Combination, we would repay such loaned amounts out of the proceeds of the Trust
Account released to us upon consummation of the Business Combination, or, at the lender’s discretion, up to $1,500,000 of such
loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. In the event that the initial
Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned
amounts, but no proceeds from our Trust Account would be used for such repayment. The terms of such loans by our initial shareholders,
officers and directors, if any, have not been determined and no written agreements exist with respect to such loans.
Moreover,
we may need to obtain additional financing either to consummate our initial Business Combination or because we become obligated to redeem
a significant number of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional
securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would
only consummate such financing simultaneously with the consummation of our initial Business Combination. Following our initial Business
Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Going
Concern
In
connection with our 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 our
ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required
to liquidate after April 26, 2022.
Off-Balance
Sheet Arrangements
As
of September 30, 2021, we did not have any off-balance sheet arrangements. We have no obligations, assets or liabilities which would
be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities
or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating
off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose
entities, guaranteed any debt or commitments of other entities, or entered into any non-financial assets.
Contractual
Obligations
We
do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement
to pay an affiliate of the Sponsor a monthly fee of $1,000 for general and administrative services including office space, utilities
and secretarial support. We began incurring these fees on August 1, 2018 and will continue to incur these fees monthly until the earlier
of the completion of the Business Combination or our liquidation.
The
underwriters are entitled to 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.
As
of the date thereof, we have borrowed from our related parties and issued promissory notes to various parties including our Sponsor in
the aggregate amount of $4,758,081. In connection with extensions to complete the initial business combination, we issued a series of
unsecured promissory notes to SolarMax in an aggregate amount of $1,004,272. To the extent that these notes exceed $360,000, the Sponsor
agreed to transfer to Successor for cancellation sponsor shares equal to such excess.
Critical
Accounting Policies
The
preparation of the condensed financial statements and related disclosures in conformity with accounting principles generally accepted
in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those estimates. The Company has the following critical accounting
policies:
Ordinary
Shares Subject to Possible Redemption
The
Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in 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.
Recent
Accounting Standards
Management
does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect
on our condensed financial statements.