ITEM
1. BUSINESS
In
this Annual Report on Form 10-K (the “Form 10-K”), references to the “Company” and to “we,”
“us,” and “our” refer to Alberton Acquisition Corporation.
General
We,
Alberton Acquisition Corporation (“Alberton”), were incorporated on February 16, 2018 as a British Virgin Islands
company 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 target businesses. Our efforts to identify a prospective target business
are not limited to any particular industry or geographic location. We intend to utilize cash derived from the proceeds of our
initial public offering, our securities, debt or a combination of cash, securities and debt, in effecting our initial business
combination.
On
October 26, 2018, we consummated our initial public offering (the “IPO”) of 10,000,000 units. Each unit consists of
one ordinary share (the “Ordinary Shares”), 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 an initial business combination. The units were sold at
an offering price of $10.00 per unit, generating gross proceeds of $100,000,000. We granted the underwriters a 45-day option to
purchase up to 1,500,000 additional units to cover over-allotments. Simultaneously with the closing of the IPO, we consummated
a private placement with Hong Ye Hong Kong Shareholding Co., Limited (“Hong Ye” or the “Sponsor”), of
300,000 private units at a price of $10.00 per private unit, generating gross proceeds of $3,000,000. On October 26, 2018, a total
of $100,000,000 of the net proceeds from the sale of the units in the IPO and the sale of the private units in the private placement
were placed in a trust account established for the benefit of our public shareholders (the “Trust Account”).
On
November 20, 2018, the underwriters exercised the over-allotment option in part and purchased an additional 1,487,992 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 units, we consummated another private placement with the Sponsor of 29,760 private units at a price of $10.00 per
private unit, generating total additional gross proceeds of $297,600. On November 20, 2018, the underwriters waived its right
to exercise the reminder of the over-allotment option. As of November 20, 2018, an additional $14,879,920 of the net proceeds
from the sale of the over-allotment units and the additional units in the private placement were placed in the Trust Account established
for the benefit of our public shareholders, bringing the aggregate amount placed in the Trust Account to be $114,879,920.
Merger
Agreement with SolarMax
On
October 27, 2020, we entered into a certain agreement and plan of merger, as amended by an amendment dated November 10, 2020,
and further amended by an amendment dated March 19, 2021, which agreement, as amended being referred to as the “Merger Agreement”,
among Alberton Merger Subsidiary, Inc. a Nevada corporation and a wholly-owned subsidiary of Alberton (“Merger Sub”)
and SolarMax Technology Inc., a Nevada corporation (“SolarMax”). 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
Alberton (the “Merger”). The Merger will become effective at such time on the date of Closing (as defined below),
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, Alberton will change its name to “SolarMax
Technology Holdings, Inc.” (the “Successor”).
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 (“Domestication”).
At
the Effective Time, all shares of SolarMax common stock issued and outstanding prior to the Effective Time (excluding dissenting
shares as defined in the Merger Agreement, if any) will automatically be cancelled and cease to exist in exchange for the right
to receive Merger Consideration as defined in the Merger Agreement, and each outstanding option of SolarMax will be assumed by
Alberton and automatically converted into an option for shares of common stock of Alberton. At the Effective Time, each share
of Merger Sub common stock outstanding immediately prior to the Effective Time will be converted into an equal number of shares
of common stock of SolarMax, with the same rights, powers and privileges as the shares so converted and shall constitute the only
outstanding shares of capital stock of SolarMax.
Prior
to Domestication, we are a foreign private issuer. Upon the Domestication, we will lose our foreign private issuer status and
seek shareholder approval of the Business Combination at the meeting at which shareholders may seek to redeem their shares, regardless
of whether they vote for or against the Business Combination. The shareholders of Alberton will be entitled to redeem their shares
for cash equal to a pro rata share of the aggregate amount on deposit in the Trust Account which holds the proceeds of our IPO
as of two (2) business days prior to the Closing, less taxes payable, upon the Closing. Among other Closing conditions included
in the Merger Agreement, we will proceed with the Business Combination only if we will have net tangible assets of at least $5,000,001
and the Business Combination are approved by the requisite vote of the shareholders of Alberton at Alberton Special Meeting. Notwithstanding
the foregoing, a public shareholder, together with any affiliate of such shareholders or any other person with whom such shareholders
is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted
from seeking redemption rights with respect to 20% or more of the ordinary shares sold in the IPO without our prior written consent.
Our
Sponsor, together with certain of its affiliates and our former and current officers and directors (collectively, the “Initial
Shareholders”), have agreed (a) to vote their private shares (representing the ordinary shares underlying the private units)
and any public shares in favor of the Business Combination, (b) not to propose, or vote in favor of, an amendment to the memorandum
and articles of association of Alberton, prior to the Business Combination, to affect the substance or timing of Alberton’s
obligation to redeem all public shares if it cannot complete the Business Combination within 12 months (or 15 or 18 months, as
applicable) of the closing of this proposed offering, unless Alberton provides public shareholders an opportunity to redeem their
public shares, (c) not to redeem any private shares into the right to receive cash from the Trust Account in connection with a
shareholder vote to approve the Business Combination or sell their shares to Alberton in a tender offer in connection with the
Business Combination, and (d) that the private shares shall not participate in any liquidating distribution upon winding up if
the Business Combination is not consummated.
If
we are unable to consummate an initial business combination by April 26, 2021, we will, as promptly as reasonably possible but
not more than five (5) business days thereafter, subject to the British Virgin Islands Business Companies Act (the “Companies
Act”), distribute the aggregate amount then on deposit in the Trust Account (net of taxes payable), pro rata to our public
shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs.
Our
Initial Shareholders, officers, and directors have agreed to waive their redemption rights with respect to the founder shares,
private shares and any public shares they may hold in connection with the Closing. Our Initial Shareholders, officers, and directors
have agreed to waive their redemption rights with respect to the founder shares, private shares and any public shares they may
hold in connection with the Closing.
Timeline
of the Merger
On
May 19, 2020, SolarMax was referred to us by a third party. After a preliminary review of the business of SolarMax, Our management
selected SolarMax as a potential target.
On
June 7, 2020, we and SolarMax signed a non-disclosure agreement, giving Alberton an opportunity to evaluate SolarMax’ detailed
business and financial information.
On
June 15, 2020, Luke Liu, Wang Guan’s assistant, and Jim Fei, the partner of the Sponsor, visited SolarMax’ office
based in Riverside County, California, and met with David Hsu, the CEO of SolarMax, and Stephen Brown, the CFO of SolarMax. Subsequently,
Luke Liu reported in writing to Guan Wang and Kevin Liu the basic situation of SolarMax and his review of SolarMax’ filings
with the SEC.
From
June 18 to June 28, 2020, our management had several conference calls with SolarMax’ management team to discuss the potential
business combination.
In
order to further investigate the operation and position of SolarMax, on June 30, 2020, we engaged Quest Mark Capital Inc., as
a financial advisor of Alberton to conduct due diligence on SolarMax and assist with Alberton’s negotiations with SolarMax
in connection with the potential business combination.
On
July 3, 2020, our board of directors held a meeting to discuss the potential business combination with SolarMax on the base of
the available information. Alberton also invited the CEO and CFO of SolarMax to attend a conference to get a better understanding
of its business operations and financial status.
From
August 15 to September 5, 2020, we continued our negotiation with SolarMax for the business combination. Our legal counsel, Hunter
Taubman Fischer and Li LLC (“HTFL”) and SolarMax’ legal counsel, Ellenoff Grossman & Schole LLP (“EGS”),
started to draft and negotiate a letter of intent in connection with the proposed business combination, pursuant to the instructions
and comments from their respective clients.
On
September 1, 2020, we received a written notice (the “Notice”) from the Listing Qualifications Department of The Nasdaq
Stock Market (“Nasdaq”) indicating that Alberton was not in compliance with Listing Rule 5550(a)(3) (the “Minimum
Public Holders Rule”), which requires Alberton to have at least 300 public holders for continued listing on the Nasdaq Capital
Market. The Notice is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or
trading of Alberton’s securities on the Nasdaq Capital Market. The Notice states that Alberton has 45 calendar days
to submit a plan to regain compliance with the Minimum Public Holders Rule. On October 15, 2020, Alberton submitted
its plan of compliance to Nasdaq and, based on the review of the materials submitted by Alberton, Nasdaq determined to grant the
Company an extension until March 1, 2021 to regain compliance with the Public Holder Rule.
On
September 3, 2020, we and SolarMax entered into a certain letter of intent for the business combination (the “SolarMax LOI”)
and formally started to discuss the related matters for the business combination. EGS started to prepare the draft of the merger
agreement. On the same day, SolarMax loaned Alberton US$60,000 to make its payment for the April Cash Contribution, for which
Alberton issued its promissory note in the principal amount of $60,000.
On
September 11, 2020, QuestMark Capital Inc. generated a due diligence report on SolarMax for Alberton.
On
September 18, 2020, EGS sent an initial draft of the Merger Agreement to HTFL, based on the terms of the executed letter of intent.
On
September 23, 2020, HTFL sent a revised draft of the Merger Agreement to EGS containing comments from Alberton and HTFL, which
reflected certain key terms of the agreement, including terms regarding convertible debt of SolarMax, the funding obligations
of the Merger, changes to certain representations and warranties and covenants, and additional provisions.
On
September 24, 2020, HTFL sent an initial draft of the Alberton preliminary proxy in connection with Alberton’s special meeting
of shareholders to extend the deadline of Alberton’s initial business combination from October 26, 2020 to April 26, 2021
or such earlier date as determined.
Between
September 24, 2020 and September 29, 2020, representatives of Alberton and SolarMax and their respective legal counsel and financial
advisors held numerous conference calls to negotiate the terms of the Merger Agreement and related documentation, including representations
and covenants, the components and determination of the merger consideration, and voting agreements. They also corresponded regarding
the Alberton preliminary proxy statement/prospectus.
On
October 1, 2020, EGS sent a revised draft of the Merger Agreement to HTFL regarding the matters contained in September 23 draft
and the indemnifications, expense arrangement in connection with the merger, and other provisions.
On
October 5, 2020, we filed our definitive proxy in connection with Alberton’s special meeting of shareholders to be held
on October 26, 2020 to extend the deadline of Alberton’s initial business combination from October 26, 2020 to April 26,
2021 or such earlier date as determined.
On
October 6, 2020, HTFL sent a further revised draft of the Merger Agreement to EGS reflecting, among others, the outstanding issues,
including but not limited to Alberton’s fees and expenses in connection with the merger, the draft of voting agreement and
lock-up agreement as exhibits attached to the Merger Agreement.
Between
October 6, 2020 and October 16, 2020, representatives of Alberton and SolarMax and their respective legal counsel and financial
advisors held certain conference calls to finalize the terms of the Merger Agreement and related documentation, including the
lock-up agreement and the voting agreement.
On
October 7, 2020, Alberton’s board of directors and SolarMax’ management had another discussion about SolarMax’
development plan for the next five years in connection with the potential business combination. SolarMax also made its unaudited
financial statements for the quarter ended June 30, 2020 available to Alberton and subsequently made its financial statements
for the nine months ended September 30, 2020 available to Alberton.
On
October 8, 2020, we engaged Donohoe Advisory for preparing of the compliance plan with Nasdaq.
On
October 9, 2020, we held a board meeting to update the status of SolarMax business combination.
On
October 12, 2020, a meeting of the board of directors was called to discuss and approve the business combination with SolarMax.
On
the same day, Donohoe Advisory started to coordinate with EGS and the representative of SolarMax to collect supporting documents
for the preparation of the plan of compliance to Nasdaq.
On
October 16, 2020, Ogier, the British Virgin Islands counsel of us sent a further revised draft of the Merger Agreement to HTFL
and EGS.
Later
on October 16, 2020, HTFL assisted to establish the Merger Sub in connection with the Business Combination.
On
the same day, Donohoe Advisory, on behalf of Alberton, submitted its plan of compliance to Nasdaq to regain compliance with Minimum
Public Holders Rule.
On
October 19, 2020, Alberton and SolarMax entered into an amendment to SolarMax LOI, pursuant to which, Alberton and SolarMax agreed
to amend and restate some paragraphs of SolarMax LOI, including the exclusivity provisions which were extended to October 30,
2020 and related provisions.
On
the same day, Mr. John W. Allen resigned from his positions as an independent director and the chairman of the compensation committee
of Alberton and Mr. Harry Edelson resigned from his positions as an independent director and the chairman of audit committee of
Alberton. Their resignation did not result from a disagreement with Alberton on any matter relating to Alberton’s operations,
policies or practices.
On
October 20, 2020, the board of directors of Alberton appointed Mr. William Walter Young as an independent director and the chairman
of the compensation committee and Mr. Qing S. Huang as an independent director and the chairman of the audit committee of the
board of directors of Alberton to fill the vacancies created by Mr. Allen and Mr. Edelson, effective immediately. Immediately
after the appointment, Alberton management team and HTFL sent over the documents and information regarding the business combination
with SolarMax to the new board members for them to review and digest.
On
October 22, 2020, a meeting of the board of directors were called to introduce the new independent directors to the board of directors
of Alberton and update them the current status of business combination with SolarMax.
On
October 23, 2020, EGS sent a further revised draft of the Merger Agreement to HTFL to reflect that SolarMax’ financial statements
ended June 30, 2020 were delivered.
On
October 24, 2020, HTFL sent a further revised draft of the Merger Agreement to EGS.
On
October 26, 2020, we held a special shareholder meeting, at which the proposal to extend the date by which Alberton must complete
its initial business combination from October 26, 2020 to April 26, 2021 or such earlier date as determined by the board of directors
of Alberton was voted on and approved.
October
27, 2020, a meeting of the board of directors were called to discuss and approve the Merger Agreement and related transactions.
HTFL submitted a draft of the Merger Agreement substantially the same in the final form of the Merger Agreement to the board
of directors of Alberton. After considering the proposed terms of the Merger Agreement and other related transaction agreements
and taking into account the other factors described below under the caption “Alberton’s Board of Directors’
Reasons for the Approval of the Business Combination,” the board of directors of Alberton unanimously approved the Merger
Agreement and related agreements and determined that it was advisable and in the best interests of Alberton to consummate the
Business Combination and other transactions contemplated by the Merger Agreement and related agreements, directed that the Merger
Agreement and the other proposals described in this proxy statement/prospectus be submitted to Alberton’s shareholders for
approval and adoption, and recommended that Alberton’s shareholders approve and adopt the Merger Agreement and such other
proposals.
Later
on October 27, 2020, we and SolarMax entered into the Merger Agreement.
On
October 28, 2020, a press release was issued announcing the execution of the Merger Agreement and the Business Combination. On
the same day, we filed with the SEC a Current Report on Form 8-K attaching the press release.
On
October 29, 2020, we received a notification letter from the Listing Qualifications Department of The Nasdaq stating that
the Nasdaq Staff had determined to grant Alberton an extension of time through March 1, 2021 to regain compliance with Minimum
Public Holders Rule.
On
November 1, 2020, HTFL circulated the initial draft of the Alberton preliminary proxy statement/prospectus to EGS.
On
November 3, 2020, we filed with the SEC a Current Report on Form 8-K to disclose such granted extension.
On
November 15, 2020, EGS circulated the SolarMax’ related disclosure to update Alberton preliminary proxy statement/prospectus.
On
November 10, 2020, Alberton, Merger Sub and SolarMax entered into an amendment (the “Amendment”) to the Merger Agreement
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 Amendment increases the monthly payments due on or after November 10, 2020 to $70,674 and provides that,
to the extent that the payments made by SolarMax exceed the $60,000 amount provided in the Merger Agreement, Alberton shall, at
the Closing, cause to be delivered to the Successor for cancellation, such number of sponsor shares as have a value, determined
as provided in the Merger Agreement, equal to such excess.
On December 18, 2020 and
December 28, 2020, SolarMax made non-interest bearing loans to Sponsor in the aggregate principal amount of $128,466, to enable the sponsor
to provide Alberton with funds to pay for our operating costs. At the Closing, these notes are to be satisfied by the delivery of sponsor
shares having a value equal to the principal amount of the notes. Otherwise, the due date will be upon the earlier of the date on which
the Merger Agreement is terminated or the date an Event of Default shall occur.
On January 4, 2021, Nasdaq advised Alberton
that it no longer complies with Nasdaq Listing Rule 5620(a) due to the Alberton’s failure to hold an annual meeting of shareholders
within twelve months of the end of the Alberton’s fiscal year ended December 31, 2019 (the “Annual Meeting Requirement”).
On January 19, 2021, the board of Alberton
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 Alberton instructed such issuance (the
“Extension Warrants”). Alberton was advised the Extension Warrants were processed on or about February 5, 2021, although
the date of delivery may be delayed as a result of processing time by DTC, broker and dealer, and other relevant parties.
On
February 18, 2021, we received a letter from Nasdaq, advising the Company that the Company had regained compliance with the Minimum
Public Holders Rule based on the Company’s submissions to Nasdaq of shareholder records dated January 20, 2021.
On March 16, 2021, after our submission of a plan to regain compliance
with Annual Meeting Requirement, we received a notification letter from Nasdaq stating that the Nasdaq Staff had determined to grant us
an extension of time through June 29, 2021 to regain compliance with the Annual Meeting Requirement.
On
March 19, 2020, Alberton, Merger Sub and SolarMax entered into an amendment (the “Second Amendment”) to the Merger
Agreement. Pursuant to the Second Amendment, Alberton agrees to make up to two additional Extension Loans (“Additional Loans”)
in the amount $70,674 per month, but no more than two Additional Loans. The first Additional Loan was made on the date of the
Second Amendment and the second Additional Loan will be made in April 2021. At the Closing, Alberton shall cause to be delivered
to the Successor for cancellation, such number of sponsor shares as have a value, determined as provided in the Merger Agreement,
equal to the amount of each $70,674 loan, which was the amount Alberton had initially agreed to pay.
On March 26, 2021, we filed a definitive proxy statement in Form 14A
for the purposes of seeking our shareholder approval to extend the date before which we must complete an initial business combination
until October 26, 2021 or such earlier date as determined and related matters at a special meeting in lieu of the 2020 Annual Meeting
in order to be compliance with Annual Meeting Requirement.
From
November 1, 2020 through the date hereof, Alberton and SolarMax and their representatives continued to correspond regarding updates
to the Alberton preliminary proxy statement/prospectus.
April
2020 and October 2020 Extensions
On
April 23, 2020, we filed an amendment to our articles of association with the Registrar of the British Virgin Islands to extend
the time that we need to complete an initial business combination from April 27, 2020 to October 26, 2020 or such an earlier date
as determined by the board of directors of Alberton (the “April 2020 Extension”). In connection with the April 2020
Extension, shareholders holding 10,073,512 public shares exercised their right to redeem such shares for a pro rata portion of
the Trust Account. As a result, an aggregate of $105,879,188 (or $10.51 per share) was removed from the Trust Account to pay such
shareholders.
In connection with the April 2020 Extension, an aggregated amount of
$360,000 was deposited into the Trust Account as additional interest on the proceeds in the Trust Account and will be distributed pro
rata as a part of redemption amount to each public share in connection with a future redemption. In addition, we have committed to issue
a Extension Warrant to purchase one-half of one ordinary share for each public share not redeemed in connection with the April 2020 Extension.
Each such Extension Warrant will be identical to the warrants included in the Units sold our Initial Public Offering.
On
October 26, 2020, we filed an amendment to our articles of association with the Registrar of the British Virgin Islands to extend
the time that we need to complete an initial business combination from October 26, 2020 to April 26, 2021, or such an earlier
date as determined by the board of directors of Alberton (the “October 2020 Extension”). In connection with the October
2020 Extension, shareholders holding 1,000 public shares exercised their right to redeem such shares for a pro rata portion of
the Trust Account. As a result, an aggregate of $10,770 (or $10.51 per share) was removed from the Trust Account to pay such shareholders.
As
the date hereof, in connection with the October 2020 Extension, an aggregated amount of $2,572,276 was deposited into the Trust
Account as additional interest on the proceeds in the Trust Account and will be distributed pro rata as a part of redemption amount
to each public share in connection with a future redemption.
Outstanding
Promissory Notes
As the date hereof, we have outstanding loans from various parties
in the aggregated amount of $3,302,170 which include (i) unsecured promissory notes in the amount of $300,000 and $780,000issued by Alberton
to its Sponsors on July 6, 2018 and January 24, 2020, respectively (collectively, the “Sponsor Notes”), (ii) unsecured promissory
notes in the amount of $1,148,800 and $500,000 issued by Alberton to Global Nature Investment Holdings Limited on September 18, 2019 and
December 3, 2019, respectively (collectively, the “GN Notes”); (iii) an unsecured promissory note in the aggregate principal
amount of $500,000 payable upon demands, the outstanding principal of which is $100,000 issued by Alberton to Qingdao Zhongxin Huirong
Distressed Asset Disposal Co., Ltd on April 17, 2020 (the “AMC Note”) and (iv) unsecured promissory notes in the aggregate
principal amount of $473,370 issued by Alberton to SolarMax in connection with the extension of the date that Alberton must complete its
initial business combination, each in the amount of $60,000 on September 4, 2020 and October 8, 2020, and each in the amount of $70,674
on November 10, 2020, December 9, 2020, January 11, 2021, February 11, 2021, and March 19, 2021, and excluded up to one additional note
of $70,674 which may be issued to SolarMax in April 2021 (collectively, the “SolarMax Notes”).
Impact
of COVID-19 Pandemic
In
December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread
throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization
declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.”
On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United
States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized
the outbreak as a “pandemic”. A significant outbreak of COVID-19 and other infectious diseases could result in a widespread
health crisis that could adversely affect the economies and financial markets worldwide. In response to COVID-19, governmental
authorities have recommended or ordered to limit or cease certain business or commercial activities and the issuance of the certain
permits necessary for solar installation are restricted due to the closure of reduced office hours of the government offices in
California and China. SolarMax’s operations could be materially and adversely affected and the extent to which the COVID-19
pandemic may materially impact SolarMax’ financial condition, liquidity or results of operations is uncertain. Furthermore,
we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability
to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable
to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination
will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge
concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions
posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business
combination, or the operations of a target business.
EFFECTING
A BUSINESS COMBINATION
General
We
intend to utilize cash derived from the proceeds of the IPO and the private placement of private units, our capital stock, debt
or a combination of these in effecting a business combination. A business combination may involve the acquisition of, or merger
with, a company which does not need substantial additional capital but which desires to establish a public trading market for
its shares, while avoiding what it may deem to be adverse consequences of undertaking a public offering itself. These include
time delays, significant expense and potential loss of voting control, among others. In the alternative, we may seek to consummate
a business combination with a company that may be financially unstable or in its early stages of development or growth. While
we may seek to effect simultaneous business combinations with more than one target business, we will probably have the ability,
as a result of our limited resources, to effect only a single business combination.
Subject
to the requirement that while we are listed on the Nasdaq Capital Market our target business have a fair market value of 80% of
the Trust Account balance (excluding the deferred underwriting discounts and commissions and taxes payable on the interest earned
on the Trust Account), as described below, we will have virtually unrestricted flexibility in identifying and selecting a prospective
acquisition candidate. Except as described below, we have not established any other specific attributes or criteria (financial
or otherwise) for prospective target businesses. To the extent we effect a business combination with a financially unstable company
or an entity in its early stage of development or growth, including entities without established records of sales or earnings,
we may be affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential
emerging growth companies. Although our management will endeavor to evaluate the risks inherent in a particular target business,
we cannot assure you that we will properly ascertain or assess all significant risk factors.
Fair
Market Value of Target Business
The
target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance
of the funds in the Trust Account (excluding taxes payable on the income earned on the Trust Account) at the time of the execution
of a definitive agreement for our initial business combination, although we may acquire a target business whose fair market value
significantly exceeds 80% of the Trust Account balance (excluding the deferred underwriting discounts and commissions and taxes
payable on the interest earned on the Trust Account). The fair market value of the target will be determined by our board of directors
based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings,
cash flow and/or book value). Although our board of directors will rely on generally accepted standards, our board of directors
will have discretion to select the standards employed. In addition, the application of the standards generally involves a substantial
degree of judgment. Accordingly, investors will be relying on the business judgment of the board of directors in evaluating the
fair market value of the target or targets. The proxy solicitation materials or tender offer documents used by us in connection
with any proposed transaction will provide public shareholders with our analysis of the fair market value of the target business,
as well as the basis for our determinations. If our board is not able independently to determine the fair market value of the
target business or businesses, we will obtain an opinion from an independent investment banking firm, or another independent entity
that commonly renders valuation opinions, with respect to the satisfaction of such criteria. Our shareholders may not be provided
with a copy of such opinion nor will they be able to rely on such opinion. We will not be required to obtain an opinion from an
investment banking firm, or another independent entity that commonly renders valuation opinions, as to the fair market value if
our board of directors independently determines that the target business complies with the 80% threshold.
If
Nasdaq delists our securities from trading on its exchange after the IPO, we would not be required to satisfy the fair market
value requirement described above and could complete a business combination with a target business having a fair market value
substantially below 80% of the balance in the Trust Account.
We
currently anticipate structuring a business combination to acquire 100% of the equity interests or assets of the target business
or businesses. We may, however, structure our initial business combination where we merge directly with the target business or
where we acquire less than 100% of such interests or assets of the target business in order to meet certain objectives of the
target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction
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. Even
if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to
the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed
to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial
number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we could acquire a 100% controlling
interest in the target; however, as a result of the issuance of a substantial number of new shares, our shareholders immediately
prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our
initial 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% of Trust Account balance test. In order to consummate such an acquisition, we may issue a significant
amount of our debt or equity securities to the sellers of such businesses and/or seek to raise additional funds through a private
offering of debt or equity securities. We have not entered into any such fund raising arrangement and have no current intention
of doing so.
Business
Combination Procedures
In
connection with the proposed Business Combination with SolarMax, we will seek shareholder approval of such initial business combination
at a special meeting called for such purpose at which shareholders may seek to redeem their public shares, regardless of whether
they vote for or against the proposed business combination. A shareholder of public shares may redeem the public shares for cash
equal to a pro rata share of the aggregate amount on deposit in the Trust Account which holds the proceeds of our IPO as of two
(2) business days prior to the Closing, less taxes payable, upon the Closing. Our Sponsor and Initial Shareholders have agreed
to waive their redemption rights with respect to any shares of our capital stock they may hold in connection with the Closing,
and the founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price.
Our
capability to consummate the business combination, and any target business with which we ultimately consummate a business combination,
may be materially adversely affected by the recent coronavirus (COVID-19) outbreak.
In
December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread
throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization
declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.”
On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United
States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized
the outbreak as a “pandemic”. A significant outbreak of COVID-19 and other infectious diseases could result in a widespread
health crisis that could adversely affect the economies and financial markets worldwide. In response to COVID-19, governmental
authorities have recommended or ordered to limit or cease certain business or commercial activities and the issuance of the certain
permits necessary for solar installation are restricted due to the closure of reduced office hours of the government offices in
California and China. SolarMax’s operations could be materially and adversely affected and the extent to which the COVID-19
pandemic may materially impact SolarMax’ financial condition, liquidity or results of operations is uncertain. Furthermore,
we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability
to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable
to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination
will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge
concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions
posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business
combination, or the operations of a target business.
Submission
of Our Initial Business Combination to a Shareholder Vote
In
connection with IPO, each of the Initial Shareholders entered into a letter agreement with Alberton pursuant to which the Initial
Shareholders agreed to vote any Alberton ordinary shares owned by them in favor of the proposal to approve the Merger Agreement,
by and among Alberton, Merger Sub, and SolarMax, and the transactions contemplated by the Merger Agreement, including the issuance
of the merger consideration thereunder (the “Alberton Business Combination Proposal”). Collectively, Alberton Initial
Shareholders own 69.37% of the voting rights of Alberton immediately prior to the Business Combination. In connection with the
execution of the Merger Agreement, the Sponsor and an insider shareholder, representing 56.71% of the voting rights of Alberton
as of the record date entered into a sponsor voting agreement (the “Sponsor Voting Agreements”) with Alberton and
SolarMax pursuant to which, they agree to vote all of their shares of Alberton ordinary shares in favor of the Merger Agreement
and related transactions and to otherwise take certain other actions in support of the Merger Agreement and related transactions
and refrain from taking actions that would adversely affect such sponsor’s ability to perform its obligations under the
Sponsor Voting Agreement, and provide a proxy to Alberton to vote such Alberton ordinary shares accordingly.
Public
shareholders will be able to redeem their public shares in connection with the expected shareholder vote to approve the proposed
business combination with SolarMax, which shall be consummated by April 26, 2021 or such earlier date as determined by the board
of directors of Alberton, provided, however, that in the event that the redemptions result in Alberton having less than $5,000,001
in net tangible assets as of the Closing, or the Successor not satisfying the applicable listing requirements of Nasdaq,
which include a $4.0 million stockholder’s equity if the market value of the listed securities is at least $50.0 million
and $5.0 million if that test is not met, and a $15.0 million market value of unrestricted publicly held shares after giving effect
to the consummation of the Merger and any private financing, then either party may terminate the Merger Agreement, and the Business
Combination will not be consummated as a result of such termination.
Our
Initial Shareholders, officers, and directors have agreed to waive their redemption rights with respect to the founder shares,
private shares and any public shares they may hold in connection with the Closing. The founder shares and private shares will
be excluded from the pro rata calculation used to determine the per-share redemption price.
Holders
of outstanding units must separate the underlying public shares and public warrants prior to exercising redemption rights with
respect to the public shares.
We
may require public shareholders, whether they are a record holder or hold their shares in “street name,” to either
(i) tender their certificates (if any) to our transfer agent or (ii) deliver their shares to the transfer agent electronically
using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, in each case
prior to a date set forth in the proxy materials sent in connection with the proposal to approve the business combination.
There
is a nominal cost associated with the above-referenced delivery process and the act of certificating the shares or delivering
them through the DWAC System. The transfer agent will typically charge the tendering broker $45.00 and it would be up to the broker
whether or not to pass this cost on to the holder. However, this fee would be incurred regardless of whether or not we require
holders seeking to exercise conversion rights to deliver their shares. The need to deliver shares is a requirement of exercising
conversion rights regardless of the timing of when such delivery must be effectuated. However, in the event we require shareholders
seeking to exercise conversion rights prior to the consummation of the proposed business combination and the proposed business
combination is not consummated this may result in an increased cost to shareholders.
Any
proxy solicitation materials we furnish to shareholders in connection with a vote for any proposed business combination will indicate
whether we are requiring shareholders to satisfy such certification and delivery requirements. Accordingly, a shareholder would
have from the time the shareholder received our proxy statement up until the vote on the proposal to approve the business combination
to deliver his shares if such shareholder wishes to seek to exercise his conversion rights. This time period varies depending
on the specific facts of each transaction. However, as the delivery process can be accomplished by the shareholder, whether or
not he is a record holder or his shares are held in “street name,” in a matter of hours by simply contacting the transfer
agent or his broker and requesting delivery of his shares through the DWAC System, we believe this time period is sufficient for
an average investor. However, we cannot assure you of this fact.
Any
request to convert such shares once made, may be withdrawn at any time up to the vote on the proposed business combination or
the expiration of the tender offer. Furthermore, if a holder of public shares delivered his certificate in connection with an
election of their conversion and subsequently decides prior to the applicable date not to elect to exercise such rights, he may
simply request that the transfer agent return the certificate (physically or electronically).
If
the initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise
their conversion rights would not be entitled to convert their shares for the applicable pro rata share of the Trust Account as
of two business days prior to the consummation of the initial business combination. In such case, we will promptly return any
shares delivered by public holders.
Liquidation
if No Business Combination
Our
amended and restated memorandum and articles of association provided that we will have until April 26, 2021 (with two three-month
extensions) to complete our initial business combination. If we are unable to complete our initial business combination by April
26, 2021 or such longer period that our shareholders may approve, we 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 us for our 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 our 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 our amended and restated memorandum and articles of association and prior to any voluntary winding up,
although at all times subject to the Companies Act.
Following
the redemption of public shares, we intend 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 we intend to enter voluntary liquidation
following the redemption of public shareholders from the Trust Account, we do not expect that the voluntary liquidation process
will cause any delay to the payment of redemption proceeds from our 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 we have our principal place of business, and taking any
other steps the liquidator considers appropriate to identify our creditors, after which our remaining assets would be distributed.
As soon as our affairs are fully wound-up, the liquidator must complete his statement of account and make a notice filing with
the registrar. We would be dissolved once the registrar issues a Certificate of Dissolution.
Our initial shareholders, which include our independent directors,
have entered into agreements with us, pursuant to which they have waived their rights to liquidating distributions from the Trust Account
with respect to their founder shares if we fail to complete our initial business combination by April 26, 2021 or not otherwise extend
the date that we need to complete our business combination. However, if our initial shareholders or management team acquire public shares
in or after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if we
fail to complete our initial business combination by April 26, 2021.
Our
executive officers and directors have agreed, pursuant to written agreements with us, that they will not propose, or vote in favor
of, any amendment to our amended and restated memorandum and articles of association, prior to a business combination, that would
affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business
combination by April 26, 2021, unless we provide our public shareholders with the opportunity to redeem their public shares upon
approval of any such amendment 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 (which interest shall be net of taxes payable), divided by the number
of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible
assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). If this optional
redemption right is exercised with respect to a number of public shares such that we cannot satisfy the net tangible asset requirement,
we would not proceed with the amendment or the related redemption of our public shares at such time. This redemption right shall
apply in the event of the approval of any such amendment, whether proposed by our initial shareholders, any executive officer,
director or director nominee, or any other person.
There
will be no redemption rights or liquidating distributions with respect to our warrants or rights, both of which will expire worthless
if we fail to complete our initial business combination by April 26, 2021. We will pay the costs of our liquidation from our remaining
assets outside of the Trust Account. However, the liquidator may determine that he or she requires additional time to evaluate
creditors’ claims (particularly if there is uncertainty over the validity or extent of the claims of any creditors). Also,
a creditor or shareholder may file a petition with the British Virgin Islands court which, if successful, may result in our liquidation
being subject to the supervision of that court. Such events might delay distribution of some or all of our remaining assets.
If
we were to expend all of the net proceeds of the IPO and the private placements, other than the proceeds deposited in the Trust
Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption amount received
by shareholders upon our dissolution would be $10.00. The proceeds deposited in the Trust Account could, however, become subject
to the claims of our creditors which would have higher priority than the claims of our public shareholders. We cannot assure you
that the actual per-share redemption amount received by shareholders will not be less than $10.00. While we intend to pay such
amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although
we will seek to have all vendors, service providers, prospective target businesses and other entities with which we do business
execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account
for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute
such agreements that they would be prevented from bringing claims against the Trust Account including but not limited to fraudulent
inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the
waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the
Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account,
our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third
party that has not executed a waiver if management believes that such third party’s engagement would be significantly more
beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute
a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to
be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable
to find a service provider willing to execute a waiver. In order to protect the amounts held in the Trust Account, Hong Ye, an
entity owned by Guan Wang, has contractually agreed pursuant to a written agreement with us that, if we liquidate the Trust Account
prior to the consummation of a business combination, it will be liable to ensure that the proceeds in the Trust Account are not
reduced by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered
or contracted for or products sold to us. We believe Hong Ye has sufficient financial resources to satisfy its indemnity
obligation should it arise, however we cannot assure you it will have sufficient liquid assets to satisfy such obligations if
it is required to do so. Additionally, the agreement entered into with Hong Ye specifically provides for two exceptions to the
indemnity given: it will have no liability (1) as to any claimed amounts owed to a target business or vendor or other entity who
has executed an agreement with us waiving any right, title, interest or claim of any kind they may have in or to any monies held
in the Trust Account, or (2) as to any claims for indemnification by the underwriters of the IPO against certain liabilities,
including liabilities under the Securities Act. As a result, we cannot assure you that the per-share distribution from the Trust
Account, if we liquidate the Trust Account because we have not completed a business combination within the required time period,
will not be less than $10.00.
In
the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual
amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per
share due to reductions in the value of the trust assets, in each case less taxes payable, and Hong Ye asserts that it is unable
to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against Hong Ye to enforce such indemnification obligations. While we currently
expect that our independent directors would take legal action on our behalf to enforce these indemnification obligations, it is
possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance.
Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not
be less than $10.00 per share.
If
we are deemed insolvent for the purposes of the Insolvency Act (i.e., (i) we fail to comply with the requirements of a statutory
demand that has not been set aside under Section 157 of the Insolvency Act; (ii) execution or other process issued on a judgment,
decree or order of a British Virgin Islands court in favor of a creditor of ours is returned wholly or partly unsatisfied; or
(iii) either the value of our liabilities exceeds its assets, or the company is unable to pay its debts as they fall due), then
there are very limited circumstances where prior payments made to shareholders or other parties may be deemed to be a “voidable
transaction” for the purposes of the Insolvency Act. A voidable transaction would include, for these purposes, a payment
made as “unfair preferences” or a “transaction at an undervalue”. A liquidator appointed over an insolvent
company who considers that a particular transaction or payment is a voidable transaction under the Insolvency Act could apply
to a British Virgin Islands courts for an order setting aside that payment or transaction in whole or in part.
Additionally,
if we enter insolvent liquidation under the Insolvency Act, the funds held in our Trust Account will likely be included in our
estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any insolvency
claims deplete the Trust Account we may not be able to return to our public shareholders the liquidation amounts due them. Our
public shareholders will be entitled to receive funds from the Trust Account only (i) in the event of the redemption of our public
shares if we do not complete our initial business combination within the required time period, (ii) in connection with a shareholder
vote to amend our amended and restated Memorandum and Articles of Association prior to the consummation of an initial business
combination or (iii) if they redeem their respective shares for cash upon the completion of our initial business combination.
In no other circumstances will a shareholder have any right or interest of any kind to or in the Trust Account. In the event we
seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection with
the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata
share of the Trust Account. Such shareholder must have also exercised its redemption rights and followed the procedures described
above and as detailed in the applicable proxy or tender offer materials.
COMPETITION
If
we succeed in effecting a business combination with SolarMax, there will be, in all likelihood, significant competition from its
competitors. We cannot assure you that, subsequent to a business combination, we will have the resources or ability to compete
effectively. Information regarding solarMax’s competition is set forth in the proxy statement/prospectus in Form S-4, File
No. 333-251825, for the meeting to be called to approve the business combination with SolarMax.
FACILITIES
We
currently maintain our principal executive offices at Room 1001, 10/F Capital Center, 151 Gloucester Road, Wanchai, Hong Kong.
The cost for this space is included in the $1,000 per-month fee that Hong Ye charges us pursuant to a letter agreement between
us and Hong Ye for general and administrative services commencing on August 1, 2018 and terminating upon completion of our initial
business combination or the distribution of the Trust Account to our public shareholders. We believe, based on rents and fees
for similar services, that the fee charged by Hong Ye is at least as favorable as we could have obtained from an unaffiliated
person. We consider our current office space, combined with the other office space otherwise available to our executive officers,
adequate for our current operations.
EMPLOYEES
We
currently have two executive officers. These individuals are not obligated to devote any specific number of hours to our matters
and intend to devote only as much time as they deem necessary to our affairs. The amount of time they will devote in any time
period varies based on whether a target business has been selected for the business combination and the stage of the business
combination process the company is in. Accordingly, when a suitable target business to acquire is located, management will spend
more time investigating such target business and negotiating and processing the business combination (and consequently spend more
time on our affairs) than had been spent prior to locating a suitable target business. We presently expect our executive officers
to devote such amount of time as they reasonably believe is necessary to our business. We do not intend to have any other employees
prior to the consummation of a business combination.