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.
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.
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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.
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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.
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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.
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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.
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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.
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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.
30© Edgar Online, source Glimpses
ALBERTON ACQUISITION CORPORATION 
