PROPOSED BUSINESS COMBINATION: SolarMax Technology, Inc.
ENTERPRISE VALUE: $300 million
ANTICIPATED SYMBOL: SMXT
Alberton Acquisition Corp. proposes to merge with SolarMax Technology, Inc., for an implied equity value of $300 million.
SolarMax is an integrated solar energy company. It was founded in 2008 to conduct business in the U.S. and subsequently commenced operation in China following two acquisitions in 2015. Through its subsidiaries, it is primarily engaged selling and installing integrated photovoltaic systems for residential and commercial customers in the United States which is its original business, identifying and procuring solar farm system projects for resale to third party developers and related services in the People’s Republic of China; providing engineering, procuring and construction services, which are referred to in the industry as EPC services, for solar farms in China, financing the sale of its photovoltaic systems and servicing installment sales by its customers in the United States and providing exterior and interior light-emitting diodes, known as LED, lighting sales and retrofitting services for governmental and commercial applications.
SUBSEQUENT EVENT – 8-K Link
On September 10, 2021, Alberton Acquisition Corporation and SolarMax Technology, Inc. entered into a fourth amendment (the “Fourth Amendment”), to the agreement and plan of merger, dated as of October 27, 2020.
- The Company has made loans (the “Sponsor Loans”) to the Sponsor in the aggregate principal amount of $528,602.62 to enable the Sponsor to provide funds for Purchaser to pay current obligations. The Company will make additional loans to the Sponsor, on the same terms as the existing Sponsor Loans, of up to $135,000.00.
SUBSEQUENT EVENT – 8-K Link
On August 11, 2021, Alberton Acquisition Corporation and SolarMax Technology, Inc., entered into a third amendment (the “Third Amendment”), to the agreement and plan of merger, dated as of October 27, 2020.
- The number of Alberton ordinary shares to be issued to the SolarMax shareholders was changed to provide that the number of shares is determined by dividing $300,000,000 by $10.50 rather than by the Redemption Price.
- SolarMax, which had already made Extension Loans totaling $697,453.32, agreed to make up to three additional Extension Loans each in the amount of $76,704.66, for a total of a maximum of $927,567.30, as compared with a maximum of $360,000 in the initial Merger Agreement, and SolarMax agreed to the cancelation of all of the Extension Loans at the Closing.
- The requirement that Alberton satisfies its obligation with respect to the deferred underwriting compensation of $4,030,797 due to Chardan Capital Markets, LLC, the underwriter of Alberton’s initial public offering, through the delivery of Sponsor Shares was eliminated, and the deferred underwriting compensation is to be paid in cash.
- The requirement that the notes outstanding at September 3, 2020 be settled through the delivery of Sponsor Shares was replaced by the agreement that such notes, as well as an additional $273,640 of loans advanced by the Sponsor, be settled by
- (i) the issuance by Alberton of ordinary shares valued at the Conversion Loan Valuation Price, which is ten (10) times the average trading price of the Alberton Rights during a period of twenty-five (25) trading days ending on the second trading day prior to mailing of the final Proxy Statement to Alberton’s shareholders in connection with the Special Meeting, in payment of 50% of the loans and, pursuant to an agreement with the noteholders, agreeing to register those shares and
- (ii) cash payment of the other 50%. The total principal amount of these notes is $3,102,440, of which notes in the principal amount of $1,353,640 are payable to the Sponsor. Pursuant to agreements with the noteholders, Alberton agreed to register the ordinary shares issued to the noteholders.
- In the event that the registration statement covering the shares issued upon conversion of 50% of the principal amount of such notes (the “Conversion Shares”) has not been declared effective by the SEC within 15 business days after the Closing (other than as a result of the failure of noteholder to provide required information), the Conversion Shares shall be automatically forfeited with no action to be taken by the Alberton or the noteholder and Alberton shall, within ten business days of such forfeiture, pay the 50% of the note with respect to which the shares were issued.
- 800,000 Sponsor Shares will be canceled.
- All outstanding private warrants, each exercisable for one-half of one Alberton ordinary shares (or Purchaser Common Stock following Redomestication), including all rights to receive additional private warrants which may be issued upon conversion of any notes or other advances made to Alberton, shall be cancelled, and Alberton shall issue to the holder of the private warrants (including any right to receive additional private warrants) a total of 44,467 Alberton ordinary shares.
- Pursuant to loan agreements with the Sponsor, SolarMax had made loans to the Sponsor for payment of obligations of Alberton of $528,602.62 and agreed to make additional advances of up to $1,031.43. These loans will be satisfied by a portion of the 800,000 shares being delivered for cancellation. The loans from the Sponsor to Alberton are being treated as contributions to capital and not as a loan.
- The provision of the Merger Agreement that provide that, to the extent that Extension Loans made by SolarMax exceed the amount which SolarMax initially agreed to advance to Alberton ($360,000) was amended and the Sponsor’s obligation to deliver Sponsor Shares with respect to such excess advances, shall be satisfied by the delivery of a portion of the 800,000 ordinary shares being delivered for cancellation.
- The Sponsor agreed to provide up to $100,000 to provide Alberton with funds to pay its obligations. Such funds will be treated as a contribution to capital and not as a loan.
- The Company agrees that a $50,000 obligation which the Sponsor had agreed to pay to the Company’s former chairman and chief executive officer, will be paid by the Company.
- At the Closing, Alberton shall issue, under the Incentive Plan, to each of William Walter Young, Qing S. Huang and Peng Gao 30,000 shares of Common Stock as the compensation shares for their service as independent directors of Alberton until the Closing and to Citiking International Limited, a company organized under the laws of Hong Kong (“Citiking”), 200,000 shares pursuant to certain IR Agreement (defined below) between the Purchaser and Citiking, among which 50,000 shares shall vest immediately, 50,000 shares shall vest upon the first anniversary of the Closing, 50,000 shares shall vest on the second anniversary of the Closing and remaining 50,000 shares shall vest on the third anniversary of the Closing.
Share Forfeiture Agreement
- On August 11, 2021, Alberton entered into a certain share forfeiture agreement (the “Forfeiture Agreement”) with SolarMax and certain initial shareholders of Alberton including Hong Ye, Bin (Ben) Wang and Keqing (Kevin) Liu (collectively, the “Initial Shareholders”), pursuant to which the Initial Shareholders have agreed to forfeit an aggregate of 800,000 Ordinary Shares upon the closing of the merger pursuant to the terms of the Forfeiture Agreement 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, Alberton entered into certain backstop agreements (collectively, the “Backstop Agreements”) with four backstop investors (collectively, the “Backstop Investors”), pursuant to which the Backstop Investors shall commit to purchase an aggregate of no less than $18 million of Ordinary Shares in open market or private transactions from time to time, or from holders of public shares of Alberton who have exercised their redemption rights pursuant to Alberton’s organization documents, pursuant to the terms of the Backstop Agreements.
- On August 11, 2021, Alberton also entered into certain stock purchase agreement (the “PIPE SPA”) with JSDC Investment LLC (the “PIPE Investor”) who is a minority existing shareholder of SolarMax, pursuant to which the PIPE Investor shall purchase Ordinary Shares of Alberton at the amount equal to
- (i) $6 million divided by
- (ii) a price per share equal to the price at which each share of the Company is redeemed pursuant to the redemption by the Company of its public shareholders in connection with the Merger.
Investor Relations Consulting Agreement
- On August 11, 2021, Alberton entered into a certain letter agreement (the “IR Agreement”) with Citiking, pursuant to which Citiking shall render investor relations services to Alberton and to generally act as its investor relations consultant for the Asian market pursuant to the terms of the IR Agreement. Under the terms of the IR Agreement, Alberton has agreed to issue an aggregate of 200,000 Ordinary Shares or Common Stock to Citiking as consideration for its services, subject to certain vesting provisions described in the IR Agreement.
SUBSEQUENT EVENT – Press Release Link
Alberton Acquisition Corp. announced that it issued 1,414,480 dividend warrants, with each warrant entitling the holder to purchase one-half ordinary share, to the public shareholders who were holders of record on April 21, 2020 and did not exercise their right to have their shares redeemed in connection with the April 2020 extension of the date on which Alberton must complete a business combination.
On April 20, 2020, Alberton announced that it had agreed that if the April 2020 extension was approved, it would issue, with respect to each public share that is not redeemed in connection with April 2020 extension, one dividend warrant to purchase one-half of one ordinary share. The dividend warrants are identical to the warrants included in the units sold in Alberton’s initial public offering.
In connection with the April 2020 extension, the Company received redemption request in the aggregated amount of 10,073,512 shares on April 21, 2020, the cut-off date for shareholders to submit their redemption request. Accordingly, 10,073,512 public shares were redeemed, resulting in a total of 1,414,480 remaining public shares issued and outstanding. On January 19, 2021, the board of the Company approved the issuance of 1,414,480 dividend warrants to those public shareholders who were shareholders on April 21, 2020 and did not exercise their right of redemption in connection with the April 2020 extension, and the Company instructed such issuance
Under the terms of the Merger Agreement, SolarMax stockholders will receive consideration in the form of newly issued Alberton equity securities, having a value of $300 million. In addition, all SolarMax stock options and convertible notes will be assumed by Alberton following the consummation of the Merger. The Parties intend to use the cash proceeds from the trust account after the redemption by Alberton public shareholders and any financing which is completed in connection with the Merger, less the expenses and costs associated with the Merger, to develop SolarMax’ business, fund its growth initiatives and for working capital, including the payment of short-term debt obligations.
Upon and immediately following the consummation of the Merger, the board of directors of combined entity will consist of those individuals who are directors of SolarMax on the closing date of the Merger plus one individual to be designated by Alberton. Assuming no exercise of redemption rights by Alberton’s public shareholders and prior to the issuance of any securities in connection with any financing and after giving effect to the conversion of outstanding rights into shares of Alberton common stock upon completion of the merger, and based on the current estimated redemption price, the shares issued to the holders of SolarMax common stock will own approximately 27,855,153 shares of Alberton common stock, which will represent approximately 82.77% of outstanding common stock of combined entity and Alberton’s existing shareholders will retain approximately 17.23% ownership interest in the combined entity. The transaction is currently expected to close by April 2021.
Certain SolarMax stockholders, who are officers, directors and 5% stockholders of SolarMax and who beneficially own constituting approximately 41.6% of the issued and outstanding common stock of SolarMax, executed Voting Agreements in favor of the Merger Agreement and transaction contemplated thereby. Sponsor of Alberton together with one major insider shareholder, constituting approximately 56.7% of the issued and outstanding capital of Alberton, executed Voting Agreement in favor of the Merger Agreement and transaction contemplated thereby.
NOTABLE CONDITIONS TO CLOSE
- Alberton 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
NOTABLE CONDITIONS TO TERMINATE
- By written notice by either Alberton or SolarMax if the Closing has not occurred on or prior to April 26, 2021 (provided, that if the right to terminate under this clause shall not be available to a Party if the breach or violation by such Party or its affiliates of any representations, warranty, covenant or obligation under the Merger Agreement was the principal cause of, or resulted in, the failure of the Closing to occur on or before April 26, 2021)
- At the Closing, the officers and directors of SolarMax and certain SolarMax stockholders owning more than 1% of the outstanding SolarMax stock immediately prior to the Effective Time (each, a “Significant Stockholder”) will each either enter into a Lock-Up Agreement
- For the purpose of Lock-Up Agreement, the “Lock-Up Period” means (i) for 50% of each Significant Stockholder’s Securities, the period ending on the earlier of (x) six months after the closing of the Merger, and (y) the date on which the closing price of the Alberton Shares equals or exceeds $12.50 per for any 20 trading days within any 30-trading day period commencing after the closing of the Merger and (ii) for the remaining 50% of such Significant Stockholder’s Securities, ending six months after the closing of the Merger
- Hunter Taubman Fischer & Li LLC and Ogier are acting as legal counsel to Alberton
- Ellenoff Grossman & Schole LLP is acting as legal counsel to SolarMax
MANAGEMENT & BOARD
Bin (Ben) Wang, 60 [Resigned 4/2/20]
Chairman & Chief Executive Officer
Mr. Wang is the Managing Director of Eon Capital International Ltd, a Hong Kong-incorporated corporate advisory service company since 2007. In this role, he has advised many companies in mergers and acquisitions and project financing including China Railway Rolling-stock Corp. (CRRC), Weifang Hengan Radiator Group Co. Ltd., Shandong Shiheng Special Steel Group Co. Ltd., Shandong Tiantong Food Co., Ltd., American Lorain Corp., China New Media Corp. and Sino-Gas International Holdings. Ben began his financial career in 1994 with Chemical Bank, as market segment manager for the Asian market. He then served as Vice President and Team Leader of Chase International Financial Services after Chemical Bank’s merger into Chase in 1996 and later combination into JP Morgan Chase in 2000. He continued his service at JP Morgan Chase with a broad range of management responsibilities in the development and growth of the bank’s international business until 2006. Ben graduated from Northwestern Polytechnic University in 1980, received his M.S. degree in Mechanical Engineering from Xi’an Jiaotong University in 1983 and he obtained his MA in economics from Illinois State University in 1992. Ben has advised clients on many cross-border mergers and acquisitions transaction and has rich experience working with C-suite executives and negotiating transactions.
Keqing (Kevin) Liu, 59 [Re-appointed Director 7/29/20]
Chief Financial Officer & Secretary, Director
Mr. Liu is Partner, at ACL Equity, a financial services company in Beijing, China, where he focuses on deal origination and cross-border mergers and acquisitions since June 2018. He began his career in 1983 at Agricultural Bank of China Jiangxi Provincial Branch as a project manager in a portfolio co-funded by the World Bank, until 1993; from 1993 to 2001, a Senior Manager and Senior Economist at China Merchants Bank head office, Shenzhen, he led a project finance team to manage a portfolio exceeding US$1 billion; a member of the bank’s Mid-Term Development Strategies Working Group from 1997 to 2000, he represented the bank at the World Bank and International Monetary Fund annual meetings in Washington D.C.; from 2002 to 2004, he co-headed the International Department, Shenzhen Commercial Bank (now Ping An Bank) head office, to fund cross-border transactions and collaborate with more than 600 prime financial institutions worldwide; from 2005 to 2007, he was Consultant, CITIC Capital, Hong Kong, an investment banking arm of CITIC Group, one of China’s largest finance holding conglomerates, active in investment due diligence; in 2007, he founded Nanchang GlobeVision Investment, a company investing in carbon-dioxide emission reduction projects that generate saleable certified emission reduction credits, and served as Chief Executive Officer of such company from 2007 to 2010; from 2010 to June 2018, he was Partner, Wealth Assets and Capital (formerly Wealth Business Consultancy), Hong Kong, engaged in deal sourcing and due diligence. He has served as Adjunct Researcher, European Studies Center, Zhejiang University, one of China’s top institutions of higher learning. He holds a Bachelor of Economics in Statistics from Jiangxi University of Finance and Economics, China, in 1983.
Guan Wang, 41 [Appointed Chairwoman & CEO 4/2/20]
Treasurer & Director
Ms. Wang is Executive Director, Sinobay (Hong Kong) Commercial Real Estate & Management Co, Ltd, Shenzhen, China, since 2005. She has been in charge of Sinobay’s major investments for 13 years since its inception in 2005. From 2003 to 2005, she served as Director of Human Resources at Union Economic and Trading Investment Co. Ltd, Shenzhen, China, where she was responsible for the company’s human resource development, designing and improving the company’s organizational structure, and cultivating its corporate culture. From 1999 to 2002, she was an assistant in the Human Resources Division at CR Vanguard, a large national supermarket chain in China, a subsidiary of China Resources, a Fortune Global 500 company. Guan received her Bachelor of Science in Computer Application from Shenyang Aerospace University in China in 1999.
Board of Directors
Howard Jiang, 60 [Resigned 3/12/20]
Mr. Jiang is Partner at the law firm, White and Williams LLP, since 2017. He began his career at Baker & McKenzie LLP New York office in 1990 and later served as a partner there. Prior to joining White and Williams, during the last five years, he was also a partner at Locke Lord LLP and Seyfarth Shaw LLP. Howard’s practice focuses on capital markets and mergers and acquisitions. He has extensive transactional experience in structuring deals, designing exits and financial products for complicated financing purposes, including mergers and acquisitions, project finance and credit workout situations. He has participated in many projects, including IPOs, public buy-outs and going private transactions. He participated in establishing the joint venture between GM and Shanghai AutoWorks. He lead the legal team that assisted in the establishment of many US and European multinationals’ operations and acquisitions in China, including American Standard, Trane and Wabco. He advised Fresenius, the leading German managed-care provider in its acquisition of MedPartners operations in North American and Europe. He advised a consortium in the acquisition of Digital Domain, which was later injected into a Hong Kong listed company. He worked on project finance deals such as the FLAG submarine cable project and a cruise ship terminal in the US British Virgin Islands. He was active in rollup transactions and buyouts advising clients in telecom and sports equipment fields. He advised on Shandong Huaneng Power’s IPO on the New York Stock Exchange, the first Chinese ADR offering in the world. In addition, Howard has been a director of Daqing Hawkland Technology Investment Corp. since 2010, a currently inactive company that previously made investments in emerging manufacturing companies and exited its last portfolio investment in 2016. Howard’s transaction experience spans manufacturing, pharmaceuticals and nutraceuticals, biopharmaceuticals, medical device, utilities, heavy equipment manufacturing, fulfillment operations, internet technologies, entertainment and media, movie production and post production, power generation and infrastructure development projects as well as location based entertainment projects. He has broad connections in the investment community and access to deal flow. We believe that his capital market and M&A expertise as well as his connections will be beneficial to the Company. Howard obtained his JD from Columbia University Law School in 1992; Master in International Banking and Finance from Columbia University in 1989; Master of Corporate Finance from Webster University, Switzerland in 1988. He obtained his BA in English Literature from Shanghai University of International Studies in 1982. Howard is serving as a director with the approval of White and Williams LLP in his personal capacity and will not provide legal services to the Company. He will recuse himself from all board decisions related to White and Williams LLP and its engagement by the Company.
John W. Allen, 80
Mr. Allen is Chairman and Chief Executive Officer, since 1994, of Greater China Corporation, a company providing global investment banking services. Since 2008, he has also served as President of Spring Investment Corporation, a Family Investment firm. He has participated in more than 50 investment transactions in the U.S., Canada, Asia, Europe and throughout Latin America. He has served on a number of boards of public and private companies and foundations. Since December 2014 he has been an Independent Director and Chairman of the Audit Committee of Enssolutions Group Inc. a public company listed on the Toronto TSXV exchange. John began his financial career with the Bank of Boston where he eventually ran the international investment subsidiary, Boston Overseas Financial Corporation. He joined Schroder Bank and Trust Company as Assistant to James D. Wolfensohn (former President of the World Bank Group). He also served as a Trustee of the Soros Open Society Institute and as one of three Trustees of the International Science Foundation with George Soros and Nobel Laureate James Watson from 1990 to 2005. He is currently a member of the Advisory Board of the World Policy Institute and a former member of the Business Council of the United Nations. He also served as Chairman of the Board of AIESEC Yale and AIESEC U.S., an international student exchange program. He is currently a Trustee of the Chinese Cultural Foundation and founding member of the China Investment Group. John received his BA from Yale University in 1961 and his MBA from Harvard Business School in 1965.
Harry Edelson, 85
Mr. Edelson, CFA, CCP, CDP, President since 1980 of Edelson Technology, Inc., a company involved in consulting, fundraising, M&A, and investments. From 1984 until 2005 was an advisor and consultant for 10 multinational corporations (AT&T, Viacom, 3M, Ford Motor, Cincinnati Bell, Colgate-Palmolive, Reed Elsevier, Imation, Asea Brown Boveri and UPS). During this time he managed four technology-oriented strategic venture capital funds for the aforementioned 10 companies using corporate rather than pension money. He has served on over 150 boards of directors, 12 as chairman. At some time in the past five years, Harry Edelson served as a director of four private companies, Airwire, PogoTec, eChinaCash, Pathway Genomics, and one public company, China Gerui. Executive positions in industry include Senior Systems Computer Engineer for Unisys, Transmission Engineer for AT&T (1962-1967), CTO for Cities Service (1967-1970) and Director of Marketing for a terminal manufacturer serving the nascent internet industry (1971-1973). His experience in technology led him to a 12 year career as a securities analyst on Wall Street covering telecommunications, computers, and office equipment for three leading investment banking firms in the 1970s and 1980s. Harry obtained a BS in Physics from Brooklyn College in 1962, MBA from New York University Graduate School of Business in 1965, and completed a Graduate Program in Telecommunications Engineering at the Cornell Graduate School of Electrical Engineering in 1966. In 2007, Harry served as Chairman and Chief Executive Officer for China Opportunity Acquisition Corp., a SPAC that raised $40 million and merged with China Gerui in 2009.
Peng Gao has been the chief attorney of Law Offices of Gao Peng, a law firm since June 2006. Mr. Gao received a Bachelor of Science from Fudan University China in 1988, his Master of Science from Georgia Institute of Technology in 1995, and his Juris Doctor degree from Pepperdine Law School in 2005. Mr. Gao has been admitted to State Bar of Los Angeles, CA, since 2006. Mr. Gao’s qualifications to serve as a director include his 14-year experience in the legal industry.