UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form
(Mark One)
FOR THE QUARTERLY PERIOD ENDED
or
FOR THE TRANSITION PERIOD FROM _________ to __________
COMMISSION FILE NUMBER
ALTERNUS CLEAN ENERGY, INC.
(Exact name of registrant as specified in its charter)
| | | |
| (State or other jurisdiction of | (I.R.S. Employer | |
|
| ( | |
| (Address of principal executive offices) (Zip Code) | (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| | | OTC Pink Market | ||
| | | OTC Pink Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| | ☒ | Smaller reporting company | |
| Emerging growth company | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes
As of April 24, 2026, the registrant had a total of
ALTERNUS CLEAN ENERGY, INC.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Quarterly Report on Form 10-Q are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical facts, including statements regarding our future results of operations and financial position, our business strategy and plans and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, in “Item 1A. Risk Factors” in Part II of this Quarterly Report on Form 10-Q and in any subsequent filing we make with the SEC, as well as in any documents incorporated by reference that describe risks and factors that could cause results to differ materially from those projected in these forward-looking statements.
Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of these forward-looking statements after completion of this Quarterly Report on Form 10-Q to conform these statements to actual results or revised expectations.
ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(Unaudited)
| As of | As of | |||||||
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Taxes recoverable | ||||||||
| Total Current Assets | ||||||||
| Capitalized costs | ||||||||
| Intangible assets | ||||||||
| Goodwill | ||||||||
| Long-term prepaid expenses | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Taxes payable | ||||||||
| Operating lease liability | ||||||||
| Convertible notes measured at fair value | ||||||||
| Short term convertible and non-convertible promissory notes, net of debt issuance costs | ||||||||
| Derivative liability - warrants | ||||||||
| Other payables | ||||||||
| Total Current Liabilities | ||||||||
| Long term convertible and non-convertible promissory notes, net of debt issuance costs | ||||||||
| Operating lease liability, net of current portion | ||||||||
| Total Liabilities | ||||||||
| Shareholders’ Deficit | ||||||||
| Series A Preferred stock, $ par value, authorized as of September 30, 2025 and December 31, 2024. issued and outstanding as of September 30, 2025 and as at December 31, 2024. | ||||||||
| Series B Preferred stock, $ par value, authorized as of September 30, 2025 and December 31, 2024. issued and outstanding as of September 30, 2025 and as at December 31, 2024. | ||||||||
| Common stock, $ par value, authorized as of September 30, 2025 and authorized as of December 31, 2024; issued and outstanding as of September 30, 2025 and issued and outstanding as of December 31, 2024. | ||||||||
| Additional paid in capital | ||||||||
| Foreign currency translation reserve | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Shareholders’ Equity (Deficit) attributable to parent | ( | ) | ||||||
| Noncontrolling interest | ||||||||
| Total Shareholders’ Equity (Deficit) | ( | ) | ||||||
| Total Liabilities and Shareholder’ Equity (Deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share data)
(Unaudited)
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| September 30, |
September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| Revenues |
$ | $ | $ | $ | ||||||||||||
| Operating Expenses |
||||||||||||||||
| Cost of revenues |
( |
) | ( |
) | ||||||||||||
| Selling, general and administrative |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Depreciation, amortization, and accretion |
( |
) | ( |
) | ( |
) | ||||||||||
| Development costs |
( |
) | ( |
) | ||||||||||||
| Gain on sale of subsidiaries |
||||||||||||||||
| Total operating income/ (expenses) |
( |
) | ( |
) | ( |
) | ||||||||||
| Income/(loss) from operations |
( |
) | ( |
) | ( |
) | ||||||||||
| Other income/(expense): |
||||||||||||||||
| Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Fair value movement of FPA Asset |
( |
) | ||||||||||||||
| Fair value movement of convertible notes |
( |
) | ( |
) | ||||||||||||
| Debt restructuring costs |
( |
) | ||||||||||||||
| Fair value movement of warrant derivative liability |
( |
) | ( |
) | ||||||||||||
| Gain on settlement of payables |
||||||||||||||||
| Loss on settlement of liabilities |
( |
) | ( |
) | ||||||||||||
| Loss on settlement of SAA with Hover |
( |
) | ( |
) | ||||||||||||
| Loss on issuance of debt |
( |
) | ( |
) | ( |
) | ||||||||||
| Loss on extinguishment of debt |
( |
) | ( |
) | ||||||||||||
| Provision for loss from related party |
( |
) | ( |
) | ||||||||||||
| Other expense |
( |
) | ( |
) | ||||||||||||
| Other income |
||||||||||||||||
| Total other expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Income / (Loss) before provision for income taxes |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Income taxes |
||||||||||||||||
| Income / (Loss) from continuing operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Discontinued operations: |
||||||||||||||||
| Gain/(loss) from operations of discontinued business component |
( |
) | ( |
) | ||||||||||||
| Gain/(loss) on sale of discontinued operations, net assets |
( |
) | ||||||||||||||
| Income/(loss) from discontinued operations |
( |
) | ( |
) | ||||||||||||
| Net income/(loss) for the period |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Basic & diluted earnings/(loss) per share of common stock: |
||||||||||||||||
| Continuing operations, basic and diluted |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Discontinued operations, basic and diluted |
( |
) | ( |
) | ||||||||||||
| Total loss per share of common stock, basic and diluted |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Weighted-average common stock outstanding, basic & diluted |
||||||||||||||||
| Comprehensive income / (loss): |
||||||||||||||||
| Net income / (loss) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Foreign currency translation adjustment |
( |
) | ( |
) | ( |
) | ||||||||||
| Comprehensive income/(loss) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
The accompanying notes are an integral part of these consolidated financial statements.
ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
(in thousands, except share amounts)
(Unaudited)
| Foreign |
Shareholders |
|||||||||||||||||||||||||||||||||||||||
| Additional |
Currency |
Equity |
Total |
|||||||||||||||||||||||||||||||||||||
| Preferred Stock |
Common Stock |
Paid-In |
Translation |
Accumulated |
Attributable |
Noncontrolling |
Shareholders’ |
|||||||||||||||||||||||||||||||||
| Shares |
Amount |
Shares |
Amount |
Capital |
Reserve |
Deficit |
to Parent |
Interest |
Equity |
|||||||||||||||||||||||||||||||
| Balance at June 30, 2024 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||||||
| Conversion of Debt |
||||||||||||||||||||||||||||||||||||||||
| Shares Issued for Joint Venture Agreement |
||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment |
- | 0 | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Net Loss |
- | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||||||
| Foreign |
Shareholders |
|||||||||||||||||||||||||||||||||||||||
| Additional |
Currency |
Equity |
Total |
|||||||||||||||||||||||||||||||||||||
| Preferred Stock |
Common Stock |
Paid-In |
Translation |
Accumulated |
Attributable |
Noncontrolling |
Shareholders’ |
|||||||||||||||||||||||||||||||||
| Shares |
Amount |
Shares |
Amount |
Capital |
Reserve |
Deficit |
to Parent |
Interest |
Equity |
|||||||||||||||||||||||||||||||
| Balance at June 30, 2025 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||||||
| Stock compensation |
- | - | ||||||||||||||||||||||||||||||||||||||
| Shares issued related party |
||||||||||||||||||||||||||||||||||||||||
| Shares issued in conversion of debt |
||||||||||||||||||||||||||||||||||||||||
| Consideration for EverOn transaction |
||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment |
- | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Net Loss in period |
- | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
(in thousands, except share amounts)
(Unaudited)
| Foreign |
Shareholders |
|||||||||||||||||||||||||||||||||||||||
| Additional |
Currency |
Equity |
Total |
|||||||||||||||||||||||||||||||||||||
| Preferred Stock |
Common Stock |
Paid-In |
Translation |
Accumulated |
Attributable |
Noncontrolling |
Shareholders’ |
|||||||||||||||||||||||||||||||||
| Shares |
Amount |
Shares |
Amount |
Capital |
Reserve |
Deficit |
to Parent |
Interest |
Equity |
|||||||||||||||||||||||||||||||
| Balance at January 1, 2024 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||||||
| Settlement of related party debt for shares |
||||||||||||||||||||||||||||||||||||||||
| Conversion of Debt |
||||||||||||||||||||||||||||||||||||||||
| Merger Costs – Settlement of Related Party Debt and Conversion of Debt |
- | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Stock Compensation for Third Party Services |
||||||||||||||||||||||||||||||||||||||||
| Shares Issued for Joint Venture Agreement |
||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment |
- | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Net Loss |
- | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||||||
| Foreign |
Shareholders |
|||||||||||||||||||||||||||||||||||||||
| Additional |
Currency |
Equity |
Total |
|||||||||||||||||||||||||||||||||||||
| Preferred Stock |
Common Stock |
Paid-In |
Translation |
Accumulated |
Attributable |
Noncontrolling |
Shareholders’ |
|||||||||||||||||||||||||||||||||
| Shares |
Amount |
Shares |
Amount |
Capital |
Reserve |
Deficit |
to Parent |
Interest |
Equity |
|||||||||||||||||||||||||||||||
| Balance at January 1, 2025 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||||||
| Shares issued for Conversion of Debt |
||||||||||||||||||||||||||||||||||||||||
| Settlement of Payables for Shares |
||||||||||||||||||||||||||||||||||||||||
| Shares issued for Debt Issuance Costs |
||||||||||||||||||||||||||||||||||||||||
| Stock compensation |
||||||||||||||||||||||||||||||||||||||||
| Shares issued related party |
||||||||||||||||||||||||||||||||||||||||
| Shares Issued to third party for services |
||||||||||||||||||||||||||||||||||||||||
| Shares Issued under 3a(10) debt settlement |
||||||||||||||||||||||||||||||||||||||||
| Shares Returned on Recission of Liion Acquisition |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Issuance of Preferred equity shares to Officer |
||||||||||||||||||||||||||||||||||||||||
| Consideration for EverOn transaction |
||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment |
- | - | ||||||||||||||||||||||||||||||||||||||
| Net Loss |
- | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except share and per share data)
(Unaudited)
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net income/(loss) | $ | ( | ) | $ | ( | ) | ||
| Income/(loss) from discontinued operations, net of tax | ||||||||
| Loss from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile loss from continuing operations to net cash provided by/(used in) operations: | ||||||||
| Depreciation, amortization and accretion | ||||||||
| Amortization of debt discount | ||||||||
| Stock compensation costs | ||||||||
| Credit loss expense | ||||||||
| Share-based compensation to third parties | ||||||||
| Gain on foreign currency exchange rates | ( | ) | ||||||
| Fair value movement of FPA asset | ||||||||
| Fair value movement of convertible debt | ( | ) | ||||||
| Debt restructuring costs | ||||||||
| Fair value movement in warrant liability | ( | ) | ||||||
| Loss on issuance of debt | ||||||||
| (Gain) / loss on debt settlement | ( | ) | ||||||
| (Gain)/loss on debt extinguishment | ( | ) | ||||||
| Loss on settlement of SAA | ||||||||
| Impairment of amounts due from related party | ||||||||
| Development costs | ||||||||
| (Gain)/loss on disposal of assets | ( | ) | ||||||
| Non-cash operating lease assets | ||||||||
| Changes in assets and liabilities, net of effects of acquisitions: | ||||||||
| Accounts receivable and other short-term receivables | ||||||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Accounts payable | ||||||||
| Accrued liabilities | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ||||||
| Related party | ||||||||
| Net Cash provided by/(used in) Operating Activities | $ | ( | ) | $ | ( | ) | ||
| Net Cash provided by/(used in) Operating Activities - Discontinued Operations | ( | ) | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Purchases of property and equipment | ( | ) | ||||||
| Capitalized Cost | ( | ) | ||||||
| Construction in Process | ( | ) | ||||||
| Net Cash provided by/(used in) Investing Activities | $ | $ | ( | ) | ||||
| Net Cash provided by/(used in) Investing Activities - Discontinued Operations | ||||||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from debt | ||||||||
| Payments of debt principal | ( | ) | ( | ) | ||||
| Repayments of shareholder loans | ( | ) | ||||||
| Proceeds from issuance of share capital | ||||||||
| Net Cash provided by/(used in) Financing Activities | $ | $ | ||||||
| Net Cash provided by/(used in) Financing Activities - Discontinued Operations | ( | ) | ||||||
| Effect of exchange rate on cash | ||||||||
| Net increase/(decrease) in cash, cash equivalents and restricted cash | $ | ( | ) | $ | ( | ) | ||
| Cash, cash equivalents, and restricted cash beginning of the year | ||||||||
| Cash, cash equivalents, and restricted cash end of the period | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements
ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED SUPPLEMENTAL STATEMENTS OF CASH FLOW
(Unaudited)
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Supplemental Cash Flow Disclosure | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Taxes | ||||||||
| Non-cash investing and financing activities: | ||||||||
| Shares issued for conversion of debt | ||||||||
| Shares issued for settlement of debt | ||||||||
| Shares issued as compensation to third parties | ||||||||
| Shares issued for JV with Hover | ||||||||
| Preferred Shares issued to officer | ||||||||
| Fair value of Series B Preferred Shares issued for SAA settlement | ||||||||
| Fair value of Series B Preferred Shares issued for business combination | ||||||||
| Noncash reduction of debt and non-current lease liability from sale of Spanish subsidiary | ||||||||
The accompanying notes are an integral part of these consolidated financial statements
ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Formation
Alternus Clean Energy, Inc. (the “Company”) was incorporated in Delaware on May 14, 2021 and was originally known as Clean Earth Acquisitions Corp. (“Clean Earth”).
On October 12, 2022, Clean Earth entered into a Business Combination Agreement, as amended by that certain First Amendment to the Business Combination Agreement, dated as of April 12, 2023 (the “First BCA Amendment”) (as amended by the First BCA Amendment, the “Initial Business Combination Agreement”), and as amended and restated by that certain Amended and Restated Business Combination Agreement, dated as of December 22, 2023 (the “A&R BCA”) (the Initial Business Combination Agreement, as amended and restated by the A&R BCA, the “Business Combination Agreement”), by and among Clean Earth, Alternus Energy Group Plc (“AEG”) and the Sponsor. Following the approval of the Initial Business Combination Agreement and the transactions contemplated thereby at the special meeting of the stockholders of Clean Earth held on December 4, 2023, the Company consummated the Business Combination on December 22, 2023. In accordance with the Business Combination Agreement, Clean Earth issued and transferred
Clean Earth’s (SPAC) only pre-combination assets were cash and investments and the SPAC did not meet the definition of a business in accordance with U.S. GAAP. Therefore, the substance of the transaction was a recapitalization of the target (AEG) rather than a business combination or an asset acquisition. In such a situation, the transaction is accounted for as though the target issued its equity for the net assets of the SPAC and, since a business combination has not occurred, no goodwill or intangible assets would be recorded. As such, AEG was considered the accounting acquirer and these consolidated financial statements represent a continuation of the consolidated financial statements of the AEG Acquired Subsidiaries. Assets and liabilities of AEG are presented at their historical carrying values.
Alternus Clean Energy Inc. is a holding company that operates through the following 8 subsidiaries as of September 30, 2025:
| Principal |
Date Acquired / |
Country of |
||||||
| Subsidiary |
Activity |
Established |
ALTN Ownership |
Operations |
||||
| Alternus Europe Limited f/k/a AEG JD 03 Limited |
Holding Company |
21 March 2022 |
Alternus Lux 01 S.a.r.l. |
Ireland |
||||
| Alternus LUX 01 S.a.r.l. |
Holding Company |
5 October 2022 |
Alternus Clean Energy, Inc. |
Luxembourg |
||||
| Alt Alliance LLC |
Holding Company |
September 2023 |
Alternus Clean Energy, Inc. |
USA |
||||
| AEG MH 04 Limited |
Holding Company |
16 January 2024 |
Alternus Lux 01 S.a.r.l. |
Ireland |
||||
| ALT POL HC 02 sp. z.o.o. |
Holding Company |
20 January 2023 |
Alternus Europe Limited |
Poland |
||||
| ALANTEAN LLC |
Joint Venture |
10 April 2024 |
Alt Alliance LLC |
USA |
||||
| BESS LLC |
Holding Company |
10 December 2024 |
Alternus Clean Energy, Inc. |
USA |
||||
| EverOn Energy LLC |
Joint Venture | 24 March 2025 |
Alternus Clean Energy, Inc. |
USA |
2. Going Concern and Management’s Plans
The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the Consolidated Financial Statements are issued. Based on its recurring losses from operations since inception and continued cash outflows from operating activities (all as described below), the Company has concluded that there is substantial doubt about its ability to continue as a going concern for a period of one year from the date that these Consolidated Financial Statements were issued.
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company had a net loss from continuing operations of approximately ($
Our operating revenues are insufficient to fund our operations and our assets already are pledged to secure our indebtedness to various third party secured creditors, respectively. The unavailability of additional financing could require us to delay, scale back, or terminate our acquisition efforts and other core business activities, which would have a material adverse effect on the Company and its viability and prospects.
The terms of our indebtedness, including the covenants and the dates on which principal and interest payments on our indebtedness are due, increases the risk that we will be unable to continue as a going concern. To continue as a going concern over the next twelve months, we must make payments on our debt as they come due and comply with the covenants in the agreements governing our indebtedness or, if we fail to do so, to (i) negotiate and obtain waivers of or forbearances with respect to any defaults that occur with respect to our indebtedness, (ii) amend, replace, refinance, or restructure any or all of the agreements governing our indebtedness, and/or (iii) otherwise secure additional capital. However, we cannot provide any assurances that we will be successful in accomplishing any of these plans.
On February 10, 2025, the Company received a determination letter (the “Delisting Notification”) from the Nasdaq Hearings Advisor stating that the Panel determined to delist the Company’s common stock, par value $
A Form 25-NSE was filed with the Securities and Exchange Commission (“SEC”), which removed the Company’s securities from listing on Nasdaq. The Company’s Common Stock is currently quoted on the OTC trading market. However, there can be no assurance that the Company’s Common Stock will continue to trade on any over-the-counter trading market.
The Company is currently taking several steps to begin to alleviate the going concern issue. We are working with existing shareholders and various funds as well as local and international banks in an attempt secure the necessary financing to execute on our business plan. The Company has sold or discontinued non-strategic businesses, operations, and assets in order to eliminate significant indebtedness and has reported an improvement in shareholder equity for the nine months ended September 30, 2025.
3. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements.
In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included.
These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Basis of Consolidation
The consolidated financial statements include the financial statements of the Company, its wholly owned and majority-owned subsidiaries and entities consolidated as variable interest entities ("VIEs") for which the Company has been determined to be the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. The results of subsidiaries acquired or disposed of during the respective periods are included in the consolidated financial statements from the effective date of acquisition or up to the effective date of disposal, as appropriate. The consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the related notes for the year ended December 31, 2024, contained in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”).
Net Income / (Loss) Per Share
Net income / (loss) per share is computed pursuant to ASC 260, Earnings per Share. Basic net income / (loss) per share attributable to common shareholders is computed by dividing net income / (loss) attributable to common shareholders by the weighted average number of common stock outstanding for the period. Diluted net income / (loss) per share attributable to common shareholders is computed by dividing net loss attributable to common shareholders by the weighted average number of common stock outstanding for the period plus the number of common stock that would have been outstanding if all potentially dilutive common stock had been issued, using the treasury stock method or if-converted method, as applicable. Potentially dilutive shares related to warrants and convertible notes were excluded from the calculation of diluted net income / (loss) per share due to their anti-dilutive effect due to losses in 2024 and 2025. The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive:
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Impact of Warrants | ||||||||||||||||
| 2024 convertible notes | ||||||||||||||||
| OID notes | ||||||||||||||||
| Total | ||||||||||||||||
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with ASC 718. Stock-based compensation expense for equity instruments issued to employees and non-employees is measured based on the grant-date fair value of the awards. The fair value of each stock unit is determined based on the valuation of the Company’s stock on the date of grant. The fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton stock option pricing valuation model. The Company uses a simplified method for calculating the expected term of their options. The Company recognizes compensation costs using the straight-line method for equity compensation awards over the requisite service period of the awards, which is generally the awards’ vesting period. The Company accounts for forfeitures of awards in the period they occur.
Use of the Black-Scholes-Merton option-pricing model requires the input of highly subjective assumptions, including (1) the expected terms of the option, (2) the expected volatility of the price of the Company’s common stock, and (3) the expected dividend yield of our common stock. The assumptions used in the option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgments. If factors change and different assumptions are used, the Company’s stock-based compensation expense could be materially different in the future. Additional inputs to the Black-Scholes-Merton option-pricing model include the risk-free interest rate and the fair value of the Company’s common stock. The Company determines the risk-free interest rate by using the United States Treasury Rates of the same period as the expected term of the stock-option.
Recently Issued Not Yet Effective Accounting Standards
In March 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public business entities to disclose, on an annual and interim basis, specified expense captions (such as cost of sales, SG&A, and R&D) disaggregated by their natural components (e.g., compensation, depreciation, amortization, and inventory/overhead costs). The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027; early adoption is permitted. The Company is currently evaluating the impact of this guidance on its disclosures. Because the ASU expands footnote requirements without affecting recognition or measurement, management does not expect the adoption to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.
In January 2025, the FASB issued ASU 2025-01 to clarify the effective dates of ASU 2024-03. The clarification confirms that the annual disclosures are required for fiscal years beginning after December 15, 2026, and the interim disclosures are required for interim periods within fiscal years beginning after December 15, 2027. Early adoption remains permitted. The Company’s evaluation of ASU 2024-03, as clarified by ASU 2025-01, is ongoing. The Company expects the standard to result in enhanced disaggregation of expense information within the notes to the financial statements but does not anticipate a material effect on its consolidated financial statements.
In April 2024, the FASB issued ASU 2024-04, Debt — Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. The ASU provides explicit guidance on how issuers should account for inducements offered to holders to convert convertible debt to equity instruments, requiring the difference between the fair value of consideration transferred and the fair value of securities issuable under the original conversion terms to be recognized as an expense at the inducement date. The ASU is effective for all entities for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. The Company is assessing the impact of ASU 2024-04. Because the Company has not historically entered into conversion inducements, management does not expect adoption to materially affect its consolidated financial statements.
In March 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer When the Legal Acquiree Is a Variable Interest Entity. The amendment clarifies how an entity identifies the accounting acquirer in a business combination when the legal acquiree is a VIE, aligning the guidance with the broader control and consolidation framework under ASC 810. The ASU is effective for public business entities for fiscal years beginning after December 15, 2026, and interim periods within those years; early adoption is permitted. The Company is currently evaluating the impact of this guidance. The adoption of ASU 2025-03 is not expected to have a material impact on the Company’s consolidated financial statements but may affect future acquisition analyses and related disclosures.
4. Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Inputs used to measure fair value are prioritized within a three-level fair value hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
As of September 30, 2025, a summary of the Company’s assets and liabilities measured at fair value on a recurring basis is as follows, in thousands:
| Fair Value Measurement |
||||||||||||||||
| (in thousands) | ||||||||||||||||
| Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
| Convertible notes measured at fair value |
$ | $ | $ | $ | ||||||||||||
| Derivative Warrant Liability |
||||||||||||||||
| Total |
$ | $ | $ | $ | ||||||||||||
Valuation Techniques
| ● |
Convertible Note (fair value option): Valued using unobservable inputs that are not corroborated by market data (Level 3). |
| ● |
Warrant Liability: Valued using unobservable inputs that are not corroborated by market data (Level 3). |
As the remaining balances on the convertible notes issued April 19, 2024 and October 1, 2024 have identical terms and maturity dates, the Company grouped them together. The Company measures the April 19, 2024 and October 1, 2024 convertible notes, and April 19, 2024 private placement warrants using a Monte Carlo simulation valuation model and applying the following assumptions as of September 30, 2025:
| Convertible |
||||
| Loan Notes |
||||
| Risk-free rate |
% | |||
| Underlying stock price |
$ | |||
| Expected volatility |
% | |||
| Term (years) |
||||
| Dividend yield |
% | |||
The Company measures the April and October private placement warrants using a Monte Carlo simulation valuation model and applying the following assumptions as of September 30, 2025:
| Warrant |
||||
| Liability |
||||
| Risk-free rate |
% | |||
| Underlying stock price |
$ | |||
| Expected volatility |
% | |||
| Term (years) |
||||
| Dividend yield |
% | |||
The following table presents changes of the convertible notes measured at fair value with significant unobservable inputs (Level 3) as of September 30, 2025. As the terms of the notes are mostly identical the Company has combined the amounts as shown below:
| Convertible |
Convertible |
Convertible |
OID |
|||||||||||||||||
| Notes |
Notes |
Notes |
Convertible |
|||||||||||||||||
| April 2024 |
October 2024 |
Total |
Notes |
Total |
||||||||||||||||
| (in thousands) |
||||||||||||||||||||
| Balance at December 31, 2024 |
$ | |||||||||||||||||||
| Conversions in period |
) | ) | ) | |||||||||||||||||
| Movement in fair value |
) | |||||||||||||||||||
| Balance at March 31, 2025 |
$ | |||||||||||||||||||
| Conversions in period |
) | ) | ||||||||||||||||||
| Reclass of accrued interest to convertible note |
||||||||||||||||||||
| Movement in fair value |
||||||||||||||||||||
| Balance at June 30, 2025 |
$ | |||||||||||||||||||
| Notes reclassified upon reevaluation of embedded features |
||||||||||||||||||||
| Loss from extinguishment on July 1, 2025 |
||||||||||||||||||||
| New convertible notes issued at fair value |
||||||||||||||||||||
| Conversions in period |
) | ) | ||||||||||||||||||
| Movement in fair value |
||||||||||||||||||||
| Balance at September 30, 2025 |
$ | $ | $ | |||||||||||||||||
Refer to footnote 12 for a description of the fair value methodology and assumptions applied to determine the fair value of the OID Convertible Notes.
The following table presents changes of warrants issued with significant unobservable inputs (Level 3) as of September 30, 2025, in thousands:
| Warrants |
||||||||||||
| Issued with |
April 2025 |
|||||||||||
| Convertible Notes |
Warrants |
Total |
||||||||||
| Balance at December 31, 2024 |
$ | $ | ||||||||||
| Fair value of warrants issued as finance charge |
||||||||||||
| Movement in fair value |
( |
) | ( |
) | ( |
) | ||||||
| Balance at June 30, 2025 |
$ | $ | $ | |||||||||
| Movement in fair value |
( |
) | ||||||||||
| Balance at September 30, 2025 |
$ | |||||||||||
Warrants Issued in April 2025:
On April 28, 2025 the Company issued warrants, as contractually adjusted due to the 2025 Stock Split, to purchase up to
The fair values of these Level 3 liabilities are sensitive to unobservable inputs used in the Monte Carlo simulation valuation model, including discount rates, expected term, expected volatility, path dependency parameters and estimates of various payout outcomes. Changes to these inputs could result in significantly higher or lower fair value measurement.
5. LiiON Rescission
On December 11, 2024, BESS LLC, a Delaware limited liability company and wholly owned subsidiary of the Company entered into an asset purchase agreement (the “APA”) with LiiON LLC (“LiiON”), a U.S.-based expert in advanced energy storage solutions, and closed on the acquisition of certain assets related to LiiON’s Battery Storage Business. The assets purchased included customer relationships, customer service agreements and intellectual property (IP). Also, in connection with the APA, the Company entered into an exclusive consulting agreement, with an initial term of
The Company and LiiON LLC mutually agreed to rescind the Asset Purchase Agreement. The primary driver that led the Parties to discuss alternative plans was the February 2025 Nasdaq notice that the Company’s equity had been delisted. Prior to receiving the notice, the Company expected Nasdaq to provide an extension of time to correct the matters that resulted in delisting. Although the acquisition Agreement permitted the Company to issue restricted common stock (i.e., active listing was not necessary to fulfill the requirements), questions around the timing of the Company’s ability to raise additional equity funding to support its integration plan, caused by the delisting, led the Parties to discussions regarding the path forward which, ultimately, culminated with the Parties’ mutual decision to rescind the Agreement.
Therefore, on May 1, 2025 the Company and its wholly owned subsidiary, BESS, LLC, entered into a Rescission and Release Agreement with LiiON (the “Rescission”) resulting in the unwinding of all consideration transferred and legal ownership. The parties rescinded the Asset Purchase Agreement, as well as the $
Upon the unwinding of the remaining net book values of the promissory note and the net assets acquired of on the rescission date, the Company recognized a loss of $
6. Formation of EverOn Energy Joint Venture and Consolidation of Variable Interest Entity
Background and Transaction Overview
Strategic Alliance Agreement. Prior to September 30, 2025, the Company (via its wholly owned subsidiary Alt Alliance LLC) and Hover (collectively, the "Parties") were parties to a Strategic Alliance Agreement (the "SAA") pursuant to which the Company provided funding support for Hover's development of Microgrid Projects in return for Hover’s commitment to present projects having a defined value to the Company (i.e., for first right of consideration for purchase, lease, etc.).
Joint Venture Formation. On March 24, 2025, the Company incorporated a new legal entity (the “JV”) with no assets or operations for the purpose of entering into a future joint venture operating agreement (“JVOA”) with Hover. On September 30, 2025 (the “Transaction Date”), the Company and Hover finalized the JVOA and contemporaneously terminated the preexisting SAA. Under the terms of the JVOA:
| ● | Hover contributed its portfolio of developed Microgrid Projects and related customer relationships in exchange for a |
| ● | The Company retained a |
| ● | The JV entered into (i) separate Master Services Agreements with each of the Company and Hover and (ii) an Equipment Supply Agreement with Hover. |
Master Services Agreements. Concurrently with the execution of the JVOA, the JV entered into separate Master Services Agreements (“MSAs”) with the Company and Hover. As further described below, it was not until the MSAs were executed – which provided the JV with an assembled skilled workforce capable of processing the contributed inputs to generate outputs – that the JV first met the definition of a “business” under ASC 805.
Execution of JVOA. On September 30, 2025, the Company entered into and closed a Securities Purchase Agreement (“SPA”) and a Joint Venture Operating Agreement (“JVOA”) with Hover Energy LLC (“Hover”), a Delaware company engaged in the business of developing, manufacturing and deploying distributed generation renewable energy projects featuring Hover wind powered generators together with varied generation and storage technologies (“Microgrid Projects”), pursuant to which Alternus sold a
Additionally, one of the Company’s subsidiaries, Alt Alliance LLC, entered into a Settlement Agreement with Hover related to the termination of the Strategic Alliance Agreement dated October 31, 2023 (“SAA”) as the Joint Venture has superseded the SAA. As part of the settlement, the Company agreed to repay the total outstanding amount of $
In connection with the JVOA, the Company issued
CONSOLIDATION – VARIABLE INTEREST ENTITY
| (a) | VIE Determination |
The Company evaluated the JV for consolidation under ASC 810, Consolidation. An entity is considered a variable interest entity ("VIE") if, by design, it (i) has insufficient equity investment at risk to finance its activities without additional subordinated financial support, (ii) has equity investors that, as a group, lack the ability to make decisions about the entity's activities through voting or similar rights, lack the obligation to absorb expected losses, or lack the right to receive expected residual returns, or (iii) has voting rights that are disproportionate to the economic interests of the equity investor and the entity's activities are conducted on behalf of an investor with disproportionately few voting rights.
The Company concluded that the JV is a VIE because it was capitalized with insufficient equity at risk — that is, the equity contributions at inception were not sufficient to finance the JV's projected activities without the expectation of additional subordinated financial support from its members. This conclusion was based on a quantitative and qualitative assessment of the JV's projected operational funding requirements relative to its initial equity capitalization.
| (b) | Primary Beneficiary Determination |
Under ASC 810-10-25-38A, the primary beneficiary of a VIE is the entity that has both: (i) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance, and (ii) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. The Company determined that it is the primary beneficiary of the JV based on the following analysis:
1. Power Criterion: The JV Operating Agreement grants the Company certain tie-breaking governance rights over all significant operating and financial decisions of the JV, including those decisions most likely to have the greatest impact on the JV's economic performance. Hover does not hold substantive participating rights that would overcome the Company’s power over such activities.
2. Economic Criterion: The Company’s obligation to absorb losses and right to receive benefits is consistent with its
As a result of this assessment, the Company consolidates the JV in its consolidated financial statements with Hover's
| (c) | Reassessment |
The Company will reassess, each reporting period, whether it continues to be the primary beneficiary of the JV upon the occurrence of reconsideration events, including any change in the governing documents, contractual arrangements, or economic interests of the JV.
| (d) | Nature of Assets, Liabilities, and Restrictions |
The consolidated balance sheet as of September 30, 2025 reflects the assets and liabilities of the JV based on a preliminary purchase price allocation. The assets of the JV can only be used to settle the obligations of the JV and are not available for the general use of the Company. The liabilities of the JV do not have recourse to the general credit of the Company beyond any commitments made in its capacity as a Member.
ACCOUNTING FOR THE ACQUISITION AS A BUSINESS COMBINATION
| (a) | Application of the Acquisition Method |
The Company’s obtaining control of the JV as primary beneficiary on the Transaction Date was accounted for as a business combination under ASC 805, Business Combinations. Although the assets and processes initially contributed to the JV by the Company and Hover, considered in isolation, did not meet the definition of a business as defined in ASC 805, the JV first met the definition of a business — and the Company first obtained control — at the moment the JV simultaneously entered into the MSAs with both Parties. The MSAs provided the JV with an assembled skilled workforce, which, combined with the contributed inputs and processes, enabled the JV to produce outputs for the first time. This represented the first point in time at which (i) all three elements of a business (inputs, processes, and the ability to generate outputs) were present, and (ii) the Company exercised control over a business through the JVOA. Accordingly, September 30, 2025 represents the acquisition date for purposes of ASC 805.
| (b) | Identification and Measurement of Consideration Transferred |
Under the acquisition method, the consideration transferred is measured at fair value as of the acquisition date. The total consideration transferred for the Company’s
| Consideration transferred - Company's 51% Interest: | ||||
| Series B Convertible Preferred Stock issued to Hover | $ | |||
| OASIS Software contributed to JV at fair value | ||||
| Capitalized development costs subsumed | ||||
| Total Consideration for Company's % | $ | |||
| Fair Value of NCI (i.e., Hover's % Interest) | ||||
| Total Fair Value of Invested Capital | $ |
The preferred stock issued to Hover is based on a preliminary third-party valuation of $
| (c) | Preliminary Purchase Price Allocation |
The total fair value of invested capital of $56.9 million has been preliminarily allocated to identifiable assets and goodwill as follows. The Company has engaged a third-party valuation specialist to assist with the final purchase price allocation, which is expected to be completed within the measurement period (not to exceed one year from the acquisition date).
| Identifiable Intangible Assets and Goodwill — Preliminary Purchase Price Allocation | Fair Value (in thousands) | Estimated Useful Life (in years) | |||
| Customer relationships |
| | |||
| Favorable contracts | | | |||
| OASIS software | | | |||
| Goodwill | | Indefinite | |||
| Total Fair Value of Invested Capital |
|
| (d) | Preliminary Nature of Allocation and Measurement Period Adjustments |
As of the date these financial statements were issued, the purchase price allocation described above is preliminary. The final allocation may differ materially from the preliminary amounts as the Company completes its detailed review, obtains updated third-party valuations, finalizes the evaluation of the deferred tax consequences of the transaction, and gathers additional information about facts and circumstances existing as of the acquisition date. Any adjustments to the preliminary purchase price allocation will be made retrospectively as measurement period adjustments in accordance with ASC 805-10-25-17.
| (e) | Noncontrolling Interest (“NCI”) |
The NCI, representing Hover's
| (f) | Supplemental Pro Forma Information |
The following unaudited supplemental pro forma information presents the combined results of operations of the Company and JV as if the acquisition occurred on January 1, 2024 – the beginning of the earliest period presented. The pro forma information is presented for informational purposes only and is not necessarily indicative of what the Company’s actual results of operations would have been had the acquisition been completed on that date nor is it indicative of future results.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||
| Pro forma revenues | $ | $ | $ | $ | |||||||
| *Pro forma net income (loss) | $ | $ | $ | $ | |||||||
*Presented on a consolidated company basis before allocation of losses to the noncontrolling interest of $(
IDENTIFIED INTANGIBLE ASSETS
| (a) | Classification and Useful Lives |
In connection with the preliminary purchase price allocation, the Company identified the following finite-lived intangible assets that are subject to amortization:
|
| Gross Carrying Amount (in thousands) | Annual Amortization (in thousands) | Estimated Useful Life (in years) | ||||||
| Customer relationships | $ | $ | | ||||||
| Favorable contracts | | ||||||||
| OASIS Software | | ||||||||
| Total Amortizable Intangibles | $ | $ | |||||||
Customer Relationships ($
Favorable Contracts ($
OASIS Software ($0.9 million): Represents the fair value of the Company’s OASIS Software contributed to the JV determined using the replacement cost method. The OASIS Software intangible is amortized on a straight-line basis over the weighted-average remaining term of assumed benefit, estimated to be
IMPAIRMENT CONSIDERATIONS
| (a) | Finite-Lived Intangible Assets and Long-Lived Assets |
Finite-lived intangible assets and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability is assessed by comparing the carrying amount of the asset or asset group to the undiscounted future net cash flows expected to be generated by the asset or asset group. If the carrying amount exceeds the sum of the undiscounted future cash flows, an impairment loss is recognized equal to the amount by which the carrying amount exceeds the asset's fair value. As a result of the JV transaction being recorded as a business combination with identifiable assets initially recognized at fair value on the Transaction Date, no impairment indicators were identified as of September 30, 2025 with respect to the JV's finite-lived intangibles or long-lived assets.
| (b) | Goodwill |
Goodwill is not amortized but is tested for impairment annually, or more frequently if events or circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. The Company performs its annual goodwill impairment assessment as of December 31. The goodwill impairment test compares the fair value of the reporting unit to which the goodwill is assigned to that reporting unit's carrying amount; if the carrying amount of the reporting unit exceeds its fair value, an impairment charge is recognized for the excess, not to exceed the total amount of goodwill allocated to that reporting unit.
As the JV was formed and goodwill was recognized on September 30, 2025, the fair value of the JV reporting unit was, by definition, at least equal to its carrying amount as of the Transaction Date. Accordingly, no goodwill impairment existed at inception.
TERMINATION OF STRATEGIC ALLIANCE AGREEMENT AND PRE-EXISTING RELATIONSHIP
Upon entering into the JVOA on September 30, 2025, the SAA between the Company and Hover was simultaneously terminated. In accordance with ASC 805-10-55-21 through 55-28, the Company evaluated whether the settlement of the pre-existing SAA relationship in connection with the business combination should be recognized as a separate transaction from the business combination itself, or whether it was effectively part of the exchange for the acquired business.
At the Transaction Date, the Company owed Hover approximately $
7. Prepaid Expenses and Other Current Assets
Prepaid and other current expenses generally consist of amounts paid to vendors for services that have not yet been performed. Other receivable consist of the following (in thousands):
| September 30, |
December 31, |
|||||||
| 2025 |
2024 |
|||||||
| (in thousands) |
||||||||
| Prepaid expenses and other current assets |
$ | $ | ||||||
| Total |
$ | $ | ||||||
8. Capitalized cost and other long-term assets
Capitalized development costs are amounts paid to vendors that are related to the purchase and construction of microgrid and solar energy facilities. Long-term prepaid expenses and other receivables consist of amounts owed to the Company as well as amounts paid to vendors for services that have yet to be received by the Company. Capitalized development costs and other long-term assets consisted of the following:
| September 30, |
December 31, |
|||||||
| 2025 |
2024 |
|||||||
| (in thousands) |
||||||||
| Capitalized development cost |
$ | $ | ||||||
| Long-term prepaid expenses |
||||||||
| Total |
$ | $ | ||||||
Capitalized costs relate to various projects that are at the pre-acquisition phase and capitalizable in the industry by analogy to ASC 970-360-25-2 and 25-3, that the Company expects to start to receive meaningful revenues from as they are commissioned. As the Company completes either a purchase or development of new solar parks or microgrids, these costs are added to the final asset displayed in Property and Equipment. If the Company does not close on the prospective project, these costs are written off to Development Cost on the Consolidated Statement Operations and Comprehensive Loss.
Capitalized cost as of September 30, 2025 were zero. On September 30, 2025, the Company entered into and closed a Securities Purchase Agreement (“SPA”) and a Joint Venture Operating Agreement (“JVOA”) with Hover Energy LLC (“Hover”), see footnote 6. As part of the transaction, $
Long-term Prepaid Expenses consist of estimated income tax payments made by Clean Earth prior to the business combination in December 2023 that will used to offset any taxes payable in the future.
9. Accounts Payable
Accounts payable represents the amounts owed to suppliers of goods and services the Company has consumed through operations. Accounts payable consist of the following:
| September 30, |
December 31, |
|||||||
| 2025 |
2024 |
|||||||
| (in thousands) |
||||||||
| Accounts payable |
$ | $ | ||||||
| Total |
$ | $ | ||||||
10. Accrued Liabilities
Accrued expenses relate to various accruals for the Company. Accrued interest represents the interest on the Company’s debt that has accrued and has been unpaid through September 30, 2025 and as of December 31, 2024. Accrued liabilities consist of the following (in thousands):
| September 30, |
December 31, |
|||||||
| 2025 |
2024 |
|||||||
| (in thousands) |
||||||||
| Accrued legal |
$ | $ | ||||||
| Accrued interest |
||||||||
| Accrued audit fees |
||||||||
| Accrued payroll |
||||||||
| Accrued consulting fees |
||||||||
| Accrued tax penalties |
||||||||
| Other accrued expenses |
||||||||
| Total |
$ | $ | ||||||
11. Taxes Recoverable and Payable
Taxes recoverable and payable consist of VAT taxes payable and receivable from various European governments through group transactions in these countries. Taxes recoverable consist of the following:
| September 30, |
December 31, |
|||||||
| 2025 |
2024 |
|||||||
| (in thousands) |
||||||||
| Taxes recoverable |
$ | $ | ||||||
| Less: Taxes payable |
( |
) | ||||||
| Total |
$ | $ | ||||||
12. Convertible and Non-convertible Promissory Notes
Convertible notes measured at fair value
The following table reflects the Company's convertible notes measured at fair value under the ASC 825 fair value option ("FVO") election as of September 30, 2025 and December 31, 2024:
| Convertible | Convertible | Convertible | OID | |||||||||||
| Notes | Notes | Notes | Convertible | |||||||||||
| April 2024 | October 2024 | Total | Notes | Total | ||||||||||
| (in thousands) | ||||||||||||||
| Balance at December 31, 2024 |
|
|
| - |
| |||||||||
| Conversions in period | - |
|
| - |
| |||||||||
| Movement in fair value |
|
|
| - |
| |||||||||
| Balance at March 31, 2025 |
|
|
| - |
| |||||||||
| Conversions in period |
| - |
| |||||||||||
| Reclass of accrued interest to convertible note |
| - |
| |||||||||||
| Movement in fair value |
| - |
| |||||||||||
| Balance at June 30, 2025 |
| - |
| |||||||||||
| Notes reclassified upon reevaluation of embedded features | - |
|
| |||||||||||
| Loss from extinguishment on July 1, 2025 | - |
|
| |||||||||||
| New convertible notes issued at fair value | - |
|
| |||||||||||
| Conversions in period |
| - |
| |||||||||||
| Movement in fair value | ||||||||||||||
| Balance at September 30, 2025 |
|
|
| |||||||||||
April and October 2024 Convertible Promissory Notes:
In April 2024, the Company issued to an institutional investor a senior convertible note in the principal amount of $
As of December 31, 2024, $
On April 28, 2025, the Company entered into a Letter Agreement with the Investor, which modifies certain terms and conditions of the Senior Convertible Note issued April 19, 2024 and the Senior Convertible Note issued October 1, 2024, by the Company to the Investor, collectively (the “2024 Notes”). The interest rate on the 2024 Notes is and will continue at a rate of
On October 1, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”), by and between the Company and an institutional investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor a series of senior convertible notes up to an aggregate principal amount of $
The Convertible Note was extended and matures on December 31, 2025 (unless accelerated due to an event of default, or accelerated up to six installments by the Investor), bears interest at a rate of seven percent (
On October 21, 2024, pursuant to the Purchase Agreement, the closing of the second tranche of the Convertible Note and Warrant occurred, whereby the Company issued a Warrant to purchase
On November 12, 2024, pursuant to the Purchase Agreement, the closing of the third tranche of the Convertible Note and Warrant occurred, whereby the Company issued a Warrant to purchase
On December 5, 2024, pursuant to the Purchase Agreement, the closing of the fourth and final tranche of the Convertible Note and Warrant occurred, whereby the Company issued a Warrant, which as of September 30, 2025 was adjusted to purchase up to
As of December 31, 2024, the outstanding principal was $
During the Three Months Ended September 30, 2025, $
During the nine months ended September 30, 2025, given that the notes have materially the same terms and duration, the Company combined their presentation in the financial statements. During the nine months ended September 30, 2025, an aggregate of $
OID Convertible Notes
In September 2025, the Company entered into two Note Purchase Agreements with two accredited investors (the “Investors”), pursuant to which the Company issued two
OID Convertible Notes Modification, Extinguishment and Fair Value Election
In connection with the Company’s OID Convertible Notes and other convertible debt with similar terms (the “OID Convertible Notes”), the Company evaluated the accounting implications of modifications or amendments executed during the three months ended September 30, 2025.
Original Terms
The OID Convertible Notes were originally issued with a stated maturity and included and original issue discount (“OID”) of 20% which was accreted to interest expense using the effective interest method through the quarterly period ended June 30, 2025.
Modification and Extension Feature
During the third quarter of 2025, the terms were modified to provide the Company with an option to extend the maturity date on a month-to-month basis for a cost of an additional 5% increase to the OID for each month that repayment goes beyond the stated maturity and this extension option continues for an undefined number of additional months. The Company evaluated this modification under ASC 470-50, Debt Modifications and Extinguishments.
The Company’s evaluation revealed that the change in the present value of the cash flows associated with the modified instrument, as compared to the remaining cash flows under the original terms, was substantial. Accordingly, the amendment was accounted for as a debt extinguishment as of July 1, 2025.
Embedded Derivative Evaluation
In connection with the modification, the Company also determined that change in the potential economics associated with the extension feature combined with the holder’s conversion right needed to be reassessed to determine if the embedded features were derivatives requiring bifurcation and separate accounting under ASC 815-15, Derivatives and Hedging—Embedded Derivatives. Upon reassessment, it was determined that the newly introduced extension feature combined with the holder’s conversion right has the potential to create economic returns for the holder that are not clearly and closely related to the host debt instrument was determined to be a derivative requiring bifurcation and separate accounting as a liability at fair value, with subsequent changes in fair value recognized in earnings.
Fair Value Option Election
Because the modification resulted in the introduction of an embedded derivative that would otherwise require bifurcation, the Company elected, pursuant to ASC 825-10, to apply the fair value option (“FVO”) to each of the OID Convertible Notes impacted by the incorporation of the Company option to extend maturity.
As a result of this election, the OID Convertible Notes are accounted for as a single hybrid instrument measured at fair value, with changes in fair value recognized in earnings each reporting period. The Company determined that the FVO election eliminates the requirement to separately account for the embedded derivative under ASC 815.
Extinguishment Accounting
The extinguishment was accounted for by comparing (i) the carrying amount of the OID Convertible Notes immediately prior to the modification, consisting of the outstanding principal amount less unamortized OID, to (ii) the fair value of the modified OID Convertible Notes on the modification date.
The Company recognized a loss on extinguishment of $
Subsequent Fair Value Changes
Following the modification and the election of the fair value option, the OID Convertible Notes are remeasured at fair value at each reporting date in accordance with ASC 820, Fair Value Measurement.
For the period from July 1, 2025 through September 30, 2025, the Company recognized a loss of $
Valuation Methodology
The fair value of the OID Convertible Notes reflects the present value of expected future cash flows, incorporating the impact of the extension feature and the increasing OID structure, as well as market participant assumptions regarding discount rates, credit risk, and expected timing of repayment. The valuation requires significant judgment and is classified within Level 3 of the fair value hierarchy.
Valuation Inputs and Assumptions
The fair value of the OID Convertible Notes was determined using a probability-weighted discounted cash flow model that incorporates the economic effects of the extension feature, including the increasing OID structure.
Significant unobservable inputs include:
| ● | Expected timing of repayment or extension elections |
| ● | Discount rate, inclusive of market participant assumptions regarding credit risk |
Sensitivity Analysis
Because the valuation of the OID Convertible Notes utilizes significant unobservable inputs, the resulting fair value is inherently subjective. Changes in these inputs could result in materially different fair value measurements.
| ● | Discount Rate: An increase in the discount rate would generally result in a decrease in the fair value of the Convertible Notes, while a decrease in the discount rate would result in an increase in fair value. |
| ● | Expected Term / Extension Assumptions: An increase in the expected duration of the instrument, including the likelihood of extension elections that increase OID, would generally result in an increase in the fair value of the Convertible Notes. |
The Company notes that these inputs are interrelated, and changes in one input may be accompanied by changes in others. Accordingly, the sensitivity analysis above is provided for illustrative purposes and may not be indicative of actual future changes in fair value.
Credit Risk Attribution
The Company determined that no material portion of the change in fair value during the three months ended September 30, 2025 was attributable to changes in instrument-specific credit risk. The change in fair value was primarily driven by changes in expected cash flows associated with the extension feature, including the increasing OID structure, and the passage of time.
Convertible and non-convertible promissory notes, net of debt issuance costs
The following table reflects the Company's convertible and non-convertible promissory notes, net of related discounts as of September 30, 2025 and December 31, 2024:
| As of | As of | |||||||
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Term loans | ||||||||
| Gross convertible and non-convertible notes | ||||||||
| Debt discount | $ | ) | $ | ) | ||||
| Total convertible and non-convertible notes, net | ||||||||
| Current Maturities net of debt discount | $ | ) | $ | ) | ||||
| Long-term maturities net of debt discount | $ | $ | ||||||
The Company’s remaining debt is recorded net of debt issuance costs of $
There was
Senior secured debt:
In May 2022, AEG MH02 entered into a loan agreement with a group of private lenders of approximately $
In July 2023, Alt Spain Holdco, one of the Company’s Spanish subsidiaries acquired the project rights for a 32 MWp portfolio of Solar PV projects in Valencia, Spain, with an initial payment of $
In October 2023, Alternus Energy Americas, one of the Company’s prior US subsidiaries secured a working capital loan in the amount of $
On March 21, 2024, ALCE, SPAC Sponsor Capital Access (“SCAF”), and the Sponsor of Clean Earth (“CLIN”) agreed to a settlement of a $
On December 11, 2024, BESS LLC, a wholly owned subsidiary of the Company, issued a non-interest-bearing promissory note with a principal amount of $
On December 30, 2024, one of the Company’s subsidiaries, Alternus Europe Ltd, assumed a ($
On December 31, 2024, the Company terminated their agreement with Meteora Capital LLC by issuing a $
On January 21, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”) pursuant to which the Company sold, in a private placement (the “Offering”), unsecured
On April 28, 2025, the Company entered into a Note Purchase Agreement (the “Purchase Agreement”), by and between the Company and an institutional investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor promissory notes in the aggregate total principal amount of up to $
On June 6, 2025, the Company entered into a Note Purchase Agreement (the “Purchase Agreement”), by and between the Company and an institutional investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor a promissory note in the aggregate total principal amount of $
On August 7, 2025, the Company issued a promissory note to an accredited investor in the aggregate total principal amount of $
13. Other Payables
This represents $
14. Commitments and Contingencies
Litigation
The Company recognizes a liability for loss contingencies when it believes it is probable a liability has occurred, and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount in the range. The Company has established an accrual for those legal proceedings and regulatory matters for which a loss is both probable and the amount can be reasonably estimated.
On October 15, 2024 Sunrise Development LLC (“Sunrise”) requested a hearing be scheduled in binding arbitration against the Company, two of its former indirect wholly owned subsidiaries, ALT US 03 and ALT US 04, and a related party, Alternus Energy Group PLC (“AEG”), to be conducted in Minneapolis, MN in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “AAA”), claiming that approximately $
On March 11, 2025, the Company was served a complaint filed in the Superior Court of the State of Delaware by SPAC Sponsor Capital Access (“SCAF”), claiming that approximately $
On May 8, 2025, the Company, Alternus Energy Group PLC (AEG) and one of AEG’s subsidiaries, Alternus Energy Americas Inc. (AEA), was served a Demand for Arbitration through JAMS in Washington DC by Orrick, Herrington and Sutcliffe LLP (“Orrick”), claiming that approximately $
Commitments
On October 14, 2024, the Company entered into a settlement agreement and release with Morgan Franklin Consulting LLC (“MF”) related to the settlement of payments owed to MF for services rendered in the total amount of $
CFGI LP and the Company entered into a settlement agreement for a contractual amount owed for services rendered in the amount of $
On April 28, 2025, the Company entered into a Settlement Agreement and Stipulation (the “Agreement”) with Southern Point Capital Corporation (“SPC”), pursuant to which the Company agreed to issue Common Stock to SPC in exchange for the settlement of an aggregate of $
In connection with the Agreement, on May 2, 2025, the Company issued
The Company determined that the Agreement represents a financial instrument that requires the Company to settle a fixed monetary amount by issuing a variable number of shares of its common stock. As a result, the Company is required to account for the Agreement as a liability at fair value with periodic changes in fair value recorded through earnings until the liability has been settled through the issuance of shares (i.e., in one or more tranches) that yield SPC cumulative cash receipts equal to the Settlement Amount. The fair value of this liability as of September 30, 2025 was $
Contingencies
Guarantee of MH02 Note
In connection with the Company’s prior ownership of AEG MH02 Ltd. (“MH02”), the Company guaranteed a third-party loan (the “Note”) with an outstanding principal balance of million ($
The Company’s guarantee of the Note remains in effect following the sale of MH02. While the Standstill delays the lender’s ability to demand repayment, it does not extinguish the underlying obligation or the Company’s guarantee. The timing and amount of any potential payments under the guarantee are dependent on several factors, including the successful development of the Projects to RTB status, the ultimate sale proceeds realized for such Projects, and the resolution of the outstanding balance under the Note. As of September 30, 2025, the Company evaluated its guarantee under applicable accounting guidance for guarantees and contingencies. Based on the information currently available, including the status of the Projects and expected future development and disposition plans, the Company has not recorded a liability related to this guarantee. The Company has currently determined that a loss resulting from the guarantee is remote. The Company monitors developments related to the Projects and the Note and will adjust its assessment of the guarantee obligation as additional information becomes available.
15. Development Cost
Initial costs incurred in project development are capitalized and held on the balance sheet. The Company regularly reviews the status of these projects with our development partners and can decide to abandon a project if it becomes uneconomic due to various factors, for example, a change in market conditions leading to higher costs of construction, lower energy rates, political factors or otherwise where governments from time to time may review their laws and policies that support renewable energy and consider actions that would make the laws and policies less conducive to the development and operation of renewable energy facilities, or other factors that change the expected returns on the project. Any reductions or modifications to, or the elimination of, governmental incentives, such as the renewable energy tax credits in the US, or policies that support renewable energy or the imposition of additional taxes or other assessments on renewable energy could result in, among other items, the lack of a satisfactory market for the development and/or financing of new renewable energy projects, our abandoning the development of renewable energy projects, a loss of our investments in the projects, and reduced project returns, any of which could have a material adverse effect on our business, financial condition, results of operations, and prospects. In such an event that Company believes that a capitalized project is no longer viable, then the associated costs are written of as development cost in the income statement. There have been no cancellations of currently capitalized projects in the financial statements as of September 30, 2025 and the Company accounted for $
Miscellaneous development cost relates to cost associated with projects abandoned during various phases, due to lack of technical, legal, or financial feasibility are immediately expensed to development costs.
16. Discontinued Operations Sold – Poland & Netherlands
In July 2023, the Company engaged multiple parties to market the Polish and Netherlands assets to potential buyers. In the fourth quarter of 2023, the Company decided to proceed with the sales of the PV parks in Poland and park in the Netherlands. As the exit of these two markets represented a strategic shift for the Company, the assets were classified as discontinued operations in accordance with ASC 205-20. As of December 31, 2023, the Polish and Netherlands assets were classified as disposal groups held for sale. The balances and results of the Polish and Netherlands disposal groups are presented below.
The sale of the Polish assets was finalized January 19, 2024 with a cash consideration of $
The sale of the Netherlands assets was finalized February 21, 2024 with a cash consideration of $
| Three Months Ended |
Nine Months Ended |
|||||||
| Poland |
September 30, 2024 |
|||||||
| (in thousands) |
||||||||
| Revenues |
$ | $ | ||||||
| Operating Expenses |
||||||||
| Cost of revenues |
( |
) | ||||||
| Depreciation, amortization, and accretion |
( |
) | ||||||
| Gain on disposal of asset |
||||||||
| Total operating expenses |
||||||||
| Income/(loss) from discontinued operations |
||||||||
| Other income/(expense): |
||||||||
| Interest expense |
( |
) | ||||||
| Other expense |
||||||||
| Total other expenses |
$ | $ | ( |
) | ||||
| Income/(Loss) before provision for income taxes |
$ | $ | ||||||
| Net income/(loss) from discontinued operations |
$ | $ | ||||||
| Impact of discontinued operations on EPS |
||||||||
| Net income/(loss) attributable to common stockholders, basic and diluted |
$ | $ | ||||||
| Net income/(loss) per share attributable to common stockholders, basic and diluted |
$ | $ | ||||||
| Weighted-average common stock outstanding, basic |
||||||||
| Weighted-average common stock outstanding, diluted |
||||||||
| Three Months Ended |
Nine Months Ended |
|||||||
| Netherlands |
September 30, 2024 |
|||||||
| (in thousands) |
||||||||
| Revenues |
$ | $ | ||||||
| Operating Expenses |
||||||||
| Cost of revenues |
( |
) | ||||||
| Depreciation, amortization, and accretion |
( |
) | ||||||
| Loss on disposal of asset |
( |
) | ||||||
| Total operating expenses |
( |
) | ||||||
| Income/(loss) from discontinued operations |
( |
) | ||||||
| Other income/(expense): |
||||||||
| Interest expense |
( |
) | ||||||
| Other expense |
||||||||
| Total other expenses |
$ | $ | ( |
) | ||||
| Loss before provision for income taxes |
$ | $ | ( |
) | ||||
| Net loss from discontinued operations |
$ | $ | ( |
) | ||||
| Impact of discontinued operations on EPS |
||||||||
| Net loss attributable to common stockholders, basic and diluted |
$ | $ | ( |
) | ||||
| Net loss per share attributable to common stockholders, basic and diluted |
$ | $ | ( |
) | ||||
| Weighted-average common stock outstanding, basic |
||||||||
| Weighted-average common stock outstanding, diluted |
||||||||
On October 3, 2024, the Company completed the sale of Solis Bond Company DAC, a company formed under the laws of Ireland and an indirect wholly owned subsidiary of the Company, and its subsidiaries in Romania to Solis Trustee Special Vehicle Limited, the Solis Bondholders’ ownership vehicle, for in accordance with the terms of the Solis Bonds, as amended. As a result of the sale, the Company eliminated approximately $
The sale of these entities and exit of this market represented a strategic shift for the Company that has a major effect on the Company’s operations and financial results. Results of operations, financial position, and cash flows for these subsidiaries are reported as discontinued operations, in accordance with ASC 205-20, for all periods presented.
The notes to the financial statements have been adjusted to reflect this retroactive presentation.
| Three Months Ended |
||||
| Solis and Subsidiaries in Romania |
September 30, 2024 | |||
| (in thousands) |
||||
| Revenues |
$ | |||
| Operating Expenses |
||||
| Cost of revenues |
( |
) | ||
| Selling, general, and administrative |
( |
) | ||
| Depreciation, amortization, and accretion |
( |
) | ||
| Costs of disposal of assets |
( |
) | ||
| Total operating expenses |
( |
) | ||
| Income from discontinued operations |
||||
| Other income/(expense): |
||||
| Interest expense |
( |
) | ||
| Other expense |
||||
| Total other expenses |
$( |
) | ||
| Loss before provision for income taxes |
$ | ( |
) | |
| Net loss from discontinued operations |
$ | ( |
) | |
17. Sale of Spanish Subsidiaries
On March 25, 2025, one of the Company’s subsidiaries, AEG MH02, entered into a Share Purchase Agreement with Alternus Energy Group Plc, a related party, for the sale of the entire issued share capital of Alt Spain Holdco S.l.u., including all of its subsidiaries: ALT Spain 03, S.L.U., ALT Spain 04, S.L.U. and New Frog Projects SL, for a total consideration of In accordance with ASC 360, the Company removed the net assets of the disposal group and recognized a gain of $
The major classes of assets and liabilities transferred on March 25, 2025 in the sale of the Company’s subsidiaries are shown below:
| As of |
||||
| March 25, |
||||
| Spain |
2025 |
|||
| (in thousands) |
||||
| Assets: |
||||
| Other current assets |
$ | |||
| Total assets sold |
$ | |||
| Liabilities: |
||||
| Accounts payable |
$ | |||
| Short secured debt |
||||
| Operating leases, current liabilities |
||||
| Other current liabilities |
||||
| Operating leases, non-current liabilities |
||||
| Total liabilities sold |
$ | |||
| Net (gain)/loss on sale of net assets |
$ | ( |
) | |
18. Sale of Assets Held for Sale: MH 02 & its Subsidiaries
During the second quarter of 2025, on May 7, 2025, the Company sold AEG MH 02 Limited (“MH02”) and all its subsidiaries to two buyers. Pursuant to which, the Company entered into a Share Purchase Agreement along with its subsidiary, Alternus Europe Limited (the “Seller”), OBN Real Estate Limited (the “Majority Buyer”) and BVP Green Bond 2018 Limited (the “Minority Buyer”) (together the “Buyers”) for the sale of the entire issued share capital of AEG MH 02 Limited (“MH02”), including all of MH02’s subsidiaries: AED Italia-01 S.r.l; AED Italia-02 S.r.l; AED Italia-03 S.r.l; AED Italia-04 S.r.l; AED Italia-05 S.r.l; AED Italia-06 S.r.l; AED Italia-07 S.r.l; AED Italia-08 S.r.l; PC-Italia-01 S.r.l; PC-Italia-03 S.r.l; PC-Italia-04 S.r.l; Risorse Solari I S.r.l; and Risorse Solari III S.r.l (the “Transaction”), for a total consideration of (i) the assumption of approximately $
As part of the Transaction the Minority Buyer agreed to forbear its claim aganst AEG, and as an incentive for the parties to enter into the transaction, the Company issued
As a result of the Transaction, the Company recorded a gain on the sale of approximately $
As this sale is not considered an exit strategy of the Italian market, the assets were not classified as discontinued operations in accordance with ASC 205-20.
The major classes of assets and liabilities transferred on May 7, 2025 in the sale of MH02 and its subsidiaries are shown below:
| As of |
||||
| May 7, |
||||
| MH 02 and Italian Subsidiaries |
2025 |
|||
| (in thousands) |
||||
| Assets: |
||||
| Cash and cash equivalents |
$ | |||
| Other current assets |
||||
| Capitalized development costs |
||||
| Total assets |
$ | |||
| Liabilities: |
||||
| Accounts payable & accrued liabilities |
$ | |||
| Short term convertible & non-convertible notes |
||||
| Other current liabilities |
||||
| Total liabilities |
$ | |||
| Amounts due to AEG not acquired |
||||
| Foreign currency translation reserve |
||||
| Net (gain)/loss on sale of the subsidiaries |
$ | ( |
) | |
19. Shareholders’ Equity
Common Stock
As of December 31, 2024, the Company had a total of
Reverse Stock Splits
On October 11, 2024, the Company effected a one-for-twenty five (1:25) reverse stock split of all issued and outstanding shares of the Company’s common stock, par value $
As a result of the 2024 Reverse Stock Split, every twenty-five (
On September 5, 2025, the Company effected a one-for- (1:200) reverse stock split of all issued and outstanding shares of the Company’s common stock, par value $
As a result of the Sept 2025 Reverse Stock Split, every two hundred (
All share and per share amounts in the accompanying consolidated financial statements and notes thereto have been retroactively adjusted to reflect both the 2024 Reverse Stock Split and the Sept 2025 Reverse Stock Split for all periods presented.
Common Stock Issuances
On January 2, 2025, a convertible note holder converted $
On January 8, 2025, a convertible note holder converted $
On January 23, 2025, the Company issued
On February 6, 2025, a convertible note holder converted $
On February 11, 2025, a convertible note holder converted $
On April 14, 2025 the Company issued a total of
On May 1, 2025 the Company issued
On May 2, 2025, the Company issued
On May 20, 2025 the Company issued
On June 30, 2025 a convertible promissory note holder converted $
On July 15, 2025 a convertible promissory note holder converted $
On August 4, 2025 a convertible promissory note holder converted $
Preferred Stock
As of September 30, 2025 and December 31, 2024, the Company had a total of
The board of directors of the Company has the authority to establish one or more series of preferred stock, fix the voting rights, if any, designations, powers, preferences and any other rights, if any, of each such series and any qualifications, limitations and restrictions thereof.
Series A Super Voting Preferred Stock
Each share of the Series A is entitled to have the right to vote in an amount equal to
Series A Super Voting Preferred Stock Issuance
On March 21, 2025 the Company issued
On April 24, 2025 the Company issued an additional
Series B Convertible Preferred Stock
Each share of Series B has a par value of $
Conversion Right. Each share of Series B converts into a number of fully paid and non-assessable shares of Common Stock equal to the face value of each share ($
Adjustments of Conversion Price. If, from the Original Issue Date to December 31, 2026, the Company has issued any shares of Common Stock or convertible preferred stock (or any securities convertible into or exercisable for Common Stock) at a price per share less than the then-effective Conversion Price (the “Original Conversion Price”) of the Series B (a “Dilutive Issuance”), then the Original Conversion Price shall be reduced to the lowest price per share of Common Stock or convertible preferred stock issued during this period.
Restriction on Conversion. In no event shall the Holder have the right or the Company be required to convert, as applicable, shares of Series B if as a result of such conversion the aggregate number of shares of Common Stock beneficially owned by such Holder and its Affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the shareholder for purposes of Section 13(d) of the 1934 Act, would exceed
Restriction on Sales. Beginning on the month after the Holder is able to convert the Series B and utilize an exemption under SEC Rule 144, the Holder may sell a maximum amount of Common Shares per month not to exceed the average daily volume of the Company’s common stock in the prior month.
Voting Rights. Each holder of Series B has full voting rights and powers equal to the voting rights and powers of holders of common stock, and for so long as Series B is issued and outstanding, the holders of Series B shall vote together as a single class with the holders of the Company’s common stock and the holders of any other class or series of shares entitled to vote on all such matters equal to the number of whole shares of Common Stock into which the shares of Series B Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. (For avoidance of doubt, voting rights are on an ‘as-converted’ basis.)
Series B Issuances
On September 30, 2025, the Company issued an aggregate of
Warrants
As of September 30, 2024, warrants to purchase up to
| Weighted | ||||||||||||
| Average | ||||||||||||
| Weighted | Remaining | |||||||||||
| Average | Contractual | |||||||||||
| Exercise | Term | |||||||||||
| Warrants | Price | (Years) | ||||||||||
| Outstanding – January 1, 2024 | $ | |||||||||||
| Issued during the period | ||||||||||||
| Expired during the period | - | - | - | |||||||||
| Outstanding – September 30, 2024 | $ | |||||||||||
| Exercisable – September 30, 2024 | $ | |||||||||||
| Weighted | ||||||||||||
| Average | ||||||||||||
| Weighted | Remaining | |||||||||||
| Average | Contractual | |||||||||||
| Exercise | Term | |||||||||||
| Warrants | Price | (Years) | ||||||||||
| Outstanding – January 1, 2025 | $ | |||||||||||
| Issued during the period | ||||||||||||
| Expired during the period | - | - | - | |||||||||
| Outstanding – September 30, 2025 | $ | |||||||||||
| Exercisable – September 30, 2025 | $ | |||||||||||
2023 Equity Incentive Plan
As of December 31, 2024 and September 30, 2025, there were
On March 21, 2025, Mr. Vincent Browne, our CEO and Interim CFO and shareholder with majority voting rights, representing
20. Segment and Geographic Information
Effective January 1, 2024, the Company adopted Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update requires disclosure of significant segment expenses regularly provided to the Chief Operating Decision Maker (CODM) and enhances qualitative disclosures about segment operations. The adoption of this ASU did not impact the Company’s consolidated financial position, results of operations, or cash flows.
The Company has reportable segments that consist of PV operations by geographical region, United States Operations and European Operations. The Chief Operating Decision-Maker (CODM) is the CEO.
Historically, the European Segment had derived revenues from three sources, Country Renewable Programs, Green Certificates and Long-term Offtake Agreements. The United States Segment revenues are expected to be derived from Long-term Offtake Agreements. As of December 31, 2024, the Company had revenue from discontinued operations as the operating parks in Poland, the Netherlands, and Romania were sold. Additionally, the Company had no revenue from continuing operations as the Lightwave operating parks were sold to a related party, Alternus Energy Group Plc, as a result of the deconsolidation of Alternus Energy Americas Inc. on November 5, 2024.
In evaluating financial performance, the CODM uses Adjusted EBITDA to assess segment performance and decide how to allocate resources. Adjusted EBITDA is defined as earnings before interest expense, income tax expense, depreciation and amortization, and any one time non-operational costs or costs related to financing or capital transactions. The Company uses Adjusted EBITDA because management believes that it can be a useful financial metric in understanding the Company’s earnings from operations. Adjusted EBITDA is not a measure of the Company’s financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP. As a trans-Atlantic independent solar power provider, we evaluate many of our capital expenditure decisions at a regional level. Accordingly, expenditures on property, plant and equipment and associated debt by segment are presented.
The following tables present information related to the Company’s reportable segments. The data has been presented to show the effect of discontinued operations for subsidiaries sold or deconsolidated.
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| September 30, |
September 30, |
|||||||||||||||
| Revenue by Segment |
2025 |
2024 |
2025 |
2024 |
||||||||||||
| (in thousands) |
(in thousands) |
|||||||||||||||
| Europe |
$ | $ | $ | $ | ||||||||||||
| Europe – Discontinued Operations |
||||||||||||||||
| United States |
||||||||||||||||
| Total for the period |
$ | $ | $ | $ | ||||||||||||
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| September 30, |
September 30, |
|||||||||||||||
| Net Income/(loss) by Segment |
2025 |
2024 |
2025 |
2024 |
||||||||||||
| (in thousands) |
(in thousands) |
|||||||||||||||
| Europe |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||
| Europe – Discontinued Operations |
( |
) | ( |
) | ||||||||||||
| United States |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Total for the period |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| As of |
Year Ended |
|||||||
| September 30, |
December 31, |
|||||||
| Assets by Segment |
2025 |
2024 |
||||||
| (in thousands) |
||||||||
| Europe – Continuing Operations |
||||||||
| Other Assets |
$ | $ | ||||||
| Total for Europe – Continuing Operations |
$ | $ | ||||||
| United States – Continuing Operations |
||||||||
| Other Assets |
$ | $ | ||||||
| Total for United States – Continuing Operations |
$ | $ | ||||||
| As of |
Year Ended |
|||||||
| September 30, |
December 31, |
|||||||
| Liabilities by Segment |
2025 |
2024 |
||||||
| (in thousands) |
||||||||
| Europe – Continuing Operations |
||||||||
| Debt |
$ | $ | ||||||
| Other Liabilities |
||||||||
| Total for Europe – Continuing Operations |
$ | $ | ||||||
| United States – Continuing Operations |
||||||||
| Debt |
$ | $ | ||||||
| Other Liabilities |
||||||||
| Total for United States – Continuing Operations |
$ | $ | ||||||
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| September 30, |
September 30, |
|||||||||||||||
| EBITDA by Segment |
2025 |
2024 |
2025 |
2024 |
||||||||||||
| (in thousands) |
(in thousands) |
|||||||||||||||
| Europe |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | ||||||
| Europe - discontinued operations |
( |
) | ||||||||||||||
| US |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Total for the period |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Below is a reconciliation of net income to Adjusted EBITDA for the periods presented:
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| September 30, |
September 30, |
|||||||||||||||
| EBITDA Reconciliation to Net Loss |
2025 |
2024 |
2025 |
2024 |
||||||||||||
| (in thousands) |
(in thousands) |
|||||||||||||||
| Europe |
||||||||||||||||
| Adjusted EBITDA |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | ||||||
| Depreciation, amortization, and accretion |
( |
) | ( |
) | ||||||||||||
| Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Gain on sale of subsidiaries |
||||||||||||||||
| Net Income /(Loss) |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||
| Europe - discontinued operations |
||||||||||||||||
| Adjusted EBITDA |
$ | $ | ( |
) | $ | $ | ||||||||||
| Gain/(loss) from operations of discontinued business component |
( |
) | ||||||||||||||
| Gain/(loss) on sale of discontinued business components |
( |
) | ||||||||||||||
| Interest expense |
( |
) | ( |
) | ||||||||||||
| Net Income /(Loss) |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
| US |
||||||||||||||||
| Adjusted EBITDA |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Depreciation, amortization, and accretion |
( |
) | ( |
) | ( |
) | ||||||||||
| Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Fair value movement of FPA Asset |
( |
) | ||||||||||||||
| Fair value movement of convertible notes |
( |
) | ( |
) | ||||||||||||
| Debt restructuring costs |
( |
) | ||||||||||||||
| Fair value movement of warrant derivative liability |
( |
) | ( |
) | ||||||||||||
| Gain on settlement of payables |
||||||||||||||||
| Loss on issuance of debt |
( |
) | ( |
) | ||||||||||||
| Loss on extinguishment of debt |
( |
) | ( |
) | ||||||||||||
| Loss on settlement of SAA with Hover |
( |
) | ( |
) | ||||||||||||
| Loss on settlement of liabilities |
|
- |
|
|
||||||||||||
| Provision for loss from related party |
( |
) | ( |
) | ||||||||||||
| Other expense |
( |
) | ||||||||||||||
| Net Loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Income Taxes |
||||||||||||||||
| Consolidated Net Income / (Loss) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
21. Income Tax Provision
The Company’s provision for income taxes for interim periods is determined using its effective tax rate expected to be applied for the full year. The Company’s effective tax rate was
The Company assesses the realizability of the deferred tax assets at each reporting date. The Company continues to maintain a full valuation allowance for its net deferred tax assets. If certain substantial changes in the entity’s ownership occur, there may be an annual limitation on the amount of the carryforwards that can be utilized. The Company will continue to assess the need for a valuation allowance on its deferred tax assets.
22. Related Party
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.
AEG:
Alternus Energy Group Plc (“AEG”) was a
In January 2024, the Company assumed a $
During the period ended September 30, 2025, the Company and its subsidiaries and AEG and its subsidiaries had numerous financial transactions between each other which were approved by each company’s board of directors.
Specifically during the period, the Company issued
Nordic ESG:
In January of 2024, the Company issued
Sponsor:
On March 19, 2024 we entered into a settlement agreement with the Clean Earth Acquisitions Sponsor LLC (“Sponsor”) and SPAC Sponsor Capital Access (“SCA”) pursuant to which, among other things, we agreed to repay Sponsor’s debt to SCA, related to the Sponsor’s SPAC entity extensions, in the amount of $
Hover:
On September 30, 2025 we entered into a joint venture operating agreement with Hover Energy LLC (“Hover”) pursuant to which Alternus sold a
D&O:
In connection with the Business Combination Closing, the Company entered into indemnification agreements (each, an “Indemnification Agreement”) with its directors and executive officers. Each Indemnification Agreement provides for indemnification and advancements by the Company of certain expenses and costs if the basis of the indemnitee’s involvement in a matter was by reason of the fact that the indemnitee is or was a director, officer, employee, or agent of the Company or any of its subsidiaries or was serving at the Company’s request in an official capacity for another entity, in each case to the fullest extent permitted by the laws of the State of Delaware.
On January 28, 2025, John McQuillan, a Class I director of the Company, resigned from the Company’s Board of Directors (the “Board”) effective immediately.
On January 28, 2025, Rolf Wikborg
On March 21, 2025 the Company filed an Amended and Restated Certificate of Designation of its Series A Super Voting Preferred Stock, such that
Also on March 21, 2025, Mr. Vincent Browne, our CEO and Interim CFO and shareholder with majority voting rights, representing
On April 21, 2025 the Company issued a total of
On April 24, 2025 the Company’s Board increased the total shares designated as Series A by
On April 25, 2025, Mr. Vincent Browne, our CEO, Interim CFO and shareholder with majority voting rights, representing
On December 30, 2025, Mr. Vincent Browne, our CEO, Interim CFO and shareholder with majority voting rights, representing
On March 3, 2026, we entered into subscription agreements with certain accredited investors, of which Nicholas Parker, one of our directors, was one, pursuant to which Mr. Parker invested $
Consulting Agreements:
On May 15, 2021 VestCo Corp., a company owned and controlled by our Chairman and CEO, Vincent Browne, entered into a Professional Consulting Agreement with one of our US subsidiaries under which it pays VestCo a monthly fee of $
In July of 2023, John Thomas, one of our directors, entered into a Consulting Services Agreement with one of our US subsidiaries under which it pays Mr. Thomas a monthly fee of $
| Nine Months Ended |
||||||||
| September 30, |
||||||||
| Director’s remuneration |
2025 |
2024 |
||||||
| (in thousands) |
||||||||
| Remuneration in respect of services as directors |
$ | $ | ||||||
| Remuneration in respect to long-term incentive schemes – restricted shares |
||||||||
| Total |
$ | $ | ||||||
23. Subsequent Events
Management has evaluated subsequent events that occurred through the date the financial statements were issued and has determined that there were no subsequent events that required recognition or disclosure in the financial statements as of and for the period ended September 30, 2025, except as disclosed below.
Extension of Notes with SNC:
The $
The $
The $
The $
On March 31, 2026 the Company settled with SNC pursuant to which the Company issued
Note Assignments:
In November 2025, a portion equal to $
Unregistered Securities Issuance:
On November 6, 2025, a portion equal to $
November 2025 Notes:
In November 2025, the Company entered into Note Purchase Agreements with two accredited investors (each an “Investor” and together the “Investors”), pursuant to which the Company issued to each Investor a
Increase in Total Authorized Common Stock:
On December 30, 2025, Mr. Vincent Browne, our CEO, Interim CFO and shareholder with majority voting rights, representing
Debt Settlements:
On December 31, 2025, the Company entered into a settlement agreement with Jones Trading Institutional Services LLC (“Jones”), whereby Jones agreed to reduce its fee owed from $
Also on December 31, 2025, the Company entered into a settlement agreement with SCM Tech LLC (“SCM”), whereby the parties agreed that the total balance owed to SCM was $
The terms of the Series C are set forth in detail below and in the Certificate of Designation of Series C, filed as part of the Company’s current report on Form 8K filed on March 9, 2026.
Additionally, on March 31, 2026, the Company issued
Executive Officer Resignation. On February 13, 2026, David Farrell resigned as Chief Commercial Officer of the Company, effective immediately.
Series C Convertible Preferred Stock:
On March 3, 2026, the board of directors (the “Board”) of the Company declared the formation of an aggregate of up to
General. The Series C consists of a total of
Conversion Right. Each share of Series C shall convert into a number of fully paid and non-assessable shares of Common Stock equal to the value of each share ($
Adjustments of Conversion Price. If, from the Original Issue Date to December 31, 2028, the Company has issued any shares of Common Stock or convertible preferred stock (or any securities convertible into or exercisable for Common Stock) at a price per share less than the then-effective Conversion Price (the "Original Conversion Price") of the Series C (a "Dilutive Issuance"), then the Original Conversion Price shall be reduced to the lowest price per share of Common Stock or convertible preferred stock issued during this period.
Restriction on Conversion. In no event shall the Holder have the right or the Company be required to convert, as applicable, shares of Series C if as a result of such conversion the aggregate number of shares of Common Stock beneficially owned by such Holder and its Affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the shareholder for purposes of Section 13(d) of the 1934 Act, would exceed
Restriction on Sales. Beginning on the month after the Holder is able to convert the Series C and utilize an exemption under SEC Rule 144, the Holder may sell a maximum amount of Common Shares per month not to exceed the average daily volume of the Company’s common stock in the prior month.
Voting Rights. Each holder of Series C has full voting rights and powers equal to the voting rights and powers of holders of common stock, and for so long as Series C is issued and outstanding, the holders of Series C shall vote together as a single class with the holders of the Company’s common stock and the holders of any other class or series of shares entitled to vote on all such matters equal to the number of whole shares of Common Stock into which the shares of Series C Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. (For avoidance of doubt, voting rights are on an ‘as-converted’ basis.)
Dividend Rights. The holders of Series C, as such, will not be entitled to receive dividends of any kind.
Liquidation Preference. The holders of Series C shall be entitled to receive distributions in the event of any liquidation, dissolution or winding up of the Company pari passu with the Common Stock.
March 2026 Funding:
Subscription Agreements
On March 3, 2026, we entered into subscription agreements (the “Subscription Agreements”) with certain investors (the “Purchasers”) pursuant to which the Company’s wholly owned subsidiary, Alt Alliance LLC (“AltA”), sold in a private placement (the “Offering”), unsecured
The aggregate gross proceeds to the Company were $
Original Issue Discount Secured Promissory Notes
The Notes were issued with an original issue discount of
The Notes are secured by a first-priority pledge of 100% of the membership interests of AltA held by the Company, pro rata among the holders of the Notes, pursuant to the Pledge Agreement.
The Notes contain certain Events of Default, including but not limited to (i) the Company’s failure to pay any amount of principal or other amounts due under the Notes, (ii) commencement of bankruptcy proceedings by Alta if they remain undismissed for 60 days, (iii) the dissolution of the Company or Alta, and (iv) any breach or failure to comply with any provision of the Note if it remains uncured for 60 days. Upon the occurrence of any Event of Default and at any time thereafter, the Purchasers shall have the right to exercise all of the remedies under the Notes.
Extension of Notes:
Also on March 3, 2026, a number of accredited investors agreed to extend their existing notes in the aggregate amount of $
Intercompany Transfer of EverOn Energy LLC (“EverOn”)
On March 24, 2026, the Company transferred its
March 27, 2026 Subscription Agreement:
On March 27, 2026 the Company entered into a subscription agreement (the “Subscription Agreement”) with a certain third party accredited investor (the “Purchaser”) pursuant to which the Company sold in a private placement (the “Offering”) an aggregate of
Put Option Agreement
Simultaneously with the March 27, 2026 Subscription Agreement, the Company also entered into a Put Option Agreement with the Purchaser, pursuant to which the Purchaser has the right, for a period of year after the Company raises a minimum of $
Series D Convertible Preferred Stock:
On March 27, 2026, the board of directors (the “Board”) of the Company declared the formation of an aggregate of up to
General. The Series D consists of a total of
Conversion Right. Each share of Series D shall convert into a number of fully paid and non-assessable shares of Common Stock equal to the value of each share ($
Adjustments of Conversion Price. If, during the period of twelve months from the issuance date, the Company has issued any shares of Common Stock or convertible preferred stock (or any securities convertible into or exercisable for Common Stock) at a price per share less than the then-effective Conversion Price (the "Original Conversion Price") of the Series D (a "Dilutive Issuance"), then the Original Conversion Price shall be reduced to the lowest price per share of Common Stock or convertible preferred stock issued during this period.
Restriction on Conversion. In no event shall the Holder have the right or the Company be required to convert, as applicable, shares of Series D if as a result of such conversion the aggregate number of shares of Common Stock beneficially owned by such Holder and its Affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the shareholder for purposes of Section 13(d) of the 1934 Act, would exceed
Restriction on Sales. Beginning on the month after the Holder is able to convert the Series D and utilize an exemption under SEC Rule 144, the Holder may sell a maximum amount of Common Shares per month not to exceed the average daily volume of the Company’s common stock in the prior month.
Voting Rights. Each holder of Series D has full voting rights and powers equal to the voting rights and powers of holders of common stock, and for so long as Series D is issued and outstanding, the holders of Series D shall vote together as a single class with the holders of the Company’s common stock and the holders of any other class or series of shares entitled to vote on all such matters equal to the number of whole shares of Common Stock into which the shares of Series D Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. (For avoidance of doubt, voting rights are on an ‘as-converted’ basis.)
Dividend Rights. The holders of Series D, as such, will not be entitled to receive dividends of any kind.
Liquidation Preference. The holders of Series D shall be entitled to receive distributions in the event of any liquidation, dissolution or winding up of the Company pari passu with the Common Stock.
Series E Convertible Preferred Stock:
On March 31, 2026, the board of directors (the “Board”) of the Company declared the formation of an aggregate of up to
General. The Series E consists of a total of
Conversion Right. Each share of Series E shall convert into a number of fully paid and non-assessable shares of Common Stock equal to the value of each share ($
Adjustments of Conversion Price. If, during the period of twelve months from the issuance date, the Company has issued any shares of Common Stock or convertible preferred stock (or any securities convertible into or exercisable for Common Stock) at a price per share less than the then-effective Conversion Price (the "Original Conversion Price") of the Series E (a "Dilutive Issuance"), then the Original Conversion Price shall be reduced to the lowest price per share of Common Stock or convertible preferred stock issued during this period.
Restriction on Conversion. In no event shall the Holder have the right or the Company be required to convert, as applicable, shares of Series E if as a result of such conversion the aggregate number of shares of Common Stock beneficially owned by such Holder and its Affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the shareholder for purposes of Section 13(d) of the 1934 Act, would exceed
Piggyback Registration Rights. Each holder of Series E has the right to include the shares of common stock underlying the Series E in any registration statement on SEC Form S-1 that the Company may file.
Voting Rights. Each holder of Series E has full voting rights and powers equal to the voting rights and powers of holders of common stock, and for so long as Series E is issued and outstanding, the holders of Series E shall vote together as a single class with the holders of the Company’s common stock and the holders of any other class or series of shares entitled to vote on all such matters equal to the number of whole shares of Common Stock into which the shares of Series E Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. (For avoidance of doubt, voting rights are on an ‘as-converted’ basis.)
Dividend Rights. The holders of Series E, as such, will not be entitled to receive dividends of any kind.
Liquidation Preference. The holders of Series E shall be entitled to receive distributions in the event of any liquidation, dissolution or winding up of the Company pari passu with the Common Stock
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report and in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 27, 2025. In addition to historically consolidated financial information, this discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to these differences include, but are not limited to, those identified below, and those discussed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, in “Item 1A. Risk Factors” in Part II of this Quarterly Report on Form 10-Q and in any subsequent filing we make with the SEC.
Overview
We are a renewable energy company committed to advancing sustainable solutions. With a focus on utility-scale projects, such as utility solar parks, microgrids and battery storage, we aim to deliver comprehensive, clean energy across Europe and America. Through strategic investments, we are building a portfolio poised to lead the transition to a sustainable energy future.
The Company was incorporated in Delaware on May 14, 2021, and was originally known as Clean Earth Acquisitions Corp. (“Clean Earth”).
On October 12, 2022, Clean Earth entered into a Business Combination Agreement, as amended by that certain First Amendment to the Business Combination Agreement, dated as of April 12, 2023 (the “First BCA Amendment”) (as amended by the First BCA Amendment, the “Initial Business Combination Agreement”), and as amended and restated by that certain Amended and Restated Business Combination Agreement, dated as of December 22, 2023 (the “A&R BCA”) (the Initial Business Combination Agreement, as amended and restated by the A&R BCA, the “Business Combination Agreement”), by and among Clean Earth, Alternus Energy Group Plc (“AEG”), and the Sponsor. Following the approval of the Initial Business Combination Agreement and the transactions contemplated thereby at the special meeting of the stockholders of Clean Earth held on December 4, 2023, the Company consummated the Business Combination on December 22, 2023. In accordance with the Business Combination Agreement, Clean Earth issued 11,500 shares of common stock of Clean Earth, par value $0.0001 per share, to AEG, and AEG transferred to Clean Earth, and Clean Earth received from AEG, all of the issued and outstanding equity interests in the Acquired Subsidiaries (as defined in the Business Combination Agreement) (the “Equity Exchange,” and together with the other transactions contemplated by the Business Combination Agreement, the “Business Combination”). In connection with the Closing, the Company changed its name from Clean Earth Acquisition Corp. to Alternus Clean Energy, Inc.
The Company plans to use annual recurring revenues (“ARR”) as a key metric in its financial management information and believes this method better reflects the long-term stability of operations in the future. Annual recurring revenues are defined as the estimated future revenue generated by operating solar parks based on the remaining term by the price received per mega-watt hour (MWh) of energy produced multiplied by the estimated production from each solar park over a full year of operation. It should be noted that the actual revenues reported by the Company in a particular year may be lower than the annual recurring revenues because not all parks may be revenue generating for the full year in their first year of operation. The Company must also account for the timing of acquisitions that take place throughout the financial year.
Impacts of the Ukraine/Russia Conflict
The geopolitical situation in Eastern Europe intensified on February 24, 2022, with Russia’s invasion of Ukraine. The war between the two countries continues to evolve as military activity proceeds and additional sanctions are imposed. In addition to the human toll and impact of the events on entities that have operations in Russia, Ukraine, or neighboring countries (e.g., Belarus, Poland, Romania) or that conduct business with their counterparties, the war is increasingly affecting economic and global financial markets and exacerbating ongoing economic challenges, including issues such as rising inflation and global supply-chain disruption. Although we no longer have physical facilities in Romania, the Company has seen fluctuations in energy rates due to inflation, increased interest rates, and other macro-economic factors.
Known trends or Uncertainties
The Company has a working capital deficiency and negative equity, and management has determined there is doubt about the Company’s ability to continue as a going concern, if planned financing and/or equity raises do not occur and/or if the terms of financings or equity raises are not acceptable to the Company. Refer to Footnote 2 of the accompanying financial statements.
The Company is currently working on several processes to address the going concern issue. We are working with multiple global banks and funds to secure the necessary corporate and project level financing to execute our transatlantic business plan and we have sold or otherwise discontinued operations in order to eliminate significant amounts of debt and other obligations.
Competitive Strengths
The Company believes the following competitive strengths have contributed and will continue to contribute to its success:
| ● |
Fully Integrated Clean Energy Provider Model: |
We operate as a comprehensive energy provider, managing the full renewable energy value chain across both utility scale and behind-the-meter microgrid markets. This “develop-to-own or sell” strategy enables the Company to capture greater margin and retain control from early-stage development through to long-term operations or strategic monetization, unlike peers focused solely on operational asset acquisitions.
| ● |
Experienced and Adaptive Management Team: |
The leadership team brings decades of collective experience in capital markets, energy infrastructure, project development, and public company governance. Recent partnerships also bolster technical and operational capabilities in areas such as microgrids, reinforcing the Company’s strategic direction.
| ● |
Capital-Efficient Growth Through Project-Level Leverage: |
Our approach emphasizes projects with minimal to no owner equity requirements, particularly in the U.S. where tax equity (ITC) and long-term debt can fund up to 100% of project costs. This model allows for rapid, capital-efficient scaling and high-return deployments, freeing up corporate equity for strategic growth.
| ● |
Transatlantic Market Footprint Mitigates Risk: |
With operations and revenue targets split between North America and Europe by 2029, Alternus is uniquely positioned to reduce geopolitical and regulatory concentration risk. The diversified presence enhances resilience and positions the Company to capture incentives from multiple clean energy policy regimes.
| ● |
Unique Microgrid Technology and Offerings: |
Through partnerships such as with Hover Energy, Alternus delivers differentiated microgrid solutions combining rooftop wind, solar, storage, and AI-based energy management systems. This provides a compelling and exclusive offering, particularly in the high-growth commercial and industrial market segments.
| ● |
Proven International Expansion and Partner Network: |
The Company’s historical ability to enter new geographies and establish strong local partnerships is expected to enable consistent expansion across Europe and North America once the Company has completed plans to improve and stabilize its balance sheet. These local relationships and Alternus’ development track record provide a competitive edge in securing grid access, permits, and financing in highly competitive markets.
| ● |
Flexible and Technology Agnostic Strategy: |
Alternus is not tied to specific technologies or suppliers, allowing it to source best-in-class components and services globally. This flexibility supports cost optimization and future proofing as new solutions and innovations emerge in the renewable energy space.
Vision and Strategy
We are expanding beyond our core utility solar operations by integrating microgrids and on-site generation systems that provide customers with energy resilience, grid independence, and long-term cost savings. These customer deployed systems enable faster revenue realization and lower capital intensity compared to utility scale projects.
To accelerate this transition, we are actively forming strategic partnerships and pursuing targeted ventures and acquisitions in high-growth areas such as battery storage and circular economy energy systems. These additions enhance our technical capabilities, diversify revenue streams, and strengthen our ability to meet the rising demand for consistent power driven by AI, data centers, and industrial onshoring.
This strategy builds on our foundation as an integrated independent power producer (IPP) with experience developing a portfolio of renewable energy assets across North America and Europe. By owning and operating long-term contracted energy projects, we generate stable, recurring income while unlocking lasting value for shareholders.
With strong regulatory tailwinds and rapidly growing global demand for sustainable and reliable energy, Alternus is well positioned to scale as a more comprehensive energy provider, broadening our market reach, enhancing financial performance, and advancing our mission to power a cleaner, more resilient energy future.
To achieve its goals, the Company intends to pursue the following strategies:
| ● |
Continue our growth strategy of acquiring utility scale clean energy (e.g., solar, battery storage and other technologies) projects that are either in development, in construction, newly installed or already operational, in order to build a diversified portfolio across multiple geographies; |
| ● |
Pursue expansion into complementary or strategic market segments either through M&A or strategic partnerships that enhance and diversify our core energy generation business. These additional segments are designed to create independent income streams and strengthen our asset platform; |
| ● |
Strengthen long-term relationships with high-quality developers and other partners, both local and international, to reduce competition in acquisition pricing and provide Alternus with exclusive rights to projects at varying stages of development. This provides the Company with a better understanding of the markets we address and, in some cases, enables it to contract for projects in a less competitive environment; |
| ● |
Expand our US and European portfolio in regions with attractive returns on investments, and increase the Company’s long-term recurring revenue and cash flow; |
| ● |
Secure strong and predictable cash flows via long-term FIT (feed-in tariff) contracts combined with the Company’s efficient operations. This allows for high leverage capacity and flexibility of debt structuring. Our strategy is to reinvest of project cash flows into additional projects to provide non-dilutive capital for Alternus to “self-fund” organic growth; |
| ● |
Optimization of financing sources to support long-term growth and profitability in a cost-efficient manner; |
| ● |
As a renewable energy company, we are committed to growing our portfolio of projects in the most sustainable way possible. Alternus is highly aware and conscious of the ever growing need to mitigate the effects of climate change which is evident by its core strategy. As the Company grows, it intends to establish a formal sustainability policy framework in order to ensure that all project development is carried out in a sustainable manner, mitigating any potential local and environmental impacts identified during the development, construction, and operational process. |
Given the long-term nature of our business, Alternus operates with a strategic focus on sustained value creation rather than short-term quarterly performance. Our approach prioritizes maximizing long-term shareholder returns by developing projects from the ground up and acquiring assets at various stages of maturity, whether in development, under construction, or already operational. In parallel, we are expanding into complementary market segments that enhance our operational capabilities and financial performance, strengthening the foundation for consistent, scalable growth.
Key Factors that Significantly Affect Company Results of Operations and Business
The Company expects the following factors will affect its results of operations – inflation and energy rate fluctuations.
Offtake Contracts
Company revenue is primarily a function of the volume of electricity generated and sold by its renewable energy facilities as well as, where applicable, the sale of green energy certificates and other environmental attributes related to energy generation. The Company’s current portfolio of renewable energy facilities is generally contracted under long-term FIT programs or PPAs with investment grade counterparties. Pricing of the electricity sold under these FITs and PPAs is generally fixed for the duration of the contract, although some of its PPAs have price escalators based on an index (such as the consumer price index) or other rates specified in the applicable PPA.
Project Operations and Generation Availability
The Company revenue is a function of the volume of electricity generated and sold by Company renewable energy facilities. The volume of electricity generated and sold by the Company’s renewable energy facilities during a particular period is impacted by the number of facilities that have achieved commercial operations, as well as both scheduled and unexpected repair and maintenance required to keep its facilities operational.
The costs the Company incurs to operate, maintain, and manage renewable energy facilities also affect the results of operations. Equipment performance represents the primary factor affecting the Company’s operating results because equipment downtime impacts the volume of the electricity that the Company can generate from its renewable energy facilities. The volume of electricity generated and sold by the Company’s facilities will also be negatively impacted if any facilities experience higher than normal downtime as a result of equipment failures, electrical grid disruption or curtailment, weather disruptions, or other events beyond the Company’s control.
Seasonality and Resource Variability
The amount of electricity produced and revenues generated by the Company’s solar generation facilities is dependent in part on the amount of sunlight, or irradiation, where the assets are located. As shorter daylight hours in winter months result in less irradiation, the electricity generated by these facilities will vary depending on the season. Irradiation can also be variable at a particular location from period to period due to weather or other meteorological patterns, which can affect operating results. As most of the Company’s solar power plants are in the Northern Hemisphere, the Company expects its current solar portfolio’s power generation to be at its lowest during the first and fourth quarters of each year. Therefore, the Company expects first and fourth quarter solar revenue to be lower than in other quarters. As a result, on average, each solar park generates approximately 15% of its annual revenues in Q1 every year, 35% in each of Q2 and Q3, and the remaining 15% in Q4. The Company’s costs are relatively flat over the year, and so the Company will always report lower profits in Q1 and Q4 as compared to the middle of the year.
Interest Rates on Company Debt
Interest rates on the Company’s senior debt are mostly variable for the full term of finance at interest rates ranging from 6% to 30%.
In addition to the project specific senior debt, the Company uses a small number of promissory notes in order to reduce, and in some cases eliminate, the requirement for the Company to provide equity in the acquisition of the projects.
Cash Distribution Restrictions
In certain cases, the Company, through its subsidiaries, obtain project-level or other limited or non-recourse financing for Company renewable energy facilities which may limit these subsidiaries’ ability to distribute funds to the Company for corporate operational costs. These limitations typically require that the project-level cash is used to meet debt obligations and fund operating reserves of the operating subsidiary. These financing arrangements also generally limit the Company’s ability to distribute funds generated from the projects if defaults have occurred or would occur with the giving of notice or the lapse of time, or both.
Renewable Energy Facility Acquisitions and Investments
The Company’s long-term growth strategy is dependent on its ability to acquire additional renewable power generation assets. This growth is expected to be comprised of additional acquisitions across the Company’s scope of operations both in its current focus countries and new countries. Our operating revenues are insufficient to fund our operations and our assets already are pledged to secure our indebtedness to various third party secured creditors, respectively. The unavailability of additional financing could require us to delay, scale back, or terminate our acquisition efforts as well as our own business activities, which would have a material adverse effect on the Company and its viability and prospects.
Management believes renewable power has been one of the fastest growing sources of electricity generation globally over the past decade. The Company expects the renewable energy generation segment to continue to offer growth opportunities driven by:
| ● |
The continued reduction in the cost of solar and other renewable energy technologies, which the Company believes will lead to grid parity in an increasing number of markets; |
| ● |
Distribution charges and the effects of an aging transmission infrastructure, which enable renewable energy generation sources located at a customer’s site, or distributed generation, to be more competitive with, or cheaper than, grid-supplied electricity; |
| ● |
The replacement of aging and conventional power generation facilities in the face of increasing industry challenges, such as regulatory barriers, increasing costs of and difficulties in obtaining and maintaining applicable permits, and the decommissioning of certain types of conventional power generation facilities, such as coal and nuclear facilities; |
| ● |
The ability to couple renewable energy generation with other forms of power generation and/or storage, creating a hybrid energy solution capable of providing energy on a 24/7 basis while reducing the average cost of electricity obtained through the system; |
| ● |
The desire of energy consumers to lock in long-term pricing for a reliable energy source; |
| ● |
Renewable energy generation’s ability to utilize freely available sources of fuel, thus avoiding the risks of price volatility and market disruptions associated with many conventional fuel sources; |
| ● |
Environmental concerns over conventional power generation; and |
| ● |
Government policies that encourage the development of renewable power, such as country, state or provincial renewable portfolio standard programs, which motivate utilities to procure electricity from renewable resources. |
Access to Capital Markets
The Company’s ability to acquire additional clean power generation assets and manage its other commitments will likely be dependent on its ability to raise or borrow additional funds and access debt and equity capital markets, including the equity capital markets, the corporate debt markets, and the project finance market for project-level debt. The Company accessed the capital markets several times in 2024 and during the nine months ended September 30, 2025, in connection with long-term project debt, and corporate loans and equity. Limitations on the Company’s ability to access the corporate and project finance debt and equity capital markets in the future on terms that are accretive to its existing cash flows would be expected to negatively affect its results of operations, business, and future growth.
Foreign Exchange
The Company’s operating results are reported in United States (USD) Dollars. The Company’s current project revenue and expenses are generated in other currencies, including the Euro (EUR), the Romanian Lei (RON), and the Polish Zloty (PLN). This mix may continue to change in the future if the Company elects to alter the mix of its portfolio within its existing markets or elect to expand into new markets. In addition, the Company’s investments (including intercompany loans) in renewable energy facilities in foreign countries are exposed to foreign currency fluctuations. As a result, the Company expects revenues and expenses will be exposed to foreign exchange fluctuations in local currencies where the Company’s renewable energy facilities are located. To the extent the Company does not hedge these exposures, fluctuations in foreign exchange rates could negatively impact profitability and financial position.
Key Metrics
Operating Metrics
The Company regularly reviews several operating metrics to evaluate its performance, identify trends affecting its business, formulate financial projections and make certain strategic decisions. The Company considers a solar park operating when it has achieved connection and begins selling electricity to the energy grid.
Operating Nameplate capacity
The Company measures the electricity-generating production capacity of its renewable energy facilities in nameplate capacity. The Company expresses nameplate capacity in direct current (DC), for all facilities. The size of the Company’s renewable energy facilities varies significantly among the assets comprising its portfolio.
The Company believes the combined nameplate capacity of its portfolio is indicative of its overall production capacity and period to period comparisons of its nameplate capacity are indicative of the growth rate of its business. The production capacity listed below for the United States and Romania reflect the actual production from those parks during the nine months ended September 30, 2025 and 2024. The table below outlines the Company’s operating renewable energy facilities as of September 30, 2025 and 2024:
| Nine Months Ended |
||||||||
| September 30, |
||||||||
| MW (DC) Nameplate capacity by country – continuing operations |
2025 |
2024 |
||||||
| United States |
- | 3.8 | ||||||
| Total |
- | 3.8 | ||||||
| Discontinued Operations: |
||||||||
| Netherlands |
- | 11.8 | ||||||
| Poland |
- | 88.4 | ||||||
| Romania |
- | 40.1 | ||||||
| Total |
- | 140.3 | ||||||
| Total for the period |
- | 144.1 | ||||||
Consolidated Results of Operations
The following table illustrates the consolidated results of continuing operations for the three and nine months ended September 30, 2025 and 2024:
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| September 30, |
September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| Revenues |
$ | - | $ | 93 | $ | - | $ | 280 | ||||||||
| Operating Expenses |
||||||||||||||||
| Cost of revenues |
- | (47 | ) | - | (71 | ) | ||||||||||
| Selling, general and administrative |
(984 | ) | (1,524 | ) | (6,163 | ) | (7,204 | ) | ||||||||
| Depreciation, amortization, and accretion |
- | (52 | ) | (130 | ) | (175 | ) | |||||||||
| Development costs |
- | (741 | ) | - | (748 | ) | ||||||||||
| Gain on sale of subsidiaries |
- | - | 15,513 | - | ||||||||||||
| Total operating income/ (expenses) |
(984 | ) | (2,364 | ) | 9,220 | (8,198 | ) | |||||||||
| Income/(loss) from operations |
(984 | ) | (2,271 | ) | 9,220 | (7,918 | ) | |||||||||
| Other income (expense): |
||||||||||||||||
| Interest expense |
(399 | ) | (1,572 | ) | (3,839 | ) | (4,854 | ) | ||||||||
| Fair value movement of FPA Asset |
- | - | - | (483 | ) | |||||||||||
| Fair value movement of convertible notes |
(1,377 | ) | 1,079 | (2,263 | ) | 898 | ||||||||||
| Debt restructuring costs |
- | - | (753 | ) | - | |||||||||||
| Fair value movement of warrant derivative liability |
(676 | ) | - | (514 | ) | - | ||||||||||
| Gain on settlement of payables |
426 | - | 426 | - | ||||||||||||
| Loss on settlement of liabilities |
(151 | ) | - | (151 | ) | (948 | ) | |||||||||
| Loss on settlement of SAA with Hover |
(2,025 | ) | - | (2,025 | ) | - | ||||||||||
| Loss on issuance of debt |
(19 | ) | - | (19 | ) | - | ||||||||||
| Loss on extinguishment of debt |
(3,404 | ) | - | (3,404 | ) | - | ||||||||||
| Provision for loss from related party |
(1,139 | ) | - | (1,139 | ) | (8 | ) | |||||||||
| Other expense |
- | 64 | (232 | ) | 67 | |||||||||||
| Other income |
- | - | ||||||||||||||
| Income / (Loss) from continuing operations |
(9,749 | ) | (2,700 | ) | (4,694 | ) | (13,246 | ) | ||||||||
| Discontinued operations: |
||||||||||||||||
| Loss from operations of discontinued business component |
- | (1,735 | ) | - | (6,950 | ) | ||||||||||
| Gain on sale of discontinued operations, net assets |
- | (635 | ) | - | 1,531 | |||||||||||
| Income/(loss) from discontinued operations |
- | (2,370 | ) | - | (5,419 | ) | ||||||||||
| Net income /(loss) |
$ | (9,749 | ) | $ | (5,070 | ) | $ | (4,694 | ) | $ | (18,486 | ) | ||||
| Net income / (loss) |
(9,749 | ) | (5,070 | ) | (4,694 | ) | (18,486 | ) | ||||||||
| Foreign currency translation adjustment |
(100 | ) | (2,659 | ) | 94 | (3,379 | ) | |||||||||
| Comprehensive income/(loss) |
$ | (9,849 | ) | $ | (7,729 | ) | $ | (4,600 | ) | $ | (21,865 | ) | ||||
| Continuing operations, basic and diluted |
(14.48 | ) | (163.08 | ) | (11.69 | ) | (789.26 | ) | ||||||||
| Discontinued operations, basic and diluted |
- | (143.15 | ) | - | (327.31 | ) | ||||||||||
| Total loss per share of common stock, basic and diluted |
(14.48 | ) | (306.23 | ) | (11.69 | ) | (1,116.58 | ) | ||||||||
| Weighted-average common stock outstanding, basic & diluted |
673,133 | 16,556 | 401,699 | 16,556 | ||||||||||||
Three and Nine Months Ended September 30, 2025 compared to September 30, 2024.
The Company generates its revenue from the sale of electricity from its solar parks. The revenue is from FIT, PPA, REC, or in the day-ahead or spot market.
Revenue
Revenue for the three and nine months ended September 30, 2025 and 2024 were as follows:
| Three Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| Revenue by Country |
2025 |
2024 |
($) |
(%) |
||||||||||||
| (in thousands) |
||||||||||||||||
| United States |
- | 93 | (93 | ) | (100 | )% | ||||||||||
| Total for continuing operations |
$ | - | $ | 93 | $ | (93 | ) | (100 | )% | |||||||
| Discontinued Operations: |
||||||||||||||||
| Netherlands |
$ | - | $ | - | $ | - | (100 | )% | ||||||||
| Poland |
- | - | - | (100 | )% | |||||||||||
| Romania |
- | 3,649 | (3,649 | ) | (100 | )% | ||||||||||
| Total for discontinued operations |
$ | - | $ | 3,649 | $ | (3,649 | ) | (100 | )% | |||||||
| Total for the period |
$ | - | $ | 3,742 | $ | (3,742 | ) | (100 | )% | |||||||
| Nine Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| Revenue by Country |
2025 |
2024 |
($) |
(%) |
||||||||||||
| (in thousands) |
||||||||||||||||
| United States |
- | 280 | (280 | ) | (100 | )% | ||||||||||
| Total for continuing operations |
$ | - | $ | 280 | $ | (280 | ) | (100 | )% | |||||||
| Discontinued Operations: |
||||||||||||||||
| Netherlands |
$ | - | $ | 16 | $ | (16 | ) | (100 | )% | |||||||
| Poland |
- | 106 | (106 | ) | (100 | )% | ||||||||||
| Romania |
- | 9,489 | (9,489 | ) | (100 | )% | ||||||||||
| Total for discontinued operations |
$ | - | $ | 9,611 | $ | (9,611 | ) | (100 | )% | |||||||
| Total for the period |
$ | - | $ | 9,891 | $ | (9,891 | ) | (100 | )% | |||||||
Revenue for continuing operations decreased by $.01 million and $0.2 million for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024, as there was only one country producing revenue in 2024 (Lightwave parks) compared to no operating parks owned by the Company in 2025.
Revenue for discontinued operations decreased by $3.8 million and $6.0 million for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024, as all operating parks in Poland, the Netherlands, and Romania were sold on January 19, 2024, February 21, 2024 and October 3, 2024, respectively. Refer to Footnote 14 for additional sale information.
| Three Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| Revenue by Offtake Type |
2025 |
2024 |
($) |
(%) |
||||||||||||
| (in thousands) |
||||||||||||||||
| Energy Offtake Agreements (PPA) |
$ | - | $ | 93 | (93 | ) | (100 | )% | ||||||||
| Total for continuing operations |
$ | - | $ | 93 | $ | (93 | ) | (100 | )% | |||||||
| Discontinued Operations: |
||||||||||||||||
| Country Renewable Programs (FIT) |
$ | - | $ | 115 | $ | (115 | ) | (100 | )% | |||||||
| Guarantees of Origin |
- | $ | 2,157 | (2,157 | ) | (100 | )% | |||||||||
| Green Certificates |
- | - | - | (100 | )% | |||||||||||
| Energy Offtake Agreements (PPA) |
- | 1,377 | (1,377 | ) | (100 | )% | ||||||||||
| Other Revenue |
- | - | - | (100 | )% | |||||||||||
| Total for discontinued operations |
$ | - | $ | 3,649 | $ | (3,649 | ) | (100 | )% | |||||||
| Total for the period |
$ | - | $ | 3,742 | $ | (3,742 | ) | (100 | )% | |||||||
| Nine Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| Revenue by Offtake Type |
2025 |
2024 |
($) |
(%) |
||||||||||||
| (in thousands) |
||||||||||||||||
| Energy Offtake Agreements (PPA) |
$ | - | $ | 280 | (280 | ) | (100 | )% | ||||||||
| Total for continuing operations |
$ | - | $ | 280 | $ | (280 | ) | (100 | )% | |||||||
| Discontinued Operations: |
||||||||||||||||
| Country Renewable Programs (FIT) |
$ | - | $ | 330 | $ | (330 | ) | (100 | )% | |||||||
| Guarantees of Origin |
- | 5,753 | (5,753 | ) | (100 | )% | ||||||||||
| Green Certificates |
- | - | - | (100 | )% | |||||||||||
| Energy Offtake Agreements (PPA) |
- | 3,494 | (3,494 | ) | (100 | )% | ||||||||||
| Other Revenue |
- | 34 | (34 | ) | (100 | )% | ||||||||||
| Total for discontinued operations |
$ | - | $ | 9,611 | $ | (9,611 | ) | (100 | )% | |||||||
| Total for the period |
$ | - | $ | 9,891 | $ | (9,891 | ) | (100 | )% | |||||||
Cost of Revenues
The Company capitalizes its equipment costs, development costs, engineering, and construction related costs that are deemed recoverable. The Company’s cost of revenues with regards to its solar parks is primarily a result of the asset management, operations, and maintenance, as well as tax, insurance, and lease expenses. Certain economic incentive programs, such as FIT regimes, generally include mechanisms that ratchet down incentives over time. As a result, the Company seeks to connect its solar parks to the local power grids and commence operations in a timely manner to benefit from more favorable existing incentives. Therefore, the Company generally seeks to make capital investments during times when incentives are most favorable.
Cost of revenues for the three and nine months ended September 30, 2025 and 2024 were as follows:
| Three Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| Cost of Revenues by Country |
2025 |
2024 |
($) |
(%) |
||||||||||||
| (in thousands) |
||||||||||||||||
| United States |
- | 47 | (47 | ) | (100 | )% | ||||||||||
| Total for continuing operations |
$ | - | $ | 47 | $ | (47 | ) | (100 | )% | |||||||
| Discontinued Operations: |
||||||||||||||||
| Netherlands |
$ | - | $ | - | $ | - | (100 | )% | ||||||||
| Poland |
- | - | - | (100 | )% | |||||||||||
| Romania |
- | 1,374 | (1,374 | ) | (100 | )% | ||||||||||
| Total for discontinued operations |
$ | - | $ | 1,374 | $ | (1,374 | ) | (100 | )% | |||||||
| Total for the period |
$ | - | $ | 1,421 | $ | (1,421 | ) | (100 | )% | |||||||
| Nine Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| Cost of Revenues by Country |
2025 |
2024 |
($) |
(%) |
||||||||||||
| (in thousands) |
||||||||||||||||
| United States |
- | 71 | (71 | ) | (100 | )% | ||||||||||
| Total for continuing operations |
$ | - | $ | 71 | $ | (71 | ) | (100 | )% | |||||||
| Discontinued Operations: |
||||||||||||||||
| Netherlands |
$ | - | $ | 115 | $ | (115 | ) | (100 | )% | |||||||
| Poland |
- | 101 | (101 | ) | (100 | )% | ||||||||||
| Romania |
- | 3,678 | (3,678 | ) | (100 | )% | ||||||||||
| Total for discontinued operations |
$ | - | $ | 3,894 | $ | (3,894 | ) | (100 | )% | |||||||
| Total for the period |
$ | - | $ | 3,965 | $ | (3,965 | ) | (100 | )% | |||||||
Cost of revenues for continuing operations decreased by $47,000 and $71,000 for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024. The decrease was due to the operating parks in the United States being sold in November of 2024.
Cost of revenues for discontinued operations decreased by $1.4 million and $3.9 million for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024, due to all operating parks in Poland, the Netherlands, and Romania being sold on January 19, 2024, February 21, 2024 and October 3, 2024, respectively.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three and nine months ended September 30, 2025 and 2024 were as follows:
| Three Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2025 |
2024 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Selling, general and administrative |
$ | 984 | $ | 1,524 | (540 | ) | (35 | )% | ||||||||
| Total for continuing operations |
$ | 984 | $ | 1,524 | $ | (540 | ) | (35 | )% | |||||||
| Discontinued Operations: |
||||||||||||||||
| Selling, general and administrative |
$ | - | $ | 77 | $ | (77 | ) | (100 | )% | |||||||
| Total for discontinued operations |
$ | - | $ | 77 | $ | (77 | ) | (100 | )% | |||||||
| Total for the period |
$ | 984 | $ | 1,601 | $ | (617 | ) | (39 | )% | |||||||
| Nine Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2025 |
2024 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Selling, general and administrative |
$ | 6,163 | $ | 7,204 | (1,041 | ) | (14 | )% | ||||||||
| Total for continuing operations |
$ | 6,163 | $ | 7,204 | $ | (1,041 | ) | (14 | )% | |||||||
| Discontinued Operations: |
||||||||||||||||
| Selling, general and administrative |
$ | - | $ | 1,559 | $ | (1,559 | ) | (100 | )% | |||||||
| Total for discontinued operations |
$ | - | $ | 1,559 | $ | (1,559 | ) | (100 | )% | |||||||
| Total for the period |
$ | 6,163 | $ | 8,763 | $ | (2,600 | ) | (30 | )% | |||||||
Selling, general and administrative expenses for continuing operations decreased by $0.5 million for the three months ended September 30, 2025, due primarily to non-cash stock compensation costs of approximately $2.1 million. Selling, general and administrative expenses for continuing operations decreased $1.0 million for the nine months ended September 30, 2025 compared to the same period in 2024. The majority of this decrease was from a decrease in cash compensation costs, consulting expenses, insurance and the accounting and legal costs associated with audit preparation and Nasdaq listing costs during 2024 offset by the stock compensation costs during the period.
Selling, general and administrative expenses for discontinued operations decreased by $0.1 million and $1.5 million for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024, due to Solis being sold on October 3, 2024.
Development Cost
The Company depends heavily on government policies that support our business and enhance the economic feasibility of developing and operating solar energy projects in regions in which we operate or plan to develop and operate renewable energy facilities. The Company can decide to abandon a project if there is material change in budgetary constraints, political factors or otherwise, governments from time to time may review their laws and policies that support renewable energy and consider actions that would make the laws and policies less conducive to the development and operation of renewable energy facilities. Any reductions or modifications to, or the elimination of, governmental incentives or policies that support renewable energy or the imposition of additional taxes or other assessments on renewable energy, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new renewable energy projects, our abandoning the development of renewable energy projects, a loss of our investments in the projects, and reduced project returns, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects. Refer to Footnote 13 to the accompanying financial statements for more detail of development cost.
| Three Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2025 |
2024 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Development Cost |
$ | - | $ | 741 | $ | (741 | ) | (100 | )% | |||||||
| Total for continuing operations |
$ | - | $ | 741 | $ | (741 | ) | (100 | )% | |||||||
| Total for the period |
$ | - | $ | 741 | $ | (741 | ) | (100 | )% | |||||||
| Nine Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2025 |
2024 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Development Cost |
$ | - | $ | 748 | $ | (748 | ) | (100 | )% | |||||||
| Total for continuing operations |
$ | - | $ | 748 | $ | (748 | ) | (100 | )% | |||||||
| Total for the period |
$ | - | $ | 748 | $ | (748 | ) | (100 | )% | |||||||
There were no development costs for discontinued operations for the three and nine months ended September 30, 2025.
Depreciation, Amortization and Accretion Expense
Depreciation, amortization, and accretion expenses for the three and nine months ended September 30, 2025 and 2024 were as follows:
| Three Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2025 |
2024 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Depreciation, Amortization and Accretion expense |
$ | - | $ | 52 | (52 | ) | (100 | )% | ||||||||
| Total for continuing operations |
$ | - | $ | 52 | $ | (52 | ) | (100 | )% | |||||||
| Discontinued Operations: |
||||||||||||||||
| Depreciation, Amortization and Accretion expense |
$ | - | $ | 504 | $ | (504 | ) | (100 | )% | |||||||
| Total for discontinued operations |
$ | - | $ | 504 | $ | (504 | ) | (100 | )% | |||||||
| Total for the period |
$ | - | $ | 556 | $ | (556 | ) | (100 | )% | |||||||
| Nine Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2025 |
2024 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Depreciation, Amortization and Accretion expense |
$ | 130 | $ | 175 | (45 | ) | (26 | )% | ||||||||
| Total for continuing operations |
$ | 130 | $ | 175 | $ | (45 | ) | (26 | )% | |||||||
| Discontinued Operations: |
||||||||||||||||
| Depreciation, Amortization and Accretion expense |
$ | - | $ | 1,675 | $ | (1,675 | ) | (100 | )% | |||||||
| Total for discontinued operations |
$ | - | $ | 1,675 | $ | (1,675 | ) | (100 | )% | |||||||
| Total for the period |
$ | 130 | $ | 1,850 | $ | (1,720 | ) | (93 | )% | |||||||
Depreciation and amortization and accretion expense for continuing operations decreased by $50,000 and decreased by $45,000 for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024. This was primarily driven by the amortization for the intangible assets acquired in the Liion transaction December 2024, and the sale of the assets that related to the 2024 charge.
There was no depreciation, amortization and accretion expenses for discontinued operations throughout 2025 compared to the same period in 2024, due to all operating parks in Poland, the Netherlands and Romania being sold on January 19, 2024, February 21, 2024 and October 3, 2024, respectively.
Gain on Disposal of Assets
| Three Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2025 |
2024 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Gain on sale of continuing operations |
$ | - | $ | - | - | (100 | )% | |||||||||
| Total for continuing operations |
- | - | $ | - | (100 | )% | ||||||||||
| Discontinued Operations: |
||||||||||||||||
| Gain on disposal of asset |
$ | - | $ | - | $ | - | (100 | )% | ||||||||
| Costs related to disposal of asset |
- | (635 | ) | $ | 635 | (100 | )% | |||||||||
| Total for discontinued operations |
$ | - | $ | (635 | ) | $ | 635 | (100 | )% | |||||||
| Total for the period |
$ | - | $ | (635 | ) | $ | 635 | (100 | )% | |||||||
| Nine Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2025 |
2024 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Gain on sale of continuing operations |
$ | 15,513 | $ | - | 15,513 | (100 | )% | |||||||||
| Total for continuing operations |
15,513 | - | $ | 15,513 | (100 | )% | ||||||||||
| Discontinued Operations: |
||||||||||||||||
| Gain on disposal of asset |
$ | - | $ | 3,374 | $ | (3,374 | ) | (100 | )% | |||||||
| Costs related to disposal of asset |
- | (1,843 | ) | $ | 1,843 | (100 | )% | |||||||||
| Total for discontinued operations |
$ | - | $ | 1,531 | $ | (1,531 | ) | (100 | )% | |||||||
| Total for the period |
$ | 15,513 | $ | 1,531 | $ | 13,982 | 913 | % | ||||||||
On May 7, 2025, the Company sold AEG MH 02 Limited (“MH02”) and all its subsidiaries to third parties. There was no cost incurred to complete the sale. As a result of the Transaction, the Company recorded a gain on the sale of $11.9 million and removed approximately $18.3 million in debt and payables related to MH02’s activities (See Footnote 18).
On April 29, 2025, the LiiON asset purchase agreement was rescinded, resulting in a disposal of assets. The Company recorded a loss of $33,700 in the income statement for the three months ended June 30,2025 in relation to the transaction.
On March 25, 2025, the Company sold its subsidiaries in Spain to AEG, a related party. There were no costs incurred to complete the transaction. As a result of the Transaction, the Company recorded a gain on the sale of $3.5 million and removed approximately $3.6 million in debt and payables related to MH02’s activities (See footnote 17).
On January 19, 2024, the Company sold its operating parks in Poland with a carrying value of $55.2 million for $59.4 resulting in a $4.2 million gain partially offset by a $0.9 million loss on sale of assets in the Netherlands. $1.6M of the cash received was held back by the seller per the SPA and recorded as a receivable on the Consolidated Balance Sheet. On February 22, 2024, the Company sold its operating park in the Netherlands with a carrying value of $8.0 million for $7.1 million resulting in a $0.9 million loss. The costs incurred to complete the transaction totaled $1.2 million and are reported together with the disposal of the assets according to ASC 360-10-35-38.
Interest Expense, Other Income, and Other Expense
| Three Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2025 |
2024 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Interest expense |
$ | (399 | ) | $ | (1,572 | ) | 1,173 | (75 | )% | |||||||
| Fair value movement of convertible notes |
(1,377 | ) | 1,079 | (2,456 | ) | (228 | )% | |||||||||
| Fair value movement of warrant derivative liability |
(676 | ) | - | (676 | ) | 100 | % | |||||||||
| Gain on settlement of payables |
426 | - | 426 | 100 | % | |||||||||||
| Loss on settlement of liabilities |
(151 | ) | - | (151 | ) | 100 | % | |||||||||
| Loss on settlement of SAA with Hover |
(2,025 | ) | - | (2,025 | ) | 100 | % | |||||||||
| Loss on issuance of debt |
(19 | ) | - | (19 | ) | 100 | % | |||||||||
| Loss on extinguishment of debt |
(3,404 | ) | - | (3,404 | ) | 100 | % | |||||||||
| Provision for loss from related party |
(1,139 | ) | - | (1,139 | ) | 100 | % | |||||||||
| Other income |
- | 64 | ||||||||||||||
| Total for continuing operations |
$ | (8,765 | ) | $ | (429 | ) | $ | (8,336 | ) | 1,943 | % | |||||
| Discontinued Operations: |
||||||||||||||||
| Interest income/(expense) |
$ | - | $ | (3,428 | ) | $ | 3,428 | (100 | )% | |||||||
| Other expense |
- | - | - | 100 | % | |||||||||||
| Total for discontinued operations |
$ | - | $ | (3,428 | ) | $ | 3,428 | (100 | )% | |||||||
| Total for the period |
$ | (8,765 | ) | $ | (3,857 | ) | $ | (4,908 | ) | 127 | % | |||||
| Nine Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2025 |
2024 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Interest expense |
$ | (3,839 | ) | $ | (4,854 | ) | 1,015 | (21 | )% | |||||||
| Fair value movement of FPA Asset |
- | (483 | ) | 483 | (100 | )% | ||||||||||
| Fair value movement of convertible notes |
(2,263 | ) | 898 | (3,161 | ) | (352 | )% | |||||||||
| Debt restructuring costs |
(753 | ) | - | (753 | ) | 100 | % | |||||||||
| Fair value movement of warrant derivative liability |
(514 | ) | - | (514 | ) | 100 | % | |||||||||
| Gain on settlement of payables |
426 | - | 426 | 100 | % | |||||||||||
| Loss on settlement of liabilities |
(151 | ) | - | (151 | ) | 100 | % | |||||||||
| Loss on settlement of SAA with Hover |
(2,025 | ) | - | (2,025 | ) | 100 | % | |||||||||
| Loss on issuance of debt |
(19 | ) | (948 | ) | 929 | (98 | )% | |||||||||
| Loss on extinguishment of debt |
(3,404 | ) | 179 | (3,583 | ) | (2002 | )% | |||||||||
| Provision for loss from related party |
(1,139 | ) | - | (1,139 | ) | 100 | % | |||||||||
| Other expense |
(232 | ) | (8 | ) | (232 | ) | 100 | % | ||||||||
| Other income |
- | 67 | (67 | ) | (100 | )% | ||||||||||
| Total for continuing operations |
$ | (13,914 | ) | $ | (5,149 | ) | $ | (8,765 | ) | 170 | % | |||||
| Discontinued Operations: |
||||||||||||||||
| Interest income/(expense) |
$ | - | $ | (9,213 | ) | $ | 9,213 | (100 | )% | |||||||
| Other expense |
- | (221 | ) | 221 | (100 | )% | ||||||||||
| Total for discontinued operations |
$ | - | $ | (9,434 | ) | $ | 9,434 | (100 | )% | |||||||
| Total for the period |
$ | (13,914 | ) | $ | (14,583 | ) | $ | 669 | (5 | )% | ||||||
Total interest expense, other income, and other expense for continuing operations increased by approximately $8.3 million for the three months and increased $8.8 million for nine months, respectively, ended September 30, 2025 compared to the same period in 2024. The primary drivers for the change in the respective periods was a $3.4 million loss on debt extinguishment relating to the reclassification of debt as per footnote 12, $2.0 million associated with the settlement of the Strategic Alliance Agreement ('SAA") with Hover as part of the EverOn JV transaction (see footnote 6), $3.6 million in fair value movements on convertible debt and warrants measured as fair value (footnote 4, and $1.2 million of impairment of amounts due from a related party.
Total interest expense, other income, and other expense for discontinued operations decreased by $3.4 million and $9.4 million for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024, due to all operating parks in Poland, the Netherlands and Romania being sold on January 19, 2024, February 21, 2024 and October 3, 2024, respectively.
Movement in Interest Expense
| Three Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2025 |
2024 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Interest charged on debt |
$ | 251 | $ | 387 | $ | 136 | 35 | % | ||||||||
| Debt issuance cost expense |
- | 405 | 405 | 100 | % | |||||||||||
| Amortization of debt discount |
148 | 780 | 632 | 81 | % | |||||||||||
| Total interest expense for continuing operations |
$ | 399 | $ | 1,572 | $ | 1,173 | 75 | % | ||||||||
| Nine Months Ended September 30, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2025 |
2024 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Interest charged on debt |
$ | 1,868 | $ | 2,687 | $ | 819 | 30 | % | ||||||||
| Debt issuance cost expense |
- | 400 | 400 | 100 | % | |||||||||||
| Amortization of debt discount |
1,972 | 1,767 | (205 | ) | (12 | )% | ||||||||||
| Total interest expense for continuing operations |
$ | 3,840 | $ | 4,854 | $ | 1,014 | 21 | % | ||||||||
Net Loss
Net loss for continuing operations increased by $7.0 million for the three months ended September 30, 2025 compared to the same period in 2024. This is primarily caused by a $1.3 million reduction in SG&A and development costs offset by negative movement in fair value of convertible notes and warrants measured at fair value of $5.7 million compared to the same period in 2024. One time costs related to a $2.0 million loss on settlement of the Strategic Alliance Agreement ('SAA") with Hover as part of the acquisition of the EverOn Energy joint venture, and a $1.1 million impairment of amounts due from AEG, a related party, added to the costs in the three months ended September 30, 2025
Net income for continuing operations decreased by $8.4 million for the nine months ended September 30, 2025 compared to the same period in 2024. This is primarily due to a gain of $15.5m from sale of Spanish, MH02 and associated Italian subsidiaries during the period is primarily and a $1.8 million decrease in SG&A and development costs, offset by negative movement in fair value of convertible notes and warrants measured at fair value of $5.7 million. One time costs related to a $2.0 million loss on settlement of the Strategic Alliance Agreement ('SAA") with Hover as part of the acquisition of the EverOn Energy joint venture, and a $1.1 million impairment of amounts due from AEG, a related party, added to the costs in the nine months ended September 30, 2025
Liquidity and Capital Resources
Capital Resources
A key element to the Company’s financing strategy is to raise much of its debt in the form of project specific non-recourse borrowings at its subsidiaries with investment grade metrics. Going forward, the Company intends to primarily finance acquisitions or growth capital expenditures using long-term non-recourse debt that fully amortizes within the asset’s contracted life, as well as retained cash flows from operations and issuance of equity securities through public markets.
The following table summarizes certain financial measures that are not calculated and presented in accordance with U.S. GAAP, along with the most directly comparable U.S. GAAP measure, for each period presented below. In addition to its results determined in accordance with U.S. GAAP, the Company believes the following non-U.S. GAAP financial measures are useful in evaluating its operating performance. The Company uses the following non-U.S. GAAP financial information, collectively, to evaluate its ongoing operations and for internal planning and forecasting purposes.
The following non-U.S. GAAP table summarizes the total capitalization and debt as of September 30, 2025 and December 31, 2024:
| As of |
As of |
|||||||
| September 30, |
December 31, |
|||||||
| 2025 |
2024 |
|||||||
| (in thousands) |
||||||||
| Convertibles measures at fair market value |
$ | 8,813 | $ | 1,702 | ||||
| Convertible and non convertible other debt |
7,958 | 27,719 | ||||||
| Total debt |
16,771 | 29,421 | ||||||
| Less current maturities |
(16,771 | ) | (27,792 | ) | ||||
| Long term debt, net of current maturities |
$ | - | $ | 1,629 | ||||
| Current Maturities |
$ | 16,771 | $ | 27,792 | ||||
| Debt discount |
(50 | ) | (1,239 | ) | ||||
| Current Maturities net of debt discount |
$ | 16,721 | $ | 24,851 | ||||
| Long-term maturities |
$ | - | $ | 1,629 | ||||
| Long-term maturities net of debt discount |
$ | - | $ | 1,629 | ||||
| As of |
As of |
|||||||
| September 30, |
December 31, |
|||||||
| 2025 |
2024 |
|||||||
| (in thousands) |
||||||||
| Cash and cash equivalents |
$ | 39 | $ | 161 | ||||
Liquidity Position
Our consolidated financial statements for the three and nine months ended September 30, 2025 and for the year ended December 31, 2024 identifies the existence of certain conditions that raise substantial doubt about our ability to continue as a going concern for twelve months from the issuance of this report. Refer to Footnote 2 of the accompanying financial statements for more information.
On October 3, 2024, because Solis was unable to fully repay the Solis Bonds, the Company sold Solis and its subsidiaries in Romania to Solis Trustee Special Vehicle Limited, the Solis Bondholders’ ownership vehicle, for €1 in accordance with the terms of the Solis Bonds, as amended. As a result of the sale, the Company eliminated approximately $115 million in debt and payables related to Solis activities and improved shareholders equity by approximately $59 million. Solis accounted for 98% of group revenues for the nine months ended September 30, 2024. Solis bondholders continue to hold a preference share in an Alternus holding company which holds certain development projects in Spain and Italy. The preference share gives the bondholders the right on any distributions up to €10 million, and such assets will be divested to ensure repayment of up to €10 million should it not be fully repaid by the Maturity Date.
On November 8, 2024, the Company was notified by the staff of The Nasdaq Stock Market (“Nasdaq”) that the Company did not meet the market value of listed securities requirement in Listing Rule 5550(b)(2) (the “MVLS Rule”) for continued listing on The Nasdaq Capital Market (the “Staff Determination”). The Company requested a hearing before the Nasdaq Hearings Panel (the “Panel”) to appeal the Staff Determination.
On February 10, 2025, the Company received a determination letter (the “Delisting Notification”) from the Nasdaq Hearings Advisor stating that the Panel has determined to delist the Company’s common stock, par value $0.0001 per share (the “Common Stock”) from the Nasdaq Capital Market, and Nasdaq suspended trading in the Company’s Common Stock on February 12, 2025 because the Company has not demonstrated compliance with the MVLS Rule, nor does it meet any of the alternative requirements under Nasdaq Listing Rule 5550(b) and has failed to demonstrate that additional time to regain compliance is appropriate. The Company was additionally in violation of the bid price requirement of Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”), as disclosed on January 31, 2025, which was taken into consideration by the Panel in its Delisting Notification.
The Company’s Common Stock is currently quoted on an over-the-counter trading market.
The Company is currently working on several processes to address the going concern issue. We are working with multiple global banks and funds to secure the necessary project financing to execute our transatlantic business plan.
Financing Activities
In May 2022, AEG MH02 entered into a loan agreement with a group of private lenders of approximately $10.8 million with an initial stated interest rate of 8% and a maturity date of May 31, 2023. In February 2023, the loan agreement was amended stating a new interest rate of 16% retroactive to the date of the first draw in June 2022. In May 2023, the loan was extended, and the interest rate was revised to 18% from June 1, 2023. In July 2023, the loan agreement was further extended to October 31, 2023. In November 2023, the loan agreement further extended to May 31, 2024. On December 31, 2024, the loan agreement was further extended to September 30, 2025 while also stating any accrued interest up to the date of the amendment was to be added to the principal loan balance. As a result of these amendments, $3.2 million of interest was recognized during the year period ended December 31, 2024, $5.9 million of accrued interest was added to the existing loan balance. On May 7, 2025, AEG MH02 was sold, and the note was assumed by the Buyer. See Footnote 16 for more information. The Company had principal outstanding of $0 and $16.0 million as of September 30, 2025 and December 31, 2024, respectively.
In July 2023, Alt Spain Holdco, one of the Company’s Spanish subsidiaries acquired the project rights for a 32 MWp portfolio of Solar PV projects in Valencia, Spain, with an initial payment of $1.9 million, financed through a €3.0 million ($3.3 million) bank facility having a six-month term and accruing ‘Six Month Euribor’ plus 2% margin. On January 24, 2024, the maturity date was extended to July 28, 2024. On July 28, 2024, the loan was further extended to January 28, 2025 and the principal amount was reduced to €2.6 million ($2.8 million) from cash on hand. On March 25, 2025, Alt Spain Holdco was sold, and the note was assumed by the buyer. See Footnote 15 for more information. This note had a principal outstanding balance of $0.0 million and $2.7 million as of September 30, 2025 and December 31, 2024, respectively.
In January 2024, the Company assumed a $938 thousand (€850 thousand) convertible promissory note with a 10% interest maturing in March 2025 as part of the Business Combination that was completed in December 2023. On January 3, 2024, the noteholder converted all of the principal and accrued interest owed under the note, equal to $1.0 million, into 264 shares of restricted common stock.
On March 21, 2024, ALCE, SPAC Sponsor Capital Access (“SCAF”), and the Sponsor of Clean Earth (“CLIN”) agreed to a settlement of a $1.4 million note assumed by ALCE as part of the Business Combination that was completed in December 2023. The note had a maturity date of whenever CLIN closes its Business Combination Agreement and accrued interest of 25%. ALCE issued 45 shares to SCAF on March 21, 2024 and a payment plan of the rest of the outstanding balance was agreed to with payments to commence on July 15, 2024. The closing stock price of the Company was $2,350 on the date of issuance.
On April 19, 2024, the Company entered into a Securities Purchase Agreement with an institutional investor pursuant to which the Company agreed to issue to the Investor a senior convertible note in the principal amount of $2,160,000, issued with an eight percent (8.0%) original issue discount and a warrant to purchase up to 482 shares of the Company’s common stock, at an exercise price of $2,400 per share. As of September 30, 2025 the warrant was adjusted to purchase up to 5,778 shares at an exercise price of $200 per share. The Company received gross proceeds of $2,000,000, before fees and other expenses associated with the transaction. The Convertible Note matured on April 20, 2025, bearing interest at 7% per annum, which was adjusted in April of 2025 so that the Maturity Date is December 31, 2025 and the interest rate is 12% per annum, and ranks senior to the Company’s existing and future unsecured indebtedness. This note had a principal outstanding balance of $0.4 million as of September 30, 2025 and December 31, 2024, respectively.
On October 1, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”), by and between the Company and an institutional investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor a series of senior convertible notes up to an aggregate principal amount of $2,500,000, issued with a twelve percent (12.0%) original issue discount (each a “Convertible Note” and together, the “Convertible Notes”), and warrants (each a “Warrant” and together the “Warrants”) to purchase shares of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), equal to 50% of the face value of the Convertible Note divided by the volume weighted average price, at an exercise price of $2.00 per share (the “Exercise Price”). Pursuant to the Purchase Agreement, with the closing of the initial tranche of the Convertible Note and Warrant, the Company issued a Warrant to purchase up to 1,063 shares of Common Stock and the Company received gross proceeds of $700,000, before fees and other expenses associated with the transaction, accounting for the 12% original issue discount. This warrant was adjusted on November 12, 2024 and on December 5, 2024 so that as of September 30, 2025 the warrant was asdjusted to purchase up to 2,128 shares exercisable at $200 per share. In conjunction with the transaction, the Company issued warrants for the purchase of 106 shares of common stock with an exercise price of $440 per share to Maxim for their role as placement agent, which is exercisable at any time on or after April 1, 2025 and will expire on December 19, 2027.
The Convertible Note was extended and matures on December 31, 2025 (unless accelerated due to an event of default, or accelerated up to six installments by the Investor), bears interest at an adjusted rate of twelve percent (12%) per annum, which shall automatically be increased to eighteen percent (18.0%) per annum in the event of default and, other than the First Convertible Note, ranks senior to the Company’s existing and future unsecured indebtedness. The Convertible Note is convertible in whole or in part at the option of the Investor into shares of Common Stock (the “Conversion Shares”) at the Conversion Price (as defined below) at any time following the date of issuance of the Convertible Note. The Convertible Note is payable monthly on each Installment Date (as defined in the Convertible Note) commencing on the earlier of December 1, 2024 and the effective date of the initial registration statement required to be filed pursuant to the Registration Rights Agreement (as defined below) in an amount equal the sum of (A) the lesser of (x) $79,545 and (y) the outstanding principal amount of the Convertible Note, (B) interest due and payable under the Convertible Note and (C) other amounts specified in the Convertible Note (such sum being the “Installment Amount”); provided, however, if on any Installment Date, no failure to meet the Equity Conditions (as defined in the Convertible Note) exits pursuant to the Convertible Note, the Company may pay all or a portion of the Installment Amount with shares of its common stock. The portion of the Installment Amount paid with common stock shall be based on the Installment Conversion Price. “Installment Conversion Price” means the lower of (i) the Conversion Price (defined below) and (ii) the greater of (x) 92% of the average of the two (2) lowest daily VWAPs (as defined in the Convertible Note) in the ten (10) trading days immediately prior to each conversion date and (y) $150. “Equity Conditions Failure” means that on any day during the period commencing twenty (20) trading days prior to the applicable Installment Notice Date or Interest Date (each as defined in the Convertible Note) through the later of the applicable Installment Date or Interest Date and the date on which the applicable shares of Common Stock are actually delivered to the Holder, the Equity Conditions have not been satisfied (or waived in writing by the Holder). This note had a principal outstanding balance of $0.5 and $2.2 as of September 30, 2025 and December 31, 2024, respectively.
On October 21, 2024, pursuant to the Purchase Agreement, the closing of the second tranche of the Convertible Note and Warrant occurred, whereby the Company issued a Warrant to purchase 813 shares of Common Stock exercisable at $400 per share and the Company received gross proceeds of $535,000, before fees and other expenses associated with the transaction, accounting for the 12% original issue discount. This warrant was adjusted on November 12, 2024 and on December 5, 2024, such that as of September 30, 2025, the warrant was adjusted to purchase up to 1,626 shares at an exercise price of $200 per share. In conjunction with the transaction, the Company issued warrants for the purchase of 81 shares of common stock with an exercise price of $440 per share for their role as placement agent, which is exercisable at any time on or after April 21, 2024 and will expire on the third anniversary of the effective date of the registration statement registering the underlying warrant shares.
On November 12, 2024, pursuant to the Purchase Agreement, the closing of the third tranche of the Convertible Note and Warrant occurred, whereby the Company issued a Warrant to purchase 1,520 shares of Common Stock exercisable at $300 per share and the Company received gross proceeds of $750,000, before fees and other expenses associated with the transaction, accounting for the 12% original issue discount. This warrant was adjusted on December 5, 2024 so that as of September 30, 2025, the warrant was adjusted to purchase up to 2,280 shares at an exercise price of $200 per share. In conjunction with the transaction, the Company issued warrants for the purchase of 114 shares of common stock with an exercise price of $440 per share to Maxim for their role as placement agent, which is exercisable at any time on or after May 12, 2025 and will expire on December 19, 2027.
On December 5, 2024, pursuant to the Purchase Agreement, the closing of the fourth and final tranche of the Convertible Note and Warrant occurred, whereby the Company issued a Warrant, which as of September 30, 2025 was adjusted to purchase up to 654 shares of Common Stock exercisable at $200 per shares and the Company received gross proceeds of $214,999 before fees and other expenses associated with the transaction, accounting for the 12% original issue discount. In conjunction with the transaction, the Company issued warrants for the purchase of 33 shares of common stock with an exercise price of $440 per share to Maxim for their role as placement agent, which is exercisable at any time on or after June 5, 2025 and will expire on December 19, 2027.
On April 28, 2025, the Company entered into a Letter Agreement with the Investor, which modifies certain terms and conditions of the Senior Convertible Note issued April 19, 2024 and the Senior Convertible Note issued October 1, 2024, by the Company to the Investor, collectively (the “2024 Notes”). The interest rate on the 2024 Notes is and will continue at a rate of 12% per annum. The conversion price of the 2024 Notes which remain outstanding shall be adjusted to the lesser of i) $6.00 and ii) 55% of the Market Price. Market Price shall mean the average of the three lowest traded prices of at least 100 shares during the twenty (20) Trading Days immediately prior to the Conversion Date. Unless mutually agreed upon, the Conversion Price shall not be less than $0.0001. The maturity date of the 2024 Notes shall be extended to December 31, 2025. Pursuant to the Letter Agreement, the Company agreed to issue the Investor a warrant (the “Warrant”) to purchase up to 170,000 shares of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), at an exercise price of $6.00 per share (the “Exercise Price”). The Warrant is exercisable immediately and will expire on the date that is five and one-half (5 1/2) years after its date of issuance.
On December 4, 2024, the Company entered into a Note Purchase Agreement (the “Purchase Agreement”) with Secure Net Capital LLC (“Secure Net”), pursuant to which the Company issued a 20% Original Issue Discount promissory convertible note (the “2024 Note”) with a maturity date in April 2025, which was extended to November 5, 2025, in the principal sum of $1,250,000. Pursuant to the terms of the 2024 Note, the Company agreed to pay to Secure Net the entire principal amount on the Maturity Date, failing which and certain events of default (as described in the 2024 Note), the 20% Original Issue Discount shall increase to 30% Original Issue Discount. The Purchase Agreement resulted in net proceeds of $1,000,000 to the Company. The 2024 Note, issued pursuant to the Purchase Agreement, is convertible at the option of the Holder at any time after the Maturity Date, including with registration rights, at a conversion price per share equal to ninety percent (90%) of the Company’s common stock’s VWAP (which is the three (3) Trading Days immediately prior to such Conversion Date (or the nearest preceding date)) as of the date of such conversion (the “Conversion Date”).
On December 11, 2024, the Company entered into an agreement with LiiON LLC as part of the business acquisition for a $2,000,000 note with a maturity date of December 31, 2027. Subsequent to December 31, 2024, on April 28, 2025, the Company and LiiON LLC mutually agreed to rescind the Asset Purchase Agreement. See Footnote 5 for further information on.
On December 30, 2024, the Company assumed a $1,041,720 (€1,000,000) promissory note from AEG with a 10% interest maturing July 31, 2025. Additionally, the Company assumed multiple promissory notes totaling $1,025,000 million from AEG maturing June 30, 2025. This note had a principal outstanding balance of $1 million as of September 30, 2025 and December 31, 2024.
On December 31, 2024, the Company terminated their agreement with Meteora Capital LLC by issuing a $500,000 promissory note with a 10% annual interest rate maturing January 31, 2026. This note had a principal outstanding balance of $0.5 million as of September 30, 2025 and December 31, 2024.
On January 21, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”) pursuant to which the Company sold, in a private placement (the “Offering”), unsecured 20% original issue discount promissory notes with an aggregate principal amount of $2,812,500 (the “Notes”). The Purchase Agreement also provides for the issuance of an aggregate of 7,630 shares of common stock of the Company, par value $0.0001 per share (the “Shares”) to the Purchasers. The transaction closed on January 23, 2025 (the “Closing Date”).
The aggregate gross proceeds to the Company were expected to be $2,250,000, before deducting placement agent fees and expenses. $580,000 of such proceeds were released on the Closing Date and the remaining amount were held in escrow, to be released to the Company upon the later of: i) filing the registration statement referenced below and ii) the date on which the Company receives a written communication from the Nasdaq Stock Market (“Nasdaq”) that Nasdaq has granted the Company an extension to meet the continued listing requirements of the Nasdaq. Because the Company received a delisting determination from the Nasdaq on February 10, 2025, the Escrow Agent disbursed the funds back to the Purchasers as provided below against cancellation of a proportional portion of each Purchaser’s Note (inclusive of original issue discount).
The Notes were issued with an original issue discount of 20%. No interest shall accrue on the Notes unless and until an Event of Default (as defined in the Notes) has occurred, upon which interest shall accrue at a rate of twenty percent (20.0%) per annum. The Notes matured on April 23, 2025, have not been repaid as of September 30, 2025 and are therefore in default. Upon the occurrence of any Event of Default and at any time thereafter, the Purchasers shall have the right to exercise all of the remedies under the Notes.
Maxim served as the placement agent in the Offering, pursuant to the terms of a Placement Agency Agreement and received 8% of the gross proceeds of the Offering, and placement agent warrants to purchase up to 381 shares of common stock at $81.18 per share (the “Placement Agent Warrants”) and reimbursement of the legal fees of its counsel of up to $50,000. The Placement Agent Warrants will be exercisable on the six (6) month anniversary of issuance and will expire on the five (5) year anniversary of issuance.
On April 28, 2025, the Company entered into a Note Purchase Agreement (the “Purchase Agreement”), by and between the Company and an institutional investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor promissory notes in the aggregate total principal amount of up to $558,000, with the first tranche of $318,000 closing immediately and the remaining $240,000 to close upon request of the Company and at the Investor’s discretion, having a 16.67% original issue discount, an interest rate of 12% per annum and a maturity date of December 31, 2025 (the “Notes”). Pursuant to the Purchase Agreement, with the closing of the private placement of the Note (the “Private Placement”), the Company received gross proceeds of $265,000, before fees and other expenses associated with the transaction. On May 30, 2025, a second partial tranche in the amount of $180,000 of the Notes closed, and the Company received gross proceeds of $150,000.
On May 29, 2025, the Company entered into a Note Purchase Agreement (the “Purchase Agreement”), dated as of May 29, 2025, with an institutional investor pursuant to which the Company issued a 20% Original Issue Discount promissory convertible note (the “2025 Note”) with a maturity date in August 2025, which was extended to November 5, 2025, in the principal sum of $312,500. Pursuant to the terms of the 2025 Note, the Company agreed to pay to the entire principal amount on the Maturity Date, failing which and certain events of default (as described in the 2025 Note), the 20% Original Issue Discount shall increase by 5% per month until the Note is fully repaid. The Purchase Agreement contains customary representations and warranties by the Company and closed on the same date thereof. The Purchase Agreement resulted in net proceeds of $250,000 to the Company, which the Company intends to use for working capital purposes.
The 2025 Note, issued pursuant to the Purchase Agreement, is convertible at the option of the Holder at any time after the Maturity Date, including with registration rights, at a conversion price per share equal to ninety percent (90%) of the Company’s common stock’s VWAP (which is the three (3) Trading Days immediately prior to such Conversion Date (or the nearest preceding date)) as of the date of such conversion (the “Conversion Date”). The current 2025 Note is a senior direct debt obligation of the Company ranking pari passu with all other Notes, but subordinate and junior in right of payment to the Senior Convertible Notes originally issued to 3i, LP., and other senior or pari passu Indebtedness (as defined in the Purchase Agreement) of the Company.
On June 6, 2025, the Company entered into a Note Purchase Agreement (the “Purchase Agreement”), by and between the Company and an institutional investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor a promissory note in the aggregate total principal amount of $240,000, having a 16.67% original issue discount, an interest rate of 12% per annum and a maturity date of December 31, 2025 (the “Note”). Pursuant to the Purchase Agreement, with the closing of the private placement of the Note, the Company received gross proceeds of $200,000, before fees and other expenses associated with the transaction.
Cash Flow Discussion
The Company uses traditional measures of cash flows, including net cash flows from operating activities, investing activities and financing activities to evaluate its periodic cash flow results.
For the Nine Months Ended September 30, 2025 compared to September 30, 2024
The following table reflects the changes in cash flows for the comparative periods:
| Nine Months Ended |
||||||||||||
| September 30, |
||||||||||||
| Change |
||||||||||||
| 2025 |
2024 |
($) |
||||||||||
| (in thousands) |
||||||||||||
| Net cash provided by/(used in) operating activities |
(2,321 | ) | (1,820 | ) | (501 | ) | ||||||
| Net cash provided by/(used in) operating activities – Discontinued Operations |
- | (4,579 | ) | 4,579 | ||||||||
| Net cash provided by/(used in) investing activities |
- | (6,544 | ) | 6,544 | ||||||||
| Net cash provided by/(used in) investing activities – Discontinued Operations |
- | 69,019 | (69,019 | ) | ||||||||
| Net cash provided by/(used in) financing activities |
2,198 | 664 | 1,534 | |||||||||
| Net cash provided by/(used in) financing activities – Discontinued Operations |
- | (80,422 | ) | 80,422 | ||||||||
| Effect of exchange rate on cash |
1 | 124 | (123 | ) | ||||||||
Net Cash Provided by Operating Activities
Net cash used in continuing operating activities for the nine months ended September 30, 2025 compared to 2024 increased by $0.5 million. Net loss from continuing operations decreased by $8.5 million for the nine months ending September 30, 2025, which was mainly due to gains booked on sale of assets during the period and lower SG&A costs which were offset by higher other expenses for the nine months ended September 30, 2025.
Net cash used in discontinued operating activities for the nine months ended September 30, 2025 compared to 2024 decreased by $4.6 million due to all operating parks in Poland, the Netherlands and Romania being sold on January 19, 2024, February 21, 2024 and October 3, 2024, respectively.
Net Cash Used in Investing Activities
Net cash used in continuing investing activities was zero for the nine months ended September 30, 2025 compared to 2024 and so decreased by $6.5 million year on year as the Company did not pursue cash investments in the period but used equity as the consideration for the acquisition of the EverOn Energy joint venture that increased assets by approximately $50 million for the three and nine months ended September 30, 2025
There was no net cash used in or provided by discontinued investing activities for nine months ended September 30, 2025$69.0 million was provided by discontinued investing activities for the nine months ended September 30, 2024.
Net Cash Provided by Financing Activities
Net cash provided by continuing financing activities for the nine months ended September 30, 2025 compared to 2024 increased by $1.5 million as new debt financing was raised in the period.
Net cash used in discontinued financing activities for the nine months ended September 30, 2025 compared to 2024 decreased by $80.5 million due to all operating parks in Poland, the Netherlands and Romania being sold on January 19, 2024, February 21, 2024 and October 3, 2024, respectively.
Critical Accounting Estimates
In the notes to our consolidated financial statements and in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Annual Report on Form 10-K, we have disclosed those accounting policies that we consider to be most significant in determining our results of operations and financial condition and involve a higher degree of judgment and complexity. There have been no changes to those policies that we consider to be material since the filing of our 2024 Annual Report on Form 10-K. The accounting principles used in preparing our consolidated financial statements conform in all material respects to GAAP.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
For quantitative and qualitative disclosures about market risk, see “Item 7A., Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the year ended December 31, 2024. Our exposures to market risk have not changed materially since December 31, 2024.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to ensure that the information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.
Our management, with the participation and supervision of Mr. Browne, our Chief Executive Officer and Interim Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this annual report. Based on such evaluation, our Chief Executive Officer and Interim Chief Financial Officer have concluded that as of such date, our disclosure controls and procedures were not, in design and operation, effective at a reasonable assurance level due to the material weaknesses in internal control over financial reporting described below.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
The Company has identified the following material weakness in internal control over the financial reporting process.
| ● |
The Company did not design and maintain an effective control environment commensurate with its financial reporting requirements. Specifically, the Company lacked a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately. Additionally, the lack of a sufficient number of professionals resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of its financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in its finance and accounting functions. |
To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned weaknesses, including, but not limited to, increasing the capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate controls over our Exchange Act reporting disclosures.
| ● |
The Company did not design and maintain effective controls for communicating and sharing information within the Company. Specifically, the accounting and finance departments were not consistently provided the complete and adequate support, documentation, and information including the nature of relationships with certain counterparties to record transactions within the financial statements timely, completely and accurately. |
The accounting group has implemented a monthly review with the appropriate responsible parties within the Company, to review and confirm that the accounting department has received the proper documentation for various transactions.
| ● |
The Company did not design and maintain effective controls for transactions between related parties and affiliates recorded between itself, the parent company and its subsidiaries. Specifically, the accounting and finance departments lacked formalized documentation establishing intercompany due to/from balances and did not periodically assess the collectability of such outstanding balances. |
| ● |
The Company did not design and maintain effective controls to address the identification of and accounting for certain non-routine, unusual or complex transactions, including the proper application of U.S. GAAP to such transactions. Specifically, the Company did not design and maintain controls to timely identify and account for warrant instruments related to certain promissory notes, forward purchase agreements, debt modifications, and impairment of discontinued operations. |
The Company will have third party experts review non routine, unusual and complex transactions in order to have the required expertise to confirm the proper accounting treatment.
| ● |
The Company did not design and maintain formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over the period-end financial reporting process addressing areas including financial statement and footnote presentation and disclosures, account reconciliations and journal entries, including segregation of duties, assessing the reliability of reports and spreadsheets used in controls, and the timely identification and accounting for cut-off of expenditures. |
The Company is working with an external consultant to review and assess the Company’s current internal control structure to improve the overall effectiveness of the control environment. In addition, the Company is investing in third party software to improve the accuracy, review, and approval of account reconciliations and other accounting functions. Also, the Company is investing in third party software to improve the process around the completion of the financial statements.
The Company will have third party experts review non routine, unusual and complex transactions in order to have the required expertise to confirm the proper accounting treatment.
The material weaknesses described above could result in a material misstatement to substantially all of the Company’s accounts or disclosures. These material weaknesses leads management to conclude that the Company’s disclosure controls and procedures are not effective to give reasonable assurance that the information required to be disclosed in reports that the Company files under the Exchange Act is recorded, processed, summarized and reported as and when required.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management utilized the criteria established in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to conduct an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have identified the material weaknesses described above in our internal controls over financial reporting and have therefore concluded that our internal controls over financial reporting are not effective at the reasonable assurance level.
As stated above, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control procedures over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our fiscal quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
From time to time, we are subject to various legal proceedings and claims that arise in the ordinary course of our business activities. In connection with such litigation, the Company may be subject to significant damages. We may also be subject to equitable remedies and penalties. Such litigation could be costly and time-consuming and could divert or distract Company management and key personnel from its business operations. Although the results of litigation and claims cannot be predicted with certainty, as of the date of this registration statement, we do not believe we are party to any claim or litigation, the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business. However, due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of these matters could materially affect the Company’s business, results of operations, financial position, or cash flows.
On October 15, 2024 Sunrise Development LLC (“Sunrise”) requested a hearing be scheduled in binding arbitration against the Company, two of its former indirect wholly owned subsidiaries, ALT US 03 and ALT US 04, and a related party, Alternus Energy Group PLC (“AEG”), to be conducted in Minneapolis, MN in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “AAA”), claiming that approximately $5 million is due and owed to Sunrise pursuant to a settlement agreement by and among the parties, plus costs, expenses, legal fees and interest. On or about February 6, 2025, the Company entered into a second set of settlement terms with Sunrise, pursuant to which the Company agreed to make certain monthly payments to Sunrise, related to amounts allegedly owed by one of the Company’s former subsidiaries pursuant to a share purchase agreement, and in exchange Sunrise dismissed its arbitration case against the Company. As of March 10, 2025, the Company breached its payment obligations under the settlement terms, and on June 18, 2025 an arbitration award of $5.7 million was granted to Sunrise. The Company has accrued a liability for this loss contingency in the amount of approximately $5.2 million in other payables in the financial statements, which represents the amount allegedly owed less the value provided to Sunrise by way of share issuance to reduce the amount due.
On March 11, 2025, the Company was served a complaint filed in the Superior Court of the State of Delaware by SPAC Sponsor Capital Access (“SCAF”), claiming that approximately $1.7 million is due and owed to SCAF pursuant to a settlement agreement by and among the parties, plus legal costs and accrued interest. The Company has accrued a liability for this loss contingency in the amount of approximately $1.5 million, which represents the contractual amount allegedly owed. It is reasonably possible that the potential loss may exceed our accrued liability due to costs, expenses, legal fees, interest and damages that are also alleged by SCAF as owed. Subsequently, on July 10, 2025 the Company was notified that the Superior Court of the State of Delaware granted a motion of summary judgment for $1.5 million due under a settlement agreement, plus interest to date in the amount of approximately $225,000, plus attorney’s fees of approximately $26,000. The parties are currently in further settlement discussions.
On May 8, 2025, the Company, Alternus Energy Group PLC (AEG), a related party, and one of AEG’s subsidiaries, Alternus Energy Americas Inc. (AEA), was served a Demand for Arbitration through JAMS in Washington DC by Orrick, Herrington and Sutcliffe LLP (“Orrick”), claiming that approximately $1 million is due and owed to Orrick pursuant to an engagement agreement entered into with AEA, plus interest. The Company intends to vigorously defend itself in this matter and has filed a motion to dismiss itself from the arbitration as the Company was not a party to this engagement agreement nor is AEA a subsidiary of the Company.
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2024 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. There have been no material changes during fiscal 2025 to the risk factors that were included in Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Sales of Unregistered Securities
On January 2, 2025, a convertible promissory note holder converted $1,588,693 of the October Convertible Note into 10,591 shares of unrestricted common stock valued at $150 per share.
On January 8, 2025, a convertible promissory note holder converted $202,500 of the October Convertible Note into 1,350 shares of unrestricted common stock valued at $150 per share.
On January 23, 2025, the Company issued an aggregate of 7,630 shares of common stock to six accredited investors as part of a debt financing, valued at $563,268.
On February 6, 2025, 3i converted $85,113 of the October Convertible Note into 567 shares of unrestricted common stock valued at $150 per share.
On February 11, 2025, 3i converted $150,000 of the October Convertible Note into 1,000 shares of unrestricted common stock valued at $150 per share.
On February 18, 2025, the Company issued 1 share of Series A Super Voting Preferred Stock to Mr. Vincent Browne valued at $6.00 per share.
On March 21, 2025, the Company issued 10,000 shares of Series A Super Voting Preferred Stock to Mr. Browne valued at $6.00 per share.
On April 14, 2025 the Company issued a total of 484,100 shares of restricted common stock valued at $3,872,800, including 11,000,000 shares to Alternus Energy Group PLC, a related party, 15,000 shares to each of our 4 current independent directors (Ms. Bjornov, Mr. Wikborg, Mr. Parker and Mr. Ratner) and one past director, Mr. Chaudhri, 75,000 shares each to Mr. Browne, our CEO, and Mr. Thomas, our executive director, 25,000 shares to Ms. Durant, our CLO, 12,500 shares to an employee for past services rendered, 28,750 shares to Hover Energy LLC for certain assets acquired and 137,850 shares to four accredited third party debt holders.
On April 24, 2025 the Company issued an additional 50,000 shares of Series A Super Voting Preferred Stock to Mr. Browne.
On April 28, 2025 the Company issued a warrant to purchase up to 170,000 shares of the Company’s common stock at an exercise price of $6.00 per share to an accredited investor. The warrant is exercisable immediately and will expire on the date that is five and one-half (5 1/2) years after its date of issuance.
On May 1, 2025 the Company issued 5,000 shares of restricted common stock to Assure Power, LLC for services pursuant to a consulting agreement, valued at $43,000.
On May 2, 2025, the Company issued 20,000 shares of common stock to SPC as a settlement fee, valued at $172,000.
On May 20, 2025 the Company issued 40,000 shares of restricted common stock to a related party, Alternus Energy Group PLC, for services rendered, valued at $224,000.
On June 30, 2025 a convertible promissory note holder converted $67,063 worth of the October Convertible Note into 29,500 shares of unrestricted common stock valued at $64 per share.
On August 4, 2025 a convertible promissory note holder converted $22,072 worth of the October Convertible Note into 32,838 shares of unrestricted common stock valued at $0.69 per share.
On September 30, 2025, the Company issued an aggregate of 21,150 shares of Series B Convertible Preferred Stock to Hover Energy LLC as part of the EverOn Energy Joint Venture.
On November 6, 2025, a portion equal to $13,250 of the assigned Convertible Note (originally issued in October 2024, of which, $142,857 was assigned to a third party on August 1, 2025), was converted at a discounted conversion price of $0.385 into 34,416 shares of unrestricted common stock, and valued at $0.70 per share.
On December 31, 2025 the Company issued 400 shares of Series C Convertible Preferred Stock ("Series C") to a third party accredited investor valued at $1,000 per share.
Also on December 31, 2025 the Company issued 2,750 shares of Series C to a third party accredited investor valued at $1,000 per share.
On March 3, 2026 the Company issued 2,625 shares of Series C to numerous third party accredited investors valued at $1,000 per share.
On March 27, 2026 the Company issued 2,150 shares of Series D Convertible Preferred Stock to a third party accredited investor valued at $1,000 per share.
On March 31, 2026 the Company issued (i) 7,583 shares of Series D Convertible Preferred Stock valued at $1,000 per share to an accredited third party investor, and (ii) 684 shares of Series E Convertible Preferred Stock valued at $1,000 per share to an accredited third party investor.
On April 21, 2026 the Company issued 240 shares of Series C to an accredited third party investor, valued at $1,000 per share.
Issuer Purchases of Equity Securities
None.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
Not applicable.
| Exhibit No. |
Description |
|
| 3.1 |
||
| 3.2 |
||
| 3.3 |
||
| 3.4 |
||
| 3.5 | Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation of Alternus Clean Energy, Inc. | |
| 3.6 | Certificate of Designation of Series C Convertible Preferred Stock, dated March 3, 2026 (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-41306) filed with the Securities and Exchange Commission on March 9, 2026) | |
| 4.1 |
||
| 4.2 |
||
| 4.3 |
||
| 4.4 |
||
| 4.5 |
||
| 4.6 |
||
| 4.7 |
||
| 4.8 | Form of Note (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-41306) filed with the Securities and Exchange Commission on March 9, 2026) | |
| 10.1 |
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| 10.2 |
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| 10.3 |
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| 10.4 |
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| 10.5 |
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| 10.6 |
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| 10.7 |
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| 10.8 |
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| 10.9 |
| 10.10 |
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| 10.11 |
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| 10.12 |
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| 10.13 |
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| 10.14 |
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| 10.15 | Form of Securities Purchase Agreement dated March 3, 2026 (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-41306) filed with the Securities and Exchange Commission on March 9, 2026) | |
| 10.16 | Form of Pledge Agreement (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-41306) filed with the Securities and Exchange Commission on March 9, 2026) | |
| 31.1* |
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| 31.2** |
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| 32.1** |
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| 101.INS |
Inline XBRL Instance Document. |
|
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document. |
|
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
|
| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document. |
|
| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document. |
|
| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
|
| 104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * |
Filed herewith |
| ** |
Exhibit 32.1 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing. |
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: April 27, 2026 |
ALTERNUS CLEAN ENERGY, INC. |
|
| By: |
/s/ Vincent Browne |
|
| Vincent Browne |
||
| Chairman, Chief Executive Officer and |
||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on November 3, 2025.
| Signature |
Title |
Date |
||
| /s/ Vincent Browne |
Chairman, Chief Executive Officer |
April 27, 2026 |
||
| Vincent Browne |
(Principal Executive Officer) and Interim Chief Financial Officer (Principal Financial and Accounting Officer) |
|||
| /s/ Aaron T. Ratner |
Director |
April 27, 2026 |
||
| Aaron T. Ratner |
||||
| /s/ Nicholas Parker |
Director |
April 27, 2026 |
||
| Nicholas Parker |
||||
| /s/ Tone Bjornov |
Director |
April 27, 2026 |
||
| Tone Bjornov |
||||
| /s/ Rolf Wikborg |
Director |
April 27, 2026 |
||
| Rolf Wikborg |
||||
| /s/ John Thomas |
Director |
April 27, 2026 |
||
| John Thomas |