Alternus Clean Energy Announces Closing of $2.25 Million Private Placement

Rhea-AI Summary

Alternus Clean Energy (NASDAQ: ALCE) has announced the closing of a $2.25 million private placement through an Unsecured 20% Original Issue Discount Promissory Note. The total offering size was $2.81 million, with the company receiving approximately $2.25 million in proceeds before expenses.

As part of the offering, institutional investors received 1,526,058 shares of ALCE common stock. The company will use the net proceeds for working capital and general corporate purposes. Alternus has committed to filing a registration statement for the resale of these shares.

The private placement, managed by Maxim Group as sole placement agent, was conducted under Section 4(a)(2) of the Securities Act and Regulation D, exempting it from registration requirements.

Positive

• Secured immediate working capital of $2.25 million
• Transaction completed with institutional investors, showing market confidence

Negative

• 20% Original Issue Discount indicates high cost of capital
• Significant share issuance of 1,526,058 shares causing dilution
• Total repayment obligation of $2.81 million versus $2.25 million received

Insights

Financial Analyst

This $2.25 million private placement reveals concerning signals about Alternus Clean Energy's financial position and cost of capital. The 20% Original Issue Discount structure means the company must repay $2.81 million at maturity, representing a significant premium that suggests financing alternatives and urgent capital needs.

The simultaneous issuance of 1,526,058 common shares is particularly noteworthy given ALCE's current market cap of approximately $1.8 million. This represents potential dilution of over 85% of the current market cap, a substantial ownership impact for existing shareholders. The requirement for registration rights for these shares could create additional selling pressure once effective.

The terms of this financing raise several red flags:

• The effective cost of capital, combining the OID and equity component, is extraordinarily high for a NASDAQ-listed company
• The use of unsecured notes suggests asset backing or collateral availability
• The generic 'working capital' use of proceeds typically indicates immediate operational funding needs rather than growth initiatives

In the current market environment, where clean energy companies face headwinds from rising interest rates and sector-specific challenges, this expensive financing could signal deeper operational or financial challenges. The structure and terms suggest this was likely a last-resort financing option, potentially indicating difficulties accessing traditional or less costly capital sources.

New York, New York--(Newsfile Corp. - January 24, 2025) - Alternus Clean Energy, Inc. (NASDAQ: ALCE) ("ALCE", "Alternus" or the "Company") a renewable energy company, today announced the closing of its previously announced private placement of $2.25 million pursuant to the terms of a securities purchase agreement, dated January 21, 2025, with several institutional investors (the "Purchasers").

The offering was in the form of an Unsecured 20% Original Issue Discount Promissory Note (the "Note"), resulting in proceeds (before expenses) to Alternus of approximately $2.25 million (out of the total $2.81 million offering size). The Company shall use the net proceeds from the said offering for working capital and general corporate purposes. The Note is fully repayable in cash upon maturity, as defined in the form of Note.

As part of the offering, the Purchasers were also issued an aggregate of 1,526,058 shares of the Company's common stock, par value $0.0001 per share. Alternus has agreed to file a registration statement registering for the resale of the shares.

Maxim Group LLC acted as the sole placement agent for the offering.

The securities described above were offered in a private placement exempt from the registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Act") and Regulation D promulgated thereunder and in a transaction not involving a public offering and were not registered under the Act or applicable state securities laws. Accordingly, the securities may not be reoffered or resold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Act and such applicable state securities laws.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Alternus Clean Energy, Inc.:

Alternus Clean Energy, Inc. is a NASDAQ-listed renewable energy company committed to advancing sustainable solutions. With a focus on utility-scale projects, such as solar parks, and complementary technologies like 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. For more information, please visit https://alternusce.com/.

Forward-Looking Statements

Certain information contained in this release, including any information on the Company's plans or future financial or operating performance and other statements that express the Company's management's expectations or estimates of future performance, constitute forward-looking statements. When used in this notice, words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions, as they relate to us or our management team, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company's management. Such statements are based on a number of estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond the control of the Company. The Company cautions that such forward-looking statements involve known and unknown risks and other factors that may cause the actual financial results, performance or achievements of the Company to differ materially from the Company's estimated future results, performance or achievements expressed or implied by the forward-looking statements. These statements should not be relied upon as representing Alternus' assessments of any date after the date of this release. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Media Contact: IR@alternusenergy.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/238278

FAQ

How much did Alternus Clean Energy (ALCE) raise in its January 2024 private placement?

Alternus Clean Energy raised $2.25 million in proceeds through a private placement of an Unsecured 20% Original Issue Discount Promissory Note, with a total offering size of $2.81 million.

How many shares did ALCE issue in the January 2024 private placement?

ALCE issued 1,526,058 shares of common stock to the institutional investors as part of the private placement offering.

What is the purpose of ALCE's $2.25 million fundraising?

Alternus Clean Energy will use the net proceeds from the private placement for working capital and general corporate purposes.

Who was the placement agent for ALCE's January 2024 private placement?

Maxim Group acted as the sole placement agent for the private placement offering.

What type of security was issued in ALCE's January 2024 private placement?

ALCE issued an Unsecured 20% Original Issue Discount Promissory Note along with common stock shares.