Alternus Clean Energy Announces Pricing of $2.25 Million Private Placement

Rhea-AI Summary

Alternus Clean Energy (NASDAQ: ALCE) has announced the pricing of a $2.25 million private placement with institutional investors. The offering consists of an Unsecured 20% Original Issue Discount Promissory Note, with expected proceeds of approximately $2.25 million before expenses.

The private placement includes the issuance of 1,526,058 shares of common stock to the purchasers. The company plans to use the net proceeds for working capital and general corporate purposes. The transaction is expected to close around January 23, 2025, subject to customary closing conditions.

Maxim Group is serving as the sole placement agent. The securities will be offered through a private placement exempt from registration requirements under Section 4(a)(2) of the Securities Act of 1933. The company has agreed to file a registration statement for the resale of the shares.

Positive

• Secured $2.25 million in additional funding for working capital
• Institutional investors participation indicates market confidence

Negative

• 20% Original Issue Discount on the promissory note indicates high cost of capital
• Dilutive effect from issuance of 1,526,058 new shares
• Additional debt burden through promissory note

Insights

Financial Analyst

Alternus Clean Energy's $2.25M private placement reveals some concerning elements about the company's financial position. The structure of the deal - an Unsecured 20% Original Issue Discount Promissory Note - essentially means the company is borrowing at a significant premium, as they'll need to repay more than they're receiving. In simple terms, this is similar to taking out a loan with substantial fees attached.

The issuance of 1,526,058 additional shares represents further dilution for existing shareholders. For a company with a market cap of about $2.3M, this share issuance is particularly significant, potentially representing substantial dilution of existing shareholders' ownership.

The timing and terms of this financing raise some red flags. Companies typically resort to such expensive financing terms when they have alternatives or urgent capital needs. The 20% Original Issue Discount is particularly steep - imagine borrowing $80 but having to pay back $100. This suggests the company might be facing challenges in securing more conventional financing options.

The stated use of proceeds for "working capital and general corporate purposes" is notably vague and could indicate immediate operational funding needs rather than growth initiatives. This type of financing, while providing immediate capital, often comes at a significant long-term cost to the company and its shareholders.

New York, New York--(Newsfile Corp. - January 22, 2025) - Alternus Clean Energy, Inc. (NASDAQ: ALCE) ("ALCE", "Alternus" or the "Company") a renewable energy company, today announced the pricing of an approximately $2.25 million private placement round pursuant to the terms of a securities purchase agreement, dated January 21, 2025, with several institutional investors (the "Purchasers"). The closing of the current private placement round is expected to occur on or about January 23, 2025, subject to the satisfaction of customary closing conditions.

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

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

Maxim Group LLC is acting as the sole placement agent for the offering.

The securities described above will be 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 have not been 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/238066

FAQ

How much funding did Alternus Clean Energy (ALCE) raise in the January 2025 private placement?

Alternus Clean Energy raised approximately $2.25 million through a private placement announced on January 22, 2025.

How many new shares will ALCE issue in the January 2025 private placement?

ALCE will issue 1,526,058 shares of common stock as part of the private placement.

What is the structure of ALCE's January 2025 private placement offering?

The offering consists of an Unsecured 20% Original Issue Discount Promissory Note and the issuance of 1,526,058 shares of common stock.

What will ALCE use the January 2025 private placement proceeds for?

ALCE will use the net proceeds for working capital and general corporate purposes.

When is ALCE's January 2025 private placement expected to close?

The private placement is expected to close on or about January 23, 2025, subject to customary closing conditions.