Debt deals and lawsuits weigh on Alternus Clean Energy (OTC: ALCE)
Rhea-AI Filing Summary
Alternus Clean Energy, Inc. reported first-quarter 2026 results with no revenue and a consolidated net loss of $0.9 million, of which $80 thousand was attributable to common shareholders. Total assets were $56.9 million, driven by $37.0 million of EverOn-related intangible assets and $19.0 million of goodwill.
Liquidity is tight. Cash and cash equivalents were $0.36 million at March 31, 2026, while current liabilities totaled $25.8 million, including $6.8 million of short-term notes and $0.7 million of convertible notes measured at fair value. Operating activities used $1.2 million of cash in the quarter. Management states that these factors, together with the absence of operating revenues and pledged assets, raise substantial doubt about the company’s ability to continue as a going concern.
The company restructured portions of its debt, issuing new Series C, D and E convertible preferred stock and recording a $5.3 million gain on settlement of OID convertible notes, while also recognizing a $1.7 million loss on debt restructuring. Significant legal obligations include a $5.7 million arbitration award to Sunrise and a judgment of about $2.1 million in favor of SCAF. Management has signed term sheets for up to $20.0 million of preferred equity and a proposed $50.0 million equity line but concludes these plans do not remove going-concern uncertainty.
Positive
- Recognized a $5.3 million gain on settlement of OID Convertible Notes and reduced this category of debt from about $5.6 million to roughly $0.1 million outstanding.
Negative
- Management discloses that recurring losses, $0.36 million of cash, negative operating cash flow and high short-term obligations raise substantial doubt about the company’s ability to continue as a going concern.
- Legal matters include an arbitration award to Sunrise of approximately $5.7 million and a judgment in favor of SCAF of about $2.1 million, adding additional recorded liabilities.
Filing Explained
Completed preferred issuances create conversion capacity, while a PIPE-triggered repurchase obligation remains conditional through March 27, 2027.
Form 10-Q is an unaudited quarterly report, and this filing reports the company’s position for the quarter ended
The balance sheet lists
The filing excludes
Separately, the company says most term loans had passed their original maturity dates and remained outstanding under repeated waivers; combined principal was
A Series D put option could require repurchase of up to
Key Figures
Key Terms
Variable interest entity financial
Original issue discount financial
Energy-as-a-Service financial
Fair value option financial
Section 3(a)(10) regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Alternus Clean Energy (ALCE) perform financially in Q1 2026?
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What debt restructuring and preferred stock moves did ALCE make in Q1 2026?
What is the EverOn Energy joint venture and its impact on ALCE’s balance sheet?
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Table of Contents
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 Market | ||
| | | OTC 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 July 17, 2026, the registrant had a total of
ALTERNUS CLEAN ENERGY, INC.
INDEX TO FORM 10-Q
| Page # |
|
| PART I - FINANCIAL INFORMATION |
1 |
| Item 1. Financial Statements (Unaudited) |
1 |
| Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 |
1 |
| Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025 |
2 |
| Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025 |
3 |
| Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 |
4 |
| Notes to Condensed Consolidated Financial Statements |
6 |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
30 |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk |
42 |
| Item 4. Controls and Procedures |
42 |
| PART II - OTHER INFORMATION |
44 |
| Item 1. Legal Proceedings |
44 |
| Item 1A. Risk Factors |
45 |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
45 |
| Item 3. Defaults Upon Senior Securities |
46 |
| Item 4. Mine Safety Disclosures |
46 |
| Item 5. Other Information |
46 |
| Item 6. Exhibits |
47 |
| Signatures |
49 |
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, 2025, 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.
PART I
ITEM 1. FINANCIAL STATEMENTS
ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
| As of | As of | |||||||
| March 31, | December 31, | |||||||
| 2026 (unaudited) | 2025 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Taxes recoverable | ||||||||
| Total Current Assets | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Long-term prepaid expenses | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable (of which $ payable to related party) | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Convertible notes measured at fair value | ||||||||
| Short term convertible and non-convertible promissory notes, net of debt issuance costs | ||||||||
| Other payables (of which $ payable to related party) | ||||||||
| Put Option Liability (Series D) | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Temporary Equity | ||||||||
| Series D Convertible Preferred stock subject to Put Option. shares issued and outstanding as of March 31, 2026 and as of December 31, 2025 | ||||||||
| Shareholders’ Equity | ||||||||
| Series A Convertible Preferred stock, $ par value, authorized as of March 31, 2026 and December 31, 2025 respectively. issued and outstanding as of March 31, 2026 and December 31, 2025 respectively. | ||||||||
| Series B Convertible Preferred stock, $ par value, authorized as of March 31, 2026 and December 31, 2025 respectively. issued and outstanding as of March 31, 2026 and December 31, 2025. | ||||||||
| Series C Convertible Preferred stock, $ par value, authorized as of March 31, 2026 and December 31, 2025. issued and outstanding as of March 31, 2026 and issued and outstanding as at December 31, 2025 respectively. | ||||||||
| Series D Convertible Preferred stock, $ par value, authorized as of March 31, 2026. issued and outstanding as of March 31, 2026 and as at December 31, 2025. | ||||||||
| Series E Convertible Preferred stock, $ par value, authorized as of March 31, 2026. issued and outstanding as of March 31, 2026 and as at December 31, 2025. | ||||||||
| Common stock, $ par value, billion authorized as of March 31, 2026 and December 31, 2025. issued and outstanding as of March 31, 2026 and December 31, 2025. | ||||||||
| Additional paid in capital | ||||||||
| Foreign currency translation reserve | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Shareholders’ Equity attributable to parent | ||||||||
| Noncontrolling interest | ||||||||
| Total Shareholders’ Equity | ||||||||
| Total Liabilities and Shareholders' Equity | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share data)
(Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | $ | $ | ||||||
| Operating Expenses | ||||||||
| Selling, general and administrative | ( | ) | ( | ) | ||||
| Depreciation, amortization, and accretion | ( | ) | ( | ) | ||||
| Gain on sale of subsidiaries | ||||||||
| Total operating income/ (expenses) | ( | ) | ||||||
| Income/(loss) from operations | ( | ) | ||||||
| Other income/(expense): | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Fair value movement of convertible notes | ( | ) | ||||||
| Fair value movement of warrants | ( | ) | ||||||
| Gain on settlement of debt | ||||||||
| Loss on extinguishment of debt | ( | ) | ||||||
| Issuance cost put option liability (Series D) | ( | ) | ||||||
| Other income | ||||||||
| Total other expenses | ( | ) | ||||||
| Loss before provision for income taxes | ( | ) | ( | ) | ||||
| Income taxes | ||||||||
| Net loss for the period | $ | ( | ) | $ | ( | ) | ||
| Net loss attributable to noncontrolling interest | ( | ) | ||||||
| Net loss attributable to common stock | $ | ( | ) | $ | ( | ) | ||
| Basic & diluted loss per share of common stock: | ||||||||
| Total loss per share of common stock, basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted-average common stock outstanding, basic & diluted | ||||||||
| Comprehensive loss | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Comprehensive loss | ( | ) | ( | ) | ||||
| Comprehensive loss attributable to noncontrolling interest | ( | ) | ||||||
| Comprehensive loss attributable to Alternus | ( | ) | ( | ) | ||||
See accompanying notes to unaudited condensed consolidated financial statements.
ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(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, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||
| Conversion of debt | ||||||||||||||||||||||||||||||||||||||||
| Settlement of Payables for Shares | ||||||||||||||||||||||||||||||||||||||||
| Shares issued for debt issuance costs | ||||||||||||||||||||||||||||||||||||||||
| Issuance of Series A Preferred shares to Officer | ||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | 0 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||
| 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, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||
| Series C convertible preferred shares issued for debt restructuring | ||||||||||||||||||||||||||||||||||||||||
| Series D convertible preferred shares issued for debt settlement | ||||||||||||||||||||||||||||||||||||||||
| Series D convertible preferred shares issued for cash | - | - | ||||||||||||||||||||||||||||||||||||||
| Series E convertible preferred shares issued for debt settlement | ||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss in period | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Loss attributable to noncontrolling interest | ( | ) | ||||||
| $ | ( | ) | $ | ( | ) | |||
| Adjustments to reconcile loss from continuing operations to net cash (used in) operations: | ||||||||
| Depreciation, amortization and accretion | ||||||||
| Amortization of debt discount | ||||||||
| Debt issuance costs capitalized | ( | ) | ||||||
| Stock compensation costs (Series A Preferred Shares issued to officer) | ||||||||
| Gain on foreign currency exchange rates | ( | ) | ||||||
| Fair value movement of convertible debt | ( | ) | ||||||
| Fair value movement in warrant liability | ||||||||
| Gain on debt settlement | ( | ) | ||||||
| Loss on debt extinguishment | ||||||||
| Issuance cost of put option liability (Series D) with Series D convertible preference shares | ||||||||
| Gain on disposal of assets | ( | ) | ||||||
| Changes in assets and liabilities, net of effects of acquisitions: | ||||||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Accounts payable | ||||||||
| Accrued liabilities | ||||||||
| Payable to affiliate | ||||||||
| Net Cash Used in Operating Activities | $ | ( | ) | $ | ( | ) | ||
| Cash Flows from Investing Activities: | ||||||||
| Net Cash provided by/(used in) Investing Activities | $ | $ | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from debt | ||||||||
| Payments of debt principal | ( | ) | ||||||
| Net cash proceeds from issuance of Series D convertible preferred shares (includes $62 related to Put Option) | ||||||||
| Net Cash provided by Financing Activities | $ | $ | ||||||
| Effect of exchange rate on cash | ||||||||
| Net increase/(decrease) in cash and cash equivalents | $ | $ | ( | ) | ||||
| Cash and cash equivalents beginning of the year | ||||||||
| Cash and cash equivalents end of the period | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SUPPLEMENTAL STATEMENTS OF CASH FLOW
(in thousands)
(Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Supplemental Cash Flow Disclosure | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Taxes | ||||||||
| Non-cash investing and financing activities: | ||||||||
| Common shares issued for conversion of debt | $ | $ | ||||||
| Common shares issued for settlement of debt | ||||||||
| Common shares issued for debt issuance costs | ||||||||
| Fair value of Series C Convertible Preferred shares issued for settlement of liabilities | ||||||||
| Fair value of Series D Convertible Preferred shares issued for settlement of liabilities | ||||||||
| Fair value of Series E Convertible Preferred shares issued for settlement of liabilities | ||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 March 31, 2026:
| 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 |
The Company's primary commercial vehicle is EverOn Energy LLC ("EverOn"), a joint venture formed with Hover Energy LLC, through which it develops and will operate Wind Powered Microgrids™ for blue-chip corporate clients across four high-value verticals: big box retail, real estate, education, and manufacturing. Upon commercial launch, customers will receive energy under long-term, 25-year Energy-as-a-Service ("EaaS") contracts at rates at or below what they currently pay to their grid provider, with no upfront capital expenditure required. This model is designed to deliver immediate and measurable cost savings to customers while generating stable, long-term recurring revenues for the Company. See Note 5 for more details on EverOn.
2. Going Concern and Management’s Plans
As of March 31, 2026, certain conditions remain that raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance of these financial statements.
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 condensed consolidated financial statements for the period ended March 31, 2026, the Company has incurred losses of ($
Additionally, the Company currently has no operating revenues and its assets are already pledged to secure indebtedness to various third party secured creditors. Without additional financing, the Company could be required to delay, scale back, or terminate its business activities, which would have a material adverse effect on the Company and its viability and prospects.
The terms of the Company’s indebtedness, including the covenants and the dates on which principal and interest payments on indebtedness become due, increase the risk that the Company will be unable to continue as a going concern. To continue as a going concern over the next twelve months, the Company must make payments on its debt as they come due and comply with the covenants in the agreements governing our indebtedness or, if it fails to do so, to (i) negotiate and obtain waivers of or forbearances with respect to any defaults that occur with respect to indebtedness, (ii) amend, replace, refinance, or restructure any or all of the agreements governing the Company’s indebtedness, and/or (iii) otherwise secure additional capital. However, the Company cannot provide any assurances that it will be successful in accomplishing any of these plans.
The Company’s Common Stock is currently quoted on an over-the-counter trading market.
Based upon the Company's current operating plan and forecasted expenditures, without the successful execution of management’s plans (described below) management believes that existing cash resources will not be sufficient to fund operations for the twelve-month period following the issuance of these financial statements. Accordingly, substantial doubt exists regarding the Company's ability to continue as a going concern.
Management's Plans
Management entered into a term sheet on June 3, 2026 with institutional investors providing for two tranches of preferred equity financing of up to $
In addition, the Company also entered into a preliminary term sheet on June 3, 2026 for an equity line of credit (“ELOC”) facility providing for up to $
Because the completion and ultimate timing of these transactions remain dependent upon matters that are not entirely within the Company's control, management has concluded that its plans do not alleviate the substantial doubt regarding the Company's ability to continue as a going concern.
3. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed 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 8 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, 2025 as filed on June 15, 2026.
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.
Variable Interest Entities ("VIEs")
A VIE is a legal entity whose equity investors either do not provide sufficient at-risk capital or do not possess the essential characteristics of a controlling financial interests, such that voting interests alone may not be the appropriate basis for determining which party should consolidate the entity.
In the period in which the Company obtains a financial interest in a VIE, the Company assesses whether it is the primary beneficiary as prescribed by the accounting guidance which outlines the basis for consolidation of a VIE.
The Company evaluates its business relationships with related parties to identify potential VIEs under Accounting Standards Codification ("ASC") 810, Consolidation. The Company consolidates VIEs in which it is considered to be the primary beneficiary. Entities are considered to be the primary beneficiary if they have both of the following characteristics: (i) the power to direct the activities that, when taken together, most significantly impact the VIE's performance; and (ii) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. The Company's judgment with respect to its level of influence or control of an entity involves the consideration of various factors including the form of its ownership interest, its representation in the entity's governance, the size of its investment, estimates of future cash flows, its ability to participate in policy making decisions and the rights of the other investors to participate in the decision making process and to replace the Company as manager and/or liquidate the joint venture, if applicable.
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. No impairment was recorded during the three months ended March 31, 2026.
| (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.
Net Income / (Loss) Per Share
Net loss per share is computed pursuant to ASC 260, Earnings per Share. Basic net 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. Diluted net 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 stock options, warrants, and convertible notes were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect due to losses in each period. 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 | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Warrants | ||||||||
| April and October 2024 Convertible Notes | ||||||||
| OID Notes | ||||||||
| Convertible Preferred Stock | ||||||||
| 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 October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. For SEC registrants, the effective date for each amendment will be the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective. If the SEC has not removed the applicable requirement by June 30, 2027, the related amendment will not become effective. The Company is currently evaluating the impact of this guidance on its disclosures.
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 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.
On various dates in 2025, the FASB issued several narrow-scope ASUs, including ASU 2025-04 through ASU 2025-12 (in addition to the others discussed above), addressing topics such as VIE acquisition accounting, share-based consideration payable to customers, credit losses, internal-use software, derivatives and hedging, government grants, interim reporting, and codification improvements. The effective dates for these standards generally begin in annual periods after December 15, 2026 through December 15, 2028, depending on the standard. The Company is currently evaluating the impact of these standards and does not expect them to have a material impact on its consolidated financial statements or related disclosures, except for any additional disclosure requirements that may apply.
Recently Adopted Accounting Standards
Effective January 1, 2026, the Company adopted ASU 2024-04, Debt-Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements or 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.
Recurring Fair Value Measurements
As of March 31, 2026, 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 | 732 | |||||||||||||||
| Warrant liability | - | |||||||||||||||
| Put Option Liability (Series D) | 62 | |||||||||||||||
| Total | $ | $ | $ | 794 | $ | |||||||||||
Valuation Techniques
| ● | Convertible Loan 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 March 31, 2026:
| 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 March 31, 2026:
| 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 March 31, 2026. As the terms of the notes are mostly identical the Company has combined the amounts as shown below:
| Convertible | OID | |||||||||||
| Notes | Convertible | |||||||||||
| April 2024 | Notes | Total | ||||||||||
| (in thousands) | ||||||||||||
| Balance at December 31, 2025 | $ | |||||||||||
|
| ||||||||||||
| Series D Convertible Preferred shares issued for debt | ( | ) | ( | ) | ||||||||
| Series E Convertible Preferred shares issued for debt | ( | ) | ( | ) | ||||||||
| Gain on settlement of debt | ( | ) | ( | ) | ||||||||
| Balance at March 31, 2026 | ||||||||||||
Refer to Note 10 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 in fair value of warrants issued with significant unobservable inputs (Level 3) as of March 31, 2026, in thousands:
| Warrants | ||||||||||||
| Issued with | April 2025 | |||||||||||
| Convertible Notes | Warrants | Total | ||||||||||
| Balance at December 31, 2025 | $ | $ | ||||||||||
| Balance at March 31, 2026 | $ | $ | $ | |||||||||
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
As of March 31, 2026 and December 31, 2025 the Company had warrants outstanding permitting holders to purchase a total of
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.
Put Option issued on March 27, 2026:
In connection with the sale of
The Company determined that the Put Option represents a derivative financial instrument which is not clearly and closely related to the Series D equity host instrument. As a result, the Company is required to account for the Put Option as a separate liability in the Company's consolidated balance sheet with periodic changes in the fair value recognized in earnings. As of the issuance date and March 31, 2026, the fair value of the Put Option was $
| Put | ||||
| Option | ||||
| No. Shares (subject to Put Option) | ||||
| Expiration date | ||||
| Risk free rate | % | |||
| Discount for lack of marketability (DLOM) | % | |||
| Put purchase price per share | $ | |||
| Probability of qualifying PIPE | % | |||
| Probability of liquidation | % |
Non-recurring Fair Value Measurements
During the three months ended March 31, 2026, the Company had the following issuances of Convertible Preferred Stock (see Note 14):
| ● | Issued |
| ● | Issued a total of |
| ● | Issued |
These convertible preferred stock issuances were initially measured at their fair values on the issuance date. Because the Company’s convertible preferred stock is not subsequently remeasured to fair value after initial recognition, this represents a nonrecurring fair value measurement.
The estimated fair values of the Series D, C and E Convertible Preferred Stock was classified as a Level 3 measurement within the fair value hierarchy.
The Company utilized a Monte Carlo simulation to estimate the fair value of its Convertible Preferred Stock by applying the following inputs and assumptions as of March 31, 2026:
| Series C | Series D | Series E | |||||||
| No Shares | | | | ||||||
| Initial Conversion Price | $ | | $ | | $ | | |||
| ALCE Closing Price | $ | | $ | | $ | | |||
| Holding Period (yrs) | | | | ||||||
| Face Value of Preferred | $ | | $ | | $ | | |||
| Risk-free rate | | % | | % | | % | |||
| Volatility | | % | | % | | % | |||
| Liquidation (probability) | | % | | % | | % | |||
| DLOM | | % | | % | | % |
The fair value of the Company’s Convertible Preferred Stock is particularly sensitive to changes in certain of these assumptions. For example, increases in probability of liquidation and in the discount for lack of marketability (“DLOM”) will decrease the estimated fair value.
5. EverOn Energy Joint Venture and Consolidation of Variable Interest Entity
Joint Venture Formation. On March 24, 2025, the Company incorporated EverOn Energy LLC, a new legal entity (the “JV” or "EverOn") 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 with EverOn. In connection with the transaction, the Company retained a
The transaction was accounted for as a business combination under ASC 805. Additional information regarding the acquisition is included in Note
Consolidation - Variable Interest Entity. The Company determined that EverOn is a variable interest entity ("VIE") under the consolidation guidance in ASC 810 and that the Company is the primary beneficiary. Accordingly, EverOn is consolidated in the accompanying condensed consolidated financial statements, with Hover's
There were no changes to the Company's consolidation conclusions during the three months ended March 31, 2026.
Purchase Price Allocation. The purchase price allocation remains unchanged from December 31, 2025 and is summarized below (in thousands):
| 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 | $ | ||||||
Noncontrolling Interest ("NCI"). The NCI, representing Hover's
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, 2025. 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.
| Year-ended | ||||
| December 31, | ||||
| 2025 | ||||
| Revenue | $ | |||
| Net Income / (loss) | $ | ( | ) | |
*Presented on a consolidated company basis before allocation of losses to the non-controlling interest of ($
Intangible Assets.
| Gross Carrying Amount | Accumulated Amortization |
Net | ||||||||||
| Customer relationship | $ | $ | ( | ) | $ | |||||||
| Favorable contracts | ( | ) | ||||||||||
| OASIS Software | ( | ) | ||||||||||
| Total | $ | $ | ( | ) | $ | |||||||
The carrying amounts of identifiable intangible assets as of December 31, 2025 were as follows (in thousands):
| Gross Carrying Amount | Accumulated Amortization | Net | ||||||||||
| Customer relationships | $ | $ | ( | ) | $ | |||||||
| Favorable contracts | ( | ) | ||||||||||
| OASIS Software | ( | ) | ||||||||||
| Total | $ | $ | ( | ) | $ | |||||||
The Company recognized amortization expense of $
Impairment considerations - Identifiable Intangibles. During the three month period ended March 31, 2026, there were no impairment indicators identified that would warrant further impairment testing with respect to the JV's finite-lived intangibles or long-lived assets. Therefore, no impairment was recorded during the period.
Impairment considerations - Goodwill. During the three month period ended March 31, 2026, there were no impairment indicators identified that would warrant additional goodwill impairment testing beyond the annual impairment testing performed each year on December 31. Therefore,
6. Other long-term assets
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. Other long-term assets consisted of the following:
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (in thousands) | ||||||||
| Long-term prepaid expenses | ||||||||
| Total | $ | $ | ||||||
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.
7. 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:
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (in thousands) | ||||||||
| Trade payables | $ | $ | ||||||
| Payable to related party | ||||||||
| Total | $ | $ | ||||||
8. Accrued Liabilities
Accrued expenses relate to various expenses incurred by the Company but not yet invoiced or paid. Accrued interest represents the interest on the Company’s debt that has accrued and has been unpaid through March 31, 2026 and as of December 31, 2025. Accrued liabilities consist of the following (in thousands):
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (in thousands) | ||||||||
| Legal fees | $ | $ | ||||||
| Interest on debt | ||||||||
| Audit Fees | ||||||||
| Payroll | ||||||||
| Consulting fees | ||||||||
| Tax penalties | ||||||||
| Total | $ | $ | ||||||
9. Taxes Recoverable and Payable
Taxes recoverable and payable consist of VAT taxes receivable from various European governments through group transactions in these countries.
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (in thousands) | ||||||||
| Taxes recoverable | $ | $ | ||||||
| Total | $ | $ | ||||||
10. 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 March 31, 2026 and December 31, 2025
| Convertible | OID | |||||||||||
| Notes | Convertible | |||||||||||
| April 2024 | Notes | Total | ||||||||||
| (in thousands) | ||||||||||||
| Balance at December 31, 2025 | $ | |||||||||||
| Movement in fair value | ||||||||||||
| Series D Convertible Preferred shares issued for debt | ( | ) | ( | ) | ||||||||
| Series E Convertible Preferred shares issued for debt | ( | ) | ( | ) | ||||||||
| Gain on settlement of debt | ( | ) | ( | ) | ||||||||
| Balance at March 31, 2026 | $ | $ | $ | |||||||||
April and October 2024 Convertible Promissory Notes. The Company previously issued senior convertible promissory notes in April 2024 and October 2024 (collectively, the "2024 Convertible Notes"). The terms of the 2024 Convertible Notes, together with significant conversion features, are described in Note 10 to the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2025.
The aggregate amount outstanding under the 2024 Convertible Notes as of March 31, 2026 and December 31, 2025 was approximately $
There were
The Company accounts for the 2024 Convertible Notes under the fair value option. During the three months ended March 31, 2026 and March 31, 2025, the Company recognized a $
No other material modifications were made to the terms of the 2024 Convertible Notes during the three months ended March 31, 2026.
OID Convertible Notes. Between December 2024 and November 2025, the Company issued a series of convertible promissory notes at an original issue discount ("OID") of
There were no conversions of the OID Convertible Notes during the three months ended March 31, 2026 or March 31, 2025.
The Company accounts for the OID Convertible Notes under the fair value option following the embedded derivative reevaluation described below. During the three months ended March 31, 2026 and March 31, 2025, the Company recognized a $
No other material modifications were made to the terms of the OID Convertible Notes during the three months ended March 31, 2026.
On March 31, 2026 the Company settled with one of the OID noteholders pursuant to which the Company issued
On March 31, 2026, the Company issued
Original Terms
The OID Convertible Notes were originally issued with a stated maturity and included and original issue discount (“OID”) of
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
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 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 were accounted for as a single hybrid instrument measured at fair value, with changes in fair value recognized in earnings each reporting period beginning with the quarterly period ended September 30, 2025. The FVO election eliminated the requirement to separately account for the embedded derivative under ASC 815.
Subsequent Fair Value Changes
Following the modification and the election of the fair value option, the OID Convertible Notes have been remeasured at fair value at each reporting date in accordance with ASC 820, Fair Value Measurement.
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 March 31, 2026 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 March 31, 2026 and December 31, 2025:
| As of | As of | |||||||
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (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 | $ | $ | ||||||
From the Company inception through March 31, 2026, the Company issued a series of convertible and/or non-convertible promissory notes, term loans and bridge notes having stated interest rates between
On March 3, 2026, the Company restructured $
In connection with the modification or restructuring of the pre-existing term loans, the Company considered the troubled debt restructuring ("TDR") guidance in ASC 470-60 and the guidance related to Modifications and Extinguishments of debt included in ASC 470-50. Because the effective borrowing rate to the Company increased as a result of the Subscription Agreements (see below), the Company determined that the modifications did not represent a TDR. However, as a result of the substantial change in the terms of the pre-existing loans, including the fair value required to be paid by the Company in the form of Series C shares, the Subscription Agreements together with the change in maturity dates associated with these loans were required to be treated as a debt extinguishment (hereinafter referred to as "debt restructuring") under ASC 470-50, resulting in a loss on debt restructuring of $
| Loss on | ||||
| Debt Restructuring | ||||
| Cash received on initial Closing | $ | |||
| Carrying value of modified term loans | ||||
| Less: Fair value of new Notes | ( | ) | ||
| Less: Fair value of Series C Convertible Preferred Stock | ( | ) | ||
| Loss on debt restructuring | $ | ( | ) | |
The new restructured
Amortization expense during the three months ended March 31, 2026, related to amortization of the discount from the closing date through March 31, 2026, was $
Subscription Agreements
On March 3, 2026, the Company 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”), the Notes. The Subscription Agreements also provide for the issuance of an aggregate of
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
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.
11. Other Payables
As of March 31, 2026 and December 31, 2025, other liabilities includes $
12. 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.
From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s business. Other than the following matters, we are not aware of any such legal proceedings that will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results.
On October 15, 2024 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 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 January 30, 2025 CFGI LLC filed a complaint in the Superior Court of Massachusetts, claiming $
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, 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 $
On May 30, 2024, the Company was served a complaint filed in the Circuit Court for Fairfax County, Virginia, by Morgan Franklin Consulting LLC ("MF"), claiming $
Commitments
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 March 31, 2026 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 March 31, 2026, 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.
13. 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 and the resulting gain recorded during the three month period ended March 31, 2025 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 | $ | ( | ) | |
14. Shareholders’ Equity
Common Stock
As of March 31, 2026 and December 31, 2025 the Company had a total of
Reverse Stock Splits
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 condensed 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
There were
Preferred Stock
As of March 31, 2026 and December 31, 2025, 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, 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 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 C Convertible Preferred Stock
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. As of December 31, 2025 there have not been any adjustments to the Original Conversion Price.
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.
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.
March 27, 2026 Series D 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
Because the
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.
Warrants
As of March 31, 2025, warrants to purchase up to
| Weighted | ||||||||||||
| Average | ||||||||||||
| Weighted | Remaining | |||||||||||
| Average | Contractual | |||||||||||
| Exercise | Term | |||||||||||
| Warrants | Price | (Years) | ||||||||||
| Outstanding – January 1, 2025 | $ | |||||||||||
| Issued during the period | - | |||||||||||
| Expired during the period | - | |||||||||||
| Outstanding – March 31, 2025 | $ | |||||||||||
| Exercisable – March 31, 2025 | $ | |||||||||||
| Weighted | ||||||||||||
| Average | ||||||||||||
| Weighted | Remaining | |||||||||||
| Average | Contractual | |||||||||||
| Exercise | Term | |||||||||||
| Warrants | Price | (Years) | ||||||||||
| Outstanding – January 1, 2026 | $ | |||||||||||
| Issued during the period | - | |||||||||||
| Expired during the period | - | |||||||||||
| Outstanding – March 31, 2026 | $ | |||||||||||
| Exercisable – March 31, 2026 | $ | |||||||||||
2023 Equity Incentive Plan
As of December 31, 2025 and March 31, 2026, there were
On March 21, 2025, Mr. Vincent Browne, our CEO and Interim CFO and shareholder with majority voting rights, representing
15. Segment and Geographic Information
The Company has reportable segments that consist of operations segmented by geographical region, United States Operations and European Operations. The Chief Operating Decision-Maker (CODM) is the CEO.
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. The Company evaluates 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 | ||||||||
| March 31, | ||||||||
| Net Income/(loss) by Segment | 2026 | 2025 | ||||||
| (in thousands) | ||||||||
| Europe | $ | ( | ) | $ | ||||
| United States | ( | ) | ( | ) | ||||
| Total for the period | $ | ( | ) | $ | ( | ) | ||
| As of | Year Ended | |||||||
| March 31, | December 31, | |||||||
| Assets by Segment | 2026 | 2025 | ||||||
| (in thousands) | ||||||||
| Europe | ||||||||
| Other Assets | $ | $ | ||||||
| Total for Europe | $ | $ | ||||||
| United States | ||||||||
| Intangible assets | $ | $ | ||||||
| Goodwill | $ | |||||||
| Other assets | ||||||||
| Total for United States | $ | $ | ||||||
| As of | Year Ended | |||||||
| March 31, | December 31, | |||||||
| Liabilities by Segment | 2026 | 2025 | ||||||
| (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 | ||||||||
| March 31, | ||||||||
| Adjusted EBITDA by Segment | 2026 | 2025 | ||||||
| (in thousands) | ||||||||
| Europe | $ | ( | ) | $ | ( | ) | ||
| US | ( | ) | ( | ) | ||||
| Total for the period | $ | ( | ) | $ | ( | ) | ||
Below is a reconciliation of net income to Adjusted EBITDA for the periods presented:
| Three Months Ended | ||||||||
| March 31, | ||||||||
| Adjusted EBITDA Reconciliation to Net Loss | 2026 | 2025 | ||||||
| (in thousands) | ||||||||
| Europe | ||||||||
| Adjusted EBITDA | $ | ( | ) | $ | ( | ) | ||
| Depreciation, amortization, and accretion | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Gain on sale of subsidiaries | $ | |||||||
| Net Income /(Loss) | $ | ( | ) | $ | ||||
| US | ||||||||
| Adjusted EBITDA | $ | ( | ) | $ | ( | ) | ||
| Depreciation, amortization, and accretion | ( | ) | ( | ) | ||||
| Interest expense | ( | ) | ( | ) | ||||
| Fair value movement of convertible notes | ( | ) | ( | ) | ||||
| Fair value movement of warrants | ||||||||
| Gain on settlement of debt | ||||||||
| Issuance cost put option liability (Series D) | ( | ) | ||||||
| Loss on extinguishment of debt | ( | ) | ||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Income Taxes | ||||||||
| Consolidated Net Income / (Loss) | $ | ( | ) | $ | ( | ) | ||
16. 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.
17. Related Party
The following is a summary of transactions since January 1, 2025 to which we have been a party, in which the amount involved exceeded $
AEG:
Alternus Energy Group Plc (“AEG”) was a
During the period ended March 31, 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. These transactions are recorded as a net liability of $0.3 million on the Consolidated Balance Sheet. Two of our Company's board members, Mr. Vincent Browne and Mr. John Thomas, are also board members of AEG.
Specifically during the three month period ended March 31, 2025, the Company issued
Hover:
On September 30, 2025 we entered into a joint venture operating agreement with Hover Energy LLC (“Hover”) pursuant to which Alternus sold a
On March 24, 2026, the Company transferred its
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 was elected to the Board effective immediately. The Board assessed the independence of Mr. Wikborg under the Company’s Corporate Governance Guidelines and the independence standards under Nasdaq rules and has determined that Mr. Wikborg is independent. Along with their appointment, Mr. Wikborg was appointed to serve on the Audit Committee, as well as the Chair of the Compensation Committee, and as a member of the Nominating and Corporate Governance Committee of the Company, effective immediately.
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 February 13, 2026, David Farrell resigned as Chief Commercial Officer of the Company, effective immediately.
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 $
| Three Months Ended | ||||||||
| March 31, | ||||||||
| Director’s remuneration | 2026 | 2025 | ||||||
| (in thousands) | ||||||||
| Remuneration in respect of services as directors | $ | $ | ||||||
| Remuneration in respect to long-term incentive schemes – restricted shares | ||||||||
| Total | $ | $ | ||||||
18. 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 March 31, 2026, except as disclosed below.
On April 21, 2026, the Company closed an additional (approximately $
On June 16, 2026, the Company's Board of Directors and Vincent Browne, as the stockholder holding a majority of the voting stock, approved an amendment to our Certificate of Incorporation to change our corporate name to Aedis Energy Inc. This name change is in process and has not gone effective as of the date of this Quarterly Report.
Management entered into a term sheet on June 3, 2026 with institutional investors providing for two tranches of preferred equity financing of up to $
Purchase Agreement
On June 30, 2026, the Company entered into a purchase agreement (the “Subscription Agreement”) with a certain accredited investor (the “Purchaser”) pursuant to which the Company sold in a private placement (the “Offering”), an unsecured
The transaction closed on June 30, 2026 and the aggregate gross proceeds to the Company were $
Original Issue Discount Secured Promissory Note
The Note was issued with an original issue discount of
The Note 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 Note, (ii) commencement of bankruptcy proceedings, (iii) a future default under any existing Company indebtedness greater than $
Series F Convertible Preferred Stock
The Board declared the formation of an aggregate of up to
General. The Series F consists of a total of
Automatic Conversion. Each share of Series F shall automatically convert 1 trading day prior to the Company’s shares of Common Stock uplisting to a national stock exchange (the “Uplist”), and each share of Series F shall convert into a number of fully paid and non-assessable shares of Common Stock equal to the value of each share ($
Maturity Date. The Series F has a stated maturity date of December 31, 2026; if no Uplist occurs by December 31, 2026, the Series F Convertible Preferred shall be cancelled and the Holder shall have no rights and the Company has no further obligations to the Holder.
Restriction on Conversion. In no event shall the Holder have the right or the Company be required to convert, as applicable, shares of Series F 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
Voting Rights. The holders of Series F hold
Dividend Rights. The holders of Series F will not be entitled to receive dividends of any kind.
Liquidation Preference. The holders of Series F shall be entitled to receive distributions in the event of any liquidation, dissolution or winding up of the Company only after the Series B, C, D and E convertible preferred stock holders and after the Common Stockholders
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, 2025, 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
The Company was incorporated on May 14, 2021 under the laws of Delaware and was originally known as Clean Earth Acquisitions Corp. The Company closed a business combination on December 22, 2023 and changed its name to Alternus Clean Energy, Inc. We currently have 13 employees; 6 employees are located in Dublin, Ireland, 2 are located at the Company’s headquarters located in New York, 2 remote employees in the US and 3 are located in Europe. Our employees perform various services such as business development, finance, and management functions.
Alternus Clean Energy, Inc. is a specialized energy transition platform dedicated to developing, owning, and operating decentralized, onsite clean energy solutions for commercial and industrial customers across the United States and the United Kingdom. The Company aims to deliver 24/7 energy independence to its customers through wind-powered microgrids and complementary energy technologies, that integrate compact wind turbines, solar, and battery storage, bypassing grid constraints and providing reliable, clean power directly at the point of consumption.
The Company's primary commercial vehicle is EverOn Energy, a joint venture formed with Hover Energy LLC, through which it develops and will operate Wind Powered Microgrids™ for Blue-Chip Clients across four high-value verticals: big box retail, real estate, education, and manufacturing. Customers receive energy under long-term, 25-year Energy-as-a-Service ("EaaS") contracts at rates at or below what they currently pay to their grid provider, with no upfront capital expenditure required. This model is designed to deliver immediate and measurable cost savings to customers while generating stable, long-term recurring revenues for the Company.
Based on our current operating plan, which assumes successful conversion of a significant portion of our existing sales pipeline and additional financing, management currently believes the Company could achieve EBITDA profitability during 2028. These expectations involve significant assumptions and uncertainties, including execution of customer contracts, timing of deployments, customer adoption rates and availability of financing.
The Company uses annual recurring revenues as a key metric in its financial management information and believes this method better reflects the long-term stability of operations into the future. Annual Recurring Revenue ("ARR") is defined as the estimated future revenue generated by operational microgrid installations under long-term Energy-as-a-Service ("EaaS") contracts, calculated as the contracted energy rate per kilowatt-hour (kWh) multiplied by the estimated annual energy generation of each installation over a full year of operation, inclusive of the contracted annual escalator.
It should be noted that the actual revenues reported by the Company in a particular period may be lower than ARR where a microgrid installation does not generate revenue for the full duration of that period, most commonly in the first year of operation, where commissioning and handover may occur part-way through the financial year. The Company must also account for the timing of new installations completed throughout the financial year, which will contribute to ARR on a pro-rated basis in the period of first operation and on a full-year basis thereafter. As the portfolio of operational installations grows, ARR accumulates accordingly, reflecting the stair-step growth profile inherent in the Company's long-term EaaS ownership model.
Impacts of the U.S./Iran conflict and the ongoing Ukraine/Russia conflict
The geopolitical situation in the Middle East intensified in early 2026 with the U.S./Iran conflict. The conflict between the two countries continues to evolve as military activity proceeds and blockades of Iranian ports as well as the Straits of Hormuz are imposed. In addition to the human toll and impact of the events on entities that have operations in Iran or its neighboring countries, 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. The Company has seen fluctuations in energy rates due to inflation, increased interest rates, and other macro-economic factors.
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. 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 increasing accumulated deficits. Management has determined there is doubt about the Company’s ability to continue as a going concern if planned debt and/or equity financing transactions are not completed. Refer to Note 2 of the accompanying financial statements.
The Company is currently working on several plans 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.
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.
| ● |
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 ability to enter new geographies and establish strong local partnerships has enabled consistent expansion across Europe and North America. 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 futureproofing 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 – interest rates and inflation.
Interest Rates on Company Debt
Interest rates on the Company’s debt, that is not measured at fair value, are mostly variable for the full term of the debt at annual interest rates ranging from 9% to 25%.
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 wind, 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 2025 and during the three months ended March 31, 2026, 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. Some of the Company’s current expenses are generated in other currencies, including the Euro (EUR) 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) and some of its debt in foreign countries are exposed to foreign currency fluctuations. As a result, the Company expects expenses will be exposed to foreign exchange fluctuations in local currencies. 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.
Consolidated Results of Operations
The following table illustrates the consolidated results of continuing operations for the three months ended March 31, 2026 and 2025:
| Three Months Ended |
||||||||
| March 31, |
||||||||
| 2026 |
2025 |
|||||||
| Revenues |
$ | - | $ | - | ||||
| Operating Expenses |
||||||||
| Selling, general and administrative |
(1,321 | ) | (1,490 | ) | ||||
| Depreciation, amortization, and accretion |
(477 | ) | (130 | ) | ||||
| Gain on sale of subsidiaries |
- | 3,589 | ||||||
| Total operating income/ (expenses) |
(1,798 | ) | 1,969 | |||||
| Income/(loss) from operations |
(1,798 | ) | 1,969 | |||||
| Other income (expense): |
||||||||
| Interest expense |
(276 | ) | (2,190 | ) | ||||
| Fair value movement of convertible notes |
(2,363 | ) | 806 | |||||
| Fair value movement of warrants |
- | (811 | ) | |||||
| Gain on settlement of debt |
5,257 | - | ||||||
| Loss on extinguishment of debt |
(1,706 | ) | - | |||||
| Issuance cost put option liability (Series D) |
(6 | ) | - | |||||
| Other income |
- | 46 | ||||||
| Total other expenses |
906 | (2,149 | ) | |||||
| Loss before provision for income taxes |
(892 | ) | (180 | ) | ||||
| Income taxes |
- |
- |
||||||
| Net loss for the period |
$ | (892 | ) | $ | (180 | ) | ||
| Net loss attributable to noncontrolling interest |
(812 | ) | - | |||||
| Net loss attributable to common stock |
$ | (80 | ) | $ | (180 | ) | ||
| Basic & diluted earnings/(loss) per share of common stock: |
||||||||
| Total loss per share of common stock, basic and diluted |
$ | (0.11 | ) | $ | (4.28 | ) | ||
| Weighted-average common stock outstanding, basic & diluted |
724,658 | 42,020 | ||||||
| Comprehensive income / (loss): |
||||||||
| Net loss |
(892 | ) | (180 | ) | ||||
| Foreign currency translation adjustment |
23 | (536 | ) | |||||
| Comprehensive income/(loss) |
$ | (869 | ) | $ | (716 | ) | ||
| Comprehensive loss attributable to noncontrolling interest |
(812 | ) | - | |||||
| Comprehensive loss attributable to Alternus |
(57 | ) | (716 | ) | ||||
Three Months Ended March 31, 2026 compared to March 31, 2025.
The Company currently has no revenues.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended March 31, 2026 and 2025 were as follows:
| Three Months Ended March 31, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2026 |
2025 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Selling, general and administrative |
1,321 | 1,490 | (169 | ) | (11 | )% | ||||||||||
| Total |
$ | 1,321 | $ | 1,490 | $ | (169 | ) | (11 | )% | |||||||
Selling, general and administrative expenses decreased $0.2 million for the three months ended March 31, 2026 compared to the same period in 2025. The majority of this decrease was from a decrease in cash compensation and other employee-related costs resulting from the Company's continued efforts to resize its operations after the sale or disposal of non-core assets and operations.
Depreciation, Amortization and Accretion Expense
Depreciation, amortization, and accretion expenses for the three months ended March 31, 2026 and 2025 were as follows:
| Three Months Ended March 31, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2026 |
2025 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Depreciation, Amortization and Accretion expense |
$ | 477 | $ | 130 | 347 | 267 | % | |||||||||
| Total for the period |
$ | 477 | $ | 130 | $ | 347 | 267 | % | ||||||||
Depreciation and amortization and accretion expense increased by $347,000 for the three months ended March 31, 2026 compared to the same period in 2025. This was primarily driven by the incremental amortization of the intangible assets acquired in the EverOn Energy LLC acquisition that closed on September 30, 2025.
Gain on Disposal of Assets
| Three Months Ended March 31, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2026 |
2025 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Gain on sale of subsidiaries |
$ | - | $ | 3,589 | (3,589 | ) | (100 | )% | ||||||||
| Total for period |
$ | - | $ | 3,589 | $ | (3,589 | ) | (100 | )% | |||||||
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 $3.6 million in debt and payables related to MH02’s activities (See Note 13). There were no transactions resulting in a gain or loss from the sale of subsidiaries during the three month period ended March 31, 2026.
Interest Expense, Other Income, and Other Expense
| Three Months Ended March 31, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2026 |
2025 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Interest expense |
$ | (276 | ) | $ | (2,190 | ) | 1,914 | (87 | )% | |||||||
| Fair value movement of convertible notes |
(2,363 | ) | 806 | (3,169 | ) | (393 | )% | |||||||||
| Fair value movement of warrants |
- | (811 | ) | 811 | (100 | )% | ||||||||||
| Gain on settlement of debt |
5,257 | - | 5,257 | 100 | % | |||||||||||
| Loss on extinguishment of debt |
(1,706 | ) | - | (1,706 | ) | 100 | % | |||||||||
| Issuance cost put option liability (Series D) | (6 | ) | (6 | ) | 100 | % | ||||||||||
| Other income | - | 46 | (46 | ) | (100 | )% | ||||||||||
| Total for period |
$ | 906 | $ | (2,149 | ) | $ | 3,055 | (142 | )% | |||||||
Total interest expense, other income, and other expense decreased by approximately $3.1 million for the three months ended March 31, 2026 compared to the same period in 2025. The primary drivers for the change in the respective periods was a $2.2 million increase in financing expenses associated with fair value movement and losses on debt restructuring, offset by the effect of a one time gain of $5.3 million on the settlement of certain of the Company's OID Convertible Notes (see Note 10). The overall decrease is consistent with management's continued efforts to deleverage the Company through the issuance of preferred equity.
Movement in Interest Expense
| Three Months Ended March 31, |
||||||||||||||||
| Change |
Change |
|||||||||||||||
| 2026 |
2025 |
($) |
(%) |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Interest charged on debt |
$ | (226 | ) | $ | (790 | ) | $ | (564 | ) | 71 | % | |||||
| Amortization of debt discount |
(50 | ) | (1,400 | ) | (1,350 | ) | 96 | % | ||||||||
| Total interest expense for period |
$ | (276 | ) | $ | (2,190 | ) | $ | (1,914 | ) | 87 | % | |||||
The decrease in interest expense for the three months ended March 31, 2026, when compared to the same period in 2025 resulted primarily from debt modifications in 2025 which led to the reclassification of OID Convertible Notes from debt carried net of OID (with the OID amortized to interest expense over the debt term) to debt or OID Convertible Notes that were accounted for using the fair value option permitted by ASC 825. Following the fair value election as of July 1, 2025, there was no longer interest expense relating to OID amortization. Rather, the periodic changes in the carrying value of associated OID Convertible Notes is reflected in the fair value movement of convertible notes in the Company consolidated statement of operations in periods following the change.
Net Loss
Net loss for continuing operations increased by $0.7 million for the three months ended March 31, 2026 compared to the same period in 2025. The increased loss was primarily driven by increased amortization expense of $0.3 million resulting from amortization of intangible assets acquired in the September 2025 acquisition of Everon and a $0.4 million increase in expenses due to the movement in fair value of Company's debt and other financial instruments (i.e., those carried at fair value). The 2025 gain on the sale of the Company's Spanish subsidiaries of $3.6 million was offset entirely by a $3.6 million net effect (i.e., $5.3 million gain on settlement offset by $1.7 million loss on extinguishment) of gains and losses resulting from the Company's financing modification or restructuring efforts.
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 equity and 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 US GAAP, along with the most directly comparable US GAAP measure, for each period presented below. In addition to its results determined in accordance with US GAAP, the Company believes the following non-US GAAP financial measures are useful in evaluating its operating performance. The Company uses the following non-US 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 March 31, 2026 and December 31, 2025:
| As of |
As of |
|||||||
| March 31, |
December 31, |
|||||||
| 2026 |
2025 |
|||||||
| (in thousands) |
||||||||
| Convertibles measures at fair market value |
$ | 732 | $ | 9,900 | ||||
| Convertible and non convertible other debt |
7,072 | 6,161 | ||||||
| Total debt |
7,804 | 16,061 | ||||||
| Less current maturities |
(7,804 | ) | (16,061 | ) | ||||
| Long term debt, net of current maturities |
$ | - | $ | - | ||||
| Current Maturities |
$ | 7,804 | $ | 16,061 | ||||
| Debt discount |
(306 | ) | - | |||||
| Current Maturities net of debt discount |
$ | 7,498 | $ | 16,061 | ||||
| Long-term maturities net of debt discount |
$ | - | $ | - | ||||
| As of |
As of |
|||||||
| March 31, |
December 31, |
|||||||
| 2026 |
2025 |
|||||||
| (in thousands) |
||||||||
| Cash and cash equivalents |
$ | 363 | $ | 32 | ||||
Liquidity Position
As discussed in Note 2 to the consolidated financial statements, we have experienced recurring operating losses, generated negative cash flows from operations and have limited cash resources as of March 31, 2026, which, together with our current level of indebtedness, represent the existence of conditions that raise substantial doubt about our ability to continue as a going concern for twelve months from the issuance of this report, without additional financing.
In response to these conditions, over the past year, management has continued to pursue various actions to improve the Company’s financial position, such as making sustainable reductions of selling, general and administrative costs (excluding stock compensation costs) and taking positive actions to reduce the Company's overall level of convertible and other debt obligations. The Company also completed the acquisition of EverOn, valued at $56.5 million on September 30, 2025. As a result of these activities, Shareholders’ Equity attributable to Alternus Clean Energy Inc. has continued to increase to $11.9 million as of March 31, 2026 from $3.4 million as of December 31, 2025.
This improved balance sheet and business position is intended to support management’s plans to seek a listing on a national exchange at the earliest opportunity. As part of this activity, we are pursuing several financing initiatives intended to provide additional capital to support our operations, strategic objectives and near-term liquidity requirements.
Subsequent to December 31, 2025, we have entered into a term sheet with a leading investment bank for an initial PIPE investment of $10 million in the form of convertible preferred equity with an additional $10 million available at the Company’s option within 11 months after the first closing. The agreement has a number of conditions precedent prior to closing, including the receipt of certain governmental and regulatory approvals and other requirements that are not entirely within our control. As a result, there can be no assurance regarding the timing of, or ultimate receipt of, any proceeds under the proposed financing arrangement.
In addition, we have also entered into a preliminary term sheet with an institutional investor for an equity line of credit facility that could provide access to up to $50.0 million of additional capital at the Company’s option over the following three years. The proposed facility remains subject to negotiation and execution of definitive agreements, satisfaction of customary closing conditions and other requirements. Further, our ability to access capital under such a facility would be dependent upon a number of factors, including the Company's stock price, trading volume and other market conditions at the time of any drawdowns.
While we believe these financing initiatives, if successfully completed, would provide a significant source of additional liquidity, the transactions have not been completed as of the date of this filing and remain subject to uncertainties that are outside of our control. Accordingly, management cannot conclude that the successful completion of these transactions is probable at this time, and, therefore, these plans do not alleviate the substantial doubt regarding the Company's ability to continue as a going concern
Financing Activities
We have historically financed our operations through a combination of debt and equity financings. During the three months ended March 31, 2026, management continued to focus on strengthening the Company's capital structure while providing sufficient liquidity to fund operations and strategic initiatives.
During the first quarter of 2026, we continued to manage and, where appropriate, refinance or restructure certain outstanding indebtedness. In addition, we have continued to utilize convertible debt and other financing arrangements to provide working capital, while also pursuing longer-term capital raising initiatives intended to support future growth and improve financial flexibility.
As discussed in the accompanying notes to the condensed consolidated financial statements, the Company's financing arrangements include various promissory notes, convertible notes and other debt obligations with differing maturities, interest rates and conversion features. During the period, we have continued to evaluate opportunities to simplify the Company's capital structure through debt repayments, conversions, restructurings and other strategic financing transactions.
Management believes that successfully executing these financing initiatives remains critical to supporting our operating plans, funding strategic investments and meeting its near-term liquidity requirements. Additional information regarding our debt, equity financing activities and related transactions is included in the notes to the condensed consolidated financial statements. A summary of significant financing activities that have occurred since December 31, 2025 are as follows:
| ● |
On March 3, 2026, the Company completed a private placement consisting of secured promissory notes with an aggregate principal amount of $1.25 million issued at a 20% original issue discount, together with shares of Series C Convertible Preferred Stock. The financing generated aggregate gross proceeds of $1.0 million, of which $600,000 was funded during the first quarter, with the remaining commitments subject to specified financing milestones. The proceeds are intended to be used for working capital and general corporate purposes. |
| ● |
On March 27, 2026, the Company completed an additional private placement of Series D Convertible Preferred Stock that generated gross proceeds of $1.0 million. In connection with the financing, the Company entered into a contingent put option agreement that, upon the satisfaction of specified future financing conditions, provides the investor with the right to require the Company to repurchase a portion of the Series D Preferred Stock during a defined period. Additional information regarding the terms of the preferred stock and related put option is included in the notes to the condensed consolidated financial statements. |
| ● |
Subsequent to quarter end, on April 21, 2026, the Company completed an additional €200,000 (approximately $235,000) investment pursuant to the March 3, 2026 private placement 20% OID secured promissory notes and Series C Convertible Preferred Stock offering.
|
|
|
|
Cash Flow Discussion
The Company uses traditional measures of cash flows, including net cash flows from operating activities, investing activities and financing activities to evaluate its periodic cash flow results.
For the Three Months Ended March 31, 2026 compared to March 31, 2025
The following table reflects the changes in cash flows for the comparative periods:
| Three Months Ended |
||||||||||||
| March 31, |
||||||||||||
| Change |
||||||||||||
| 2026 |
2025 |
($) |
||||||||||
| (in thousands) |
||||||||||||
| Net cash provided by/(used in) operating activities |
(1,169 | ) | (552 | ) | (617 | ) | ||||||
| Net cash provided by/(used in) investing activities |
- | - | - | |||||||||
| Net cash provided by/(used in) financing activities |
1,500 | 471 | 1,029 | |||||||||
| Effect of exchange rate on cash |
- | 1 | (1 | ) | ||||||||
Net Cash Provided by Operating Activities
Net cash used in operating activities for the three months ended March 31, 2026 compared to 2025 increased by $0.6 million. This increase was mainly due to the Company's ability to raise more funds from debt and equity financing during the period, allowing the Company to settle more of its operating accounts and other payables in cash during the period when compared to the three months ended March 31, 2025.
Net Cash Used in Investing Activities
Net cash used in investing activities was zero for the three months ended March 31, 2026 and 2025 because the Company did not pursue cash investments in either period. Given cash constraints, the Company has recently used equity to execute business or asset acquisition activities.
Net Cash Provided by Financing Activities
Net cash provided by continuing financing activities for the three months ended March 31, 2026 compared to 2025 increased by $1.0 million relating to i) $0.6 million of cash received in the March 3, 2026 private placement of 20% OID secured promissory notes, and ii) $0.9 million of net proceeds from the March 27, 2026 sale of Series D to an accredited investor (refer to Notes 10 and 14 for additional details).
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 2025 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 2025 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, 2025. Our exposures to market risk have not changed materially since December 31, 2025.
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 March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
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 $5.7 million in other payables in the financial statements. The parties are currently in further settlement discussions and have reached a tentative agreement in principle to a payment plan which is conditional on an equity funding.
On January 30, 2025 CFGI LLC filed a complaint in the Superior Court of Massachusetts, claiming $358,000 is due and owed to CFGI pursuant to a services agreement by and among the parties, plus fees and costs. CFGI and the Company entered into a settlement agreement for the contractual amount owed for services rendered in the amount of $358,000, whereby the Company agreed to pay to CFGI approximately $10,000 per month commencing June 2, 2025 for a period of three years. The Company has failed to make all but one of the payments and on May 6, 2026 CFGI filed a request for default judgment in the amount of $358,000 and on June 4, 2026 the request was granted. The Company has accrued a liability for this loss contingency in the amount of approximately $358,000 in other payables in the financial statements, which represents the amount owed less the one $10,000 payment made, plus fees and costs of approximately $10,000.
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 $1.5 million is due and owed to SCAF pursuant to a settlement agreement by and among the parties, plus costs, expenses, legal fees, interest and damages, if proven. 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 Company has accrued a liability for this loss contingency in the amount of approximately $2.1 million which represents the contractual amount allegedly owed plus legal costs and accrued interest. 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. The parties are currently in further settlement discussions.
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 $1 million is due and owed to Orrick pursuant to an engagement agreement entered into with AEA, plus interest. In February of 2026, Orrick withdrew its claims, and the arbitration was discontinued. Orrick has threatened to commence an action in state court against the Company and AEG and AEA, but to the Company's knowledge, no such action has been commenced. If an action is commenced, the Company intends to vigorously defend itself in this matter and intends to file 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.
On May 30, 2024, the Company was served a complaint filed in the Circuit Court for Fairfax County, Virginia, by Morgan Franklin Consulting LLC ("MF"), claiming $276,796 is due and owed to MF pursuant to a Master Services Agreement by and among the parties. In October of 2024, MF and the Company entered into a settlement agreement for the contractual amount owed for services rendered through the payment of twelve equal monthly installments commencing immediately, but the Company failed to make any payments. On September 22, 2025, the Court granted summary judgment to MF for the amount claimed as owed. Subsequently, on February 6, 2026 the Court granted MF's motion for late fees in the amount of $153,949. The Company has accrued a liability for this loss contingency in the amount of approximately $430,746, which represents the contractual amount owed plus late fees. The parties are currently in payment plan discussions.
Item 1A. Risk Factors
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 2025 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 2026 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 11,120 shares of unrestricted common stock valued at $150 per share.
On January 2, 2025, the Company issued 1,109 shares of common stock to an accredited debt holder 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 10, 2025, the Company issued 1,162 shares of common stock to an accredited debt holder valued at $128.40 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 January 31, 2025, the Company issued 850 shares of common stock to an accredit debt holder valued at $65.28 per share.
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 9,999 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 55,000 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 1,199,295 shares of the Company’s common stock at an exercise price of $0.85 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 July 15, 2025 a convertible promissory note holder converted $39,710 worth of the October Convertible Note into 30,000 shares of unrestricted common stock valued at $1.32 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.
On June 30, 2026 the Company issued 750 shares of Series F Convertible Preferred Stock to an accredited third party investor, valued at $1,000 per share.
None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. We believe each of these transactions was exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act (and Regulation D promulgated thereunder) as transactions by an issuer not involving any public offering or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer under benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed on the share certificates issued in these transactions. All recipients had adequate access, through their relationships with us, to information about us. The sales of these securities were made without any general solicitation or advertising.
Issuer Purchases of Equity Securities
None.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Item 6. Exhibits
| Exhibit No. |
Description |
|
| 3.1 |
Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation of Alternus Clean Energy, Inc. (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 September 9, 2025) |
|
| 3.2 |
Amended and Restated Bylaws of Alternus Clean Energy, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-41306), filed with the Securities and Exchange Commission on December 22, 2023) |
|
| 3.3 |
Amended And Restated Certificate of Designation of Rights, Preferences and Privileges of Series A Super Voting Preferred Stock (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 27, 2025) |
|
| 3.4 |
Certificate of Designation of Series B Convertible Preferred Stock, dated September 30, 2025 (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 October 6, 2025) |
|
| 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) | |
| 3.7 | Certificate of Designation of Series D Convertible Preferred Stock, dated April 2, 2026 (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K (File No. 001-41306) filed with the Securities and Exchange Commission on March 27, 2026) | |
| 3.8 | Certificate of Designation of Series E Convertible Preferred Stock, dated April 2, 2026 (incorporated by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K (File No. 001-41306) filed with the Securities and Exchange Commission on March 27, 2026) | |
| 3.9* | Certificate of Designation of Series F Convertible Preferred Stock, dated June 30, 2026 | |
| 4.1 |
Form of Warrant Certificate that was issued by the Registrant to Clean Earth Acquisitions Sponsor LLC (incorporated by reference to Exhibit 10.12 to the Registrant’s Registration Statement on Form S-1 (File No. 333-276630), filed with the Securities and Exchange Commission on January 19, 2024) |
|
| 4.2 |
Form of Note issued by the Registrant dated January 21, 2025 (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-41306), filed with the Securities and Exchange Commission on January 24, 2025) |
|
| 4.3 |
Form of Placement Agent Warrant issued by the Registrant on January 21, 2025 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 001-41306), filed with the Securities and Exchange Commission on January 24, 2025) |
|
| 4.4 |
Form of Note. (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No.001-41306), filed with the Securities and Exchange Commission on May 2, 2025) |
|
| 4.5 |
Form of Private Placement Warrant. (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No.001-41306), filed with the Securities and Exchange Commission on May 2, 2025) |
|
| 4.6 |
Form of Note issued by the Registrant to the Investor dated June 6, 2025 (incorporated by reference to the Registrant’s Form 10Q for the three months ended March 31, 2025 (File No. 001-41306), filed with the Securities and Exchange Comission on June 30, 2025) |
|
| 4.7 |
Form of 20% Original Issue Discount Unsecured Convertible Promissory Note issued by Alternus Clean Energy, Inc. ((incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No.001-41306), filed with the Securities and Exchange Commission on September 24, 2025) |
|
| 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) | |
| 4.9* | Form of Note issued June 30, 2026 | |
| 10.1 |
Form of Securities Purchase Agreement dated January 21, 2025 by and between the Registrant and the Purchasers (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-41306), filed with the Securities and Exchange Commission on January 24, 2025) |
|
| 10.2 |
Form of Registration Rights Agremeent dated January 21, 2025 by and among the Registrant and the Purchasers (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-41306), filed with the Securities and Exchange Commission on January 24, 2025) |
|
| 10.3 |
Form of Lock-Up Agreement by and among the Company and the Purchasers dated January 21, 2025 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 001-41306), filed with the Securities and Exchange Commission on January 24, 2025) |
|
| 10.4 |
Form of Placement Agency Agreement by and among the Company and the Purchasers (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K (File No. 001-41306), filed with the Securities and Exchange Commission on January 24, 2025) |
|
| 10.5 |
Form of Note Purchase Agreement, by and between the Company and the Investor. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No.001-41306), filed with the Securities and Exchange Commission on May 2, 2025) |
|
| 10.6 |
Letter Agreement by and between the Company and the Investor. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No.001-41306), filed with the Securities and Exchange Commission on May 2, 2025) |
|
| 10.7 |
Rescission and Release Agreement dated May 1, 2025 by and between the Company and LiiON, LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No.001-41306), filed with the Securities and Exchange Commission on May 2, 2025) |
|
| 10.8 |
Consulting Agreement dated May 1, 2025 by and between the Company and Assure Power LLC (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K (File No.001-41306), filed with the Securities and Exchange Commission on May 2, 2025) |
|
| 10.9 |
Settlement Agreement and Stipulation dated April 28, 2025 by and between the Company and Southern Point Capital Corporation (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K (File No.001-41306), filed with the Securities and Exchange Commission on May 2, 2025) |
| 10.10 |
Note Purchase Agreement by and among the Registrant and Investor dated June 6, 2025 (incorporated by reference to the Registrant’s Form 10Q for the three months ended March 31, 2025 (File No. 001-41306), filed with the Securities and Exchange Comission on June 30, 2025) |
|
| 10.11 |
Form of Note Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-41306), filed with the Securities and Exchange Commission on September 24, 2025) |
|
| 10.12 |
Joint Venture Operating Agreement, by and among Alternus Clean Energy Inc. and Hover Energy LLC dated September 30, 2025 (incorporated by reference to Exhibit 10.1 the Registrant’s Current Report on Form 8-K (File No. 001-41306), filed with the Securities and Exchange Commission on October 6, 2025) |
|
| 10.13 |
Securities Purchase Agreement dated September 30, 2025 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-41306), filed with the Securities and Exchange Commission on October 6, 2025) |
|
| 10.14 |
Settlement Agreement dated September 30, 2025 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 001-41306), filed with the Securities and Exchange Commission on October 6, 2025) |
|
| 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) | |
| 10.17* | Form of Note Purchase Agreement dated June 30, 2026 | |
| 31.1* |
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
| 31.2** |
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
| 32.1** |
Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
| 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. |
SIGNATURES
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: July 17, 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 |
July 17, 2026 |
||
| Vincent Browne |
(Principal Executive Officer) and Interim Chief Financial Officer (Principal Financial and Accounting Officer) |
|||
| /s/ Aaron T. Ratner |
Director |
July 17, 2026 |
||
| Aaron T. Ratner |
||||
| /s/ Nicholas Parker |
Director |
July 17, 2026 |
||
| Nicholas Parker |
||||
| /s/ Tone Bjornov |
Director |
July 17, 2026 |
||
| Tone Bjornov |
||||
| /s/ Rolf Wikborg |
Director |
July 17, 2026 |
||
| Rolf Wikborg |
||||
| /s/ John Thomas |
Director |
July 17, 2026 |
||
| John Thomas |