UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _________ to __________

COMMISSION FILE NUMBER 001-41306

ALTERNUS CLEAN ENERGY, INC.

(Exact name of registrant as specified in its charter)

Delaware		87-1431377
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

360 Kingsley Park Drive, Suite 250 Fort Mill, South Carolina		(803) 280-1468
(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
Common Stock, par value $0.0001 per share		ALCE		The Nasdaq Stock Market LLC

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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	☐
Non-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 ☐ No ☒

As of May 21, 2024, the registrant had a total of 81,396,664 shares of its common stock, par value $0.0001 per share, issued and outstanding.

ALTERNUS CLEAN ENERGY, INC.

INDEX TO FORM 10-Q

	Page #
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	1
Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	1
Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023	2
Consolidated Statements of Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2024 and 2023	3
Consolidated Statements of Cash Flows for the Three months Ended March 31, 2024 and 2023	4
Notes to Consolidated Financial Statements	6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3. Quantitative and Qualitative Disclosures About Market Risk	49
Item 4. Controls and Procedures	49
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	51
Item 1A. Risk Factors	51
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3. Defaults Upon Senior Securities	52
Item 4. Mine Safety Disclosures	52
Item 5. Other Information	52
Item 6. Exhibits	52
Signatures	53

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, 2023, 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

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(Unaudited)

	As of March 31			As of December 31
	2024			2023
ASSETS
Current Assets
Cash and cash equivalents	$	1,381		$	4,618
Accounts receivable, net		2,119			651
Unbilled energy incentives earned		6,048			5,607
Prepaid expenses and other current assets		3,023			3,344
Taxes recoverable		683			631
Restricted cash		841			19,161
Current discontinued assets held for sale		-			80,943
Total Current Assets		14,095			114,955

Property and equipment, net		61,605			61,302
Right of use asset		1,303			1,330
Other receivable		1,000			1,483
Capitalized development cost and other long-term assets, net		6,351			6,216
Total Assets	$	84,354		$	185,286

LIABILITIES AND SHAREHOLDER’’ EQUITY (DEFICIT)
Current Liabilities
Accounts payable	$	10,494		$	5,084
Accrued liabilities		19,032			24,410
Taxes payable		13			14
Deferred income		6,048			5,607
Operating lease liability		177			175
Green bonds		87,264			166,122
Convertible and non-convertible promissory notes, net of debt issuance costs		30,615			31,420
Due to affiliate		1,046			-
Current discontinued liabilities held for sale		-			14,259
Total Current Liabilities		154,689			247,091

Operating lease liability, net of current portion		1,188			1,252
Asset retirement obligations		196			197
Total Liabilities		156,073			248,540

Shareholders’ Deficit
Preferred stock, $0.0001 par value, 1,000,000 authorized as of March 31, 2024 and December 31, 2023. 0 issued and outstanding as of March 31, 2024 and December 31, 2023.		-			-
Common Stock, $0.0001 par value, 150,000,000 authorized as of March 31, 2024 and December 31, 2023; 81,396,664 issued and outstanding as of March 31, 2024 and 71,905,363 issued and outstanding as of December 31, 2023.		8			7
Additional paid in capital		28,223			27,874
Foreign Currency Translation Reserve		(4,156	)		(2,924	)
Accumulated deficit		(95,794	)		(88,211	)
Total Shareholders’ Deficit		(71,719	)		(63,254	)
Total Liabilities and Shareholders’ Deficit	$	84,354		$	185,286

The accompanying notes are an integral part of these consolidated financial statements

ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)

(Unaudited)

	Three Months Ended March 31
	2024			2023

Revenues	$	2,180		$	3,846

Operating Expenses
Cost of revenues		(834	)		(1,015	)
Selling, general and administrative		(3,747	)		(1,725	)
Depreciation, amortization, and accretion		(568	)		(842	)
Development Costs		(7	)		(111	)
Total operating expenses		(5,156	)		(3,693	)

Income/(loss) from operations		(2,976	)		153

Other income/(expense):
Interest expense		(4,984	)		(3,468	)
Fair value movement of FPA Asset		(483	)		-
Other expense		(223	)		(40	)
Other income		7			-
Total other expenses		(5,683	)		(3,508	)
Loss before provision for income taxes		(8,659	)		(3,355	)
Income taxes		-			-
Net loss from continuing operations		(8,659	)		(3,355	)

Discontinued operations:
Loss from operations of discontinued business component		(1,074	)		(1,897	)
Gain on sale of discontinued business components		2,150			-
Net income/(loss) from discontinued operations		1,076			(1,897	)
Net loss for the period	$	(7,583	)	$	(5,252	)

Net loss attributable to common stockholders, basic		(8,659	)		(3,355	)
Net loss per share attributable to common stockholders, basic		(0.13	)		(0.06	)
Net loss per share attributable to common stockholders, diluted		(0.13	)		(0.06	)
Weighted-average common stock outstanding, basic		65,077,094			57,500,000
Weighted-average common stock outstanding, diluted		65,077,094			57,500,000

Comprehensive loss:
Net loss	$	(7,583	)	$	(5,252	)
Foreign currency translation adjustment		(1,232	)		(104	)
Comprehensive loss	$	(8,815	)	$	(5,356	)

The accompanying notes are an integral part of these consolidated financial statements

ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share amounts)

(Unaudited)

	Preferred Stock				Common Stock				Additional Paid-In			Foreign Currency Translation			Accumulated			Total Shareholders’
	Shares		Amount		Shares		Amount		Capital			Reserve			Deficit			Equity
Balance at January 1, 2023		-	$	-		57,500,000	$	6	$	19,797		$	(3,638	)	$	(18,747	)	$	(2,582	)
Distribution to stockholder		-		-		-		-		(1,853	)		-			-			(1,853	)
Contribution from stockholder		-		-		-		-		2,015			-			-			2,015
Foreign currency translation adjustment		-		-		-		-		-			(104	)		-			(104	)
Net Loss		-		-		-		-		-			-			(5,252	)		(5,252	)
Balance at March 31, 2023		-	$	-		57,500,000	$	6	$	19,959		$	(3,742	)	$	(23,999	)	$	(7,776	)

	Preferred Stock				Common Stock				Additional Paid-In			Foreign Currency Translation			Accumulated			Total Shareholders’
	Shares		Amount		Shares		Amount		Capital			Reserve			Deficit			Equity
Balance at January 1, 2024		-	$	-		71,905,363	$	7	$	27,874		$	(2,924	)	$	(88,211	)	$	(63,254	)
Settlement of Related Party Debt for Shares		-		-		7,990,000		1		9,836			-			-			9,837
Conversion of Debt		-		-		1,320,000		-		1,029			-			-			1,029
Merger Costs – Settlement of Related Party Debt and Conversion of Debt		-		-		-		-		(10,633	)		-			-			(10,633	)
Stock Compensation for Third Party Services		-		-		181,301		-		117			-			-			117
Foreign currency translation adjustment		-		-		-		-		-			(1,232	)		-			(1,232	)
Net Loss		-		-		-		-		-			-			(7,583	)		(7,583	)
Balance at March 31, 2024		-	$	-		81,396,664	$	8	$	28,223		$	(4,156	)	$	(95,794	)	$	(71,719	)

The accompanying notes are an integral part of these consolidated financial statements

ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, except share and per share data)

(Unaudited)

	Three Months Ended March 31,
	2024			2023
Cash Flows from Operating Activities
Net loss from continuing operations	$	(8,659	)	$	(3,355	)
Adjustments to reconcile net income/(loss) to net cash provided used in operations:
Depreciation, amortization and accretion		568			842
Amortization of debt discount		698			1,117
Credit loss expense		(3	)		-
Share-based compensation to third parties		117			-
Gain (loss) on foreign currency exchange rates		64			113
Fair value movement of FPA Asset		483			-
Loss on disposal of asset		1,348			-
Non-cash operating lease assets		(8	)		31
Changes in assets and liabilities:
Accounts receivable and other short-term receivables		(89	)		2,056
Prepaid expenses and other assets		199			(491	)
Accounts payable		2,155			278
Accrued liabilities		(3,292	)		599
Operating lease liabilities		(48	)		(11	)
Payable to affiliate		1,039			-
Net Cash provided by (used in) Operating Activities	$	(5,428	)	$	1,179
Net Cash provided by (used in) Operating Activities - Discontinued Operations		(2,085	)		(805	)

Cash Flows from Investing Activities:
Purchases of property and equipment		(1,486	)		(124	)
Sales of property and equipment		67,540			107
Capitalized Cost		(228	)		(241	)
Construction in Process		(340	)		(770	)
Net Cash provided by (used in) Investing Activities	$	65,486		$	(1,028	)
Net Cash provided by (used in) Investing Activities - Discontinued Operations		-			(52	)

Cash Flows from Financing Activities:
Proceeds from debt		1,109			1,396
Debt Issuance Cost		(315	)		(130	)
Payments of debt principal		(77,682	)		-
Distributions to parent		-			(403	)
Contributions from parent		253			1,074
Net Cash provided by (used in) Financing Activities	$	(76,635	)	$	1,937
Net Cash provided by (used in) Financing Activities - Discontinued Operations		(3,151	)		(325	)

Effect of exchange rate on cash		(528	)		215
Net increase (decrease) in cash, cash equivalents and restricted cash	$	(22,341	)	$	1,121
Cash, cash equivalents, and restricted cash beginning of the year		24,563			7,747
Cash, cash equivalents, and restricted cash end of the year	$	2,222		$	8,868

Cash Reconciliation
Cash and cash equivalents		1,381			2,090
Restricted cash		841			6,778
Cash, cash equivalents, and restricted cash end of the year	$	2,222		$	8,868

The accompanying notes are an integral part of these consolidated financial statements

ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED SUPPLEMENTAL STATEMENTS OF CASH FLOW

(Unaudited)

	Three Months Ended March 31,
	2024		2023
	(in thousands)
Supplemental Cash Flow Disclosure
Cash paid during the period for:
Interest (net of capitalized interest of 47 and 64 respectively)		5,287		1,920
Taxes		526		777
Non-cash financing activities:
Shares issued for settlement of debt		9,836		-
Shares issued for conversion of debt		1,029		-
Shares issued for stock compensation to third parties		117		-

The accompanying notes are an integral part of these consolidated financial statements

ALTERNUS CLEAN ENERGY, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Formation

Alternus Clean Energy, Inc. (the “Company”) was incorporated in Delaware on May 14, 2021 and was originally known as Clean Earth Acquisitions Corp. (“Clean Earth”).

On October 12, 2022, Clean Earth entered into a Business Combination Agreement, as amended by that certain First Amendment to the Business Combination Agreement, dated as of April 12, 2023 (the “First BCA Amendment”) (as amended by the First BCA Amendment, the “Initial Business Combination Agreement”), and as amended and restated by that certain Amended and Restated Business Combination Agreement, dated as of December 22, 2023 (the “A&R BCA”) (the Initial Business Combination Agreement, as amended and restated by the A&R BCA, the “Business Combination Agreement”), by and among Clean Earth, Alternus Energy Group Plc (“AEG”) and the Sponsor. Following the approval of the Initial Business Combination Agreement and the transactions contemplated thereby at the special meeting of the stockholders of Clean Earth held on December 4, 2023, the Company consummated the Business Combination on December 22, 2023. In accordance with the Business Combination Agreement, Clean Earth issued and transferred 57,500,000 shares of common stock of Clean Earth, par value $0.0001 per share, to AEG, and AEG transferred to Clean Earth, and Clean Earth received from AEG, all of the issued and outstanding equity interests in the Acquired Subsidiaries (as defined in the Business Combination Agreement) (the “Equity Exchange,” and together with the other transactions contemplated by the Business Combination Agreement, the “Business Combination”). In connection with the Closing, the Company changed its name from Clean Earth Acquisition Corp. to Alternus Clean Energy, Inc.

Clean Earth’s 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 is considered the accounting acquirer and these consolidated financial statements represent a continuation of AEG’s financial statements. 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 forty-two operating subsidiaries as of March 31, 2024:

Subsidiary	Principal Activity	Date Acquired / Established	ALCE Ownership	Country of Operations
Power Clouds S.r.l.	SPV	31 March 2015	Solis Bond Company DAC	Romania
F.R.A.N. Energy Investment S.r.l.	SPV	31 March 2015	Solis Bond Company DAC	Romania
PC-Italia-01 S.r.l.	Sub-Holding SPV	15 May 2015	AEG MH 02 Limited	Italy
PC-Italia-03 S.r.l.	SPV	1 July 2020	AEG MH 02 Limited	Italy
PC-Italia-04 S.r.l.	SPV	15 July 2020	AEG MH 02 Limited	Italy
Solis Bond Company DAC	Holding Company	16 October 2020	AEG JD 03 Limited	Ireland
ALT US 03, LLC	LLC	4 May 2022	ALT US 03 LLC	USA
Alternus Energy Americas Inc.	Holding Company	10 May 2021	Alternus Energy Group Pl	USA
LJG Green Source Energy Beta S.r.l	SPV	29 July 2021	Solis Bond Company DAC	Romania
Ecosfer Energy S.r.l.	SPV	30 July 2021	Solis Bond Company DAC	Romania
Lucas EST S.r.l.	SPV	30 July 2021	Solis Bond Company DAC	Romania
Risorse Solari I S.r.l.	SPV	28 September 2019	AEG MH 02 Limited	Italy
Risorse Solari III S.r.l.	SPV	3 August 2021	AEG MH 02 Limited	Italy
Alternus Iberia S.L.	SPV	4 August 2021	AEG MH 02 Limited	Spain
AED Italia-01 S.r.l.	SPV	22 October 2021	AEG MH 02 Limited	Italy
AED Italia-02 S.r.l.	SPV	22 October 2021	AEG MH 02 Limited	Italy
AED Italia-03 S.r.l.	SPV	22 October 2021	AEG MH 02 Limited	Italy
AED Italia-04 S.r.l.	SPV	22 October 2021	AEG MH 02 Limited	Italy
AED Italia-05 S.r.l.	SPV	22 October 2021	AEG MH 02 Limited	Italy
ALT US 01 LLC	SPV	6 December 2021	Alternus Energy Americas Inc.	USA
AEG MH 01 Limited	Holding Company	8 March 2022	Alternus Lux 01 S.a.r.l.	Ireland
AEG MH 02 Limited	Holding Company	8 March 2022	AEG JD 03 Limited	Ireland
ALT US 02 LLC	Holding Company	8 March 2022	Alternus Energy Americas Inc.	USA
AEG JD 01 Limited	Holding Company	16 March 2022	AEG MH 03 Limited	Ireland
Alternus Europe Limited (f/k/a AEG JD 03 Limited)	Holding Company	21 March 2022	Alternus Lux 01 S.a.r.l.	Ireland
Alt Spain 03, S.L.U.	SPV	31 May 2022	Alt Spain Holdco S.L.	Spain
AEG MH 03 Limited	Holding Company	10 June 2022	AEG MH 01 Limited	Ireland
Lightwave Renewables, LLC	SPV	29 June 2022	ALT US 02 LLC	USA
Alt Spain Holdco, S.L.U.	Holding Company	Acquired 14 July 2022	AEG MH 02 Limited	Spain
AED Italia-06 S.r.l.	SPV	2 August 2022	AEG MH 02 Limited	Italy
AED Italia-07 S.r.l.	SPV	2 August 2022	AEG MH 02 Limited	Italy
AED Italia-08 S.r.l.	SPV	5 August 2022	AEG MH 02 Limited	Italy
ALT US 04 LLC	Holding Company	14 September 2022	Alternus Energy Americas Inc.	USA
Alternus LUX 01 S.a.r.l.	Holding Company	5 October 2022	Alternus Energy Group Plc	Luxembourg
Alt Spain 04, S.L.U.	SPV	May 2022	Alt Spain Holdco, S.L.U.	Spain
Alt Alliance LLC	Holding Company	September 2023	Alternus Energy Amercias Inc.	USA
ALT US 05 LLC	Holding Company	September 2023	Alternus Energy Americas Inc.	USA
ALT US 06 LLC	Holding Company	October 2023	Alternus Energy Americas Inc.	USA
ALT US 07 LLC	Holding Company	November 2023	Alternus Energy Americas Inc.	USA
AEG MH 04 Limited	Holding Company	January 2024	AEG MH 04 Limited	Ireland
ALT US 08 LLC	Holding Company	January 2024	Alternus Energy Americas Inc.	USA
ALT US AM LLC	Holding Company	March 2024	Alternus Energy Americas Inc.	USA

2. Going Concern and Management’s Plans

The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the Condensed Consolidated Financial Statements are issued. Based on its recurring losses from operations since inception and continued cash outflows from operating activities (all as described below), the Company has concluded that there is substantial doubt about its ability to continue as a going concern for a period of one year from the date that these Condensed Consolidated Financial Statements were issued.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements during the period ended March 31, 2024, the Company had net loss from continuing operations of ($8.7) million and a net loss of ($

SEC Form 10-Q filed by Alternus Clean Energy Inc.