Alternus Clean Energy : Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
ALCE
Published on 04/27/2026 at 06:10 am EDT
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report and in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 27, 2025. In addition to historically consolidated financial information, this discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to these differences include, but are not limited to, those identified below, and those discussed in "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024, in "Item 1A. Risk Factors" in Part II of this Quarterly Report on Form 10-Q and in any subsequent filing we make with the SEC.
Overview
We are a renewable energy company committed to advancing sustainable solutions. With a focus on utility-scale projects, such as utility solar parks, microgrids and battery storage, we aim to deliver comprehensive, clean energy across Europe and America. Through strategic investments, we are building a portfolio poised to lead the transition to a sustainable energy future.
The Company was incorporated in Delaware on May 14, 2021, and was originally known as Clean Earth Acquisitions Corp. ("Clean Earth").
On October 12, 2022, Clean Earth entered into a Business Combination Agreement, as amended by that certain First Amendment to the Business Combination Agreement, dated as of April 12, 2023 (the "First BCA Amendment") (as amended by the First BCA Amendment, the "Initial Business Combination Agreement"), and as amended and restated by that certain Amended and Restated Business Combination Agreement, dated as of December 22, 2023 (the "A&R BCA") (the Initial Business Combination Agreement, as amended and restated by the A&R BCA, the "Business Combination Agreement"), by and among Clean Earth, Alternus Energy Group Plc ("AEG"), and the Sponsor. Following the approval of the Initial Business Combination Agreement and the transactions contemplated thereby at the special meeting of the stockholders of Clean Earth held on December 4, 2023, the Company consummated the Business Combination on December 22, 2023. In accordance with the Business Combination Agreement, Clean Earth issued 11,500 shares of common stock of Clean Earth, par value $0.0001 per share, to AEG, and AEG transferred to Clean Earth, and Clean Earth received from AEG, all of the issued and outstanding equity interests in the Acquired Subsidiaries (as defined in the Business Combination Agreement) (the "Equity Exchange," and together with the other transactions contemplated by the Business Combination Agreement, the "Business Combination"). In connection with the Closing, the Company changed its name from Clean Earth Acquisition Corp. to Alternus Clean Energy, Inc.
The Company plans to use annual recurring revenues ("ARR") as a key metric in its financial management information and believes this method better reflects the long-term stability of operations in the future. Annual recurring revenues are defined as the estimated future revenue generated by operating solar parks based on the remaining term by the price received per mega-watt hour (MWh) of energy produced multiplied by the estimated production from each solar park over a full year of operation. It should be noted that the actual revenues reported by the Company in a particular year may be lower than the annual recurring revenues because not all parks may be revenue generating for the full year in their first year of operation. The Company must also account for the timing of acquisitions that take place throughout the financial year.
Impacts of the Ukraine/Russia Conflict
The geopolitical situation in Eastern Europe intensified on February 24, 2022, with Russia's invasion of Ukraine. The war between the two countries continues to evolve as military activity proceeds and additional sanctions are imposed. In addition to the human toll and impact of the events on entities that have operations in Russia, Ukraine, or neighboring countries (e.g., Belarus, Poland, Romania) or that conduct business with their counterparties, the war is increasingly affecting economic and global financial markets and exacerbating ongoing economic challenges, including issues such as rising inflation and global supply-chain disruption. Although we no longer have physical facilities in Romania, the Company has seen fluctuations in energy rates due to inflation, increased interest rates, and other macro-economic factors.
Known trends or Uncertainties
The Company has a working capital deficiency and negative equity, and management has determined there is doubt about the Company's ability to continue as a going concern, if planned financing and/or equity raises do not occur and/or if the terms of financings or equity raises are not acceptable to the Company. Refer to Footnote 2 of the accompanying financial statements.
The Company is currently working on several processes to address the going concern issue. We are working with multiple global banks and funds to secure the necessary corporate and project level financing to execute our transatlantic business plan and we have sold or otherwise discontinued operations in order to eliminate significant amounts of debt and other obligations.
Competitive Strengths
The Company believes the following competitive strengths have contributed and will continue to contribute to its success:
●
Fully Integrated Clean Energy Provider Model:
We operate as a comprehensive energy provider, managing the full renewable energy value chain across both utility scale and behind-the-meter microgrid markets. This "develop-to-own or sell" strategy enables the Company to capture greater margin and retain control from early-stage development through to long-term operations or strategic monetization, unlike peers focused solely on operational asset acquisitions.
●
Experienced and Adaptive Management Team:
The leadership team brings decades of collective experience in capital markets, energy infrastructure, project development, and public company governance. Recent partnerships also bolster technical and operational capabilities in areas such as microgrids, reinforcing the Company's strategic direction.
●
Capital-Efficient Growth Through Project-Level Leverage:
Our approach emphasizes projects with minimal to no owner equity requirements, particularly in the U.S. where tax equity (ITC) and long-term debt can fund up to 100% of project costs. This model allows for rapid, capital-efficient scaling and high-return deployments, freeing up corporate equity for strategic growth.
●
Transatlantic Market Footprint Mitigates Risk:
With operations and revenue targets split between North America and Europe by 2029, Alternus is uniquely positioned to reduce geopolitical and regulatory concentration risk. The diversified presence enhances resilience and positions the Company to capture incentives from multiple clean energy policy regimes.
●
Unique Microgrid Technology and Offerings:
Through partnerships such as with Hover Energy, Alternus delivers differentiated microgrid solutions combining rooftop wind, solar, storage, and AI-based energy management systems. This provides a compelling and exclusive offering, particularly in the high-growth commercial and industrial market segments.
●
Proven International Expansion and Partner Network:
The Company's historical ability to enter new geographies and establish strong local partnerships is expected to enable consistent expansion across Europe and North America once the Company has completed plans to improve and stabilize its balance sheet. These local relationships and Alternus' development track record provide a competitive edge in securing grid access, permits, and financing in highly competitive markets.
●
Flexible and Technology Agnostic Strategy:
Alternus is not tied to specific technologies or suppliers, allowing it to source best-in-class components and services globally. This flexibility supports cost optimization and future proofing as new solutions and innovations emerge in the renewable energy space.
Vision and Strategy
We are expanding beyond our core utility solar operations by integrating microgrids and on-site generation systems that provide customers with energy resilience, grid independence, and long-term cost savings. These customer deployed systems enable faster revenue realization and lower capital intensity compared to utility scale projects.
To accelerate this transition, we are actively forming strategic partnerships and pursuing targeted ventures and acquisitions in high-growth areas such as battery storage and circular economy energy systems. These additions enhance our technical capabilities, diversify revenue streams, and strengthen our ability to meet the rising demand for consistent power driven by AI, data centers, and industrial onshoring.
This strategy builds on our foundation as an integrated independent power producer (IPP) with experience developing a portfolio of renewable energy assets across North America and Europe. By owning and operating long-term contracted energy projects, we generate stable, recurring income while unlocking lasting value for shareholders.
With strong regulatory tailwinds and rapidly growing global demand for sustainable and reliable energy, Alternus is well positioned to scale as a more comprehensive energy provider, broadening our market reach, enhancing financial performance, and advancing our mission to power a cleaner, more resilient energy future.
To achieve its goals, the Company intends to pursue the following strategies:
●
Continue our growth strategy of acquiring utility scale clean energy (e.g., solar, battery storage and other technologies) projects that are either in development, in construction, newly installed or already operational, in order to build a diversified portfolio across multiple geographies;
●
Pursue expansion into complementary or strategic market segments either through M&A or strategic partnerships that enhance and diversify our core energy generation business. These additional segments are designed to create independent income streams and strengthen our asset platform;
●
Strengthen long-term relationships with high-quality developers and other partners, both local and international, to reduce competition in acquisition pricing and provide Alternus with exclusive rights to projects at varying stages of development. This provides the Company with a better understanding of the markets we address and, in some cases, enables it to contract for projects in a less competitive environment;
●
Expand our US and European portfolio in regions with attractive returns on investments, and increase the Company's long-term recurring revenue and cash flow;
●
Secure strong and predictable cash flows via long-term FIT (feed-in tariff) contracts combined with the Company's efficient operations. This allows for high leverage capacity and flexibility of debt structuring. Our strategy is to reinvest of project cash flows into additional projects to provide non-dilutive capital for Alternus to "self-fund" organic growth;
●
Optimization of financing sources to support long-term growth and profitability in a cost-efficient manner;
●
As a renewable energy company, we are committed to growing our portfolio of projects in the most sustainable way possible. Alternus is highly aware and conscious of the ever growing need to mitigate the effects of climate change which is evident by its core strategy. As the Company grows, it intends to establish a formal sustainability policy framework in order to ensure that all project development is carried out in a sustainable manner, mitigating any potential local and environmental impacts identified during the development, construction, and operational process.
Given the long-term nature of our business, Alternus operates with a strategic focus on sustained value creation rather than short-term quarterly performance. Our approach prioritizes maximizing long-term shareholder returns by developing projects from the ground up and acquiring assets at various stages of maturity, whether in development, under construction, or already operational. In parallel, we are expanding into complementary market segments that enhance our operational capabilities and financial performance, strengthening the foundation for consistent, scalable growth.
Key Factors that Significantly Affect Company Results of Operations and Business
The Company expects the following factors will affect its results of operations - inflation and energy rate fluctuations.
Offtake Contracts
Company revenue is primarily a function of the volume of electricity generated and sold by its renewable energy facilities as well as, where applicable, the sale of green energy certificates and other environmental attributes related to energy generation. The Company's current portfolio of renewable energy facilities is generally contracted under long-term FIT programs or PPAs with investment grade counterparties. Pricing of the electricity sold under these FITs and PPAs is generally fixed for the duration of the contract, although some of its PPAs have price escalators based on an index (such as the consumer price index) or other rates specified in the applicable PPA.
Project Operations and Generation Availability
The Company revenue is a function of the volume of electricity generated and sold by Company renewable energy facilities. The volume of electricity generated and sold by the Company's renewable energy facilities during a particular period is impacted by the number of facilities that have achieved commercial operations, as well as both scheduled and unexpected repair and maintenance required to keep its facilities operational.
The costs the Company incurs to operate, maintain, and manage renewable energy facilities also affect the results of operations. Equipment performance represents the primary factor affecting the Company's operating results because equipment downtime impacts the volume of the electricity that the Company can generate from its renewable energy facilities. The volume of electricity generated and sold by the Company's facilities will also be negatively impacted if any facilities experience higher than normal downtime as a result of equipment failures, electrical grid disruption or curtailment, weather disruptions, or other events beyond the Company's control.
Seasonality and Resource Variability
The amount of electricity produced and revenues generated by the Company's solar generation facilities is dependent in part on the amount of sunlight, or irradiation, where the assets are located. As shorter daylight hours in winter months result in less irradiation, the electricity generated by these facilities will vary depending on the season. Irradiation can also be variable at a particular location from period to period due to weather or other meteorological patterns, which can affect operating results. As most of the Company's solar power plants are in the Northern Hemisphere, the Company expects its current solar portfolio's power generation to be at its lowest during the first and fourth quarters of each year. Therefore, the Company expects first and fourth quarter solar revenue to be lower than in other quarters. As a result, on average, each solar park generates approximately 15% of its annual revenues in Q1 every year, 35% in each of Q2 and Q3, and the remaining 15% in Q4. The Company's costs are relatively flat over the year, and so the Company will always report lower profits in Q1 and Q4 as compared to the middle of the year.
Interest Rates on Company Debt
Interest rates on the Company's senior debt are mostly variable for the full term of finance at interest rates ranging from 6% to 30%.
In addition to the project specific senior debt, the Company uses a small number of promissory notes in order to reduce, and in some cases eliminate, the requirement for the Company to provide equity in the acquisition of the projects.
Cash Distribution Restrictions
In certain cases, the Company, through its subsidiaries, obtain project-level or other limited or non-recourse financing for Company renewable energy facilities which may limit these subsidiaries' ability to distribute funds to the Company for corporate operational costs. These limitations typically require that the project-level cash is used to meet debt obligations and fund operating reserves of the operating subsidiary. These financing arrangements also generally limit the Company's ability to distribute funds generated from the projects if defaults have occurred or would occur with the giving of notice or the lapse of time, or both.
Renewable Energy Facility Acquisitions and Investments
The Company's long-term growth strategy is dependent on its ability to acquire additional renewable power generation assets. This growth is expected to be comprised of additional acquisitions across the Company's scope of operations both in its current focus countries and new countries. Our operating revenues are insufficient to fund our operations and our assets already are pledged to secure our indebtedness to various third party secured creditors, respectively. The unavailability of additional financing could require us to delay, scale back, or terminate our acquisition efforts as well as our own business activities, which would have a material adverse effect on the Company and its viability and prospects.
Management believes renewable power has been one of the fastest growing sources of electricity generation globally over the past decade. The Company expects the renewable energy generation segment to continue to offer growth opportunities driven by:
●
The continued reduction in the cost of solar and other renewable energy technologies, which the Company believes will lead to grid parity in an increasing number of markets;
●
Distribution charges and the effects of an aging transmission infrastructure, which enable renewable energy generation sources located at a customer's site, or distributed generation, to be more competitive with, or cheaper than, grid-supplied electricity;
●
The replacement of aging and conventional power generation facilities in the face of increasing industry challenges, such as regulatory barriers, increasing costs of and difficulties in obtaining and maintaining applicable permits, and the decommissioning of certain types of conventional power generation facilities, such as coal and nuclear facilities;
●
The ability to couple renewable energy generation with other forms of power generation and/or storage, creating a hybrid energy solution capable of providing energy on a 24/7 basis while reducing the average cost of electricity obtained through the system;
●
The desire of energy consumers to lock in long-term pricing for a reliable energy source;
●
Renewable energy generation's ability to utilize freely available sources of fuel, thus avoiding the risks of price volatility and market disruptions associated with many conventional fuel sources;
●
Environmental concerns over conventional power generation; and
●
Government policies that encourage the development of renewable power, such as country, state or provincial renewable portfolio standard programs, which motivate utilities to procure electricity from renewable resources.
Access to Capital Markets
The Company's ability to acquire additional clean power generation assets and manage its other commitments will likely be dependent on its ability to raise or borrow additional funds and access debt and equity capital markets, including the equity capital markets, the corporate debt markets, and the project finance market for project-level debt. The Company accessed the capital markets several times in 2024 and during the nine months ended September 30, 2025, in connection with long-term project debt, and corporate loans and equity. Limitations on the Company's ability to access the corporate and project finance debt and equity capital markets in the future on terms that are accretive to its existing cash flows would be expected to negatively affect its results of operations, business, and future growth.
Foreign Exchange
The Company's operating results are reported in United States (USD) Dollars. The Company's current project revenue and expenses are generated in other currencies, including the Euro (EUR), the Romanian Lei (RON), and the Polish Zloty (PLN). This mix may continue to change in the future if the Company elects to alter the mix of its portfolio within its existing markets or elect to expand into new markets. In addition, the Company's investments (including intercompany loans) in renewable energy facilities in foreign countries are exposed to foreign currency fluctuations. As a result, the Company expects revenues and expenses will be exposed to foreign exchange fluctuations in local currencies where the Company's renewable energy facilities are located. To the extent the Company does not hedge these exposures, fluctuations in foreign exchange rates could negatively impact profitability and financial position.
Key Metrics
Operating Metrics
The Company regularly reviews several operating metrics to evaluate its performance, identify trends affecting its business, formulate financial projections and make certain strategic decisions. The Company considers a solar park operating when it has achieved connection and begins selling electricity to the energy grid.
Operating Nameplate capacity
The Company measures the electricity-generating production capacity of its renewable energy facilities in nameplate capacity. The Company expresses nameplate capacity in direct current (DC), for all facilities. The size of the Company's renewable energy facilities varies significantly among the assets comprising its portfolio.
The Company believes the combined nameplate capacity of its portfolio is indicative of its overall production capacity and period to period comparisons of its nameplate capacity are indicative of the growth rate of its business. The production capacity listed below for the United States and Romania reflect the actual production from those parks during the nine months ended September 30, 2025 and 2024. The table below outlines the Company's operating renewable energy facilities as of September 30, 2025 and 2024:
Nine Months Ended
September 30,
MW (DC) Nameplate capacity by country - continuing operations
2025
2024
United States
Total
Discontinued Operations:
Netherlands
Poland
Romania
Total
Total for the period
Consolidated Results of Operations
The following table illustrates the consolidated results of continuing operations for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2025
2024
2025
2024
Revenues
Operating Expenses
Cost of revenues
Selling, general and administrative
Depreciation, amortization, and accretion
Development costs
Gain on sale of subsidiaries
Total operating income/ (expenses)
Income/(loss) from operations
Other income (expense):
Interest expense
Fair value movement of FPA Asset
Fair value movement of convertible notes
Debt restructuring costs
Fair value movement of warrant derivative liability
Gain on settlement of payables
Loss on settlement of liabilities
Loss on settlement of SAA with Hover
Loss on issuance of debt
Loss on extinguishment of debt
Provision for loss from related party
Other expense
Other income
Income / (Loss) from continuing operations
Discontinued operations:
Loss from operations of discontinued business component
Gain on sale of discontinued operations, net assets
Income/(loss) from discontinued operations
Net income /(loss)
Net income / (loss)
Foreign currency translation adjustment
Comprehensive income/(loss)
Continuing operations, basic and diluted
Discontinued operations, basic and diluted
Total loss per share of common stock, basic and diluted
Weighted-average common stock outstanding, basic & diluted
Three and Nine Months Ended September 30, 2025 compared to September 30, 2024.
The Company generates its revenue from the sale of electricity from its solar parks. The revenue is from FIT, PPA, REC, or in the day-ahead or spot market.
Revenue
Revenue for the three and nine months ended September 30, 2025 and 2024 were as follows:
Three Months Ended September 30,
Change
Change
Revenue by Country
2025
2024
($)
(%)
(in thousands)
United States
Total for continuing operations
Discontinued Operations:
Netherlands
Poland
Romania
Total for discontinued operations
Total for the period
Nine Months Ended September 30,
Change
Change
Revenue by Country
2025
2024
($)
(%)
(in thousands)
United States
Total for continuing operations
Discontinued Operations:
Netherlands
Poland
Romania
Total for discontinued operations
Total for the period
Revenue for continuing operations decreased by $.01 million and $0.2 million for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024, as there was only one country producing revenue in 2024 (Lightwave parks) compared to no operating parks owned by the Company in 2025.
Revenue for discontinued operations decreased by $3.8 million and $6.0 million for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024, as all operating parks in Poland, the Netherlands, and Romania were sold on January 19, 2024, February 21, 2024 and October 3, 2024, respectively. Refer to Footnote 14 for additional sale information.
Three Months Ended September 30,
Change
Change
Revenue by Offtake Type
2025
2024
($)
(%)
(in thousands)
Energy Offtake Agreements (PPA)
Total for continuing operations
Discontinued Operations:
Country Renewable Programs (FIT)
Guarantees of Origin
Green Certificates
Energy Offtake Agreements (PPA)
Other Revenue
Total for discontinued operations
Total for the period
Nine Months Ended September 30,
Change
Change
Revenue by Offtake Type
2025
2024
($)
(%)
(in thousands)
Energy Offtake Agreements (PPA)
Total for continuing operations
Discontinued Operations:
Country Renewable Programs (FIT)
Guarantees of Origin
Green Certificates
Energy Offtake Agreements (PPA)
Other Revenue
Total for discontinued operations
Total for the period
Cost of Revenues
The Company capitalizes its equipment costs, development costs, engineering, and construction related costs that are deemed recoverable. The Company's cost of revenues with regards to its solar parks is primarily a result of the asset management, operations, and maintenance, as well as tax, insurance, and lease expenses. Certain economic incentive programs, such as FIT regimes, generally include mechanisms that ratchet down incentives over time. As a result, the Company seeks to connect its solar parks to the local power grids and commence operations in a timely manner to benefit from more favorable existing incentives. Therefore, the Company generally seeks to make capital investments during times when incentives are most favorable.
Cost of revenues for the three and nine months ended September 30, 2025 and 2024 were as follows:
Three Months Ended September 30,
Change
Change
Cost of Revenues by Country
2025
2024
($)
(%)
(in thousands)
United States
Total for continuing operations
Discontinued Operations:
Netherlands
Poland
Romania
Total for discontinued operations
Total for the period
Nine Months Ended September 30,
Change
Change
Cost of Revenues by Country
2025
2024
($)
(%)
(in thousands)
United States
Total for continuing operations
Discontinued Operations:
Netherlands
Poland
Romania
Total for discontinued operations
Total for the period
Cost of revenues for continuing operations decreased by $47,000 and $71,000 for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024. The decrease was due to the operating parks in the United States being sold in November of 2024.
Cost of revenues for discontinued operations decreased by $1.4 million and $3.9 million for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024, due to all operating parks in Poland, the Netherlands, and Romania being sold on January 19, 2024, February 21, 2024 and October 3, 2024, respectively.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three and nine months ended September 30, 2025 and 2024 were as follows:
Three Months Ended September 30,
Change
Change
2025
2024
($)
(%)
(in thousands)
Selling, general and administrative
Total for continuing operations
Discontinued Operations:
Selling, general and administrative
Total for discontinued operations
Total for the period
Nine Months Ended September 30,
Change
Change
2025
2024
($)
(%)
(in thousands)
Selling, general and administrative
Total for continuing operations
Discontinued Operations:
Selling, general and administrative
Total for discontinued operations
Total for the period
Selling, general and administrative expenses for continuing operations decreased by $0.5 million for the three months ended September 30, 2025, due primarily to non-cash stock compensation costs of approximately $2.1 million. Selling, general and administrative expenses for continuing operations decreased $1.0 million for the nine months ended September 30, 2025 compared to the same period in 2024. The majority of this decrease was from a decrease in cash compensation costs, consulting expenses, insurance and the accounting and legal costs associated with audit preparation and Nasdaq listing costs during 2024 offset by the stock compensation costs during the period.
Selling, general and administrative expenses for discontinued operations decreased by $0.1 million and $1.5 million for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024, due to Solis being sold on October 3, 2024.
Development Cost
The Company depends heavily on government policies that support our business and enhance the economic feasibility of developing and operating solar energy projects in regions in which we operate or plan to develop and operate renewable energy facilities. The Company can decide to abandon a project if there is material change in budgetary constraints, political factors or otherwise, governments from time to time may review their laws and policies that support renewable energy and consider actions that would make the laws and policies less conducive to the development and operation of renewable energy facilities. Any reductions or modifications to, or the elimination of, governmental incentives or policies that support renewable energy or the imposition of additional taxes or other assessments on renewable energy, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new renewable energy projects, our abandoning the development of renewable energy projects, a loss of our investments in the projects, and reduced project returns, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects. Refer to Footnote 13 to the accompanying financial statements for more detail of development cost.
Three Months Ended September 30,
Change
Change
2025
2024
($)
(%)
(in thousands)
Development Cost
Total for continuing operations
Total for the period
Nine Months Ended September 30,
Change
Change
2025
2024
($)
(%)
(in thousands)
Development Cost
Total for continuing operations
Total for the period
There were no development costs for discontinued operations for the three and nine months ended September 30, 2025.
Depreciation, Amortization and Accretion Expense
Depreciation, amortization, and accretion expenses for the three and nine months ended September 30, 2025 and 2024 were as follows:
Three Months Ended September 30,
Change
Change
2025
2024
($)
(%)
(in thousands)
Depreciation, Amortization and Accretion expense
Total for continuing operations
Discontinued Operations:
Depreciation, Amortization and Accretion expense
Total for discontinued operations
Total for the period
Nine Months Ended September 30,
Change
Change
2025
2024
($)
(%)
(in thousands)
Depreciation, Amortization and Accretion expense
Total for continuing operations
Discontinued Operations:
Depreciation, Amortization and Accretion expense
Total for discontinued operations
Total for the period
Depreciation and amortization and accretion expense for continuing operations decreased by $50,000 and decreased by $45,000 for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024. This was primarily driven by the amortization for the intangible assets acquired in the Liion transaction December 2024, and the sale of the assets that related to the 2024 charge.
There was no depreciation, amortization and accretion expenses for discontinued operations throughout 2025 compared to the same period in 2024, due to all operating parks in Poland, the Netherlands and Romania being sold on January 19, 2024, February 21, 2024 and October 3, 2024, respectively.
Gain on Disposal of Assets
Three Months Ended September 30,
Change
Change
2025
2024
($)
(%)
(in thousands)
Gain on sale of continuing operations
Total for continuing operations
Discontinued Operations:
Gain on disposal of asset
Costs related to disposal of asset
Total for discontinued operations
Total for the period
Nine Months Ended September 30,
Change
Change
2025
2024
($)
(%)
(in thousands)
Gain on sale of continuing operations
Total for continuing operations
Discontinued Operations:
Gain on disposal of asset
Costs related to disposal of asset
Total for discontinued operations
Total for the period
On May 7, 2025, the Company sold AEG MH 02 Limited ("MH02") and all its subsidiaries to third parties. There was no cost incurred to complete the sale. As a result of the Transaction, the Company recorded a gain on the sale of $11.9 million and removed approximately $18.3 million in debt and payables related to MH02's activities (See Footnote 18).
On April 29, 2025, the LiiON asset purchase agreement was rescinded, resulting in a disposal of assets. The Company recorded a loss of $33,700 in the income statement for the three months ended June 30,2025 in relation to the transaction.
On March 25, 2025, the Company sold its subsidiaries in Spain to AEG, a related party. There were no costs incurred to complete the transaction. As a result of the Transaction, the Company recorded a gain on the sale of $3.5 million and removed approximately $3.6 million in debt and payables related to MH02's activities (See footnote 17).
On January 19, 2024, the Company sold its operating parks in Poland with a carrying value of $55.2 million for $59.4 resulting in a $4.2 million gain partially offset by a $0.9 million loss on sale of assets in the Netherlands. $1.6M of the cash received was held back by the seller per the SPA and recorded as a receivable on the Consolidated Balance Sheet. On February 22, 2024, the Company sold its operating park in the Netherlands with a carrying value of $8.0 million for $7.1 million resulting in a $0.9 million loss. The costs incurred to complete the transaction totaled $1.2 million and are reported together with the disposal of the assets according to ASC 360-10-35-38.
Interest Expense, Other Income, and Other Expense
Three Months Ended September 30,
Change
Change
2025
2024
($)
(%)
(in thousands)
Interest expense
Fair value movement of convertible notes
Fair value movement of warrant derivative liability
Gain on settlement of payables
Loss on settlement of liabilities
Loss on settlement of SAA with Hover
Loss on issuance of debt
Loss on extinguishment of debt
Provision for loss from related party
Other income
Total for continuing operations
Discontinued Operations:
Interest income/(expense)
Other expense
Total for discontinued operations
Total for the period
Nine Months Ended September 30,
Change
Change
2025
2024
($)
(%)
(in thousands)
Interest expense
Fair value movement of FPA Asset
Fair value movement of convertible notes
Debt restructuring costs
Fair value movement of warrant derivative liability
Gain on settlement of payables
Loss on settlement of liabilities
Loss on settlement of SAA with Hover
Loss on issuance of debt
Loss on extinguishment of debt
Provision for loss from related party
Other expense
Other income
Total for continuing operations
Discontinued Operations:
Interest income/(expense)
Other expense
Total for discontinued operations
Total for the period
Total interest expense, other income, and other expense for continuing operations increased by approximately $8.3 million for the three months and increased $8.8 million for nine months, respectively, ended September 30, 2025 compared to the same period in 2024. The primary drivers for the change in the respective periods was a $3.4 million loss on debt extinguishment relating to the reclassification of debt as per footnote 12, $2.0 million associated with the settlement of the Strategic Alliance Agreement ('SAA") with Hover as part of the EverOn JV transaction (see footnote 6), $3.6 million in fair value movements on convertible debt and warrants measured as fair value (footnote 4, and $1.2 million of impairment of amounts due from a related party.
Total interest expense, other income, and other expense for discontinued operations decreased by $3.4 million and $9.4 million for the three and nine months, respectively, ended September 30, 2025 compared to the same period in 2024, due to all operating parks in Poland, the Netherlands and Romania being sold on January 19, 2024, February 21, 2024 and October 3, 2024, respectively.
Movement in Interest Expense
Three Months Ended September 30,
Change
Change
2025
2024
($)
(%)
(in thousands)
Interest charged on debt
Debt issuance cost expense
Amortization of debt discount
Total interest expense for continuing operations
Nine Months Ended September 30,
Change
Change
2025
2024
($)
(%)
(in thousands)
Interest charged on debt
Debt issuance cost expense
Amortization of debt discount
Total interest expense for continuing operations
Net Loss
Net loss for continuing operations increased by $7.0 million for the three months ended September 30, 2025 compared to the same period in 2024. This is primarily caused by a $1.3 million reduction in SG&A and development costs offset by negative movement in fair value of convertible notes and warrants measured at fair value of $5.7 million compared to the same period in 2024. One time costs related to a $2.0 million loss on settlement of the Strategic Alliance Agreement ('SAA") with Hover as part of the acquisition of the EverOn Energy joint venture, and a $1.1 million impairment of amounts due from AEG, a related party, added to the costs in the three months ended September 30, 2025
Net income for continuing operations decreased by $8.4 million for the nine months ended September 30, 2025 compared to the same period in 2024. This is primarily due to a gain of $15.5m from sale of Spanish, MH02 and associated Italian subsidiaries during the period is primarily and a $1.8 million decrease in SG&A and development costs, offset by negative movement in fair value of convertible notes and warrants measured at fair value of $5.7 million. One time costs related to a $2.0 million loss on settlement of the Strategic Alliance Agreement ('SAA") with Hover as part of the acquisition of the EverOn Energy joint venture, and a $1.1 million impairment of amounts due from AEG, a related party, added to the costs in the nine months ended September 30, 2025
Liquidity and Capital Resources
Capital Resources
A key element to the Company's financing strategy is to raise much of its debt in the form of project specific non-recourse borrowings at its subsidiaries with investment grade metrics. Going forward, the Company intends to primarily finance acquisitions or growth capital expenditures using long-term non-recourse debt that fully amortizes within the asset's contracted life, as well as retained cash flows from operations and issuance of equity securities through public markets.
The following table summarizes certain financial measures that are not calculated and presented in accordance with U.S. GAAP, along with the most directly comparable U.S. GAAP measure, for each period presented below. In addition to its results determined in accordance with U.S. GAAP, the Company believes the following non-U.S. GAAP financial measures are useful in evaluating its operating performance. The Company uses the following non-U.S. GAAP financial information, collectively, to evaluate its ongoing operations and for internal planning and forecasting purposes.
The following non-U.S. GAAP table summarizes the total capitalization and debt as of September 30, 2025 and December 31, 2024:
As of
As of
September 30,
December 31,
2025
2024
(in thousands)
Convertibles measures at fair market value
Convertible and non convertible other debt
Total debt
Less current maturities
Long term debt, net of current maturities
Current Maturities
Debt discount
Current Maturities net of debt discount
Long-term maturities
Long-term maturities net of debt discount
As of
As of
September 30,
December 31,
2025
2024
(in thousands)
Cash and cash equivalents
Liquidity Position
Our consolidated financial statements for the three and nine months ended September 30, 2025 and for the year ended December 31, 2024 identifies the existence of certain conditions that raise substantial doubt about our ability to continue as a going concern for twelve months from the issuance of this report. Refer to Footnote 2 of the accompanying financial statements for more information.
On October 3, 2024, because Solis was unable to fully repay the Solis Bonds, the Company sold Solis and its subsidiaries in Romania to Solis Trustee Special Vehicle Limited, the Solis Bondholders' ownership vehicle, for €1 in accordance with the terms of the Solis Bonds, as amended. As a result of the sale, the Company eliminated approximately $115 million in debt and payables related to Solis activities and improved shareholders equity by approximately $59 million. Solis accounted for 98% of group revenues for the nine months ended September 30, 2024. Solis bondholders continue to hold a preference share in an Alternus holding company which holds certain development projects in Spain and Italy. The preference share gives the bondholders the right on any distributions up to €10 million, and such assets will be divested to ensure repayment of up to €10 million should it not be fully repaid by the Maturity Date.
On November 8, 2024, the Company was notified by the staff of The Nasdaq Stock Market ("Nasdaq") that the Company did not meet the market value of listed securities requirement in Listing Rule 5550(b)(2) (the "MVLS Rule") for continued listing on The Nasdaq Capital Market (the "Staff Determination"). The Company requested a hearing before the Nasdaq Hearings Panel (the "Panel") to appeal the Staff Determination.
On February 10, 2025, the Company received a determination letter (the "Delisting Notification") from the Nasdaq Hearings Advisor stating that the Panel has determined to delist the Company's common stock, par value $0.0001 per share (the "Common Stock") from the Nasdaq Capital Market, and Nasdaq suspended trading in the Company's Common Stock on February 12, 2025 because the Company has not demonstrated compliance with the MVLS Rule, nor does it meet any of the alternative requirements under Nasdaq Listing Rule 5550(b) and has failed to demonstrate that additional time to regain compliance is appropriate. The Company was additionally in violation of the bid price requirement of Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule"), as disclosed on January 31, 2025, which was taken into consideration by the Panel in its Delisting Notification.
The Company's Common Stock is currently quoted on an over-the-counter trading market.
The Company is currently working on several processes to address the going concern issue. We are working with multiple global banks and funds to secure the necessary project financing to execute our transatlantic business plan.
Financing Activities
In May 2022, AEG MH02 entered into a loan agreement with a group of private lenders of approximately $10.8 million with an initial stated interest rate of 8% and a maturity date of May 31, 2023. In February 2023, the loan agreement was amended stating a new interest rate of 16% retroactive to the date of the first draw in June 2022. In May 2023, the loan was extended, and the interest rate was revised to 18% from June 1, 2023. In July 2023, the loan agreement was further extended to October 31, 2023. In November 2023, the loan agreement further extended to May 31, 2024. On December 31, 2024, the loan agreement was further extended to September 30, 2025 while also stating any accrued interest up to the date of the amendment was to be added to the principal loan balance. As a result of these amendments, $3.2 million of interest was recognized during the year period ended December 31, 2024, $5.9 million of accrued interest was added to the existing loan balance. On May 7, 2025, AEG MH02 was sold, and the note was assumed by the Buyer. See Footnote 16 for more information. The Company had principal outstanding of $0 and $16.0 million as of September 30, 2025 and December 31, 2024, respectively.
In July 2023, Alt Spain Holdco, one of the Company's Spanish subsidiaries acquired the project rights for a 32 MWp portfolio of Solar PV projects in Valencia, Spain, with an initial payment of $1.9 million, financed through a €3.0 million ($3.3 million) bank facility having a six-month term and accruing 'Six Month Euribor' plus 2% margin. On January 24, 2024, the maturity date was extended to July 28, 2024. On July 28, 2024, the loan was further extended to January 28, 2025 and the principal amount was reduced to €2.6 million ($2.8 million) from cash on hand. On March 25, 2025, Alt Spain Holdco was sold, and the note was assumed by the buyer. See Footnote 15 for more information. This note had a principal outstanding balance of $0.0 million and $2.7 million as of September 30, 2025 and December 31, 2024, respectively.
In January 2024, the Company assumed a $938 thousand (€850 thousand) convertible promissory note with a 10% interest maturing in March 2025 as part of the Business Combination that was completed in December 2023. On January 3, 2024, the noteholder converted all of the principal and accrued interest owed under the note, equal to $1.0 million, into 264 shares of restricted common stock.
On March 21, 2024, ALCE, SPAC Sponsor Capital Access ("SCAF"), and the Sponsor of Clean Earth ("CLIN") agreed to a settlement of a $1.4 million note assumed by ALCE as part of the Business Combination that was completed in December 2023. The note had a maturity date of whenever CLIN closes its Business Combination Agreement and accrued interest of 25%. ALCE issued 45 shares to SCAF on March 21, 2024 and a payment plan of the rest of the outstanding balance was agreed to with payments to commence on July 15, 2024. The closing stock price of the Company was $2,350 on the date of issuance.
On April 19, 2024, the Company entered into a Securities Purchase Agreement with an institutional investor pursuant to which the Company agreed to issue to the Investor a senior convertible note in the principal amount of $2,160,000, issued with an eight percent (8.0%) original issue discount and a warrant to purchase up to 482 shares of the Company's common stock, at an exercise price of $2,400 per share. As of September 30, 2025 the warrant was adjusted to purchase up to 5,778 shares at an exercise price of $200 per share. The Company received gross proceeds of $2,000,000, before fees and other expenses associated with the transaction. The Convertible Note matured on April 20, 2025, bearing interest at 7% per annum, which was adjusted in April of 2025 so that the Maturity Date is December 31, 2025 and the interest rate is 12% per annum, and ranks senior to the Company's existing and future unsecured indebtedness. This note had a principal outstanding balance of $0.4 million as of September 30, 2025 and December 31, 2024, respectively.
On October 1, 2024, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement"), by and between the Company and an institutional investor (the "Investor"), pursuant to which the Company agreed to issue to the Investor a series of senior convertible notes up to an aggregate principal amount of $2,500,000, issued with a twelve percent (12.0%) original issue discount (each a "Convertible Note" and together, the "Convertible Notes"), and warrants (each a "Warrant" and together the "Warrants") to purchase shares of the Company's common stock, $0.0001 par value per share (the "Common Stock"), equal to 50% of the face value of the Convertible Note divided by the volume weighted average price, at an exercise price of $2.00 per share (the "Exercise Price"). Pursuant to the Purchase Agreement, with the closing of the initial tranche of the Convertible Note and Warrant, the Company issued a Warrant to purchase up to 1,063 shares of Common Stock and the Company received gross proceeds of $700,000, before fees and other expenses associated with the transaction, accounting for the 12% original issue discount. This warrant was adjusted on November 12, 2024 and on December 5, 2024 so that as of September 30, 2025 the warrant was asdjusted to purchase up to 2,128 shares exercisable at $200 per share. In conjunction with the transaction, the Company issued warrants for the purchase of 106 shares of common stock with an exercise price of $440 per share to Maxim for their role as placement agent, which is exercisable at any time on or after April 1, 2025 and will expire on December 19, 2027.
The Convertible Note was extended and matures on December 31, 2025 (unless accelerated due to an event of default, or accelerated up to six installments by the Investor), bears interest at an adjusted rate of twelve percent (12%) per annum, which shall automatically be increased to eighteen percent (18.0%) per annum in the event of default and, other than the First Convertible Note, ranks senior to the Company's existing and future unsecured indebtedness. The Convertible Note is convertible in whole or in part at the option of the Investor into shares of Common Stock (the "Conversion Shares") at the Conversion Price (as defined below) at any time following the date of issuance of the Convertible Note. The Convertible Note is payable monthly on each Installment Date (as defined in the Convertible Note) commencing on the earlier of December 1, 2024 and the effective date of the initial registration statement required to be filed pursuant to the Registration Rights Agreement (as defined below) in an amount equal the sum of (A) the lesser of (x) $79,545 and (y) the outstanding principal amount of the Convertible Note, (B) interest due and payable under the Convertible Note and (C) other amounts specified in the Convertible Note (such sum being the "Installment Amount"); provided, however, if on any Installment Date, no failure to meet the Equity Conditions (as defined in the Convertible Note) exits pursuant to the Convertible Note, the Company may pay all or a portion of the Installment Amount with shares of its common stock. The portion of the Installment Amount paid with common stock shall be based on the Installment Conversion Price. "Installment Conversion Price" means the lower of (i) the Conversion Price (defined below) and (ii) the greater of (x) 92% of the average of the two (2) lowest daily VWAPs (as defined in the Convertible Note) in the ten (10) trading days immediately prior to each conversion date and (y) $150. "Equity Conditions Failure" means that on any day during the period commencing twenty (20) trading days prior to the applicable Installment Notice Date or Interest Date (each as defined in the Convertible Note) through the later of the applicable Installment Date or Interest Date and the date on which the applicable shares of Common Stock are actually delivered to the Holder, the Equity Conditions have not been satisfied (or waived in writing by the Holder). This note had a principal outstanding balance of $0.5 and $2.2 as of September 30, 2025 and December 31, 2024, respectively.
On October 21, 2024, pursuant to the Purchase Agreement, the closing of the second tranche of the Convertible Note and Warrant occurred, whereby the Company issued a Warrant to purchase 813 shares of Common Stock exercisable at $400 per share and the Company received gross proceeds of $535,000, before fees and other expenses associated with the transaction, accounting for the 12% original issue discount. This warrant was adjusted on November 12, 2024 and on December 5, 2024, such that as of September 30, 2025, the warrant was adjusted to purchase up to 1,626 shares at an exercise price of $200 per share. In conjunction with the transaction, the Company issued warrants for the purchase of 81 shares of common stock with an exercise price of $440 per share for their role as placement agent, which is exercisable at any time on or after April 21, 2024 and will expire on the third anniversary of the effective date of the registration statement registering the underlying warrant shares.
On November 12, 2024, pursuant to the Purchase Agreement, the closing of the third tranche of the Convertible Note and Warrant occurred, whereby the Company issued a Warrant to purchase 1,520 shares of Common Stock exercisable at $300 per share and the Company received gross proceeds of $750,000, before fees and other expenses associated with the transaction, accounting for the 12% original issue discount. This warrant was adjusted on December 5, 2024 so that as of September 30, 2025, the warrant was adjusted to purchase up to 2,280 shares at an exercise price of $200 per share. In conjunction with the transaction, the Company issued warrants for the purchase of 114 shares of common stock with an exercise price of $440 per share to Maxim for their role as placement agent, which is exercisable at any time on or after May 12, 2025 and will expire on December 19, 2027.
On December 5, 2024, pursuant to the Purchase Agreement, the closing of the fourth and final tranche of the Convertible Note and Warrant occurred, whereby the Company issued a Warrant, which as of September 30, 2025 was adjusted to purchase up to 654 shares of Common Stock exercisable at $200 per shares and the Company received gross proceeds of $214,999 before fees and other expenses associated with the transaction, accounting for the 12% original issue discount. In conjunction with the transaction, the Company issued warrants for the purchase of 33 shares of common stock with an exercise price of $440 per share to Maxim for their role as placement agent, which is exercisable at any time on or after June 5, 2025 and will expire on December 19, 2027.
On April 28, 2025, the Company entered into a Letter Agreement with the Investor, which modifies certain terms and conditions of the Senior Convertible Note issued April 19, 2024 and the Senior Convertible Note issued October 1, 2024, by the Company to the Investor, collectively (the "2024 Notes"). The interest rate on the 2024 Notes is and will continue at a rate of 12% per annum. The conversion price of the 2024 Notes which remain outstanding shall be adjusted to the lesser of i) $6.00 and ii) 55% of the Market Price. Market Price shall mean the average of the three lowest traded prices of at least 100 shares during the twenty (20) Trading Days immediately prior to the Conversion Date. Unless mutually agreed upon, the Conversion Price shall not be less than $0.0001. The maturity date of the 2024 Notes shall be extended to December 31, 2025. Pursuant to the Letter Agreement, the Company agreed to issue the Investor a warrant (the "Warrant") to purchase up to 170,000 shares of the Company's common stock, $0.0001 par value per share (the "Common Stock"), at an exercise price of $6.00 per share (the "Exercise Price"). The Warrant is exercisable immediately and will expire on the date that is five and one-half (5 1/2) years after its date of issuance.
On December 4, 2024, the Company entered into a Note Purchase Agreement (the "Purchase Agreement") with Secure Net Capital LLC ("Secure Net"), pursuant to which the Company issued a 20% Original Issue Discount promissory convertible note (the "2024 Note") with a maturity date in April 2025, which was extended to November 5, 2025, in the principal sum of $1,250,000. Pursuant to the terms of the 2024 Note, the Company agreed to pay to Secure Net the entire principal amount on the Maturity Date, failing which and certain events of default (as described in the 2024 Note), the 20% Original Issue Discount shall increase to 30% Original Issue Discount. The Purchase Agreement resulted in net proceeds of $1,000,000 to the Company. The 2024 Note, issued pursuant to the Purchase Agreement, is convertible at the option of the Holder at any time after the Maturity Date, including with registration rights, at a conversion price per share equal to ninety percent (90%) of the Company's common stock's VWAP (which is the three (3) Trading Days immediately prior to such Conversion Date (or the nearest preceding date)) as of the date of such conversion (the "Conversion Date").
On December 11, 2024, the Company entered into an agreement with LiiON LLC as part of the business acquisition for a $2,000,000 note with a maturity date of December 31, 2027. Subsequent to December 31, 2024, on April 28, 2025, the Company and LiiON LLC mutually agreed to rescind the Asset Purchase Agreement. See Footnote 5 for further information on.
On December 30, 2024, the Company assumed a $1,041,720 (€1,000,000) promissory note from AEG with a 10% interest maturing July 31, 2025. Additionally, the Company assumed multiple promissory notes totaling $1,025,000 million from AEG maturing June 30, 2025. This note had a principal outstanding balance of $1 million as of September 30, 2025 and December 31, 2024.
On December 31, 2024, the Company terminated their agreement with Meteora Capital LLC by issuing a $500,000 promissory note with a 10% annual interest rate maturing January 31, 2026. This note had a principal outstanding balance of $0.5 million as of September 30, 2025 and December 31, 2024.
On January 21, 2025, the Company entered into a securities purchase agreement (the "Purchase Agreement") with certain investors (the "Purchasers") pursuant to which the Company sold, in a private placement (the "Offering"), unsecured 20% original issue discount promissory notes with an aggregate principal amount of $2,812,500 (the "Notes"). The Purchase Agreement also provides for the issuance of an aggregate of 7,630 shares of common stock of the Company, par value $0.0001 per share (the "Shares") to the Purchasers. The transaction closed on January 23, 2025 (the "Closing Date").
The aggregate gross proceeds to the Company were expected to be $2,250,000, before deducting placement agent fees and expenses. $580,000 of such proceeds were released on the Closing Date and the remaining amount were held in escrow, to be released to the Company upon the later of: i) filing the registration statement referenced below and ii) the date on which the Company receives a written communication from the Nasdaq Stock Market ("Nasdaq") that Nasdaq has granted the Company an extension to meet the continued listing requirements of the Nasdaq. Because the Company received a delisting determination from the Nasdaq on February 10, 2025, the Escrow Agent disbursed the funds back to the Purchasers as provided below against cancellation of a proportional portion of each Purchaser's Note (inclusive of original issue discount).
The Notes were issued with an original issue discount of 20%. No interest shall accrue on the Notes unless and until an Event of Default (as defined in the Notes) has occurred, upon which interest shall accrue at a rate of twenty percent (20.0%) per annum. The Notes matured on April 23, 2025, have not been repaid as of September 30, 2025 and are therefore in default. Upon the occurrence of any Event of Default and at any time thereafter, the Purchasers shall have the right to exercise all of the remedies under the Notes.
Maxim served as the placement agent in the Offering, pursuant to the terms of a Placement Agency Agreement and received 8% of the gross proceeds of the Offering, and placement agent warrants to purchase up to 381 shares of common stock at $81.18 per share (the "Placement Agent Warrants") and reimbursement of the legal fees of its counsel of up to $50,000. The Placement Agent Warrants will be exercisable on the six (6) month anniversary of issuance and will expire on the five (5) year anniversary of issuance.
On April 28, 2025, the Company entered into a Note Purchase Agreement (the "Purchase Agreement"), by and between the Company and an institutional investor (the "Investor"), pursuant to which the Company agreed to issue to the Investor promissory notes in the aggregate total principal amount of up to $558,000, with the first tranche of $318,000 closing immediately and the remaining $240,000 to close upon request of the Company and at the Investor's discretion, having a 16.67% original issue discount, an interest rate of 12% per annum and a maturity date of December 31, 2025 (the "Notes"). Pursuant to the Purchase Agreement, with the closing of the private placement of the Note (the "Private Placement"), the Company received gross proceeds of $265,000, before fees and other expenses associated with the transaction. On May 30, 2025, a second partial tranche in the amount of $180,000 of the Notes closed, and the Company received gross proceeds of $150,000.
On May 29, 2025, the Company entered into a Note Purchase Agreement (the "Purchase Agreement"), dated as of May 29, 2025, with an institutional investor pursuant to which the Company issued a 20% Original Issue Discount promissory convertible note (the "2025 Note") with a maturity date in August 2025, which was extended to November 5, 2025, in the principal sum of $312,500. Pursuant to the terms of the 2025 Note, the Company agreed to pay to the entire principal amount on the Maturity Date, failing which and certain events of default (as described in the 2025 Note), the 20% Original Issue Discount shall increase by 5% per month until the Note is fully repaid. The Purchase Agreement contains customary representations and warranties by the Company and closed on the same date thereof. The Purchase Agreement resulted in net proceeds of $250,000 to the Company, which the Company intends to use for working capital purposes.
The 2025 Note, issued pursuant to the Purchase Agreement, is convertible at the option of the Holder at any time after the Maturity Date, including with registration rights, at a conversion price per share equal to ninety percent (90%) of the Company's common stock's VWAP (which is the three (3) Trading Days immediately prior to such Conversion Date (or the nearest preceding date)) as of the date of such conversion (the "Conversion Date"). The current 2025 Note is a senior direct debt obligation of the Company ranking pari passu with all other Notes, but subordinate and junior in right of payment to the Senior Convertible Notes originally issued to 3i, LP., and other senior or pari passu Indebtedness (as defined in the Purchase Agreement) of the Company.
On June 6, 2025, the Company entered into a Note Purchase Agreement (the "Purchase Agreement"), by and between the Company and an institutional investor (the "Investor"), pursuant to which the Company agreed to issue to the Investor a promissory note in the aggregate total principal amount of $240,000, having a 16.67% original issue discount, an interest rate of 12% per annum and a maturity date of December 31, 2025 (the "Note"). Pursuant to the Purchase Agreement, with the closing of the private placement of the Note, the Company received gross proceeds of $200,000, before fees and other expenses associated with the transaction.
Cash Flow Discussion
The Company uses traditional measures of cash flows, including net cash flows from operating activities, investing activities and financing activities to evaluate its periodic cash flow results.
For the Nine Months Ended September 30, 2025 compared to September 30, 2024
The following table reflects the changes in cash flows for the comparative periods:
Nine Months Ended
September 30,
Change
2025
2024
($)
(in thousands)
Net cash provided by/(used in) operating activities
Net cash provided by/(used in) operating activities - Discontinued Operations
Net cash provided by/(used in) investing activities
Net cash provided by/(used in) investing activities - Discontinued Operations
Net cash provided by/(used in) financing activities
Net cash provided by/(used in) financing activities - Discontinued Operations
Effect of exchange rate on cash
Net Cash Provided by Operating Activities
Net cash used in continuing operating activities for the nine months ended September 30, 2025 compared to 2024 increased by $0.5 million. Net loss from continuing operations decreased by $8.5 million for the nine months ending September 30, 2025, which was mainly due to gains booked on sale of assets during the period and lower SG&A costs which were offset by higher other expenses for the nine months ended September 30, 2025.
Net cash used in discontinued operating activities for the nine months ended September 30, 2025 compared to 2024 decreased by $4.6 million due to all operating parks in Poland, the Netherlands and Romania being sold on January 19, 2024, February 21, 2024 and October 3, 2024, respectively.
Net Cash Used in Investing Activities
Net cash used in continuing investing activities was zero for the nine months ended September 30, 2025 compared to 2024 and so decreased by $6.5 million year on year as the Company did not pursue cash investments in the period but used equity as the consideration for the acquisition of the EverOn Energy joint venture that increased assets by approximately $50 million for the three and nine months ended September 30, 2025
There was no net cash used in or provided by discontinued investing activities for nine months ended September 30, 2025$69.0 million was provided by discontinued investing activities for the nine months ended September 30, 2024.
Net Cash Provided by Financing Activities
Net cash provided by continuing financing activities for the nine months ended September 30, 2025 compared to 2024 increased by $1.5 million as new debt financing was raised in the period.
Net cash used in discontinued financing activities for the nine months ended September 30, 2025 compared to 2024 decreased by $80.5 million due to all operating parks in Poland, the Netherlands and Romania being sold on January 19, 2024, February 21, 2024 and October 3, 2024, respectively.
Critical Accounting Estimates
In the notes to our consolidated financial statements and in Part II, "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2024 Annual Report on Form 10-K, we have disclosed those accounting policies that we consider to be most significant in determining our results of operations and financial condition and involve a higher degree of judgment and complexity. There have been no changes to those policies that we consider to be material since the filing of our 2024 Annual Report on Form 10-K. The accounting principles used in preparing our consolidated financial statements conform in all material respects to GAAP.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Disclaimer
Alternus Clean Energy Inc. published this content on April 27, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 27, 2026 at 10:09 UTC.