Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 1653

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 4
Chunk 1653
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, 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.

69

As part of the new despac structure,
the Company is in the process of formalizing documentation related to intercompany due to/from within the new organization structure,
and with Alternus Energy, Inc, which is a related party.

    ●
    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