Company: ALCE
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0001213900-25-105077
Chunk: 177

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 8
Chunk 177
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 and the amount can be
reasonably estimated.

On October 15, 2024 Sunrise
Development LLC (“Sunrise”) requested a hearing be scheduled in binding arbitration against the Company, two of its former indirect
wholly owned subsidiaries, ALT US 03 and ALT US 04, and a related party, Alternus Energy Group PLC (“AEG”), to be conducted
in Minneapolis, MN in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “AAA”),
claiming that approximately $5 million is due and owed to Sunrise pursuant to a settlement agreement by and among the parties, plus costs,
expenses, legal fees and interest. On or about February 6, 2025, the Company entered into a second set of settlement terms with Sunrise,
pursuant to which the Company agreed to make certain monthly payments to Sunrise, related to amounts allegedly owed by one of the Company’s
former subsidiaries pursuant to a share purchase agreement, and in exchange Sunrise dismissed its arbitration case against the Company.
As of March 10, 2025, the Company breached its payment obligations under the settlement terms, and on June 18, 2025 an arbitration award
of $5.7 million was granted to Sunrise. The Company is currently assessing its options. The Company has accrued a liability for this loss
contingency in the amount of approximately $5.2 million in other payables in the financial statements, which represents the amount allegedly
owed less the value provided to Sunrise by way of share issuance to reduce the amount due.

On March 11, 2025, the
Company was served a complaint filed in the Superior Court of the State of Delaware by SPAC Sponsor Capital Access
(“SCAF”), claiming that approximately $1.5 million is due and owed to SCAF pursuant to a settlement agreement by and
among the parties, plus costs, expenses, legal fees, interest and damages, if proven. The Company has accrued a liability for this
loss contingency in the amount of approximately $1.7 million, at June 30, 2025 which represents the contractual amount allegedly
owed plus legal costs and accrued interest. It is reasonably possible that the potential loss may exceed our accrued liability due
to costs, expenses, legal fees, interest and damages that are also alleged by SCAF as owed. Subsequently, on July 10, 2025 the
Company was notified that the Superior Court of the State of Delaware granted a motion of summary