Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 1581

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 4
Chunk 1581
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31, 2024
and 2023, respectively.

Stock-Based Compensation

The Company accounts for
stock-based compensation in accordance with ASC 718. Stock-based compensation expense for equity instruments issued to employees
and non-employees is measured based on the grant-date fair value of the awards. The fair value of each stock unit is determined based
on the valuation of the Company’s stock on the date of grant. The fair value of each stock option is estimated on the date of grant
using the Black-Scholes-Merton stock option pricing valuation model. The Company uses a simplified method for calculating the expected
term of their options. The Company recognizes compensation costs using the straight-line method for equity compensation awards over the
requisite service period of the awards, which is generally the awards’ vesting period. The Company accounts for forfeitures of
awards in the period they occur.

Use of the Black-Scholes-Merton
option-pricing model requires the input of highly subjective assumptions, including (1) the expected terms of the option, (2) the expected
volatility of the price of the Company’s common stock, and (3) the expected dividend yield of our common stock. The assumptions
used in the option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application
of management’s judgments. If factors change and different assumptions are used, the Company’s stock-based compensation expense
could be materially different in the future. Additional inputs to the Black-Scholes-Merton option-pricing model include the risk-free
interest rate and the fair value of the Company’s common stock. The Company determines the risk-free interest rate by using the
United States Treasury Rates of the same period as the expected term of the stock-option.

Net Loss Per Share

Net loss per share is computed
pursuant to ASC 260, Earnings per Share. Basic net loss per share attributable to common shareholders is computed by dividing net
loss attributable to common shareholders by the weighted average number of common stock outstanding for the period. Diluted net loss per
share attributable to common shareholders is computed by dividing net loss attributable to common shareholders by the weighted average
number of common stock outstanding for the period plus the number of common stock that would have been outstanding if all potentially
dilutive common stock had been issued, using the treasury stock method or if-converted method, as applicable. Potentially dilutive shares
related to stock options, warrants, and convertible notes were excluded from the