Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 3635

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 8
Chunk 3635
---
 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 and maintain controls
    to timely identify and account for warrant instruments related to certain promissory notes, forward purchase agreements, debt modifications,
    and impairment of discontinued operations.

The Company will have third party
experts review non routine, unusual and complex transactions in order to have the required expertise to confirm the proper accounting
treatment.

    ●
    The Company did not design
    and maintain formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting
    and disclosures, including controls over the period-end financial reporting process addressing areas including financial statement
    and footnote presentation and disclosures, account reconciliations and journal entries, including segregation of duties, assessing
    the reliability of reports and spreadsheets used in controls, and the timely identification and accounting for cut-off of expenditures.

The Company is working with an external
consultant to review and assess the Company’s current internal control structure to improve the overall effectiveness of the control
environment. In addition, the Company is investing in third party software to improve the accuracy, review, and approval of account reconciliations
and other accounting functions. Also, the Company is investing in third party software to improve the process around the completion of
the financial statements.

The material weaknesses described
above could result in a material misstatement to substantially all of the Company’s accounts or disclosures. These material weaknesses
leads management to conclude that the Company’s disclosure controls and procedures are not effective to give reasonable assurance
that the information required to be disclosed in reports that the Company files under the Exchange Act is recorded, processed, summarized
and reported as and when required.

Management’s Report on Internal Control
over Financial Reporting.

Management is responsible
for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act.