Company: ALCE
Filing Date: 2025-01-27
Form Type: S-1
Source: 0001213900-25-007054
Chunk: 262

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-01-27
Form: S-1
Chunk 262
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 net operating losses would be restricted in use as a result thereof.

Future realization of the tax
benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable
income within the carryforward period. As of December 31, 2023, the Company performed an evaluation to determine whether a valuation
allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations
for the current and preceding years. The Company determined that it was not possible to reasonably quantify future taxable income and
determined that it is more likely than not that all of it deferred tax assets will not be realized. Accordingly, the Company maintained
a full valuation allowance as of December 31, 2023.

F-39

| 25. | Related Party |

Financial assets and financial
liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.

AEG:

Alternus Energy Group Plc (“AEG”)
was an eighty percent (%) shareholder of the Company as of December 22, 2023 and as of December 31, 2023. On October 12, 2022 AEG entered
into the Business Combination Agreement with the Company and Clean Earth Acquisition Sponsor LLC (the “Sponsor”) which closed
on December 22, 2023 (See FN 1).In conjunction with the Business Combination Agreement, AEG also entered into an Investor Rights Agreement.
The Investor Rights Agreement provides for certain governance requirements, registration rights and a lockup agreement under which AEG
is restricted from selling its shares in the Company for one year, or until December 22, 2024, other than shares after March
22, 2024 and an additional after June 22, 2024, provided the shares are registered under a registration statement on SEC Form
S-1.

Sponsor:

Clean Earth Acquisitions Sponsor
LLC (“Sponsor”) was the founder and controlling shareholder of the Company during the year ended December 31, 2023 and up
to the Business Combination Closing Date, December 22, 2023, when Sponsor became an % shareholder of the Company. The Sponsor entered
into the Business Combination Agreement with the Company and AEG, and also entered into the Investor Rights Agreement and the Sponsor
Support Agreement, The Sponsor agreed, pursuant to the Sponsor Support Agreement, to vote all of their shares of capital stock (and any
securities convertible or exercisable into