Company: ALCE
Filing Date: 2025-06-30
Form Type: 10-Q
Source: 0001213900-25-059349
Chunk: 31

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-30
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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 expire on the five (5) year anniversary of issuance.

18

12. Commitments and Contingencies

Litigation

The Company recognizes a liability
for loss contingencies when it believes it is probable a liability has occurred, and the amount can be reasonably estimated. If some amount
within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount.
When no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount in the range. The Company
has established an accrual for those legal proceedings and regulatory matters for which a loss is both probable 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 $5.7 million, which represents the amount allegedly owed.

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