Company: ALCE
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0001213900-25-105077
Chunk: 42

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 1
Chunk 42
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 Section
3(a)(10) thereof, as an issuance of securities in exchange for bona fide outstanding claims, where the terms and conditions of such issuance
are approved by a court after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to
issue securities in such exchange shall have the right to appear. The Agreement provides that in no event will the number of shares of
Common Stock issued to SPC or its designee in connection with the Agreement, when aggregated with all other shares of Common Stock then
beneficially owned by SPC and its affiliates (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and the rules and regulations thereunder), result in the beneficial ownership by SPC and its affiliates
(as calculated pursuant to Section 13(d) of the Exchange Act and the rules and regulations thereunder) at any time of more than 9.99%
of the Common Stock. The Company recorded $172,000 in other expense in the financial statements at June 30, 2025, which represents
the value of the 20,000 shares issued as the settlement fee.

The Company determined that
the Agreement represents a financial instrument that requires the Company to settle a fixed monetary amount by issuing a variable number
of shares of its common stock. As a result, the Company is required to account for the Agreement as a liability at fair value with periodic
changes in fair value recorded through earnings until the liability has been settled through the issuance of shares (i.e., in one or more
tranches) that yield SPC cumulative cash receipts equal to the Settlement Amount. The fair value of this liability as of June 30, 2025
was $4,242,963 and has been recorded as within Accounts Payable in the Company’s consolidated balance sheet.

21

Contingencies

On August 7, 2024, the Company
entered into a ‘Heads of Terms’ (i.e., similar to a Letter of Intent) for Joint “Agreement”) with Hover Energy
LLC and its affiliates (“Hover”) to establish a joint venture (the “JV”) for the financing, development, management,
and operation of ‘Microgrid Projects’ utilizing Hover Wind-Powered Microgrid™ technology, as required. Pursuant to the
said JV, the Company and Hover have agreed to have a 51% interest and a 49% interest, respectively