Company: ALCE
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0001213900-25-105077
Chunk: 417

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 4
Chunk 417
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 from its business operations. Although
the results of litigation and claims cannot be predicted with certainty, as of the date of this registration statement, we do not believe
we are party to any claim or litigation, the outcome of which, if determined adversely to us, would individually or in the aggregate be
reasonably expected to have a material adverse effect on our business. However, due to the uncertainty of litigation and depending on
the amount and the timing, an unfavorable resolution of some or all of these matters could materially affect the Company’s business,
results of operations, financial position, or cash flows.

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 has accrued a liability for this loss contingency in the amount of approximately $5.2 million in other
payables in the financial statements, which represents the amount allegedly owed less the value provided to Sunrise by way of share issuance
to reduce the amount due.

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
$1.7 million is due and owed to SCAF pursuant to a settlement agreement by and among the parties, plus legal costs and accrued interest. The Company has accrued a liability for this loss contingency in the amount of approximately $1.5