Company: ALCE
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0001213900-25-105077
Chunk: 105

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 1
Chunk 105
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 completely and accurately.

The accounting
group has implemented a monthly review with the appropriate responsible parties within the Company, to review and confirm that the accounting
department has received the proper documentation for various transactions.

    ●
    The Company did not design and maintain effective controls for transactions between related parties and affiliates recorded between itself, the parent company and its subsidiaries. Specifically, the accounting and finance departments lacked formalized documentation establishing intercompany due to/from balances and did not periodically assess the collectability of such outstanding balances.

    ●
    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.

58

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 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 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