Company: ALCE
Filing Date: 2025-06-30
Form Type: 10-Q
Source: 0001213900-25-059349
Chunk: 14

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-30
Form: 10-Q
Item: Part I, Item 1
Chunk 14
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 Value Measurements

Fair value is defined as the
exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous
market for the asset or liability in an orderly transaction between market participants at the measurement date. Inputs used to measure
fair value are prioritized within a three-level fair value hierarchy. This hierarchy requires entities to maximize the use of observable
inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1 — Quoted prices in active
markets for identical assets or liabilities.

Level 2 — Observable inputs other
than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for
identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated
by observable market data.

Level 3 — Unobservable inputs
that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes
certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

9

As
of March 31, 2025, a summary of the Company’s assets and liabilities measured at fair value on a recurring basis is as follows,
in thousands:

    Fair Value Measurement 

    Level 1  
    Level 2  
    Level 3  
    Total 
  
    Convertible Notes 
    $        -  
    $        -  
    $450  
    $450 
  
    Warrant Liability 
     -  
     -  
     -  
     - 
  
    Total 
    $-  
    $-  
    $450  
    $450 

Valuation Techniques

●Convertible Note (fair value option): Valued using unobservable inputs that are not corroborated by
                                                                                market data (Level 3).

●Warrant Liability: Valued using unobservable inputs that are not corroborated by market data (Level
                                                                                3).

The Company measures the April
19, 2024 convertible note and private placement warrants using a Monte Carlo simulation valuation model and applying the following assumptions
as of March 31, 2025:

    Convertible Loan Note  
    Warrant Liability 
  
    Risk-free rate 
     3.94% 
     3