Company: ALCE
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0001213900-25-105077
Chunk: 16

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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compensation in accordance with ASC 718. Stock-based compensation expense for equity instruments issued to employees and non-employees
is measured based on the grant-date fair value of the awards. The fair value of each stock unit is determined based on the valuation of
the Company’s stock on the date of grant. The fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton
stock option pricing valuation model. The Company uses a simplified method for calculating the expected term of their options. The Company
recognizes compensation costs using the straight-line method for equity compensation awards over the requisite service period of the awards,
which is generally the awards’ vesting period. The Company accounts for forfeitures of awards in the period they occur.

Use of the Black-Scholes-Merton
option-pricing model requires the input of highly subjective assumptions, including (1) the expected terms of the option, (2) the expected
volatility of the price of the Company’s common stock, and (3) the expected dividend yield of our common stock. The assumptions
used in the option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application
of management’s judgments. If factors change and different assumptions are used, the Company’s stock-based compensation expense
could be materially different in the future. Additional inputs to the Black-Scholes-Merton option-pricing model include the risk-free
interest rate and the fair value of the Company’s common stock. The Company determines the risk-free interest rate by using the
United States Treasury Rates of the same period as the expected term of the stock-option.

Recently Issued Not Yet Effective Accounting
Standards

In March 2024, the FASB issued
ASU 2024-03, Income Statement — Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses, which
requires public business entities to disclose, on an annual and interim basis, specified expense captions (such as cost of sales, SG&A,
and R&D) disaggregated by their natural components (e.g., compensation, depreciation, amortization, and inventory/overhead costs).
The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December
15, 2027; early adoption is permitted. The Company is currently evaluating the impact of this guidance on its disclosures. Because the
ASU expands footnote requirements without affecting recognition or measurement