Company: ALCE
Filing Date: 2025-06-30
Form Type: 10-Q
Source: 0001213900-25-059349
Chunk: 16

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-30
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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5, in thousands:

    Convertible Note 
  
    Balance at October 1, 2024 
    $1,659 
  
    Cash payment 
     (250)
  
    Conversions 
     (31)
  
    Change in fair value 
     (32)
  
    Balance at December 31, 2024 
    $1,346 
  
    Conversions 
     (2,058)
  
    Change in fair value 
     835 
  
    Balance at March 31, 2025 
    $123 

    Warrant Liability 
  
    Balance at October 1, 2024 
    $573 
  
    Change in fair value 
     (171)
  
    Balance at December 31, 2024 
    $402 
  
    Change in fair value 
     (402)
  
    Balance at March 31, 2025 
    $- 

The fair values of these Level 3 liabilities are
sensitive to unobservable inputs used in the Monte Carlo simulation valuation model, including discount rates, expected term, expected
volatility, path dependency parameters and estimates of various payout outcomes. Changes to these inputs could result in significantly
higher or lower fair value measurement.

5. Business Combination

On December 11, 2024, BESS LLC, a Delaware limited
liability company and wholly owned subsidiary of the Company entered into an asset purchase agreement (the “APA”) with LiiON
LLC (“LiiON”), a U.S.-based expert in advanced energy storage solutions, and closed on the acquisition of certain assets related
to LiiON’s Battery Storage Business. The assets purchased included customer relationships, customer service agreements and intellectual
property (IP). Also, in connection with the APA, the Company entered into an exclusive consulting agreement, with an initial term of 3
years, providing the Company with the right to receive consulting services of three key employees of the LiiON Battery Storage Business
to assist with the transition and integration into the Company’s business.

As consideration for the acquisition, the Company
issued a non-interest bearing promissory note (the “Note”) with a principal amount of $2,000,000 and having a fair value upon
issuance of approximately $1,537,000 and 250,000 shares of the Company’s restricted common stock with a fair value of $287,500.

11

The Company determined that the set of assets