Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 1157

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 2
Chunk 1157
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ues the minimum amount in the range. The Company
has established an accrual for those legal proceedings and regulatory matters for which a loss is both probable and the amount can be
reasonably estimated.

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. As a result, upon breach in March 2025,
Sunrise alleges that approximately $5.7 million is immediately due and payable by the Company to Sunrise. Sunrise has commenced proceedings
to file a stipulation with the arbitrator, under which the arbitration award would be entered against the Company. The Company is defending
itself in this matter, claiming that a portion of this amount has already been repaid. The Company has accrued a liability for this loss
contingency in the amount of approximately $5 million, which represents the contractual amount allegedly owed. It is reasonably possible
that the potential loss may exceed our accrued liability due to costs, expenses, legal fees, and interest that are also alleged by Sunrise
as owed, but at the time of filing this report, we are unable to determine an estimate of that possible additional loss in excess of the
amount accrued.

F-37

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 $1.5 million is due and owed to SCAF pursuant to a settlement agreement by and among the parties, plus costs,