ALCE 10-K & 10-Q changes, risk factors and insider trading

The reduction, modification or elimination of government subsidies and economic incentives may reduce the economic benefits of existing solarrenewable parksenergy projects and the opportunities to develop or acquire suitable new solar parks.projects.

Decreases in the spot market price of electricity could harm our revenue and reduce the competitiveness of solarrenewable energy parks in grid-parity markets.

The price of electricity from our solarrenewable energy parks is fixed through PPAs or FiTs for a majority of its owned capacity. A FiT is a policy designed to support the development of renewable energy sources by providing a guaranteed, above-market price for producers. FiTs usually involve long-term contracts, anywhere from 15 to 20 years, whereas the PPAs that currently provide the additional revenue are typically renewed and may be terminated annually. In countries where the price of electricity is sufficiently high such that solarrenewable parksenergy projects can be profitably developed without the need for government price supports, solarthese parksprojects may choose not to enter into PPAs and would instead sell based on the spot market price of electricity. Revenue for our solar parks in Italy and Romania could fluctuate with the electricity spot market after the expiration of any PPA, unless it is renewed. The market price of electricity can be subject to significant fluctuations.

Decreases in the spot price of electricity in such countries could render PVrenewable energy less competitive compared to other forms of electricity. Thus, the spot market price of electricity may have a material adverse effect on our business, results of operations, cash flows, and financial condition.

Our power purchase agreements (PPAs) may not be successfully completed.

If we consummate any future acquisition, in line with our business model, our capitalization and results of operations may change significantly, and shareholders will generally not have the opportunity to evaluate the economic, financial and other relevant information that we consider in determining the application of these funds and other resources. As a result, the consummation of acquisitions may have a material adverse effect on the our business, financial condition, results of operations and cash flows.

Further, we may not be able to successfully integrate acquired businesses and, where desired, their product portfolios, and therefore the Company may not be able to realize the intended benefits of such acquisitions. The failure to integrate acquired businesses effectively may adversely impact the our business, results of operations or financial condition.

The delay between making significant upfront investments in solarrenewable energy parks and receiving revenue could materially and adversely affect our liquidity, business and results of operations.

There are generally multiple months between the initial significant upfront investments in solarrenewable energy parks, solarrenewable energy park development and obtaining permits to build solarrenewable energy parks which we expect to own and operate and when we begin to receive revenues from the sale of electricity generated by such solarrenewable energy parks after grid connection. Historically, we have relied on third-party equity contribution, bridging and bank loans to pay for costs and expenses incurred during project development, especially to third parties for PV modules and balance-of-system components and EPC and O&M services. Such investments may be non-refundable. SolarRenewable energy parks typically generate revenue only after becoming commercially operational and once they are able to sell electricity to the power grid. Between our initial investments in the development of solarthese parksprojects (through itsour model of working with local developers) and their connection to the transmission grid, there may be adverse developments impacting such solar parks.projects. The timing gap between its upfront investments and actual generation of revenue, or any added delay due to unforeseen events, could put strains on our liquidity and resources and materially and adversely affect its profitability and results of operations.

Development of solar powerrenewable energy projects can take many months or years to complete and may be delayed for reasons beyond its control. Development usually requires a company to make some up-front payments for, among other things, land/rooftop use rights and permitting in advance of commencing construction, and revenue from these projects may not be recognized for several additional months following contract signing. Furthermore, we may become constrained in our ability to simultaneously fund other investments in such projects.

Development, operation and maintenance of renewable energy projects and related infrastructure expose us to numerous risks, including construction, environmental, regulatory, permitting, commissioning, start-up, operating, economic, commercial, political and financial risks. This involves risks of failure to obtain or substantial delays in obtaining: (i) regulatory, environmental or other approvals or permits; (ii) financing; (iii) leasing; and (iv) suitable equipment supply, operating and off-take contracts. Moreover, renewable energy assets are subject to energy regulation and require governmental licenses and approval for their operation. The failure to obtain, maintain or comply with the licenses and approvals relating to our assets and the resulting costs, fines and penalties, could materially and adversely affect our ability to operate the assets. Renewable energy projects also require significant expenditure before the assets begin to generate income and often require long-term investment to enable projects to generate expected levels of income. The development of solarrenewable power energy projects also requires significant management attention to negotiate the terms of engagement and monitor the progress of the projects which may divert management’s attention from other matters.

SolarRenewable energy project development is challenging and may ultimately not be successful and miscalculations in planning a project may negatively affect engineering procurement and construction (“EPC”) prices, all of which could increase the costs, delay or cancel a project, and have a material adverse effect on its business, financial condition, results of operations and profit margins.

The development of solar renewable energy projects involves numerous risks and uncertainties and requires extensive research, planning and due diligence. We may be required to incur significant amounts of capital expenditure for land/rooftop use rights, interconnection rights, preliminary engineering, permits, legal and other expenses before we can determine whether a solarrenewable power project is economically, technologically or otherwise feasible. Success in developing a solarrenewable power project is contingent upon, among other things:

Successful completion of a particular solarrenewable energy project may be adversely affected by numerous factors, including without limitation:

Accordingly, some of the solarrenewable powerenergy projects in our pipeline may not be completed or even proceed to construction. If several solarrenewable powerenergy projects are not completed, our business, financial condition and results of operations could be materially and adversely affected.

Development of our solar powerrenewable energy projects may be adversely affected by circumstances outside of its control, including inclement weather, a failure to receive regulatory approvals on schedule or third-party delays in providing solarrenewable energy modules, inverters or other materials. Obtaining full permits for solar renewable power projects is time consuming and we may not be able to meet the expected timetable for obtaining full permits for solarrenewable power projects in the pipeline. In addition, we usually rely on external contractors for the development and construction of solarrenewable powerenergy projects and may not be able to negotiate satisfactory agreements with them. If contractors do not satisfy their obligations or do not perform work that meets our quality standards or if there is a shortage of third-party contractors or if there are labor strikes that interfere with the ability of employees or contractors to complete their work on time or within budget, we could experience significant delays or cost overruns. Changes in project plans or designs, or defective or late execution may increase our costs and cause delays. Increases in the prices of solarrenewable power products and balance-of-system components may increase procurement costs. Labor shortages, work stoppages or labor disputes could significantly delay a project or otherwise increase costs. In addition, delays in obtaining, our inability to obtain, or a lack of proper construction permits or post-construction approvals could delay or prevent the construction of solarrenewable power projects, commencing operation and connecting to the relevant grid.

We may not be able to recover any of these losses in connection with construction cost overruns or delays. In addition, in certain cases of delay, we might not be able to obtain any FiT or PPA at all, as certain FiTs or PPAs require that it connects to the transmission grid by a certain date. A reduction or forfeiture of FiT or PPA payments would materially and adversely affect the financial results and results of operations for that solarrenewable power project.

PVRenewable power plants quality or PV plants performance.

Insufficient quality of installed solarrenewable energy modules and other equipment resulting in faster than estimated degradation may lead to lower revenues and higher maintenance costs, particularly if the product guarantees have expired or the supplier is unable or unwilling to respect its obligations. Even well-maintained high-quality PV solarrenewable power plants may, from time to time, experience technical breakdown. Furthermore, widespread PVrenewable power plant failures may damage our market reputation, reduce its market share and cause a decline of construction projects. Although a defect in our PV plants may be caused by defects in products delivered by its sub-suppliers which are incorporated into its PV plants, there can be no assurance that we will be entitled to or successful in claiming reimbursement, repair, replacement or damages from its sub-suppliers relating to such defects.

Any reductions or modifications to, or the elimination of, governmental incentives or policies that support solarrenewable energy, including, but not limited to, tax laws, policies and incentives, renewable portfolio standards or feed-in-tariffs, or the imposition of additional taxes or other assessments on solarrenewable energy, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new solarrenewable energy projects, our abandoning the development of solarrenewable energy projects, a loss of our investments in solarrenewable energy projects and reduced project returns, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We depend heavily on government policies that support utility scale renewable energy and enhance the economic feasibility of developing and operating solar renewable energy projects in regions in which we operate or plan to develop and operate renewable energy facilities. The federal government and a majority of state governments in the United States provide incentives, such as tax incentives, renewable portfolio standards or feed-in-tariffs, that support or are designed to support the sale of energy from utility scale renewable energy facilities, such as wind and solar energy facilities. As a result of budgetary constraints, political factors or otherwise, governments from time to time may review their laws and policies that support renewable energy and consider actions that would make the laws and policies less conducive to the development and operation of renewable energy facilities. Any reductions or modifications to, or the elimination of, governmental incentives or policies that support renewable energy or the imposition of additional taxes or other assessments on renewable energy, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new renewable energy projects, our abandoning the development of renewable energy projects, a loss of our investments in the projects and reduced project returns, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act (the “IRA”), which extended the availability of investment tax credits (“ITCs”) and production tax credits (“PTCs”). On January 20, 2025 President Trump was inaugurated and his administration could reduce the amount of ITCs or PTCs available to us and/or our tax equity partners. In this event, we could be required to adjust the terms of future tax equity partnerships, or seek alternative sources of funding for solarrenewable energy projects, each of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

These and other factors could have adverse consequences on our solarrenewable energy projects. For example, these factors could require us to shut down or reduce the output of such projects, degrade equipment, reduce the useful life of the project, and materially increase O&M and other costs. Unanticipated capital expenditures associated with maintaining or repairing our projects would reduce profitability. Congestion, emergencies, maintenance, outages, overloads, requests by other parties for transmission service, including on our facilities, actions or omissions by other projects with which we share facilities, and certain other events, including events beyond our control, could partially or completely curtail generation and delivery of energy by our projects and could lead to our customers terminating their PPAs with us. Any termination of a project’s interconnection or transmission arrangements or non-compliance by an interconnection provider, the owner or operator of shared facilities, or another third party with its obligations under an interconnection, shared facilities, or transmission arrangement may delay or prevent our projects from delivering energy to our offtakers. If the interconnection, shared facilities, or transmission arrangement for a project is terminated, we may not be able to replace it on similar terms to the existing arrangement, or at all, or we may experience significant delays or costs in connection with such replacement. In addition, replacement and spare parts for solar panels, wind turbines and other key pieces of equipment may be difficult or costly to acquire or may be unavailable.

Our operations rely on our computer systems, hardware, software, and networks, as well as those of third parties with which we do business, such as O&M and other service providers, to securely process, store, and transmit proprietary, confidential, financial, and other information. We also rely heavily on these information systems to operate our solarrenewable energy projects. Information technology system failures and network disruptions may be caused by natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic break-ins, human errors in using or accessing relevant systems, or similar events or disruptions. Cyber-attacks, including those targeting information systems or electronic control systems used to operate our energy projects and the facilities of third parties on which our projects rely, could severely disrupt business operations, and result in loss of service to offtakers and significant expense to repair security breaches or system damage. In addition, our costs to adequately counter the risk of cyber-attacks may increase significantly in the future. In recent years, such cyber incidents have become increasingly frequent and sophisticated, targeting or otherwise affecting a wide range of companies. While we have instituted security measures to reduce the likelihood and impact of a cyber-attack or data breach and have back-up systems and disaster recovery plans for other disruptions, these measures, or those of the third parties with which we do business, may be ineffective or inadequate. If these measures fail, valuable information may be lost; our development, construction, O&M, and other operations may be disrupted; we may be unable to fulfill our customer obligations; and our reputation may suffer. As a result of the COVID-19 pandemic, the vast majority of our employees who are capable of performing their functions remotely are telecommuting and may continue to do so for the foreseeable future, which may exacerbate these risks. Such risks may also subject us to litigation, regulatory action and fines, remedial expenses, and financial losses beyond the scope or limits of our insurance coverage. These consequences of a failure of security measures could, individually or in the aggregate, have a material adverse effect on our business, NAV, financial condition, and results of operations.

Moreover, our current business strategy is to own and operate all of the solarrenewable parksenergy projects which we develop and acquire. As part of our growth plan, we may, in the future, acquire solarrenewable parksenergy projects in various development stages through a competitive bidding process as part of the auction schemes in the various jurisdictions we plan to grow and establish ourself in as well as the current countries we operate in. The bidding and selection process is affected by a number of factors, including factors that may be beyond our control, such as market conditions or government incentive programs. Our competitors may have greater financial resources, a more effective or established localized business presence or a greater willingness or ability to operate with little or no operating margins for sustained periods of time. Any increase in competition during such bidding processes or reduction in its competitive capabilities could have a significant adverse impact on its market share and on the margins it generates from its solarrenewable parks.energy projects.

Further, large, utility-scale solar renewable energy parks must be interconnected to the power grid in order to deliver electricity, which requires us, through its local partnerships, to find suitable sites with capacity on the power grid available. Our competitors may impede its development efforts by acquiring control of all or a portion of a PV site it seeks to develop. Even when we have identified a desirable site for a solarrenewable park,energy project, its ability to obtain site control with respect to the site is subject to its ability to finance the transaction and growing competition from other solarrenewable power producers that may have better access to local government support, financing or other resources. If we are unable to find or obtain site control for suitable PV sites on commercially acceptable terms, its ability to develop new solarrenewable parksenergy projects on a timely basis or at all might be harmed, which could have a material adverse effect on our business, financial condition and results of operations.

Our success depends to a significant degree on the services rendered by our key employees. Due to the level of technical expertise necessary to support its business strategy, our success will depend upon our ability to attract and retain highly skilled and seasoned professionals in the solarrenewable energy industry for which competition is intense. In particular, we are heavily dependent on the continued services of Mr. Vincent Browne, our Chief Executive Officer. The loss of any key employee, including executive officers or members of senior management teams, and the failure to attract, train and retain highly skilled personnel with sufficient experience in the industry to replace them, could harm our prospects, business, financial condition, and the results of operations will be materially affected.

If sufficient demand for solarrenewable parksenergy does not develop or takes longer to develop than anticipated, our business, financial condition, results of operations and prospects could be materially and adversely affected.

The PVrenewable energy market is at a relatively early stage of development in some of the markets that the Company may intend to enter. The PV industry continues to experience lower costs, improved efficiency and higher electricity output. However, trends in the PVrenewable energy industry are based only on limited data and may not be reliable. Many factors may affect the demand for solarrenewable parksenergy projects including, among others, cost and availability of financing for solar parks,such projects, fluctuations in economic and market conditions, competition from non-solarnon- renewable energy sources, environmental concerns, public perception and regulations and policies governing the electric power industry and the broader energy industry.

If market demand for solar parksrenewable energy projects fails to develop sufficiently, our business, financial condition, results of operations and prospects could be materially and adversely affected.

We are subject to risks associated with fluctuations in the prices of PVrenewable energy modules and balance-of-system components or in the costs of design, construction and labor.

We procure supplies for solar parkrenewable energy project construction, such as PV modules, wind modules and balance-of-system components, from third-party suppliers. We typically enter into contracts with its suppliers and contractors on a project-by-project basis or a project portfolio basis. We generally do not maintain long-term contracts with its suppliers. Therefore, are exposed to fluctuations in prices for its PV modules and balance-of-system components. Increases in the prices of PVrenewable energy products or balance-of-system components or fluctuations in design, construction, labor and installation costs may increase the cost of procuring equipment and engaging contractors and hence materially and adversely affect its results of operations.

Moreover, spare parts for solarrenewable energy facilities and key pieces of equipment may be hard to acquire or unavailable to us. Sources of some significant spare parts and other equipment are located outside of the jurisdictions in which it operates. Suppliers of some spare parts have filed, or may in the future file for, bankruptcy protection, potentially reducing the availability of parts that it requires to operate certain of its power generation facilities. Other suppliers may for other reasons cease to manufacture parts that it requires to operate certain of its power generation facilities. If we were to experience a shortage of or inability to acquire critical spare parts, it could incur significant delays in returning facilities to full operation, which could negatively impact its business financial condition, results of operations and cash flows.

We may operate in areas that are under the threat of floods, earthquakes, landslides, mudslides, sandstorms, drought, or other inclement weather and climate conditions or natural disasters. If inclement weather or climatic conditions or natural disasters occur in areas where its solarrenewable parksenergy projects and project teams are located, project development, connectivity to the power grid and the provision of O&M services may be adversely affected. In particular, materials may not be delivered as scheduled and labor may not be available. As some of itsour solarrenewable parksenergy projects are located in the same region, such solar parksprojects may be simultaneously affected by weather and climate conditions, natural disasters and adverse work environments.

Our operations and those of its contract manufacturers and outsourced service providers are vulnerable to interruption by fire, earthquake, hurricane, flood or other natural disaster, power loss, computer viruses, computer systems failure, telecommunications failure, quarantines, national catastrophe, terrorist activities, war and other events beyond its control. For instance, some of Alternus’ solarrenewable parksenergy projects are located in Italy near medium risk areas regarding seismic activity and may be vulnerable to damage from earthquakes. If any disaster were to occur, our ability and the ability of its contract manufacturers and outsourced service providers to operate could be seriously impaired and it could experience material harm to its business, operating results and financial condition. In addition, the coverage or limits of its business interruption insurance may not be sufficient to compensate for any losses or damages that may occur.

Due to the specific nature of solarthe photovoltaicrenewable energy industry, we depend on a limited number of suppliers of solar panels, wind components, batteries, and other system components needed to expand, operate and function our solarrenewable parks,energy projects, thus making us susceptible to quality issues, shortages, bottlenecks, and price changes. The uncertain condition of the global economy as well as the current conflict between US and Iran, as well as Russia and Ukraine, and in Israel, including the retaliatory economic measures taken by United States, European, and others continue impacting businesses around the world, and has and may continue to impact several components producers and suppliers that form part of our supply chain; impacting products, materials, components, and parts required to operate our solarrenewable parksenergy projects and expand our solar offering, both in the Europe, in the US and globally. In times of rapid industry growth or regulatory change such as current times, any further deterioration of the geopolitical, socio-economic conditions or financial uncertainty to provide our services could reduce customers’ confidence and affect negatively our sales and results of operations.

Although we have implemented policies and procedures to maintain compliance with applicable laws and regulations, these and other similar trade restrictions that may be imposed in the future could cause installation and capacity expansion delay, amidst restrictions on the global supply of polysilicon and solarother products.renewable energy products and components. This could result in near-term supply crunch in solarrenewable energy systems despite higher costs, as well as increased costs of polysilicon and the overall cost of solarrenewable energy systems, potentially translating into a material adverse effect on our business, financial condition, results of operations and prospects.

Any default under debt arrangements could lead to an event of default and acceleration under other debt instruments that contain cross default or cross acceleration provisions, as applicable at any given time. If our creditors accelerate the payment of those amounts, investors cannot be assured that our assets would be sufficient to repay in full those amounts, to satisfy all other liabilities which would be due and payable and to ensure that net assets will be available to the shareholders. For example, our prior subsidiary, Solis Bond Company DAC, breached all three financial covenants under its bond terms. As such, Solis was unable to fully repay the Solis Bond by its maturity date (as extended), and Solis’ bondholders transferred ownership of Solis and all of its subsidiaries to the bondholders. This resulted in the majority of our operating assets and related revenues being eliminated and are no longer able to book the associated EBIDTA.EBITDA. This has had a material adverse effect on our results of operations, cash flows and financial condition.

In addition, we typically pledge our solarrenewable parkenergy project assets or account or trade receivables to raise debt financing, and we are restricted from creating additional security over its assets. If we are in breach of one or more financial or other covenants or negative pledge clauses under any of our loan agreements and are not able to obtain waivers from the lenders or prepay such loan, repayment of the indebtedness under the relevant loan agreement may be accelerated, which may in turn require us to repay the entire principal amount including interest accrued, if any, of certain of its other existing indebtedness prior to their maturity under cross-default provisions of other loan agreements. If we lack sufficient financial resources to make required payments, the pledgees may auction or sell our assets or our interest in solarrenewable parksenergy projects to enforce their rights under the pledge contracts and loan agreements. Any of those events could have a material adverse effect on our financial condition, results of operations and business prospects.

The development and installation of solarrenewable energy systems is highly regulated; we may fail to comply with laws and regulations in the countries where it develops, constructs and operates solarrenewable power projects and the government approval process may change from time to time, which could severely disrupt our business operations.

The development and installation of solarrenewable energy systems is subject to oversight and regulation under local ordinances; building, zoning and fire codes; utility interconnection requirements for metering; and other rules and regulations. We attempt to keep apprised on these requirements on a national, state and local level and must design and install our solarrenewable energy systems to comply with varying standards. Certain jurisdictions may have ordinances that prevent or increase the cost of installation of our solarrenewable energy systems. New government regulations or utility policies pertaining to the installation of solarrenewable energy systems are unpredictable and might result in significant additional expenses or delays, which could cause a significant reduction in demand for solarrenewable energy systems.

We conduct our business in many countries and jurisdictions that are governed by different laws and regulations, including national and local regulations relating to building codes, taxes, safety, environmental protection, utility interconnection and metering and other matters. We have established subsidiaries in these countries and jurisdictions which were required to comply with various local laws and regulations. While we strive to work with our local counsel and other advisers to comply with the laws and regulations of each jurisdiction in which we have operations, there may be instances of non-compliance, which may result in fines, sanctions and other penalties against the non-complying subsidiaries and its directors and officers. For example, in 2020, the Company’s Romanian subsidiary, LJG Green Source Energy Beta S.r.l. had an ANRE investigation resulting from actions of the previous owner related to the breach of Article 5 of the EU Regulation No. 1227/2011 on wholesale energy market integrity and transparency by engaging in market manipulation or attempted market manipulation on the wholesale energy markets following transactions concluded between January 1, 2019 to March 31, 2020. This investigation resulted in a penalty of RON 400,000 (approximately $80,000). We cannot make any assurances that other instances of non-compliance will not occur in the future which may materially and adversely affect its business, financial condition or results of operations.

In order to develop solar renewable energy power projects, we must obtain a variety of approvals, permits and licenses from various authorities. The procedures for obtaining such approvals, permits and licenses vary from country to country, making it onerous and costly to track the requirements of individual localities and comply with the varying standards. Moreover, sovereign states retain the power to adjust their energy policies and alter approval procedures applicable to the Company. If the regulatory requirements become more stringent or the approval process becomes less efficient, the key steps in our business operations including project development, facility upgrading and product sales, could be severely disrupted or delayed. Failure to obtain the required approvals, permits or licenses or to comply with the conditions associated therewith could result in fines, sanctions, suspension, revocation or non-renewal of approvals, permits or licenses, or even criminal penalties, which could have a material adverse effect on the Company’s business, financial condition and results of operations.

Any new government regulations pertaining to the Company business or solarrenewable power projects may result in significant additional expenses. The Company cannot assure that it will be able to promptly and adequately respond to changes of laws and regulations in various jurisdictions, or that its employees and contractors will act in accordance with such laws. Failure to comply with laws and regulations where the Company develops, constructs and operates solar power projects may materially and adversely affect our business, results of operations and financial condition.

Existing rules, regulations and policies pertaining to electricity pricing and technical interconnection of customer-owned electricity generation may not continue, and changes to these regulations and policies might deter the purchase and use of solarrenewable energy systems and negatively impact development of the solarrenewable energy industry.

The market for solar renewable energy systems in the United States and Europe is heavily influenced by foreign, federal, state and local government regulations and policies concerning the electric utility industry, as well as policies adopted by electric utilities. These regulations and policies often relate to electricity pricing and technical interconnection of customer-owned electricity generation and there is no assurance that they will continue. For example, the vast majority of the United States has a regulatory policy known as net energy metering, or “net metering”, which allows our customers to interconnect their on-site solar energy systems to the utility grid and offset their utility electricity purchases by receiving a bill credit at the utility’s retail rate for energy generated by their solar energy system that is exported to the grid and not consumed on-site. The customer consequently pays for the net energy used or receives a credit at the retail rate if more electricity is produced than consumed. Net metering, in some states, is being replaced with lower credits for the excess electricity sent onto the grid from solar energy systems, and utilities are imposing minimum or fixed monthly charges on owners of solarrenewable energy systems. These regulations and policies have been modified in the past and may be modified in the future in ways that can restrict the interconnection of solar energy systems and deter purchases of solar energy systems by customers. Electricity generated by solar energy systems also competes most favorably in markets with tiered rate structures or peak hour pricing that increase the price of electricity when more is consumed. Modifications to these rate structures by utilities, such as reducing peak hour or tiered pricing or adopting flat rate pricing, could require the price of solar energy systems to be reduced in order to compete with the price of utility generated electricity.

Our energy facilities may be located on land which may be subject to government seizure or expropriation. For example, properties relating to the Company’s operations in Scornicesti, Romania, are subject to an ongoing expropriation procedure due to the construction of a new express motorway. The authorities have offered the Company cash as compensation. The process commenced in Q1 2022, and we still have not received any compensation to date. In this case, we believe that the offered compensation represents fair value. However, in general, similar proceedings may not represent fair compensation and could materially affect our other operations, in which caseoperations; certain operations may have to cease without sufficient compensation being paid to us. Although this particular expropriation does not have a material adverse effect on our business, otherCertain types of seizure or expropriation could have a material adverse effect on our ability to generate revenue.

Furthermore, we are subject to the risk of potential disputes with property owners or third parties who otherwise have rights to or interests in the properties used for the our solar parks. Such disputes, whether resolved in our favor or not, may divert management’s attention, harm our reputation or otherwise disrupt its business. An adverse decision from a court or the absence of an agreement with such third parties may result in additional costs and delays in, or the permanent termination of, the construction and operating phases of any solar park so situated.

Recent increases in inflation and in the United States and internationally could adversely affect our business.

The solarrenewable energy industry is a new and evolving market, which may not grow to the size or at the rate we expect.

The solarrenewable energy industry is a new and rapidly growing market opportunity. We believe the solarrenewable energy industry will continue still take several years to fully develop and mature, but we cannot be certain that the market will grow to the size or at the rate that we expect. Any future growth of the solarrenewable energy market and the success of our solar service offerings depend on many factors beyond our control, including recognition and acceptance of the solarrenewable service market by consumers, the pricing of alternative sources of energy, a favorable regulatory environment, the continuation of expected tax benefits and other incentives, and our ability to provide our solar service offerings cost-effectively, and our business might be adversely affected should the markets for solar energy do not develop to the size or at the rate we expect.

SolarRenewable energy has yet to achieve broad market acceptance and depends in part on continued support in the form of rebates, tax credits, and other incentives from federal, state and local governments. If this support diminishes materially, our ability to attract customers for our products and services could be adversely affected. Declining macroeconomic conditions, including labor markets, could contribute to instability and uncertainty among customers and impact their financial ability, credit scores or interest in entering into long-term contracts, even if such contracts would generate immediate and long-term savings.

Declining costs related to raw materials, manufacturing and the sale and installation of our solar service offerings have been a key driver in the pricing of our solar service offerings and customer adoption of solar energy. The prices of solar modules and raw materials have declined, however the cost of solar modulesmodules, wind components and raw materials could increase in the future, and such products’ availability could decrease, due to a variety of factors, including restrictions stemming from the COVID-19 pandemic, tariffs and trade barriers, export regulations, regulatory or contractual limitations, industry market requirements, and changes in technology and industry standards. Other factors may also impact costs, such as our choice to make significant investments to drive growth in the future.

Our business prospects could be harmed if solar energy is not widely adopted or sufficient demand for solarrenewable energy systems does not develop or takes longer to develop than we anticipate.

The solarrenewable energy market is at a relatively early stage of development. The extent to which solarrenewable energy will be widely adopted and the extent to which demand for solarrenewable energy systems will increase are uncertain. If solarrenewable energy does not achieve widespread adoption or demand for solarrenewable energy systems fails to develop sufficiently, we might be unable to achieve our revenue and profit targets. Demand for solarrenewable energy systems in our targeted markets might not develop as we anticipate. Many factors may affect the demand for solarrenewable energy systems, including the following:

Although we believe that solar renewable energy will experience widespread adoption in those applications where it competes economically with traditional forms of energy without any incentive programs, in certain markets our net sales and profits remain subject to variability based on the availability and size of government subsidies and economic incentives. Federal, state, and local governmental bodies in many countries have provided subsidies in the form of feed-in-tariff structures, rebates, tax incentives, and other incentives to end users, distributors, system integrators, and manufacturers of PV solar products.products and wind power components. Many of these incentive programs expire, phase down over time, require renewal by the applicable authority, or may be amended. To the extent government incentive programs are reduced earlier than previously expected, are changed retroactively, or are not renewed, such changes could negatively impact demand and/or price levels for our solar modules, lead to a reduction in our net sales, and adversely impact our operating results.

Impacts of the U.S./Iran conflict and the ongoing Ukraine/Russia conflict

The geopolitical situation in Easternthe EuropeMiddle East intensified on Februaryin 24,early 20222026 with Russia’sthe invasionU.S./Iran of Ukraine.conflict. The warconflict between the two countries continues to evolve as military activity proceeds and additionalblockades sanctionsof Iranian ports as well as the Straits of Hormuz are imposed. In addition to the human toll and impact of the events on entities that have operations in Russia, Ukraine,Iran or its neighboring countries (e.g., Belarus, Poland, Romania)countries, or that conduct business with their counterparties, the war is increasingly affecting economic and global financial markets and exacerbating ongoing economic challenges, including issues such as rising inflation and global supply-chain disruption. These events have not impacted the physical operations of our facilities in Romania. However, theThe Company has seen fluctuations in energy rates due to inflation, increased interest rates, and other macro-economic factors.

Interest rates on the Company’s seniordebt, debt that are not measured at fair value, are mostly variable for the full term of the debt at annual interest rates ranging from 6%9% to 30%. The relative certainty of cash flows provides sufficient coverage ratios.25%.

The Company believes the combined nameplate capacity of its portfolio is indicative of its overall production capacity and period to period comparisons of its nameplate capacity are indicative of the growth rate of its business. The production capacity listed below for Poland, the Netherlands, Romania, and the United States reflect the actual production from those parks while they were owned by or operating under the Company for the year ended December 31, 2024. The parks were sold on January 19, 2024, February 21, 2024, October 3, 2024, and November 5, 2024, respectively. Refer to Footnotes 19 and 2017 for additional information on the sale/disposal of the parks.

Megawatt hours sold refers to the actual volume of electricity sold by the Company’s renewable energy facilities during a particular period. The Company tracks MWh sold as an indicator of its ability to realize cash flows from the generation of electricity at its renewable energy facilities. The megawatt hours listed below for Poland, the Netherlands, Romania, and the United States reflect the actual volume of electricity sold during the year ended December 31, 2024. The parks were sold on January 19, 2024, February 21, 2024, October 3, 2024, and November 5, 2024, respectively. Refer to Footnotes 19 and 2017 for additional information on the sale/disposal of the parks.

The following table illustrates the consolidated results of operations for the years ended December 31, 20242025 and 20232024 (in thousandsthousands, except share and per share data):

Revenue for discontinued operations decreased by $17.2$9.8 million for the year ended December 31, 20242025 compared to the same period in 2023.2024. All operating parks in Poland andPoland, the Netherlands and Romania were sold on January 19, 2024 and2024, February 21, 2024,2024 and October 3, 2024 respectively, resulting in a $10.3$9.8 million decrease in revenues. Romanian revenues decreased by $6.9 million due to a lower volume of Green Certificates being sold in 2024 and lower energy rates obtained for energy production in 2024. Furthermore, the total Romanian revenue for 2024 accounts for only nine months as the Company sold the Romanian operating parks on October 3, 2024. Refer to Footnote 19 for additional sale information.

Cost of revenues for discontinued operations decreased by $3.2$4.1 million for the year ended December 31, 20242025 compared to the same period in 2023.2024. All operating parks in Poland andPoland, the Netherlands and Romania were sold on January 19, 2024 and2024, February 21, 2024,2024 and October 3, 2024 respectively, resulting in a $4.0$9.8 million decrease in cost of revenues. Romanian parks had a $0.8 million increase in operational costs driven by higher costs of energy acquisition for contracted revenues in the period. Furthermore, the total Romanian costs of revenue for 2024 accounts for only nine months as the Company sold the Romanian operating parks on October 3, 2024. Refer to Footnote 1917 for additional sale information.

Selling, general, and administrative expenses for continuing operations increaseddecreased by $7.1$3.9 million for the year ended December 31, 20242025 compared to the same period in 20232024 mainly driven by an increasedecrease in headcount and office costs along with significant drop in audit, consulting, legal, and listing costs along with other costs relating to be listed on Nasdaq along with an increase in insurance costs.

Selling, general and administrative expenses for discontinued operations decreased by $4.7$1.6 million for the year ended December 31, 20242025 compared to the same period in 20232024 mainly driven bydue ato decreasesale inof the Solisoperating managementassets feeduring 2024. Refer to overseeFootnote operations17 for fiveadditional parkssale in Romania for 2024 compared to the 23 parks in 2023 (5 in Romania, 1 in the Netherlands, 6 in Poland, and 11 in Italy).information.

The Company has evaluated the rescission in accordance with ASC 855, Subsequent Events, and determined it to be a non-recognized subsequent event, as the rescission did not change the condition of “control” that existed as of the acquisition date or the reporting period end. As such, no adjustments have been made to the financial statements for the period ended December 31, 2024. The rescission will bewas reflected in the Company’s financial statements in the future accounting period in which the sale or disposal criteria are met (i.e., either the first or second quarterly period of the year ending December 31, 2025).

Development cost increaseddecreased by $0.4$0.7 million for the year ended December 31, 20242025 compared to the same period in 20232024 due to final work performed for projects abandoned for the development of renewable energy projects in Spain and the United States.

Depreciation, amortization and accretion expenses for discontinued operations decreased by $3.3$1.7 million for the year ended December 31, 20242025 compared to the same period in 2023.2024. All operating parks in Poland andPoland, the Netherlands and Romania were sold on January 19, 2024 and2024, February 21, 2024, respectively, resulting in a $2.8 million decrease in depreciation expense. Furthermore, the total Romanian depreciation expense for 2024 accounts for only nine months as the Company sold the Romanian operating parks onand October 3, 2024.2025 respectively. Refer to Footnote 1917 for additional sale information.

On January 19, 2024, the Company sold its operating parks in Poland with a carrying value of $55.2 million for $59.4 resulting in a $4.2 million gain. The costs incurred to complete the transaction totaled $0.8 million and are reported together with the disposal of the assets according to ASC 360-10-35-38. Refer to Footnote 17 for additional sale information.

On February 21, 2024, the Company sold its operating park in the Netherlands with a carrying value of $8.0 million for $7.1 million resulting in a $0.9 million loss. The costs incurred to complete the transaction totaled $0.4 million and are reported together with the disposal of the assets according to ASC 360-10-35-38. Refer to Footnote 17 for additional sale information.

Income tax expense for continuing operations increased decreased by $0.6 million for the year ended December 31, 20242025 compared to the same period in 20232024 due to the recognition of penalties assessed for the late filing of the 20232024 corporate tax returnreturn.. The Company did not book additional penalties during the year ended December 31, 2025 as the business had decreased in size and lateoperating extensionsubsidiaries filingon forwhich the 2024penalties taxwere return.assessed in 2024.

Impairment loss recognized for continuing operations increased decreased by $3.3 million for the year ended December 31, 20242025 compared to the same period in 2023.2024 The decrease representsas the expected losscharge at December 31,in 2024 onrelated the disposal ofto the Spanish assets.assets that were subsequently sold in March 2025. Refer to footnote 18 for sale information.

A key element to the Company’s financing strategy is to raise much of its debt in the form of project specific non-recourse borrowings at its subsidiaries with investment grade metrics. Going forward, the Company intends to primarily finance acquisitions or growth capital expenditures using equity and long-term non-recourse debt that fully amortizes within the asset’s contracted life, as well as retained cash flows from operations and issuance of equity securities through public markets.

OurAs discussed in Footnote 2 to the consolidated financial statementsstatements, forwe the yearhave endedexperienced recurring operating losses, generated negative cash flows from operations and have limited cash resources as of December 31, 20242025 andwhich, 2023together identifieswith our current level of indebtedness, represent the existence of certain conditions that raise substantial doubt about our ability to continue as a going concern for twelve months from the issuance of this report.report, Referwithout toadditional Footnote 2 of the accompanying financial statements for more information.financing.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2025 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. There have been no material changes during fiscal 2026 to the risk factors that were included in Form 10-K.10-K, other than as follows: