{"url_path":"/sec/cik-0001883984/10-k/2026/item-1","section_key":"item-1","section_title":"Item 1 Business**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-15","source_url":"https://www.sec.gov/Archives/edgar/data/1883984/0001437749-26-020545-index.html","accession_number":"0001437749-26-020545","cik":"0001883984","ticker":null,"issuer_name":"Alternus Clean Energy, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1883984/0001437749-26-020545-index.html","primary_entity_key":"0001883984","primary_entity_name":"Alternus Clean Energy, Inc."},"word_count":27614,"has_tables":true,"body_markdown":"**Item 1. Business**\n\n \n\n*Each of the terms*“*Alternus,*”*the*“*Company,*”**“*we,*”**“*our,*”**“*us,*”*and similar terms used herein refer collectively to Alternus Clean Energy, Inc. and where appropriate, our subsidiaries.*\n\n \n\n**The Company**\n\n \n\nThe Company was incorporated on May 14, 2021 under the laws of Delaware and was originally known as Clean Earth Acquisitions Corp. The Company closed a business combination on December 22, 2023 and changed its name to Alternus Clean Energy, Inc.  We currently have 13 employees; 6 employees are located in Dublin, Ireland, 2 are located at the Company’s headquarters located in New York, 2 remote employees in the US and 3 are located in Europe. Our employees perform various services such as business development, finance, and management functions.\n\n \n\nWe are a specialized energy transition platform dedicated to powering the next generation of global infrastructure. Our mission is to secure the future of global power by deploying a diversified portfolio of onsite energy technologies that provide energy independence, predictable value, and resilience for the world’s most critical infrastructure. Our vision is to be a leading global platform for decentralized energy, empowering the digital economy to thrive beyond the limitations of the traditional power grid.\n\n \n\nWe bridge the gap between emerging energy technologies and high-demand sectors by delivering 24/7 energy solutions that leverage a diverse suite of technologies, including wind, solar, and battery storage. By bypassing grid limitations and addressing the energy bottlenecks faced by data centers and industrial facilities, we offer a scalable, capital-light model designed to enable investors to participate in the rapid expansion of the digital economy and the essential transition to a resilient energy future.\n\n \n\nOur near-term focus is the microgrid and onsite energy market, a rapidly growing segment driven by surging electricity demand from artificial intelligence infrastructure, data centers, and the onshoring of heavy industry. In furtherance of this strategy, we have formed EverOn Energy LLC (\"EverOn\"), a joint venture with Hover Energy LLC (\"Hover Energy\"), to deliver state-of-the-art wind-powered clean energy microgrids to corporates, and other facility owners across the United States and United Kingdom. EverOn combines Hover Energy’s award-winning, patented compact wind turbine technology with Alternus’s project development, financing, and asset management expertise, a pairing that provides a compelling and differentiated offering in the market today.\n\n \n\nEverOn’s microgrid systems integrate compact wind turbines, solar, and battery storage to produce clean, low-cost power directly on a customer’s premises. Solutions are delivered under long-term Power Purchase Agreements (“PPAs”) or Energy-as-a-Service (“EaaS”) contracts at rates below what customers currently pay, requiring no upfront capital expenditure from the customer. This model is designed to provide faster time to revenues and lower equity requirements compared to traditional utility-scale energy development, while generating stable, long-term recurring income for Alternus.\n\n \n\n**Our Operating Subsidiaries**\n\n \n\nAs of the date of filing, the Company is a holding company that operates through 8 operating subsidiaries, as listed in Exhibit 21.1 to this Annual Report on Form 10-K.\n\n \n\n**Business Model**\n\n \n\nAlternus operates as a focused energy transition platform, dedicated to the development and long-term ownership of decentralized, onsite energy solutions. Our operations are currently concentrated on the microgrid market, which we believe represents one of the most significant near-term opportunities in the global energy transition, driven by structural grid limitations, rising energy costs, and the explosive growth of energy-intensive industries including artificial intelligence and onshored manufacturing.\n\n \n\nOur primary route to market is through EverOn Energy, our joint venture with Hover Energy, through which we develop and deliver wind-powered clean energy microgrids to corporates, data centers, and industrial facility owners across the United States and United Kingdom. EverOn targets four high-value verticals;  big box retail, real estate, education, and manufacturing, where energy cost savings, resilience, and net zero commitments are critical operational priorities. \n\n \n\nOver 70% of our planned near-term growth is already represented in an existing pipeline of large, financially stable, and highly reputable corporations that are dominant leaders in their industries (\"Blue-Chip Clients\").\n\n \n\nRevenue is generated primarily through long-term PPA and EaaS contract structures, whereby customers receive clean, reliable onsite energy at rates below their current tariff, without carrying the capital cost of energy assets on their own balance sheets. \n\n \n\nThis model creates stable, recurring income streams for Alternus while offering customers the energy independence, cost transparency, and operational resilience that the modern grid increasingly cannot guarantee.\n\n \n\nThe value creation logic of our model is straightforward: the earlier we engage with a customer or project opportunity, the more of the value we retain as the project progresses from origination through to commissioning and long-term operation. EverOn’s ability to identify high-wind-speed sites minimizes the equity required to deliver each project, improving returns and enabling more capital to be recycled into new pipeline. Each microgrid brought into service adds a durable, recurring income stream to our portfolio, and those streams accumulate as we scale, a stair-step approach to revenue growth designed to deliver predictable, sustainable returns for shareholders.\n\n \n\nOur pipeline is generated through EverOn and a cultivated network of technology and development partners. As a long-term owner and operator of critical decentralized energy infrastructure, rather than a transactional developer building assets for others to own,  Alternus is positioned to compound value over time as the global demand for energy independence continues to accelerate.\n\n \n\n**Revenue Model: **\n\n \n\nDuring the year ended December 31, 2024, Alternus generated revenues from the sale of clean energy, under long-term offtake agreements, to national power grids (Utility Scale Solar and Storage). No revenue was generated during the year ended December 31, 2025.\n\n \n\n1\n\n[Table of Contents](#toc)\n\n \n\nSale of Clean Energy to Private Corporate *Clients** - fro****m *****Microgrids and Other Forms Energy Generation Installed and Managed at Client Premises**\n\n \n\nThe renewable energy generated from installed generation microgrid project is delivered and consumed directly - 'behind the meter' -  by corporate clients un long term power purchase agreements Revenues are booked by multiplying the energy produced, measured in megawatt hours (MWh), by the energy rate attributable to the hours during the reporting period. The rates received from either local government or investment grade commercial customers are contracted under long-term contracts and/or from local energy markets at the market rates prevailing as the energy is delivered. At any one time, Alternus aims to have approximately 70% of the energy rates contracted long-term on a portfolio basis. This revenue mix creates high margin and long-term predictable income streams that provide us with more flexible debt options that we deploy in ways to maximize returns on equity.\n\n \n\n**Revenue Model**\n\n \n\nAlternus intends to generate revenue primarily through long-term PPAs and EaaS contracts, under which commercial and industrial customers receive clean, reliable onsite energy at rates below, or on par with their prevailing grid tariff, with no requirement to invest upfront capital in energy assets. \n\n \n\nThis model creates stable, recurring income streams for Alternus while delivering the energy independence, cost transparency, and operational resilience that customers increasingly require.\n\n \n\nUnder the EaaS model operated through our EverOn Energy joint venture, customers pay for energy delivered on a per-kilowatt-hour basis under long-term contracts, typically structured with an initial fixed rate and an annual escalator, which provides Alternus with predictable, long-duration cash flows. \n\n \n\nThe capital cost of microgrid assets is funded by Alternus and its financing partners, meaning customer adoption requires no capital expenditure commitment, which we believe significantly accelerates commercial uptake.\n\n \n\nAs the portfolio of operational microgrids grows, revenues accumulate in a stair-step fashion: each new installation adds a durable, long-term income stream that compounds alongside the existing portfolio. This contrasts with business models based on one-time equipment sales or construction fees, where annual revenues are inherently unpredictable.\n\n \n\n**Vision and Strategy**\n\n \n\nAlternus aims to become a leading global platform for decentralized energy, empowering critical infrastructure to thrive beyond the limitations of the traditional power grid. \n\n \n\nWe intend to achieve this by deploying a diversified portfolio of onsite energy technologies, combining wind, solar, and battery storage, that deliver energy independence, predictable value, and resilience to the world’s most demanding energy users.\n\n \n\nOur near-term strategy is focused on scaling EverOn Energy, our microgrid joint venture with Hover Energy, across four high-value commercial and industrial verticals in the United States and United Kingdom: big box retail, real estate, education, and manufacturing. \n\n \n\nThese sectors share a common profile: high energy intensity, long-term site control, strong net zero commitments, and growing urgency around cost certainty and energy security. Over 70% of our planned near-term growth is already represented in an existing pipeline of Blue-Chip Clients.\n\n \n\nTo pursue this vision, the Company intends to execute the following strategies:\n\n \n\n \n\n●\n\nScale EverOn across the US and UK Commercial and Industrial (\"C&I\") microgrid market, targeting Blue-Chip Clients in retail, real estate, education, and manufacturing where onsite energy generation delivers immediate, measurable cost savings and supports net zero commitments.\n\n \n\n \n\n●\n\nDeepen EaaS contract penetration by structuring all new deployments under long-term PPA and EaaS frameworks that require no customer capital expenditure, enabling faster adoption while locking in recurring income streams for Alternus.\n\n \n\n \n\n●\n\nExpand the technology suite over time to include complementary storage, demand management, and AI-driven energy optimisation capabilities, building on EverOn’s existing integration with IBM’s Microgrid Management System.\n\n \n\n \n\n●\n\nPreserve optionality on strategic solar assets: Alternus retains exclusive rights to acquire a portfolio of utility-scale solar development projects in Italy, currently totaling approximately 217 MW. While solar is not our primary near-term focus, these assets represent a potential avenue for future portfolio diversification and long-term recurring income as the microgrid business matures.\n\n \n\n \n\n●\n\nPursue additional joint ventures and technology partnerships in adjacent decentralised energy segments, consistent with our capital-light model, to broaden revenue streams and accelerate growth without disproportionate equity dilution.\n\n \n\nWe believe that Alternus is well positioned to capture a meaningful share of the unprecedented structural growth now underway across the global energy transition, and in particular, the rapid expansion of decentralized, onsite energy solutions driven by the convergence of AI infrastructure build-out, grid congestion, and corporate energy independence mandates.\n\n \n\n**Competitive Strengths**\n\n \n\nThe Company believes the following competitive strengths have contributed and will continue to contribute to its success:\n\n \n\n \n\n●\n\n**Differentiated microgrid technology:** EverOn’s deployment of Hover Energy’s award-winning, patented compact wind turbine systems, combined with solar and battery storage, provides a multi-technology microgrid offering that is unique in the market. Wind-solar hybrid configurations deliver substantially higher on-site energy generation than solar-only systems, improving the economics and resilience of each installation.\n\n \n\n2\n\n[Table of Contents](#toc)\n\n \n\n \n\n●\n\n**Capital-light, EaaS-first model:** By delivering energy under long-term service contracts rather than selling equipment, Alternus removes the single biggest barrier to customer adoption, upfront capital expenditure, while retaining ownership of income-generating assets. This structure is designed to accelerate pipeline conversion and generate long-duration, recurring cash flows.\n\n \n\n \n\n●\n\n**Established blue-chip pipeline:** Over 70% of EverOn’s planned near-term growth is already at various stages in an existing pipeline of large, creditworthy commercial and industrial clients, providing clear near-term revenue visibility.\n\n \n\n \n\n●\n\n**Experienced transatlantic team:** The Alternus team bring decades of combined experience across renewable energy project development, asset financing, operations and maintenance, and commercial energy contracting in various  markets.\n\n \n\n \n\n●\n\n**Exclusive solar asset optionality:** Alternus retains exclusive rights to acquire approximately 217 MW of utility-scale solar development projects in Italy. These assets provide a strategic option for future portfolio expansion without requiring immediate capital deployment, and can be pursued selectively as the Company’s financial position evolves.\n\n \n\n \n\n●\n\n**Long-term owner operator philosophy:** As a long-term owner and operator of energy infrastructure, rather than a build-to-sell developer, Alternus is incentivised to design and maintain assets for maximum operational performance over their full useful life. This orientation makes us a more attractive long-term partner for corporate customers, financiers, and government counterparties alike.\n\n \n\n**Competitive Landscape**\n\n \n\nThe market for commercial and industrial microgrid solutions is growing rapidly, and remains relatively fragmented. Alternus, through EverOn, competes primarily with other microgrid developers and EaaS providers targeting the C&I sector in the US and UK. Key competitive factors include technology differentiation, contract structure, speed of deployment, customer relationships, and access to project financing.\n\n \n\nEverOn’s wind-solar-storage hybrid offering differentiates it from the majority of competitors, who deploy solar-only or storage-only solutions. The combination of Hover Energy’s proprietary compact wind technology with solar and IBM-powered energy management software enables substantially higher on-site generation density and grid offset rates than single-technology alternatives. This differentiation is a key driver of EverOn’s commercial proposition and pipeline conversion rates.\n\n \n\nIn the broader renewable energy market, Alternus may also face competition from larger integrated energy companies, specialist investment funds, and utility-scale developers, particularly if it pursues future expansion into adjacent segments or elects to exercise its solar asset options in Italy. In those segments, we would compete on the basis of development expertise, partner relationships, cost of capital, and operational track record.\n\n \n\n**The Market**\n\n \n\nAlternus operates at the intersection of two of the most powerful structural forces reshaping the global energy system: the explosive growth in demand for reliable, onsite power from data centers and digital infrastructure; and the accelerating drive by commercial and industrial organisations to achieve energy independence in the face of grid congestion, price volatility, and net zero obligations.\n\n \n\n**The AI and Data Center Energy Surge**\n\n \n\nGlobal electricity consumption from data centers reached approximately 415 terawatt-hours (TWh) in 2024, representing around 1.5% of total global electricity demand, and has grown at approximately 12% per year since 2017, more than four times faster than total global electricity consumption growth over the same period.¹ \n\n \n\nThe International Energy Agency (“IEA”) projects that data center electricity consumption will more than double to approximately 945 TWh by 2030 under its base case, growing at around 15% per year, a rate more than four times faster than the growth of all other electricity-consuming sectors combined.²\n\n \n\nAI is the primary driver of this acceleration. Electricity demand from AI-focused data centers surged 50% in 2025 alone, well outpacing the 17% growth in overall data center electricity demand and the 3% growth in global electricity demand overall. Electricity consumption in accelerated servers, driven primarily by AI adoption,  is projected to grow at 30% per year in the IEA’s Base Case, compared to 9% per year for conventional servers.³ The capital expenditure of the five largest technology companies, Amazon Web Services, Google, Meta, Microsoft and Equinix, surged to more than $400 billion in 2025, and is set to increase by a further 75% in 2026.⁴\n\n \n\nThis surge in demand is straining existing grid infrastructure. Data center developers are increasingly advancing projects with onsite power generation to bypass slow grid connections and constrained transmission capacity.⁵ Onsite microgrid solutions, providing reliable, clean power without dependence on the grid, are a direct and compelling response to this constraint.\n\n \n\n**Reshoring and Industrial Electrification**\n\n \n\nAlongside AI infrastructure, the reshoring of manufacturing to the United States represents a significant and growing source of industrial energy demand. In 2024, 244,000 US manufacturing jobs were announced via reshoring and foreign direct investment, continuing the nation’s multi-year push to rebuild domestic production capacity.⁶ The US Council of Economic Advisers estimates that continued electrification of the economy and reshoring of energy-intensive manufacturing will require as much as $1.4 trillion of investment in power generation capacity between 2025 and 2030.⁷\n\n \n\nFor manufacturers reshoring production, reliable and cost-effective energy supply is a critical operational prerequisite. Grid constraints in many US markets make onsite generation, including microgrid solutions, an increasingly important enabler of domestic manufacturing competitiveness.\n\n \n\n**The Global Microgrid Market**\n\n \n\nMicrogrids are localized energy systems capable of operating independently or in conjunction with the main electrical grid, integrating distributed energy resources, such as wind turbines, solar panels, battery storage, and generators,  to generate, store, and manage electricity within a defined area.\n\n \n\n3\n\n[Table of Contents](#toc)\n\n \n\nThe global microgrid market was valued at approximately $35–43 billion in 2024 across leading industry estimates, and is projected to grow at a compound annual growth rate of approximately 17–18% through 2030–2032, reaching between $95 billion and $142 billion by the early part of the next decade.⁸ The commercial and industrial segment, which represents EverOn’s primary market, accounted for the largest share of global microgrid revenues in 2024, driven by the growing need for reliable, cost-efficient power and energy independence in manufacturing, retail, logistics, and data center applications.⁹\n\n \n\nThe industrial and commercial scale microgrid segment specifically was valued at approximately $2.2 billion in 2023 and is projected to grow at a CAGR of approximately 24% through 2032, one of the fastest growth rates in any energy sub-segment, driven by rising demand for solutions that deliver cost savings through local generation and reduced grid dependence.¹⁰\n\n \n\nThe UK Microgrid Market\n\n \n\nThe United Kingdom represents EverOn’s initial primary market, and is an especially attractive environment for commercial microgrid deployment. Energy prices in the UK have increased sharply over the past five years, driven by wholesale market volatility and structural grid constraints, and now represent the single largest cost concern for many large UK businesses. A recent survey found that energy prices have become the primary operational concern for over half of large UK enterprises.¹¹\n\n \n\nThe UK microgrid market generated approximately $4.02 billion in revenue in 2025 and is expected to reach approximately $10.21 billion by 2030, growing at a CAGR of approximately 20.5%.12 The UK has also committed to achieve net zero greenhouse gas emissions by 2050 and to source all electricity from renewable sources by 2035, regulatory commitments that create powerful incentives for corporates to invest in, or contract for, onsite clean energy generation. EverOn’s EaaS model, which requires no customer capital expenditure and delivers immediate energy cost savings under long-term contracts, is well aligned with both the economic and regulatory imperatives facing UK businesses today.\n\n \n\nReferences:\n\n \n\n1. International Energy Agency (IEA), Energy and AI Report, April 2025. https://www.iea.org/reports/energy-and-ai\n\n \n\n2. IEA, Energy Demand from AI, April 2025. https://www.iea.org/reports/energy-and-ai/energy-demand-from-ai\n\n \n\n3. IEA, Energy and AI: Executive Summary, April 2025. https://www.iea.org/reports/energy-and-ai/executive-summary\n\n \n\n4. IEA, Key Questions on Energy and AI, April 2025. https://www.iea.org/news/data-center-electricity-use-surged-in-2025\n\n \n\n5. IEA, Key Questions on Energy and AI, April 2025. https://www.iea.org/news/data-center-electricity-use-surged-in-2025\n\n \n\n6. Reshoring Initiative, 2024 Annual Report Including 1Q2025 Insights, June 2025. https://reshorenow.org/june-9-2025/\n\n \n\n7. US Council of Economic Advisers, The Economic Benefits of Unleashing American Energy, August 2025. https://www.whitehouse.gov/wp-content/uploads/2025/08/The-Economic-Benefits-of-Unleashing-American-Energy.pdf\n\n \n\n8. MDPI - Microgrids as a Tool for Energy Self-Sufficiency-  https://www.mdpi.com/1424-8220/25/21/6707\n\n \n\n9. The Insight Partners, Microgrid Market Analysis, Size and Share by 2031 - https://www.theinsightpartners.com/reports/microgrid-technology-market\n\n \n\n10. Global Market Insights, Industrial & Commercial Scale Microgrid Market Report, August 2024. https://www.gminsights.com/industry-analysis/industrial-and-commercial-scale-microgrid-market\n\n \n\n11. SNRG, Huge Growth in Commercial and Industrial Microgrid, 2024. https://oursnrg.com/huge-growth-in-commercial-and-industrial-microgrid/\n\n \n\n12. Grand View Research / Horizon Databook, UK Microgrid Market Size & Outlook, 2023–2030, March 2025. https://www.grandviewresearch.com/horizon/outlook/microgrid-market/uk\n\n \n\n4\n\n[Table of Contents](#toc)\n\n \n\n**Facilities and Corporate Information**\n\n \n\nOur headquarters are located at 17 State Street, Suite 4000, New York, NY 10004. Our main telephone number is (212) 739-0727. Our website is https://alternusce.com\n\n \n\n**Government Regulations**\n\n \n\n*Environmental:*\n\n \n\nThe Company is subject to environmental laws and regulations in the jurisdictions in which it owns and operates renewable energy facilities. These laws and regulations generally require that government permits and approvals be obtained and maintained both before construction and during operation of these renewable energy facilities. The Company incurs costs in the ordinary course of business to comply with these laws, regulations, and permit requirements. The Company does not anticipate material capital expenditures for environmental compliance for its renewable energy facilities in the next several years. While the Company does not expect that the costs of compliance would generally have a material impact on its business, financial condition or results of operations, it is possible that as the size of its portfolio grows, it may become subject to new or modified regulatory regimes that may impose unanticipated requirements on the business as a whole that the Company did not anticipate with respect to any individual renewable energy facility. Additionally, environmental laws and regulations frequently change and often become more stringent, or subject to more stringent interpretation or enforcement, and therefore future changes could require the Company to incur materially higher costs which could have a material negative impact on its financial performance or results of operations.\n\n \n\n*Regulatory Matters, Government Legislation, and Incentives:*\n\n \n\nAs the size of the Company’s portfolio grows, or as applicable rules and regulations evolve, it may become subject to new or modified regulatory regimes that may impose unanticipated requirements on the business as a whole that were not anticipated with respect to any individual renewable energy facility. Any local, state, federal or international regulations could place significant restrictions on the Company’s ability to operate its business and execute its business plan by prohibiting or otherwise restricting the sale of electricity. If the Company was deemed to be subject to the same state, federal or foreign regulatory authorities as traditional utility companies, or if new regulatory bodies were established to oversee the renewable energy industry in Europe or in international markets, its operating costs could materially increase, adversely affecting results of operations.\n\n \n\n**Available Information**\n\n \n\nOur website address is https://alternusce.com. We make available on our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov. The information found on our website is not incorporated by reference into this Annual Report on Form 10-K or any other report we file with or furnish to the SEC.\n\n \n\n5\n\n[Table of Contents](#toc)\n\n \n\n**I****tem****1A. R****isk Factors.**\n\n \n\n*Investing in us involves a high degree of risk. Before you invest in us, you should carefully consider the following risks, as well as general economic and business risks, and all of the other information contained in this Annual Report on Form* *10-K.* *Any of the following risks could have a material adverse effect on our business, operating results and financial condition and cause the trading price of our common stock to decline, which would cause you to lose all or part of your investment. When determining whether to invest, you should also refer to the other information contained in this Annual Report on Form 10-K, including our financial statements and the related notes thereto, and the other financial information concerning us included elsewhere in this Annual Report on Form 10-K.*\n\n \n\n**We cannot assure you that we will achieve or maintain profitability and our auditor has expressed substantial doubt about our ability to continue as a going concern.**\n\n \n\nWe will need to raise additional working capital to continue our normal and planned operations. We will need to generate and sustain significant revenue levels in future periods in order to become profitable, and, even if we do, we may not be able to maintain or increase our level of profitability. In addition, as a public company, we will incur accounting, legal and other expenses. These expenditures will make it necessary for us to continue to raise additional working capital. Our efforts to grow our business may be costlier than we expect, and we may not be able to generate sufficient revenue to offset our increased operating expenses. We may incur significant losses in the future for a number of reasons, including unforeseen expenses, difficulties, complications and delays and other unknown events. Accordingly, substantial doubt exists about our ability to continue as a going concern and we cannot assure you that we will achieve sustainable operating profits as we continue to expand our business, and otherwise implement our growth initiatives.\n\n \n\nThe financial statements included with this Annual Report have been prepared on a going concern basis. We may not be able to generate profitable operations in the future and/or obtain the necessary financing to meet our obligations and pay liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time. These factors raise substantial doubt that we will be able to continue as a going concern. We plan to continue to provide for our capital needs through sales of our securities and/or other financing activities. Our financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.\n\n \n\n**Our substantial indebtedness could adversely affect our renewable energy business, financial condition and results of operations.**\n\n \n\nWe believe that our substantial indebtedness will increase. As of December 31, 2025, we had $6.2 million in outstanding short-term borrowing. It is likely that we will continue to be highly leveraged. The degree to which we remain leveraged could have important consequences to stockholders of the Company, including, but not limited to:\n\n \n\n \n\n●\n\nmaking it more difficult for the Company to satisfy its obligations with respect to its other debt and liabilities;\n\n \n\n \n\n●\n\nincreasing the Company’s vulnerability to, and reducing its flexibility to respond to, general adverse economic and industry conditions;\n\n \n\n \n\n●\n\nrequiring the dedication of a substantial portion of the cash flow of the Company from operations to the repayment of principal of, and interest on, indebtedness, thereby reducing the availability of such cash flow and limiting the ability to obtain additional financing to fund working capital, capital expenditures, acquisitions, joint ventures or other general corporate purposes, such as payments to suppliers and contractors for design, engineering, procurement, and construction services;\n\n \n\n \n\n●\n\nlimiting the Company’s flexibility in planning for, or reacting to, changes in its business and the competitive environment and the industry in which it operates; and\n\n \n\n \n\n●\n\nplacing the Company at a competitive disadvantage as compared to its competitors, to the extent that they are not as highly leveraged.\n\n \n\nIf the Company incurs new debt or other obligations, the related risks the Company now faces, as described in this risk factor and elsewhere in these “*Risk Factors*,” could intensify.\n\n \n\n**Our business as a renewable energy company requires significant financial resources, and our growth prospects and future profitability depends to a significant extent on the availability of additional funding options with acceptable terms.**\n\n \n\nOur principal resources of liquidity to date have been cash from our operations and borrowings from banks and our shareholders. We have leveraged bank facilities in certain countries in order to meet working capital requirements for its activities. Our principal use of cash has been for pipeline development, working capital, and general corporate purposes.\n\n \n\nWe will require significant amounts of cash to fund the acquisition, development, installation, and construction of our projects and other aspects of our operations. We may also require additional cash due to changing business conditions or other future developments, including any investments or acquisitions it may decide to pursue in order to remain competitive. Historically, we have used bank loans, bridging loans, and third-party equity contributions to fund its project acquisition and development. We expect to seek to expand our business with third-party financing options, including bank loans, equity partners, financial leases, and securitization. However, it cannot be guaranteed that we will be successful in locating additional suitable sources of financing in the time periods required or at all, or on terms or at costs that it finds attractive or acceptable, which may render it impossible for us to fully execute our growth plan.\n\n \n\nAny debt financing may require restrictive covenants and additional funds may not be available on terms commercially acceptable to us, *vis-*à*-vis*  acquired assets and subsidiaries. Failure to manage discretionary spending and raise additional capital or debt financing as required may adversely impact our ability to achieve our intended business objectives.\n\n \n\n6\n\n[Table of Contents](#toc)\n\n \n\n**We are a holding company that relies on distributions and other payments, advances and transfers of funds from our subsidiaries to meet our obligations.**\n\n \n\nWe have no direct operations and derive all our revenue and cash flow from our subsidiaries. Because we conduct our operations through subsidiaries, we depend on those entities for payments or distributions in order to meet our obligations. The deterioration of the earnings from, or other available assets of, our subsidiaries for any reason could limit or impair their ability to pay us and adversely affect our operations.\n\n \n\nThe reduction, modification or elimination of government subsidies and economic incentives may reduce the economic benefits of existing renewable energy projects and the opportunities to develop or acquire suitable new projects.\n\n \n\n**Decreases in the spot market price of electricity could harm our revenue and reduce the competitiveness of****renewable energy ****parks in grid-parity markets.**\n\n \n\nThe price of electricity from our renewable 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 renewable energy projects can be profitably developed without the need for government price supports, these projects may choose not to enter into PPAs and would instead sell based on the spot market price of electricity. The market price of electricity can be subject to significant fluctuations.\n\n \n\nDecreases in the spot price of electricity in such countries could render renewable 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.\n\n \n\n**Our power purchase agreements (PPAs) may not be successfully completed.**\n\n \n\nPayments by power purchasers under a PPA may provide the majority of a Subsidiary’s or a project’s cash flows. There can be no assurance that any or all of the power purchasers will fulfill their obligations under their PPAs or that a power purchaser will not become bankrupt, or that upon any such bankruptcy, its obligations under its respective PPA will not be rejected by a bankruptcy trustee. There are also additional risks relating to PPAs, including the occurrence of events beyond the control of a power purchaser that may excuse it from its obligation to accept and pay for the delivery of energy generated by the project company’s plant. The failure of a power purchaser to fulfill its obligations under any PPA or the termination of any PPA may have a material adverse effect on the respective project or project company and therefore on us.\n\n \n\n**The seasonality of our Subsidiaries**’**operations may materially affect our business, results of operations, cash flows, and financial condition.**\n\n \n\nThe energy production industry is subject to seasonal variations as well as other significant events. For instance, the amount of electricity and revenues generated by our solar generation facilities is dependent in part, on the amount of sunlight, or irradiation, where the assets are located. Due to shorter daylight hours in winter months, there is less irradiation and the generation produced by these facilities will vary depending on the season.\n\n \n\nThe seasonality of our energy production may create increased demands on liquidity during periods when cash generated from operating activities are lower and we may also require additional equity or debt financing to maintain its solvency, which may not be available when required or available on commercially favorable terms. Thus, the Company may struggle to maintain sufficient financial liquidity to absorb the impact of seasonal variations in energy productions. Other significant events and seasonal variations may adversely affect the Company’s business, results of operations, cash flows, and financial condition.\n\n \n\n**The acquisition of renewable energy facilities or of companies that own and operate renewable energy facilities is subject to substantial risk.**\n\n \n\nA significant part of our business model has been to acquire new renewable energy facilities and companies that own and operate renewable energy facilities. Acquisition of renewable energy facilities or of companies that own and operate renewable energy facilities is subject to substantial risk. While we believe that we have performed adequate due diligence on prospective acquisitions, we may not have been able to discover all potential operational deficiencies in such renewable energy facilities. In addition, our expectations for the operating performance of newly constructed renewable energy facilities as well as those under construction are based on assumptions and estimates made without the benefit of an operating history.\n\n \n\nIf 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 our business, financial condition, results of operations and cash flows.\n\n \n\nFurther, 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 our business, results of operations or financial condition.\n\n \n\n**The delay between making significant upfront investments in renewable energy parks and receiving revenue could materially and adversely affect our liquidity, business and results of operations.**\n\n \n\nThere are generally multiple months between the initial significant upfront investments in renewable energy parks, renewable energy park development and obtaining permits to build renewable energy parks which we expect to own and operate and when we begin to receive revenues from the sale of electricity generated by such renewable 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. Renewable 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 these projects  (through our model of working with local developers) and their connection to the transmission grid, there may be adverse developments impacting such 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.\n\n \n\n7\n\n[Table of Contents](#toc)\n\n \n\n**We may experience delays related to developing and maintaining renewable energy projects.**\n\n \n\nDevelopment of renewable 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.\n\n \n\nDevelopment, 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 renewable 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.\n\n \n\n**Renewable 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.**\n\n \n\nThe development of 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 renewable power project is economically, technologically or otherwise feasible. Success in developing a renewable power project is contingent upon, among other things:\n\n \n\n \n\n●\n\nsecuring investment or development rights;\n\n \n\n \n\n●\n\nsecuring suitable project sites, necessary rights of way, satisfactory land/rooftop use or access rights in the appropriate locations with capacity on the transmission grid and related permits, including completing environmental assessments and implementing any required mitigation measures;\n\n \n\n \n\n●\n\nrezoning land, as necessary, to support a renewable power project;\n\n \n\n \n\n●\n\nnegotiating satisfactory EPC agreements;\n\n \n\n \n\n●\n\nnegotiating and receiving required permits and approvals for project development from government authorities on schedule;\n\n \n\n \n\n●\n\ncompleting all required regulatory and administrative procedures needed to obtain permits and agreements;\n\n \n\n \n\n●\n\nprocuring rights to interconnect the renewable power project to the electric grid or to transmit energy;\n\n \n\n \n\n●\n\npaying interconnection and other deposits, some of which are non-refundable;\n\n \n\n \n\n●\n\nsigning grid connection and dispatch agreements, power purchase agreements, or PPAs, or other arrangements that are commercially acceptable, including adequate for providing financing;\n\n \n\n \n\n●\n\nobtaining project financing, including debt financing and own equity contribution;\n\n \n\n \n\n●\n\nnegotiating favorable payment terms with suppliers; and\n\n \n\n \n\n●\n\ncompleting construction on schedule in a satisfactory manner.\n\n \n\nSuccessful completion of a particular renewable energy project may be adversely affected by numerous factors, including without limitation:\n\n \n\n \n\n●\n\nunanticipated changes in project plans or defective or late execution;\n\n \n\n \n\n●\n\ndifficulties in obtaining and maintaining governmental permits, licenses and approvals required by existing laws and regulations or additional regulatory requirements not previously anticipated;\n\n \n\n \n\n●\n\npotential challenges from local residents, environmental organizations, and others who may not support the project;\n\n \n\n \n\n●\n\nuncertainty in the timing of grid connection;\n\n \n\n \n\n●\n\nthe inability to procure adequate financing with acceptable terms;\n\n \n\n \n\n●\n\nunforeseeable engineering problems, construction or other unexpected delays and contractor performance shortfalls;\n\n \n\n8\n\n[Table of Contents](#toc)\n\n \n\n \n\n●\n\nlabor, equipment and materials supply delays, shortages or disruptions, or work stoppages;\n\n \n\n \n\n●\n\nadverse weather, environmental and geological conditions, force majeure and other events outside of owner’s control; and\n\n \n\n \n\n●\n\ncost overruns, due to any one or more of the foregoing factors.\n\n \n\nAccordingly, some of the renewable energy projects in our pipeline may not be completed or even proceed to construction. If several renewable energy projects are not completed, our business, financial condition and results of operations could be materially and adversely affected.\n\n \n\n**Development activities may be subject to cost overruns or delays, which may materially and adversely affect our financial results and results of operations.**\n\n \n\nDevelopment of our renewable 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 renewable energy modules, inverters or other materials. Obtaining full permits for renewable power projects is time consuming and we may not be able to meet the expected timetable for obtaining full permits for renewable power projects in the pipeline. In addition, we usually rely on external contractors for the development and construction of renewable energy 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 renewable 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 renewable power projects, commencing operation and connecting to the relevant grid.\n\n \n\nWe 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 renewable power project.\n\n \n\n**Renewable power plants quality or  performance.**\n\n \n\nInsufficient quality of installed renewable 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 renewable power plants may, from time to time, experience technical breakdown. Furthermore, widespread renewable 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.\n\n \n\nOur holding companies have a significant number of foreign subsidiaries with whom they have entered into many related party transactions. The relationship of such holding companies with these entities could adversely affect us in the event of their bankruptcy or similar insolvency proceeding.\n\n \n\n**Any reductions or modifications to, or the elimination of, governmental incentives or policies that support****renewable ****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****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 renewable 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.**\n\n \n\nWe depend heavily on government policies that support utility scale renewable energy and enhance the economic feasibility of developing and operating 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.\n\n \n\nOn 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 renewable  energy projects, each of which could have a material adverse effect on our business, financial condition, results of operations and prospects.\n\n \n\n9\n\n[Table of Contents](#toc)\n\n \n\n**Operation and maintenance of renewable energy projects involve significant risks that could result in unplanned outages, reduced output, interconnection or termination issues, or other adverse consequences.**\n\n \n\nThere are risks associated with the operation of our projects. These risks include:\n\n \n\n \n\n●\n\ngreater or earlier than expected degradation, or in some cases failure, of solar panels, inverters, wind turbines, gear boxes, blades, and other equipment;\n\n \n\n \n\n●\n\ncatastrophic events, such as fires, earthquakes, severe weather, tornadoes, ice or hail storms or other meteorological conditions, landslides, and other similar events beyond our control, which could severely damage or destroy a project, reduce its energy output, result in property damage, personal injury, or loss of life, or increase the cost of insurance even if these impacts are suffered by other projects as is often seen following events like high-volume wildfire and hurricane seasons;\n\n \n\n \n\n●\n\ntechnical performance below projected levels, including the failure of solar panels, wind turbines, inverters, gear boxes, blades, and other equipment to produce energy as expected, whether due to incorrect measures of performance provided by equipment suppliers, improper operation and maintenance, or other reasons;\n\n \n\n \n\n●\n\nincreases in the cost of operating the projects, including costs relating to labor, equipment, unforeseen or changing site conditions, insurance, regulatory compliance, and taxes;\n\n \n\n \n\n●\n\nthe exercise by PPA counterparties of options present in certain PPAs to purchase the underlying project for a fixed price that may be lower than the fair market value or our NAV attributable to such project at such time;\n\n \n\n \n\n●\n\nstorm water or other site challenges;\n\n \n\n \n\n●\n\nthe discovery of unknown impacts to protected or endangered species or habitats, migratory birds, wetlands or other jurisdictional water resources, and/or cultural resources at project sites;\n\n \n\n \n\n●\n\nthe inability to sell power following the termination of offtake contracts;\n\n \n\n \n\n●\n\nerrors, breaches, failures, or other forms of unauthorized conduct or malfeasance on the part of operators, contractors, or other service providers;\n\n \n\n \n\n●\n\ncyber-attacks targeted at our projects as a way of attacking the broader grid or the ISO, or a failure by us or our operators to comply with NERC cyber-security regulations aimed at protecting the grid from such attacks;\n\n \n\n \n\n●\n\ndesign or manufacturing defects or failures, including defects or failures that are not covered by warranties or insurance;\n\n \n\n \n\n●\n\nloss of interconnection capacity, and in turn the ability to deliver power under our PPAs, due to grid or system outages or curtailments beyond our or our counterparties’ control;\n\n \n\n \n\n●\n\ninsolvency or financial distress on the part of any of our service providers, contractors, or suppliers, or a default by any such counterparty for any other reason under its warranties or other obligations to us;\n\n \n\n \n\n●\n\nbreaches by us and certain events, including force majeure events, under certain PPAs and other contracts that may give rise to a right of the applicable counterparty to terminate such contract;\n\n \n\n \n\n●\n\nunforeseen levels of price volatility that may result in financial loss when a project sells energy at a different location on the grid than where it is delivered under its PPA;\n\n \n\n \n\n●\n\nfailure to obtain or comply with permits and other regulatory consents and the inability to renew or replace permits or consents that expire or are terminated;\n\n \n\n \n\n●\n\nthe inability to operate within limitations that may be imposed by current or future governmental permits and consents;\n\n \n\n \n\n●\n\nchanges in law, particularly in land use, environmental, or other regulatory requirements;\n\n \n\n \n\n●\n\nthe inability to extend our initial land leases on the same terms for the full useful life of the project;\n\n \n\n \n\n●\n\ndisputes with federal agencies, state agencies, or other public or private owners of land on which our projects are located, or adjacent landowners;\n\n \n\n \n\n●\n\nchanges in tax, environmental, health and safety, land use, labor, trade, or other laws, including changes in related governmental permit requirements;\n\n \n\n \n\n●\n\ngovernment or utility exercise of eminent domain power or similar events;\n\n \n\n \n\n●\n\nexistence of liens, encumbrances, or other imperfections in title affecting real estate interests; and\n\n \n\n \n\n●\n\nfailure to obtain or maintain insurance or failure of our insurance to fully compensate us for repairs, theft or vandalism, and other actual losses.\n\n \n\n10\n\n[Table of Contents](#toc)\n\n \n\nThese and other factors could have adverse consequences on our renewable 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.\n\n \n\nAny of the risks described above could significantly decrease or eliminate the revenues of a project, significantly increase its operating costs, cause us to default under our financing agreements, or give rise to damages or penalties owed by us to an offtaker, another contractual counterparty, a governmental authority, or another third party, or cause defaults under related contracts or permits. Any of these events could have a material adverse effect on our business, NAV, financial condition, and results of operations.\n\n \n\n**We and any third parties with which we do business may be subject to cyber-attacks, network disruptions, and other information systems breaches, as well as acts of terrorism or war that could have a material adverse effect on our business, NAV, financial condition, and results of operations, as well as result in significant physical damage to our renewable energy projects.**\n\n \n\nOur 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 renewable 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.\n\n \n\nTerrorists have attacked energy assets such as substations and related infrastructure in the past and may attack them in the future. We cannot guarantee adequate protection from such attacks on our projects and have little or no control over the facilities of third parties on which our projects rely. Attacks on our or our counterparties’ assets could severely damage our projects, disrupt business operations, result in loss of service to offtakers, and require significant time and expense to repair. Additionally, energy-related facilities, such as substations and related infrastructure, are protected by limited security measures, in most cases only perimeter fencing. Our current portfolio, as well as projects we may develop or acquire and the facilities of third parties on which our projects rely, may be targets of burglary, terrorist acts and affected by responses to terrorist acts, each of which could fully or partially disrupt our projects’ ability to produce, transmit, transport, and distribute energy. To the extent such acts constitute force majeure events under our PPAs or interconnection agreements, the applicable offtaker generally may reduce or cease making payments to us and may terminate such PPA or interconnection agreement if such force majeure event continues for a period typically ranging from six to twelve months as specified in the applicable agreement. We are also generally unable to, or do not, obtain insurance coverage to compensate us for losses caused by terrorist or other similar attacks. As a result, any such attack could significantly decrease revenues, result in significant reconstruction or remediation costs, or otherwise disrupt our business operations, any of which could have a material adverse effect on our business, NAV, financial condition, and results of operations.\n\n \n\n**Our holding companies have historically entered into multiple transactions with their affiliates. These transactions include financial guarantees and other credit support arrangements, including letters of comfort to such affiliates pursuant to which the holding companies undertake to provide financial support to these affiliates and adequate resources as required to ensure that they are able to meet certain liabilities and local solvency requirements. These holding companies are currently party to many such affiliate transactions, and it is likely they will enter into new and similar affiliate transactions in the future.**\n\n \n\nIn the event that any of these affiliates become bankrupt or insolvent, there can be no assurance that a court or other foreign tribunal, liquidator, monitor, trustee or similar party would not seek to enforce these intercompany arrangements and guarantees or otherwise seek relief against the holding companies and their other affiliates. If any of our material foreign subsidiaries (e.g., subsidiaries that hold a significant number of customer contracts, or that are the parent company of other material subsidiaries) become subject to a bankruptcy, liquidation or similar insolvency proceeding, such proceeding could have a material adverse effect on our business and results of operations.\n\n \n\n**We are in a highly competitive marketplace.**\n\n \n\nThe renewable energy industry is highly competitive and we face significant competition in the markets in which we operate. Some of our competitors may have advantages over us in terms of greater operational, financial and technical management as well as additional resources in particular markets or in general. Our competitors may also enter into strategic alliances or form affiliates with other competitors to its detriment. Suppliers or contractors may merge with our competitors which may limit our choices of contractors and hence the flexibility of its overall project execution capabilities. Increased competition may result in price reductions, reduced profit margins and loss of market share. \n\n \n\n11\n\n[Table of Contents](#toc)\n\n \n\nMoreover, our current business strategy is to own and operate all of the renewable energy projects which we develop and acquire. As part of our growth plan, we may, in the future, acquire renewable energy 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 renewable energy projects.\n\n \n\nFurther, large, utility-scale 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 site it seeks to develop. Even when we have identified a desirable site for a renewable 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 renewable 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 sites on commercially acceptable terms, its ability to develop new renewable energy 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.\n\n \n\n**We depend on certain key personnel and loss of these key personnel could have a material adverse effect on our business, financial condition and results of operations.**\n\n \n\nOur 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 renewable 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.\n\n \n\n**If sufficient demand for****renewable energy**** 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.**\n\n \n\nThe renewable 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 renewable energy industry are based only on limited data and may not be reliable. Many factors may affect the demand for renewable energy projects including, among others, cost and availability of financing for such projects, fluctuations in economic and market conditions, competition from non- renewable energy sources, environmental concerns, public perception and regulations and policies governing the electric power industry and the broader energy industry.\n\n \n\nIf market demand for renewable energy projects fails to develop sufficiently, our business, financial condition, results of operations and prospects could be materially and adversely affected.\n\n \n\n**We are subject to risks associated with fluctuations in the prices of renewable energy modules and balance-of-system components or in the costs of design, construction and labor.**\n\n \n\nWe procure supplies for renewable 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 modules and balance-of-system components. Increases in the prices of renewable 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.\n\n \n\n**Refurbishment of renewable energy facilities involve significant risks that could result in unplanned power outages or reduced output.**\n\n \n\nOur facilities may require periodic upgrading and improvement. Any unexpected operational or mechanical failures, such as the failure of a single inverter, or other failures associated with breakdowns and forced outages generally, and any decreased operational or management performance, could reduce its facilities’ generating capacity below expected levels, reducing its revenues. Unanticipated capital expenditures associated with upgrading or repairing its facilities may also reduce our profitability.\n\n \n\nWe may also choose to refurbish or upgrade its facilities based on its assessment that such activity will provide adequate financial returns and key assumptions underpinning a decision to make such an investment may prove incorrect, including assumptions regarding construction costs, timing, available financing and future power prices. This could have a material adverse effect on our business, financial condition, results of operations and cash flows.\n\n \n\nMoreover, spare parts for renewable 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.\n\n \n\n**Our project operations may be adversely affected by weather and climate conditions, natural disasters and adverse work environments.**\n\n \n\nWe 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 renewable energy 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 our renewable energy projects are located in the same region, such projects may be simultaneously affected by weather and climate conditions, natural disasters and adverse work environments.\n\n \n\n12\n\n[Table of Contents](#toc)\n\n \n\nMoreover, natural disasters which are beyond our control may adversely affect the economy, infrastructure and communities in the countries and regions where it conducts its business operations. Such conditions may have an adverse effect on its work performance, progress and efficiency or even result in personal injuries or fatalities.\n\n \n\n**Business interruptions, whether due to catastrophic disasters or other events, could adversely affect Alternus**’**operations, financial condition and cash flows.**\n\n \n\nOur 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’ renewable energy 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.\n\n \n\nAny such terrorist acts, environmental repercussions or disruptions, natural disasters, theft incidents or other catastrophic events could result in a significant decrease in revenues or significant reconstruction, remediation or replacement costs, beyond what could be recovered through insurance policies, which could have a material adverse effect on its operating results and financial condition.\n\n \n\n**Global economic conditions and any related ongoing impact of supply chain constraints and the market of our product and service could adversely affect our results of operations.**\n\n \n\nDue to the specific nature of the renewable 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 renewable 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 renewable energy projects and expand our 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.\n\n \n\nAlthough 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 other renewable energy products and components. This could result in near-term supply crunch in renewable energy systems despite higher costs, as well as increased costs of polysilicon and the overall cost of renewable energy systems, potentially translating into a material adverse effect on our business, financial condition, results of operations and prospects.\n\n \n\n**Fluctuations in foreign currency exchange rates may negatively affect our revenue, cost of sales and gross margins and could result in exchange losses.**\n\n \n\nOur business and operational activities are dispersed and subsidiaries within it trade in their functional currencies in the course of their business operations. Our investment holding companies transact in functional currencies of their subsidiaries. Our investment holding companies may have foreign financing and investing activities, which exposes us to foreign currency risk. Any increased costs or reduced revenue as a result of foreign exchange rate fluctuations could adversely affect our profit margins.\n\n \n\nAlthough we have access to a variety of financing solutions that are tailored to the geographic location of its projects and local regulations, we have not entered into any hedging transactions to reduce the foreign exchange rate fluctuation risks, but may do so in the future when it is deemed appropriate to do so in light of the significance of such risks. However, if we decide to hedge our foreign exchange exposure in the future, we cannot be assured that we will be able to reduce our foreign currency risk exposure in an effective manner, at reasonable costs, or at all.\n\n \n\n**If we fail to comply with financial and other covenants under debt arrangements, our financial condition, results of operations and business prospects may be materially and adversely affected.**\n\n \n\nWe have a number of covenants related to certain debt arrangements. These restrictions could affect our ability to operate our business and may limit the ability to react to market conditions or take advantage of potential business opportunities as they arise. For example, such restrictions could adversely affect our ability to finance our operations, make strategic acquisitions, investments or alliances, restructure our organization or finance our capital needs. Additionally, our ability to comply with these covenants may be affected by events beyond our control. These include prevailing economic, financial and industry conditions. Failure to comply with financial and other covenants may potentially result in increased financial costs, the requirement for additional security or cancellation of loans, which in turn may have a material adverse effect on our results of operations, cash flows and financial condition.\n\n \n\nAny 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 EBITDA. This has had a material adverse effect on our results of operations, cash flows and financial condition.\n\n \n\nIn addition, we typically pledge our renewable energy 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 renewable energy 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.\n\n \n\n13\n\n[Table of Contents](#toc)\n\n \n\n**Our international operations require significant management resources and present legal, compliance and execution risks in multiple jurisdictions.**\n\n \n\nWe have adopted a business model under which it maintains significant operations and facilities through its subsidiaries located in Europe while its corporate management team and directors are primarily based in Ireland and the U.S. The nature of our business may stretch its management resources thin as well as make it difficult for its’s corporate management to effectively monitor local execution teams. The nature of our operations and limited resources of its management may create risks and uncertainties when executing its strategy and conducting operations in multiple jurisdictions, which could adversely affect the costs and results of our operations.\n\n \n\n**The development and installation of  ****renewable**** energy systems is highly regulated; we may fail to comply with laws and regulations in the countries where it develops, constructs and operates renewable power projects and the government approval process may change from time to time, which could severely disrupt our business operations.**\n\n \n\nThe development and installation of renewable 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 renewable energy systems to comply with varying standards. Certain jurisdictions may have ordinances that prevent or increase the cost of installation of our renewable energy systems. New government regulations or utility policies pertaining to the installation of renewable energy systems are unpredictable and might result in significant additional expenses or delays, which could cause a significant reduction in demand for renewable energy systems.\n\n \n\nWe 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. 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.\n\n \n\nIn order to develop 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.\n\n \n\nAny new government regulations pertaining to the Company business or renewable 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.\n\n \n\n**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 renewable energy systems and negatively impact development of the renewable energy industry.**\n\n \n\nThe market for 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 renewable 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.\n\n \n\n14\n\n[Table of Contents](#toc)\n\n \n\n**Risk related to legal rights to real property in foreign countries.**\n\n \n\nOur energy facilities may be located on land which may be subject to government seizure or expropriation. For example, expropriation proceedings may not represent fair compensation and could materially affect our operations; certain operations may have to cease without sufficient compensation being paid to us. Certain types of seizure or expropriation could have a material adverse effect on our ability to generate revenue.\n\n \n\nIn addition to the expropriation risk discussed above, the land on which the renewable energy facilities are situated is often subject to long-term easements and land leases. However, the ownership interests in the land subject to these easements and leases may also be subject to mortgages securing loans or other liens (such as tax liens) and other easement and lease rights of third parties (such as leases of oil or mineral rights) that were created prior to the land easements and leases. As a result, the facility’s rights under these easements or leases may be subject, and subordinate, to the rights of those third parties, or even to the relevant government. The Company performs title searches and obtains title insurance to protect itself against these risks. Such measures may, however, be inadequate to protect the Company against all risk of loss of the Company’s rights to use the land on which the renewable energy facilities are located, which could have a material adverse effect on our business, financial condition and results of operations.\n\n \n\nFurthermore, 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 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.\n\n \n\n**Enforcing a United States judgment against our executive officers and directors in Ireland may be difficult.**\n\n \n\nMany of our current officers and directors reside in Ireland. Service of process upon our directors and officers, many of whom reside outside the United States, may be difficult to obtain within the United States. Furthermore, because the majority of our assets and investments, and a number of our directors and officers are located outside of the United States, any judgment obtained in the United States against us or any of them may be difficult to collect within the United States and may not be enforced by an Irish court. It also may be difficult for you to effect service of process on these persons in the United States or to assert U.S. securities law claims in original actions instituted in Ireland. Irish courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Ireland is not the most appropriate forum in which to bring such a claim. In addition, even if an Irish court agrees to hear a claim, it may determine that Irish law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proven as a fact by expert witnesses, which can be a time consuming and costly process. Certain matters of procedure will also be governed by Irish law. There is little binding case law in Ireland that addresses the matters described above. As a result of the difficulty associated with enforcing a judgment against our executive officers and directors in Ireland, you may not be able to collect any damages awarded by either a U.S. or foreign court.\n\n \n\nSubject to specified time limitations and legal procedures, under the rules of private international law currently prevailing in Ireland, Irish courts may enforce a U.S. judgment in a civil matter, including a judgment based upon the civil liability provisions of U.S. securities laws, as well as a monetary or compensatory judgment in a non-civil matter, provided that the following key conditions are met:\n\n \n\n \n\n●\n\nsubject to limited exceptions, the judgment is final and non-appealable;\n\n \n\n \n\n●\n\nthe judgment was given by a court competent under the laws of the state of the court and is otherwise enforceable in such state;\n\n \n\n \n\n●\n\nthe judgment was rendered by a court competent under the rules of private international law applicable in Ireland;\n\n \n\n \n\n●\n\nthe laws of the state in which the judgment was given provide for the enforcement of judgments of Irish courts’ judgments;\n\n \n\n \n\n●\n\nadequate service of process has been effected and the defendant has had a reasonable opportunity to present his arguments and evidence;\n\n \n\n \n\n●\n\nthe judgment is enforceable under the laws of Ireland and its enforcement are not contrary to the law, public policy, security or sovereignty of Ireland;\n\n \n\n \n\n●\n\nthe judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the same parties; and\n\n \n\n \n\n●\n\nan action between the same parties in the same matter was not pending in any Irish court at the time the lawsuit was instituted in the U.S. court\n\n \n\n**The Company conducts its business operations globally and is subject to global and local risks related to economic, regulatory, tax, social and political uncertainties.**\n\n \n\nThe Company conducts its business operations in many regions. The Company’s business is therefore subject to diverse and constantly changing economic, regulatory, tax, social, and political conditions. Changes in the legislative, political, governmental, and economic framework in the regions in which the Company carries on business could have a material impact on its business. In particular, changing laws and policies affecting trade, investment and changes in tax regulations could have a material adverse effect on the Company’s revenues, profitability, cash flows and financial condition. Any new government regulations pertaining to the Company’s business or solar parks may result in significant additional expenses. Moreover, as the Company enters new markets in different jurisdictions, it will face different regulatory regimes, business practices, governmental requirements and industry conditions. To the extent that the Company’s business operations are affected by unexpected and adverse economic, regulatory, social or political conditions in the jurisdictions in which the Company has operations, it may experience project disruptions, loss of assets and personnel, and other indirect losses that could adversely affect its business, financial condition and results of operations. Geopolitical trends toward protectionism and nationalism and the dissolution or weakening of international trade pacts may increase the cost of, or otherwise interfere with, the Company’s conduct of business. Uncertainty about current and future economic and political conditions that affect the Company, its customers and partners make it difficult for the Company to forecast operating results and to make decisions about future investments.\n\n \n\n15\n\n[Table of Contents](#toc)\n\n \n\nThe current invasion of Ukraine by Russia has escalated tensions among the U.S., the North Atlantic Treaty Organization (“**NATO**”) and Russia. The U.S. and other NATO member states, as well as non-member states, have announced new sanctions against Russia and certain Russian banks, enterprises and individuals. These and any future additional sanctions and any resulting conflict between Russia, the U.S. and NATO countries could have an adverse impact on our current operations.\n\n \n\nFurther, such invasion, ongoing military conflict, resulting sanctions and related countermeasures by NATO states, the U.S. and other countries are likely to lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions for equipment, which could have an adverse impact on our operations and financial performance.\n\n \n\n**Recent increases in inflation in the United States and internationally could adversely affect our business.**\n\n \n\nRecent increases in inflation in the United States and elsewhere may be leading to increased price volatility for publicly traded securities, including ours, and may lead to other national, regional and international economic disruptions, any of which could have an adverse effect on our business and operations.\n\n \n\n**The renewable energy industry is a new and evolving market, which may not grow to the size or at the rate we expect.**\n\n \n\nThe renewable energy industry is a new and rapidly growing market opportunity. We believe the renewable 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 renewable energy market and the success of our solar service offerings depend on many factors beyond our control, including recognition and acceptance of the renewable 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.\n\n \n\nRenewable 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.\n\n \n\nMarket prices of retail electricity generated by utilities or other energy sources also could decline for a variety of reasons, as discussed further below. Any such declines in macroeconomic conditions, changes in retail prices of electricity or changes in customer preferences would adversely impact our business.\n\n \n\nThe cost of solar modules, 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.\n\n \n\n**Our business prospects could be harmed if solar energy is not widely adopted or sufficient demand for renewable energy systems does not develop or takes longer to develop than we anticipate.**\n\n \n\nThe renewable energy market is at a relatively early stage of development. The extent to which renewable energy will be widely adopted and the extent to which demand for renewable energy systems will increase are uncertain. If renewable energy does not achieve widespread adoption or demand for renewable energy systems fails to develop sufficiently, we might be unable to achieve our revenue and profit targets. Demand for renewable energy systems in our targeted markets might not develop as we anticipate. Many factors may affect the demand for renewable energy systems, including the following:\n\n \n\n \n\n●\n\navailability of government and utility company subsidies and incentives to support the development of the renewable energy industry;\n\n \n\n \n\n●\n\ngovernment and utility policies regarding the interconnection of renewable energy systems to the utility grid;\n\n \n\n \n\n●\n\nfluctuations in economic and market conditions that affect the viability of conventional and non-solar renewable energy sources, such as changes in the price of natural gas and other fossil fuels;\n\n \n\n \n\n●\n\ncost-effectiveness (including the cost of solar modules), performance and reliability of renewable energy systems compared with conventional and other non-renewable energy sources and products;\n\n \n\n \n\n●\n\nsuccess of other renewable energy generation technologies, such as hydroelectric, wind, geothermal, solar thermal, concentrated solar and biomass;\n\n \n\n \n\n●\n\navailability of customer financing with economically attractive terms;\n\n \n\n \n\n●\n\nfluctuations in expenditures by purchasers of solar energy systems, which tend to decrease in slower economic environments and periods of rising interest rates and tighter credit; and\n\n \n\n \n\n●\n\nderegulation of the electric power industry and the broader energy industry.\n\n \n\n16\n\n[Table of Contents](#toc)\n\n \n\n**The modification, reduction, elimination, or expiration of government subsidies, economic incentives, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, could negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results.**\n\n \n\nAlthough we believe that 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 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.\n\n \n\nCurrent regulatory policies, or any future changes or threatened changes to such policies, including those changes as a result of the presidential administration and control of the U.S. Congress, may subject us to significant risks, including the following:\n\n \n\n \n\n●\n\na reduction or removal of clean energy programs and initiatives and the incentives they provide may diminish the market for future renewable energy off-take agreements, slow the retirement of aging fossil fuel plants, including the retirements of coal generation plants, and reduce the ability for renewable project developers to compete for off-take agreements, which may reduce PV solar module and wind energy component sales;\n\n \n\n \n\n●\n\nany limitations on the value or availability to manufacturers or potential investors of tax incentives that benefit renewable energy production, sales, or projects, such as the Section 45X advanced manufacturing production credit, ITC, and PTC, could result in reducing such manufacturers’ or investors’ economic returns and could cause a reduction in the availability of financing, thereby reducing demand for PV solar modules and wind power components;\n\n \n\n \n\n●\n\nany incentives contingent upon domestic production of modules, such as tax incentives set forth under the IRA, could limit our ability to sell modules manufactured in certain foreign jurisdictions, which may adversely impact our module average selling prices and could require us to record significant charges to earnings should we determine that the manufacturing facilities and equipment in such foreign jurisdictions are impaired; and\n\n \n\n \n\n●\n\nany effort to overturn federal and state laws, regulations, or policies that are supportive of renewable energy generation or that remove costs or other limitations on other types of electricity generation that compete with solar energy projects could negatively impact our ability to compete with traditional forms of electricity generation and materially and adversely affect our business.\n\n \n\nApplication of trade laws may also adversely impact, either directly or indirectly, our operating results; for example, by impacting our customers’ project costs, profitability, and their demand for our modules; or by impacting our own costs or disrupting our manufacturing or supply chains, and consequently negatively impacting demand and/or price levels for our solar modules, reducing our net sales, or affecting potential profitability of fulfilling customer contracts.\n\n \n\nThe overall impact of trade laws on our business depends on multiple factors, including their duration, their scope and potential expansion thereof, enforcement, retaliatory measures by impacted exporting countries, inflationary effects and broader macroeconomic responses, changes to consumer purchasing behavior, and the effectiveness of our responses in managing these impacts. Recent developments include the following:\n\n \n\n \n\n●\n\n*United States*—* Reciprocal Tariffs.* On April 2, 2025, the U.S. President announced a 10% “baseline” reciprocal tariff on nearly all U.S. trading partners, effective April 5, 2025, and additional, higher reciprocal tariffs on specific countries, effective April 9, 2025. On April 9, 2025, the U.S. President paused the additional, higher tariffs on most countries for 90 days. However, the U.S. President raised the tariff on China. As of April 16, 2025, the 10% “baseline” reciprocal tariff applies to all countries other than China, Canada, Mexico, and countries listed under “Column 2” of the Harmonized Tariff Schedule of the United States, such as Russia and North Korea. As it pertains to the countries where we manufacture solar modules, the additional, country-specific tariffs would have applied to Vietnam, India, and Malaysia. If the additional, higher tariffs on imports from these countries go into effect, it would increase the costs of the solar modules manufactured in these countries with respect to our U.S. market. .\n\n \n\n \n\n●\n\n*United States*—* Tariffs on Certain Imported Crystalline Silicon PV Cells and Modules.* The United States currently imposes different types of tariffs and/or other trade remedies on certain imported crystalline silicon PV cells and modules from various countries. In February 2022, the previous U.S. President proclaimed a four-year extension of a global safeguard measure imposed pursuant to Section 201 of the Trade Act of 1974 that provides for tariffs on imported crystalline silicon solar modules and a tariff-rate quota on imported crystalline silicon solar cells. Thin film solar cell products, such as our CdTe technology, are specifically excluded from the tariffs. The extension measure’s tariff rate was originally set at 14.75%, with annual reductions of 0.25 percentage points over the remainder of its four-year term. The current rate is 14.25%. The extension measure also provides an annual tariff-rate quota, whereby tariffs apply to imported crystalline silicon solar cells above the first 5.0 GW of imports.\n\n \n\n \n\n●\n\n*United States*—* Additional Tariffs on Certain Chinese Imports.* The United States currently imposes tariffs on various articles imported from China, including tariffs of 50% on crystalline silicon solar cells and tariffs of 25% on modules, based on an investigation under Section 301 of the Trade Act of 1974. In February 2025, the U.S. President announced an additional 10% tariff on all imports from China, which is related to the national security threat posed by China’s trade in fentanyl and other illegal narcotics. This 10% tariff was subsequently doubled to 20% in March 2025 and applies in addition to the 25% tariffs under Section 301 and ordinary customs duties and AD/CVDs. Further, as discussed above, effective April 2025, the United States imposed an additional reciprocal tariff on China.\n\n \n\n17\n\n[Table of Contents](#toc)\n\n \n\n \n\n●\n\n*United States*—* Port Fees on Certain Chinese Vessel Operators and Chinese Vessel Owners.* On April 17, 2025, the Office of the U.S. Trade Representative published a notice of final action based on an investigation under Section 301 of the Trade Act of 1974 into China’s targeting of the maritime, logistics, and shipbuilding sectors for dominance. The action imposes new port fees on Chinese vessel operators and/or Chinese vessel owners as well as on non-Chinese operators of Chinese-origin vessels beginning on October 14, 2025. The level of fees is on a sliding scale per net ton or, in the case of non-Chinese operators, the higher of a net ton or container-based fee. Such fees may impact our logistics services and consequently impact our profitability and results of operations.\n\n \n\n \n\n●\n\n*United States*—* Tariffs on Certain Foreign-imported Aluminum and Steel.* The United States currently imposes tariffs of 25% on imported aluminum and steel articles under Section 232 of the Trade Expansion Act of 1962. Such tariffs and policies, or any other U.S. or global trade remedies or other trade barriers, may directly or indirectly affect U.S. or global markets for solar energy and our business, financial condition, and results of operations.\n\n \n\n \n\n●\n\n*United States*—* Potential Tariffs on Processed Critical Minerals and Derivative Products.* On April 22, 2025, the U.S. Secretary of Commerce initiated an investigation to determine the effects on the national security of imports of processed critical minerals, as well as their derivative products, under Section 232 of the Trade Expansion Act of 1962. The scope of the investigation includes tellurium and other critical minerals used in solar module manufacturing. In addition, the definition of derivative products covered by the investigation is potentially broad. If this investigation results in the imposition of tariffs or import restrictions on critical minerals and/or derivative products, it could negatively impact demand and/or price levels for our solar modules and limit our growth, lead to a reduction in our net sales, or increase our costs, thereby adversely impacting our operating results.\n\n \n\n \n\n●\n\n*United States*—* Antidumping and Countervailing Duties on Certain Imported Crystalline Silicon PV Cells and Modules.* The United States currently imposes AD/CVDs on certain imported crystalline silicon PV cells and modules from China and Taiwan. Such AD/CVDs can change over time pursuant to annual administrative reviews conducted by the USDOC, and a decline in duty rates or USDOC failure to fully enforce U.S. AD/CVD laws could have an adverse impact on our operating results. In August 2023, the USDOC issued final affirmative circumvention rulings, finding that solar modules completed in Cambodia, Malaysia, Thailand, and Vietnam using parts and components produced in China circumvent the pre-existing AD/CVD orders on China. Such duties apply to circumventing imports on or after June 6, 2024, as well as any circumventing imports prior to that date that were not used or installed on or before December 3, 2024.\n\n \n\n \n\n●\n\n*United States*—* Antidumping and Countervailing Duties on Certain Traded Solar Products*. In April 2024, the American Alliance for Solar Manufacturing Trade Committee, which includes First Solar, filed a set of AD/CVD petitions with the USDOC and the USITC to impose duties on certain unfairly traded solar products from Cambodia, Malaysia, Thailand, and Vietnam. The investigations could potentially lead to the imposition of AD/CVD orders on such solar products. In June 2024, the USITC issued affirmative preliminary determinations. In October 2024, the USDOC announced preliminary affirmative determinations in the countervailing duty (“CVD”) investigations, finding that silicon solar cells and panels from Cambodia, Malaysia, Thailand, and Vietnam are unfairly subsidized at rates ranging from de minimis to nearly 300%, depending on the particular foreign producer. The USDOC has imposed provisional CVDs accordingly. In November 2024, the USDOC announced preliminary affirmative determinations in the AD investigations, providing for certain preliminary dumping rates applicable to solar cells from Cambodia, Malaysia, Thailand, and Vietnam ranging from de minimis to approximately 270%, depending on the particular foreign producer. On April 21, 2025, the USDOC announced the final determinations in the AD/CVD investigations, with final rates ranging from de minimis to over 3,400%, depending on the particular foreign producer.\n\n \n\n \n\n●\n\n*India*—* Domestic and Foreign Imports.* The ALMM was introduced in 2021 as a non-tariff barrier to incentivize domestic manufacturing of PV modules by approving the list of models and manufacturers who can participate in certain solar development projects. The ALMM is approved by the MNRE, and any modifications to the ALMM and its application may affect future investments in solar module manufacturing in India. In April 2024, the government of India reimposed the ALMM, thereby requiring solar project developers to procure qualifying modules from companies on the list, which includes our Indian manufacturing facility. Also in April 2024, the ALMM was amended to include specific minimum conversion efficiency thresholds for CdTe solar technologies starting at 18% for solar lighting, 18.5% for rooftop applications, and 19% for utility-scale applications. In December 2024, the ALMM was amended to require nearly all solar development projects to use PV modules that contain domestically manufactured solar cells, which is expected to be effective for such projects completed on or after June 2026.\n\n \n\n \n\n●\n\n*India*—* Import Duty Tariffs.* In April 2022, the Indian government began imposing import duty tariffs of 40% on solar modules and 25% on solar cells. In connection with such April 2022 tariffs, the Indian government also implemented a regulation mandating that any solar project with federal utility, state utility, or commercial and industrial off-takers that interconnects through government owned transmission lines only use solar modules from manufacturers included in the ALMM, and a requirement that all federal procurement of solar modules be only from cells and modules produced domestically. However, in February 2025, the Indian government began imposing import duty tariffs of 20% each on solar modules and cells and levied additional tax on certain commercial agricultural production, which tax included 20% on solar modules and 7.5% on solar cells. Therefore, the aggregate impact on the import of solar modules and cells is 40% and 27.5%, respectively.\n\n \n\nThese examples show that established markets for PV solar development face uncertainties arising from policy, regulatory, and governmental actions. While the expected potential of the markets we are targeting is significant, policy promulgation and market development are especially vulnerable to governmental inertia, political instability, changing government policy and priorities, the imposition or lowering of trade remedies and other trade barriers, geopolitical risk, fossil fuel subsidization, potentially stringent localization requirements, and limited available infrastructure. Any negative impacts from changes in policy, regulatory and governmental actions could negatively affect our business, reduce our net sales, profitability and/or market share, and consequently adversely affect our results of operations, prospects, and financial condition.\n\n \n\n**Changes in the global trade environment, including the imposition of import tariffs, could adversely affect the amount or timing of our revenues, results of operations or cash flows.**\n\n \n\nEscalating trade tensions, particularly between the U.S. and China, have led to increased tariffs and trade restrictions, including tariffs applicable to certain materials and components for our products or for products used in solar energy projects more broadly, such as module supply and availability. The U.S. has recently imposed significant new tariffs on nearly all products and components imported into the U.S. and could propose additional tariffs or increases to those already in place. To the extent we continue to use overseas suppliers of steel and aluminum, these tariffs could result in interruptions in the supply chain and impact costs and our gross margins. In addition, the threat of potential tariffs can create uncertainty among our customers and slow down the rate of existing projects and projects in our orderbook.\n\n \n\n18\n\n[Table of Contents](#toc)\n\n \n\nMore specifically, in March 2018, the U.S. imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports pursuant to Section 232 of the Trade Expansion Act of 1962 and extended these tariffs to cover imports of derivative steel and aluminum articles on February 2020 under the same legal authority. These tariffs were increased on February 10, 2025, pursuant to two executive orders from President Trump (the “February 2025 Executive Orders”), resulting in across-the-board 25% duties on steel and aluminum imports. Additionally, all previous alternative arrangements, such as complete exemptions, hard quotas, or tariff rate quotas, with trading partners on imports of steel and aluminum products, have been eliminated. The February 2025 Executive Orders also eliminated the system for exclusions, under which thousands of products were allowed to enter the U.S. free of these additional duties and create a process by which additional “derivative” products could be added to the scope of the tariffs by request of the domestic producer.\n\n \n\nOn February 1, 2025, President Trump issued executive orders directing the U.S. to impose new tariffs on imports from Canada, Mexico, and China, to take effect on February 4, 2025. On February 3, 2025, President Trump announced his intention to pause these tariffs on Canada and Mexico for the next month. The tariffs impose an additional 25% ad valorem rate of duty on all imports from Canada and Mexico (other than imports of Canadian energy resources exports, which are subject to a 10% ad valorem rate of duty) and an additional 10% ad valorem rate of duty on all imports from China. On March 3, 2025, the announced 25% tariff on Canadian and Mexican goods took effect and the tariff on Chinese goods was doubled to 20%. On March 12, 2025 tariffs on steel and aluminum increased from 25% to 50% on all steel and aluminum coming from Canada. On April 2, 2025, President Trump introduced tariffs on most countries of a baseline rate of 10%, and individualized rates on some countries of up to 50%. On April 9, 2025, President Trump increased tariffs for Chinese goods to 125% and subsequently to 145%, while the tariffs announced on April 2, 2025 for all other countries was reduced to a baseline rate of 10% for the next 90 days.\n\n \n\nWe are currently evaluating the potential impact of the imposition of the announced tariffs, and any additional or retaliatory tariffs, to our business and financial condition. While we do not believe that the tariffs announced by the U.S. in 2025 will have a material adverse effect upon our results of operations, financial condition, or liquidity, the actual impact of the new tariffs is subject to a number of factors including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that the target countries may take and any mitigating actions that may become available.\n\n \n\nMore broadly, President Trump has directed the USDOC, USTR, and other agencies, to review and identify unfair trade practices by other countries and recommend appropriate actions, as well as recommend modifications of AD/CVD laws to further induce compliance by foreign respondents and governments involved in those proceedings. These directives have been issued under the America First Trade Policy and Reciprocal Trade and Tariffs memoranda, and the effects on the global trading system can be far-reaching.\n\n \n\nIn January 2018, the U.S. adopted a tariff on imported solar modules and cells pursuant to Section 201 of the Trade Act of 1974. The tariff was initially set at 30%, with a gradual reduction over four years to 15%. While this tariff does not apply directly to the components we import, it may indirectly affect us by impacting the financial viability of solar energy projects, which could in turn reduce demand for our products. On February 4, 2022, former President Biden extended the safeguard tariff for an additional four years, starting at a rate of 14.75% and reducing that rate each year to 14% in 2026, and directed the U.S. Trade Representative to conclude agreements with Canada and Mexico on trade in solar products. On July 7, 2022, the U.S. and Canada entered into a non-binding memorandum of understanding in which the U.S. agreed to suspend application of the safeguard tariff to Canadian crystalline silicon photovoltaic cells imported as of February 1, 2022. While this tariff does not apply directly to the components we import, it may indirectly affect us by impacting the financial viability of solar energy projects, which could in turn reduce demand for our products.\n\n \n\nFurthermore, starting in July 2018, the U.S. adopted four lists of tariffs (Lists 1,2,3, and 4A) on $550 billion worth of Chinese imports, including, inverters and power optimizers. Products on Lists 1, 2, and 3 are subject to 25% tariffs, while products on List 4A are subject to 7.5% tariffs. On December 16, 2024, the U.S. Trade Representative (“USTR”) announced that it would increase Section 301 tariffs on polysilicon and wafers to 50% in 2025. At the same time, the USTR implemented 14 tariff exclusions for listed solar cell and wafer manufacturing equipment. While these tariffs are not directly applicable to our products, they could impact the solar energy projects in which our products are used, which could lead to decreased demand for our products.\n\n \n\nOn August 18, 2023, the U.S. Department of Commerce (“USDOC”) issued final affirmative determinations of circumvention with respect to certain crystalline solar photovoltaic (“CSPV”) cells and modules produced in Cambodia, Malaysia, Thailand and Vietnam using parts and components from China. As a result, certain CSPV cells and modules from Cambodia, Malaysia, Thailand and Vietnam are now subject to antidumping and countervailing duty (“AD/CVD”) orders on CSPV cells and modules from China that have been in place since 2012. Subject to certain certification and utilization conditions, imports of CSPV cells and modules covered by the circumvention determinations that entered the U.S. during the two-year period prior to June 6, 2024 – which had been authorized by the former President Biden on June 2022 – were not subject to AD/CVD cash deposit or duty requirements. Imports of CSPV cells and modules from the four Southeast Asian countries covered by the circumvention determination that entered the U.S. on or after June 6, 2024 are subject to AD/CVD cash deposit requirements of the China AD/CVD orders and, possibly, final AD/CVD duty liability. Cash deposit rates for CSPV modules covered by the China AD/CVD orders vary significantly depending on the producer and exporter of the modules and may amount to over 250% of the entered value of the imported merchandise.\n\n \n\nAdditionally, in October 2023, a coalition of U.S. aluminum extruders and a labor union filed AD/CVD cases on aluminum extrusions from fifteen countries. The USDOC has initiated investigations based on the petitions. Certain components in our trackers, including certain clamps, U-joints, and bearing housings are made using extruded aluminum. In September 2024, the USDOC released its final determination from their investigations against aluminum extrusions from multiple countries. On October 30, 2024, the USITC voted to find no injury in its pending AD/CVD investigation, meaning that the USDOC’s AD/CVD orders will not go into effect. The coalition of petitioners may still appeal the USITC’s decision, and we will continue to monitor developments in the appeal process. If the USITC’s decision is overturned on appeal, the imposition of AD/CVD orders could negatively impact our business, financial condition, and results of operations.\n\n \n\nOn April 24, 2024, the American Alliance for Solar Manufacturing Trade Committee, an ad hoc coalition of domestic producers of CSPV cells and modules, filed a petition with the USDOC and the U.S. International Trade Commission (“USITC”) seeking the imposition of AD/CVD tariffs on imports of CSPV cells and modules from Cambodia, Malaysia, Thailand and Vietnam. The USITC made a preliminary affirmative determination on June 7, 2024, and the USDOC made its preliminary affirmative determination on October 1, 2024. The preliminary tariff rates vary from below 1% to almost 300%, depending on the relevant company.\n\n \n\n19\n\n[Table of Contents](#toc)\n\n \n\nWhile we do not sell solar modules, the degree of our exposure is dependent on, among other things, the impact of the investigation on the projects that are also intended to use our products, with such impact being largely out of our control. We have seen a number of projects in our order book delayed as a result of the USDOC investigation. The repeal of the 24-month exemption, and any affirmative determinations made once the exemption expires in any event, would have an adverse effect on our business, financial condition, and results of operations.\n\n \n\nTariffs and the possibility of additional tariffs in the future like those described above have created uncertainty in the industry. If the price of solar systems in the U.S. increases, the use of solar systems could become less economically feasible and could reduce our gross margins or reduce the demand of solar systems manufactured and sold, which in turn may decrease demand for our products. Additionally, existing or future tariffs may negatively affect key customers, suppliers, and manufacturing partners. Such outcomes could adversely affect the amount or timing of our revenues, results of operations or cash flows, and continuing uncertainty could cause sales volatility, price fluctuations or supply shortages or cause our customers to advance or delay their purchase of our products. It is difficult to predict what further trade-related actions governments may take, which may include additional or increased tariffs and trade restrictions, and we may be unable to quickly and effectively react to such actions.\n\n \n\n**We are subject to various governmental export controls, trade and economic sanctions, and import laws and regulations that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws.**\n\n \n\nOur products and technologies are subject to export control laws and regulations, including the Export Administration Regulations administered by the U.S. Department of Commerce, and our products, technologies, and activities are subject to trade and economic sanctions, including those administered by the U.S. Treasury Department’s Office of Foreign Assets Control, or OFAC, as well as regulations administered by the governments of the United Kingdom and authorities in the European Union, which we collectively refer to as trade controls. As such, licenses and notices may be required to import products, technologies, and services from or export or re-export products, technologies, and services to certain countries and end users and for certain end uses. For example, the U.S. government continues to add additional entities in China and elsewhere to restricted party lists impacting the ability of U.S. companies to provide products, technology, and services to, and in some cases receive products, technologies, and services from, these entities. These controls may impact our ability to import certain products, technology, or services from or export or re-export certain products, technology, or services to China and other destinations, and it is also possible that the Chinese government will retaliate in ways that could impact our business. The process for obtaining necessary licenses and making required notices may be time-consuming or unsuccessful, potentially causing delays in sales or losses of sales opportunities. Trade controls are complex and dynamic regimes and monitoring and ensuring compliance can be challenging. Any failure to comply with these regimes could subject us to both civil and criminal penalties, including substantial fines, possible incarceration of responsible individuals for willful violations, possible loss of our export or import privileges, and reputational harm. In addition, investigating or defending against any such allegations, actions, or investigations will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees.\n\n \n\nTariffs could also have a material impact on our product costs and decrease our ability to sell our products and services to existing or potential customers as well as harm our ability to compete internationally. Recent escalations in tariffs imposed by the United States on imports from its trading partners, retaliatory actions taken by affected countries, as well as uncertainties concerning further changes in tariff and non-tariff trade policies, particularly regarding those between the United States, Mexico, and Canada, and the between the United States and China, have been significant. The U.S. government has implemented additional broad tariffs on the import of most items from virtually all U.S. trading partners and has imposed particularly significant tariffs on imports from China. China responded by imposing significant tariffs on a variety of items imported from the United States, implementing new export controls on certain commodities, and imposing trade restrictions targeting particular U.S. companies. These tariffs could materially and adversely affect our ability to compete internationally. The future of these tariffs, as well as the possibility for new tariffs, remains very uncertain. Other causes of uncertainty include the effects of new tariffs implemented by the United States on imports from Mexico and Canada that do not qualify for duty-free treatment under the U.S.-Mexico-Canada Agreement. The macroeconomic effect of any such tariffs on major trading partners, including China, Mexico, and Canada could be significant, and our business and financial results could be negatively affected as a result.”\n\n \n\n**Changes in trade policy, including the imposition or escalation of tariffs and other trade restrictions, could increase our costs, disrupt our supply chain, delay project development and reduce the economic viability of renewable energy projects, which could have a material adverse effect on our business, financial condition and results of operations.**\n\n \n\nOur business relies on equipment, components, and materials that are sourced from multiple countries, including solar modules, wind turbine components, battery storage systems, inverters, and balance-of-system components.  We are subject to the risk that existing tariffs will be increased or that new tariffs, import duties, export controls, or other trade restrictions will be imposed on the materials, equipment, or components we require for our microgrid and renewable energy projects. \n\n \n\nThe current global trade environment is characterized by significant uncertainty, including escalating tariffs between the United States and its trading partners, particularly China, and the imposition of broad-based reciprocal tariffs by the United States on imports from most countries.  In 2025, the United States imposed a 10% baseline reciprocal tariff on nearly all trading partners and has imposed tariffs in excess of 100% on certain Chinese imports, including components used in solar energy systems.  Additional trade measures, including antidumping and countervailing duties on crystalline silicon photovoltaic cells and modules from Southeast Asia, Section 201 safeguard tariffs on solar modules, and Section 232 tariffs on steel and aluminum, continue to evolve and may be expanded or modified. \n\n \n\nThese tariffs and trade restrictions could adversely affect our business in the following ways:\n\n \n\n \n\n●\n\nincreased costs for solar modules, wind turbine components, battery systems, inverters, racking, and other balance-of-system components, which may not be fully recoverable from customers or through project economics;\n\n \n\n \n\n●\n\nsupply chain disruptions, delays in equipment delivery, and increased lead times that may delay project development and commissioning schedules;\n\n \n\n \n\n●\n\nreduced economic viability of renewable energy projects generally, which could reduce demand for our EaaS offerings and make it more difficult to achieve projected project returns;\n\n \n\n \n\n●\n\nincreased uncertainty among potential customers, partners, and financiers, which may slow pipeline conversion and delay investment decisions;\n\n \n\n \n\n●\n\nretaliatory measures by affected countries that could disrupt our ability to operate or expand internationally, including in the United Kingdom and Europe; and\n\n \n\n \n\n●\n\nbroader macroeconomic disruptions, including inflation, supply shortages, and reduced economic growth, that could reduce overall demand for energy infrastructure investment. \n\n \n\n20\n\n[Table of Contents](#toc)\n\n \n\nWe cannot predict the duration, scope, or escalation of current or future tariffs and trade restrictions, or the extent to which countermeasures, exemptions, or other policy changes may mitigate their impact. To the extent tariffs or other trade barriers significantly increase the cost of renewable energy components or reduce the economic competitiveness of clean energy relative to fossil fuel alternatives, our ability to develop, finance, and deploy projects on commercially viable terms could be materially impaired.\n\n \n\n**Rapid technological changes in the energy industry could render our products, technologies, or business model uncompetitive or obsolete, and the emergence of new or lower-cost energy sources could reduce demand for our offerings and materially adversely affect our business, financial condition and results of operations.**\n\n \n\nThe energy industry is undergoing rapid technological evolution. New technologies for electricity generation, storage, distribution, and management are being developed and commercialized at an accelerating pace. Our microgrid solutions currently integrate compact wind turbines, solar photovoltaic panels, and battery energy storage systems. If competing technologies emerge that offer superior performance, lower cost, greater efficiency, or improved reliability compared to the technologies we deploy, our competitive position could be materially harmed.\n\n \n\nSpecific technological risks include:\n\n \n\n \n\n●\n\nadvances in solar photovoltaic efficiency, perovskite solar cells, next-generation thin-film technologies, or other generation technologies that could render existing solar module technologies less competitive or obsolete;\n\n \n\n \n\n●\n\nbreakthroughs in battery chemistry, solid-state storage, or alternative energy storage solutions (such as hydrogen, compressed air, or gravity-based systems) that could offer significantly lower costs or longer duration than the lithium-ion or similar battery systems we currently deploy;\n\n \n\n \n\n●\n\ndevelopment of small modular nuclear reactors, advanced geothermal systems, or other baseload generation technologies that could provide 24/7 clean power at costs below what our microgrid systems can deliver;\n\n \n\n \n\n●\n\nimprovements in grid-scale transmission and distribution infrastructure that could reduce the economic rationale for behind-the-meter distributed generation and microgrids; \n\n \n\n \n\n●\n\nadvances in artificial intelligence and energy management software by competitors that could erode the value proposition of our IBM-integrated energy management platform; \n\n \n\n \n\n●\n\nthe emergence of significantly cheaper natural gas, hydrogen, or other fuel sources, whether through new drilling techniques, regulatory changes, or technological innovation, that could reduce the cost of conventional power generation and thereby diminish the relative cost advantage of our renewable energy offerings; and \n\n \n\n \n\n●\n\nreductions in the retail price of grid-delivered electricity, whether through increased supply from new power generation capacity, regulatory changes, reduced transmission costs, or declining demand, which could reduce the economic savings that customers realize from our EaaS contracts and make our offerings less attractive. \n\n \n\nWe may be required to invest significant resources in research and development, technology licensing, or strategic partnerships to maintain our competitive position, and there can be no assurance that such investments will be successful. If we are unable to anticipate or adapt to technological changes, or if the technologies we deploy become uncompetitive relative to newer alternatives, our market share, revenues, and ability to attract and retain customers under long-term PPAs and EaaS contracts could be materially and adversely affected. Furthermore, existing customers under long-term contracts may seek to renegotiate or terminate their agreements if competing solutions offer materially superior economics, which could reduce our recurring revenue streams and impair the value of our installed asset base.\n\n \n\n**Shortages in the supply of silicon and the increase in the cost of certain other key commodities could adversely affect the availability and cost of the solar photovoltaic modules used in our renewable energy systems.**\n\n \n\nShortages of silicon, the increase in the cost of commodities, such as silver, or supply chain issues could adversely affect the availability and cost of our renewable energy systems. Manufacturers of photovoltaic modules depend upon the availability and pricing of silicon, one of the primary materials used in photovoltaic modules, as well as other key commodities, such as silver. The worldwide market for silicon from time to time experiences a shortage of supply, which can cause the prices for photovoltaic modules to increase and supplies of photovoltaic modules become difficult to obtain. While we have been able to obtain sufficient supplies of solar photovoltaic modules to satisfy our needs to date, this may not be the case in the future. Future increases in the price of silicon or other materials and components could result in an increase in costs to us, price increases to our customers or reduced margins. Other international trade conditions such as work slowdowns and labor strikes at port facilities or major weather events can also adversely impact the availability and price of solar photovoltaic modules.\n\n \n\n**A material reduction in the retail price of electricity charged by electric utilities or other retail electricity providers would harm our business, financial condition and results of operations.**\n\n \n\nDecreases in the retail price of electricity from electric utilities or from other retail electric providers, including other renewable energy sources such as larger-scale solar energy systems, could make our offerings less economically attractive. The price of electricity from utilities could decrease as a result of:\n\n \n\n \n\n●\n\nthe construction of a significant number of new power generation plants, whether generated by natural gas, nuclear power, coal, or renewable energy technologies;\n\n \n\n \n\n●\n\nthe construction of additional electric transmission and distribution lines;\n\n \n\n \n\n●\n\na reduction in the price of natural gas or other natural resources as a result of increased supply due to new drilling techniques or other technological developments, relaxation of associated regulatory standards, or broader economic or policy developments;\n\n \n\n21\n\n[Table of Contents](#toc)\n\n \n\n \n\n●\n\nless demand for electricity due to energy conservation technologies and public initiatives to reduce electricity consumption or to recessionary economic conditions; and\n\n \n\n \n\n●\n\ndevelopment of competing energy technologies that provide less expensive energy.\n\n \n\nA reduction in electric utilities’ rates or changes to peak hour pricing policies or rate design (such as the adoption of a fixed or flat rate) could also make our offerings less competitive with the price of electricity from the electrical grid. If the cost of energy available from electric utilities or other providers were to decrease relative to solar energy generated from residential systems or if similar events impacting the economics of our offerings were to occur, we might have difficulty attracting new customers or existing customers might default or seek to terminate, cancel or otherwise avoid the obligations under their solar service agreements.\n\n \n\n**Electric utility statutes and regulations and changes to such statutes or regulations might present technical, regulatory and economic barriers to the purchase and use of our renewable energy service offerings that may significantly reduce demand for such offerings.**\n\n \n\nFederal, state and local government statutes and regulations concerning electricity heavily influence the market for our renewable energy service offerings and are constantly evolving. These statutes, regulations, and administrative rulings relate to electricity pricing, net metering, consumer protection, incentives, taxation, competition with utilities, and the interconnection of homeowner-owned and third party-owned renewable energy systems to the electrical grid. Governments, often acting through state utility or public service commissions, change and adopt different rates for residential customers on a regular basis and these changes can have a negative impact on our ability to deliver savings, or energy bill management, to customers. Many utilities, their trade associations, and fossil fuel interests, which have significantly greater economic, technical, operational, and political resources than the residential solar industry, are currently challenging solar-related policies to reduce the competitiveness of residential renewable energy. Any adverse changes in solar-related policies could have a negative impact on our business and prospects.\n\n \n\n**Technological changes in the solar power industry could render our products uncompetitive or obsolete, which could reduce our market share and cause our revenue and net income to decline.**\n\n \n\nThe renewable power industry is characterized by evolving technologies and standards, which developments place increasing demands on the improvement of our products, such as solar cells with higher conversion efficiency and larger and thinner silicon wafers and solar cells. Other companies may develop production technologies that enable them to produce silicon wafers, solar cells and solar modules with higher conversion efficiencies at a lower cost than our products. Some of our competitors are developing alternative and competing solar technologies that might require significantly less silicon than crystalline silicon wafers and solar cells, or no silicon at all. Technologies developed or adopted by others may prove more advantageous than ours for commercialization of renewable energy power products and may render our products obsolete. We might need to invest significant resources in research and development to maintain our market position, to keep pace with technological advances in the renewable power industry, and effectively compete in the future. Our failure to further refine and enhance our products and processes or to keep pace with evolving technologies and industry standards could cause our products to become uncompetitive or obsolete, which could materially adversely reduce our market share and affect our results of operations.\n\n \n\n**Already covered supply and demand in the energy market is volatile, and such volatility could have an adverse impact on electricity prices and a material adverse effect on our assets, liabilities, business, financial condition, results of operations and cash flows.**\n\n \n\nA portion of our operating revenues are tied, either directly or indirectly, to the wholesale market price for electricity in the markets in which we operate. Wholesale market electricity prices are impacted by a number of factors including: the price of fuel (for example, natural gas) that is used to generate electricity; the management of generation and the amount of excess generating capacity relative to load in a particular market; the cost of controlling emissions of pollution, including the cost of emitting carbon dioxide; the structure of the electricity market; and weather conditions (such as extremely hot or cold weather) that impact electrical load. More generally, there is uncertainty surrounding the trend in electricity demand growth, which is influenced by: macroeconomic conditions; absolute and relative energy prices; and energy conservation and demand-side management. Correspondingly, from a supply perspective, there are uncertainties associated with the timing of generating plant retirements — in part driven by environmental regulations — and with the scale, pace and structure of replacement capacity, again reflecting a complex interaction of economic and political pressures and environmental preferences. This volatility and uncertainty in the power market generally, including the non-renewable power market, could have a material adverse effect on our assets, liabilities, business, financial condition, results of operations and cash flows.\n\n \n\n**The ability to deliver electricity to our various counterparties requires the availability of and access to interconnection facilities and transmission systems.**\n\n \n\nOur ability to sell electricity is impacted by the availability of, and access to, the various transmission systems to deliver power to our contractual delivery point and the arrangements and facilities for interconnecting the generation projects to the transmission systems. The absence of this availability and access, our inability to obtain reasonable terms and conditions for interconnection and transmission agreements, the operational failure or decommissioning of existing interconnection facilities or transmission facilities, the lack of adequate capacity on such interconnection or transmission facilities, curtailment as a result of transmission facility downtime, or the failure of any relevant jurisdiction to expand transmission facilities, may have a material adverse effect on our ability to deliver electricity to its various counterparties or the requirement of counterparties to accept and pay for energy delivery, which could materially and adversely affect our assets, liabilities, business, financial condition, results of operations and cash flows.\n\n \n\n**We may pursue acquisitions that involve inherent risks related to potential internal control weaknesses and significant deficiencies which may be costly for us to remedy and could impact management assessment of internal control effectiveness.**\n\n \n\nAlthough our independent registered public accounting firm will not be required to formally attest to our internal control effectiveness while we are a smaller reporting company, management is still responsible for assessing internal control effectiveness at a consolidated level. If we acquire companies and integrate them into our business, the process of integrating our existing operations with entities that could potentially have material weaknesses and/or significant deficiencies may result in unforeseen operating difficulties and may require significant financial resources to remedy any material weaknesses or significant deficiencies that would otherwise be available for the ongoing development or expansion of our existing business. These potential material weaknesses and deficiencies may be costly for us to remedy and properly assess internal control effectiveness.\n\n \n\n22\n\n[Table of Contents](#toc)\n\n \n\n**Uncertain global macro-economic and political conditions could materially adversely affect our results of operations and financial condition.**\n\n \n\nOur results of operations are materially affected by economic and political conditions in the U.S. and internationally, including inflation, deflation, interest rates, availability of capital, energy and commodity prices, trade laws and the effects of governmental initiatives to manage economic conditions.\n\n \n\nThe current conflict between the U.S. and Iran as well as the ongoing invasion of Ukraine by Russia has escalated tensions among the U.S., NATO, Iran and Russia. The U.S. and other NATO member states, as well as non-member states, have announced new sanctions against Iran and/or Russia and certain Iranian and Russian banks, enterprises and individuals. These and any future additional sanctions and any resulting conflict between Iran, Russia, the U.S. and NATO countries could have an adverse impact on our current operations.\n\n \n\nFurther, such invasion, ongoing military conflict, resulting sanctions and related countermeasures by NATO states, the U.S. and other countries are likely to lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions for equipment, which could have an adverse impact on our operations and financial performance.\n\n \n\n**We are an**“**emerging growth company**”**and**“**smaller reporting company**”**within the meaning of the** **Securities Act** **and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, it could make our securities less attractive to investors and may make it more difficult to compare our performance to the performance of other public companies.**\n\n \n\nWe are an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we are eligible for and intends to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as it continues to be an emerging growth company, including, but not limited to, (a) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (b) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (c) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of shares of common stock that are held by non-affiliates exceeds $700 million as of March 30 of that fiscal year, (ii) the last day of the fiscal year in which it has total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which it has issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) December 31, 2026, which is the last day of the fiscal year following the fifth anniversary of the date of the first sale of common stock in CLIN’s IPO. We cannot predict whether investors will find our securities less attractive because it will rely on these exemptions. If some investors find our securities less attractive as a result of its reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.\n\n \n\nFurther, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.\n\n \n\nAs an emerging growth company, we may also take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to obtain an assessment of the effectiveness of our internal controls over financial reporting from our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our shares of common stock less attractive because we will rely on these exemptions. If some investors find our shares of common stock less attractive as a result, there may be a less active market for our shares of common stock and our share price may be more volatile.\n\n \n\nAdditionally, we qualify as a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We expect that we will remain a smaller reporting company until the last day of any fiscal year for so long as either (a) the market value of our common stock held by non-affiliates does not equal or exceed $250 million as of the end of that year’s second quarter, or (b) our annual revenues did not equal or exceed $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates did not equal or exceed $700 million as of the end of that year’s second quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.\n\n \n\n**Our common stock is quoted on the OTC Market and we may be unable to list our securities on a national securities exchange, which limits liquidity and may adversely affect the trading price of our common stock and our ability to raise capital.**\n\n \n\nOur common stock is currently quoted on the OTC Market following our delisting from The Nasdaq Capital Market in February 2025.  We may seek to list our common stock on a national securities exchange, such as Nasdaq or the NYSE, in the future; however, there can be no assurance that we will meet or maintain the applicable listing standards, or that any application we may submit will be approved. National securities exchanges impose quantitative and qualitative requirements for listing, including minimum bid price, market value of listed securities, minimum stockholders' equity or net income thresholds, corporate governance requirements, and minimum numbers of round lot holders, among other criteria.  Given our current market capitalization, stock price, financial condition, and the material weaknesses in our internal control over financial reporting, we may not be able to satisfy these requirements in the near term, if at all.\n\n \n\nThe failure to obtain or maintain a listing on a national securities exchange could have material adverse consequences, including:\n\n \n\n \n\n●\n\na limited availability of market quotations for our securities and reduced visibility to investors and analysts; \n\n \n\n \n\n●\n\nreduced liquidity and wider bid-ask spreads for our securities, making it more difficult for stockholders to sell their shares at prices they consider acceptable; \n\n \n\n23\n\n[Table of Contents](#toc)\n\n \n\n \n\n●\n\na limited amount of news, research, and analyst coverage for the Company, which may reduce institutional investor interest in our securities; \n\n \n\n \n\n●\n\na decreased ability to issue additional securities, attract strategic partners, or obtain financing on favorable terms, as certain institutional investors are prohibited from or are reluctant to invest in securities that are not listed on a national exchange; \n\n \n\n \n\n●\n\npotential negative perception among customers, suppliers, partners, and employees, which could harm our ability to execute our business strategy; \n\n \n\n \n\n●\n\nthe inability to use short-form registration statements on Forms S-3 or S-8 for certain offerings if we fail to meet applicable eligibility requirements, which would increase the cost and complexity of future capital raises; and \n\n \n\n \n\n●\n\ncertain contractual rights of our security holders, including conversion triggers and escrow release conditions in our preferred stock designations and note purchase agreements, may not be satisfied if an uplisting does not occur within specified timeframes, which could result in adverse financial consequences or disputes with counterparties.\n\n \n\nThere can be no assurance that we will be able to list our securities on a national securities exchange. Even if we are able to list our securities, there can be no assurance that we will be able to maintain compliance with the continued listing requirements of such exchange. Our prior delisting from Nasdaq and our history of non-compliance with listing standards may make it more difficult for us to obtain approval for a future listing application. \n\n \n\n**Our stock price may be volatile and may decline regardless of our operating performance.**\n\n \n\nThe market price of our common stock may fluctuate significantly in response to numerous factors and may continue to fluctuate for these and other reasons, many of which are beyond our control, including, but not limited to:\n\n \n\n \n\n●\n\nactual or anticipated fluctuations in our revenue and results of operations;\n\n \n\n \n\n●\n\nany financial projections we may provide to the public in the future, any changes in these projections or its failure to meet these projections;\n\n \n\n \n\n●\n\nfailure of securities analysts to initiate and maintain our coverage, changes in financial estimates or ratings by any securities analysts who follow us or its failure to meet these estimates or the expectations of investors;\n\n \n\n \n\n●\n\nannouncements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, results of operations or capital commitments;\n\n \n\n \n\n●\n\nchanges in operating performance and stock market valuations of other clean energy and alternative energy companies generally, or those in the energy industry in particular;\n\n \n\n \n\n●\n\nprice and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;\n\n \n\n \n\n●\n\ntrading volume of our common stock;\n\n \n\n \n\n●\n\nthe inclusion, exclusion or removal of our common stock from any indices;\n\n \n\n \n\n●\n\nchanges in our Board or management;\n\n \n\n \n\n●\n\ntransactions in our securities by our directors, officers, affiliates and other major investors;\n\n \n\n \n\n●\n\nlawsuits threatened or filed against us;\n\n \n\n \n\n●\n\nchanges in laws or regulations applicable to our business;\n\n \n\n \n\n●\n\nchanges in our capital structure, such as future issuances of debt or equity securities;\n\n \n\n \n\n●\n\nshort sales, hedging and other derivative transactions involving our capital stock;\n\n \n\n \n\n●\n\ngeneral economic conditions in the United States and other markets in which we operate;\n\n \n\n \n\n●\n\npandemics or other public health crises, including, but not limited to, the COVID-19 pandemic (including additional variants);\n\n \n\n \n\n●\n\nother events or factors, including those resulting from war, incidents of terrorism or responses to these events; and\n\n \n\n \n\n●\n\nthe other factors described in this “*Risk Factors*” section.\n\n \n\nThe stock market has recently experienced extreme price and volume fluctuations. The market prices of securities of companies have experienced fluctuations that often have been unrelated or disproportionate to their operating results. In the past, stockholders have sometimes instituted securities class action litigation against companies, and particularly against companies who have recently “gone public” through a DeSPAC transaction, following periods of volatility in the market price of their securities. Any similar litigation against us could result in substantial costs, divert management’s attention and resources and harm its business, financial condition and results of operations.\n\n \n\n24\n\n[Table of Contents](#toc)\n\n \n\n**Our stock price is subject to volatility, which could have a material adverse impact on investors and employee retention.**\n\n \n\nThe price of our stock has experienced substantial price volatility and may continue to do so in the future. From January 1, 2025 to April 30, 2026, our stock price fluctuated between a low of $0.0006 per share and a high of $183.36 per share, which reflects a 1:200 reverse stock split. Additionally, the energy and technology industries, and the stock market as a whole have, from time to time, experienced extreme stock price and volume fluctuations that have affected stock prices in ways that may have been unrelated to the performance of the companies in these sectors. We believe the price of our stock should reflect expectations of future growth and profitability. If we fail to meet expectations related to future growth, profitability, or other market expectations, the price of our stock may decline significantly, which could have a material adverse impact on investor confidence and employee retention.\n\n \n\n**An active trading market for our common stock may not be sustained.**\n\n \n\nOur common stock is listed on OTC Market under the symbol “ALCE” and trades on that market. We cannot assure you that an active trading market for its common stock will be sustained. Accordingly, we cannot assure you of the liquidity of any trading market, your ability to sell your shares of common stock when desired or the prices that you may obtain for your shares.\n\n \n\nAs a result of being listed on the OTC Market and no longer listed on a national exchange, we face significant material adverse consequences, including but not limited to:\n\n \n\n \n\n●\n\na limited availability of market quotations for our securities;\n\n \n\n \n\n●\n\nreduced liquidity for our securities;\n\n \n\n \n\n●\n\na limited amount of news and analyst coverage for the company; and\n\n \n\n \n\n●\n\na decreased ability to issue additional securities or obtain additional financing in the future.\n\n \n\n**The conversion of our outstanding Series B, Series C, Series D and Series E Convertible Preferred Stock into shares of common stock, and the down-round anti-dilution protections contained in the certificates of designation governing such preferred stock, could result in significant dilution to holders of our common stock and may adversely affect the market price of our common stock.**\n\n \n\nAs of the date of this Report, we have outstanding 21,150 shares of Series B Convertible Preferred Stock (the \"Series B\"), 6,015 shares of Series C Convertible Preferred Stock (the \"Series C\"), 9,733 shares of Series D Convertible Preferred Stock (the \"Series D\"), and 684 shares of Series E Convertible Preferred Stock (the \"Series E\"). Each series is convertible into shares of our common stock at the option of the holder, at a conversion price that is subject to downward adjustment upon certain dilutive issuances.\n\n \n\nSpecifically, the certificates of designation governing the Series B, Series C, Series D and Series E each contain \"down-round\" or \"full ratchet\" anti-dilution provisions, pursuant to which the applicable conversion price is automatically reduced to the lowest price per share at which the Company issues common stock or convertible securities during specified adjustment periods. The Series B conversion price is subject to adjustment through December 31, 2026; the Series C conversion price is subject to adjustment through December 31, 2028; and the Series D and Series E conversion prices are each subject to adjustment for twelve months from their respective issuance dates. As a result of dilutive issuances that have occurred since the original issuance of each series, the effective conversion prices may have been, or may in the future be, reduced significantly below the original conversion prices set forth in the applicable certificates of designation.\n\n \n\nThe face value of the outstanding convertible preferred stock is substantial. Each share of Series B has a face value of $1,000, with an original conversion price of $1.00 per share (subject to downward adjustment). Each share of Series C, Series D and Series E has a value of $1,000, with a conversion price of $0.10 per share (subject to downward adjustment). If all currently outstanding shares of convertible preferred stock were converted at their stated conversion prices (without giving effect to any further downward adjustments or beneficial ownership limitations), the holders would receive an aggregate number of shares of common stock that would substantially exceed the number of shares of common stock currently outstanding, resulting in massive dilution to existing common stockholders.\n\n \n\nAlthough the certificates of designation for each series contain beneficial ownership limitations (19.99% for Series B and Series C, 9.99% for Series D, and 4.99% for Series E) that restrict the number of shares any individual holder may acquire upon conversion at any one time, these limitations do not prevent dilution in the aggregate — they merely limit the pace at which any single holder may convert. Holders may convert in successive tranches over time up to the applicable limits, and multiple holders converting simultaneously could result in significant cumulative dilution.\n\n \n\nFurthermore, if the Company issues additional shares of common stock or convertible securities at prices below the then-effective conversion prices during the applicable adjustment periods, the conversion prices will be further reduced, resulting in even greater potential dilution upon conversion. The Company's ongoing need for capital and its history of issuing equity and convertible securities at declining prices increases the likelihood that additional dilutive issuances will occur, triggering further downward adjustments to the conversion prices.\n\n \n\nThe potential for significant dilution from the conversion of outstanding preferred stock, and the ongoing risk of further downward price adjustments, may depress the market price of our common stock, make it more difficult for us to raise equity capital on favorable terms, discourage new investors from purchasing our common stock, and reduce the value of existing stockholders' investments. In addition, the overhang created by a large number of shares of common stock issuable upon conversion of preferred stock may create downward pressure on our stock price even if no conversions have yet occurred, as the market anticipates future dilution.\n\n \n\n**We may issue additional shares of common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of our common stock.**\n\n \n\nWe have warrants outstanding to purchase up to 4,135,910 shares of our common stock. We will also have the ability to initially issue up to 11,200 shares of our common stock under the 2023 Plan (as defined below).\n\n \n\nWe may issue additional shares of common stock or other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions or repayment of outstanding indebtedness, without stockholder approval, in a number of circumstances.\n\n \n\n25\n\n[Table of Contents](#toc)\n\n \n\nOur issuance of additional shares of common stock or other equity securities of equal or senior rank could, without limitation, have the following effects:\n\n \n\n \n\n●\n\nour existing stockholders’ proportionate ownership interest in us will decrease;\n\n \n\n \n\n●\n\nthe amount of cash available per share, including for payment of dividends (if any) in the future, may decrease;\n\n \n\n \n\n●\n\nthe relative voting strength of each previously outstanding share of common stock may be diminished; and\n\n \n\n \n\n●\n\nthe market price of our shares of common stock may decline.\n\n \n\n**We identified material weaknesses in our internal control over financial reporting which, if not remediated appropriately or timely, could result in the loss of investor confidence and adversely impact our business operations and our stock price.**\n\n \n\nWe are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations. In addition, management’s assessment of internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure of management’s assessment of our internal controls over financial reporting or disclosure of our public accounting firm’s attestation to or report on management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our common stock.\n\n \n\nA control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be relative to their costs. Because of the inherent limitations in all control systems, no system of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.\n\n \n\nWe identified material weaknesses in our internal control over financial reporting that existed as of December 31, 2025 due to (i) lack of an effective control environment commensurate with its financial reporting requirements; (ii) lack of design and maintenance of effective controls for communicating and sharing information within the Company; (iii) lack of design and maintenance of effective controls for transactions between related parties and affiliates recorded between itself, the parent company and its subsidiaries; (iv) lack of effective controls to address the identification of and accounting for certain non-routine, unusual or complex transactions and (v) lack of design and maintenance of formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures. Management has taken initial steps to remedy these weaknesses by increasing the capacity of our qualified financial personnel; implementing a monthly review with the appropriate responsible parties to review and confirm that the accounting department has received the proper documentation for various transactions; starting the process of formalizing documentation related to intercompany due to/from within the new organization structure; having third party experts review non routine, unusual and complex transactions; and working with an external consultant to review and assess the Company’s current internal control structure.\n\n \n\nWhile we believe these efforts will improve our internal controls and address the underlying causes of the material weaknesses, such material weaknesses will not be remediated until our remediation plan has been fully implemented and we have concluded that our controls are operating effectively for a sufficient period of time. We cannot be certain that the steps we are taking will be sufficient to remediate the control deficiencies that led to our material weaknesses in our internal control over financial reporting or prevent future material weaknesses or control deficiencies from occurring. While we are working to remediate the material weaknesses as timely and efficiently as possible, at this time we cannot provide an estimate of costs expected to be incurred in connection with the implementation of this remediation plan, nor can we provide an estimate of the time it will take to complete this remediation plan. Even if management does establish effective remedial measures, we cannot guarantee that those internal controls and disclosure controls that we put in place will prevent all possible errors, mistakes or all fraud.\n\n \n\nIf our financial statements are not accurate, investors may not have a complete understanding of our operations. Likewise, if our financial statements are not filed on a timely basis, we could be in violation of covenants contained in the agreements governing our debt. We could also be subject to sanctions or investigations by the stock exchange on which our shares are listed, the SEC or other regulatory authorities, which could result in a material adverse effect on our business. These outcomes could subject us to litigation, civil or criminal investigations or enforcement actions requiring the expenditure of financial resources and diversion of management time, could negatively affect investor confidence in the accuracy and completeness of our financial statements and could also adversely impact our stock price and our access to the capital markets. \n\n \n\n**Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.**\n\n \n\nWe are required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. When we are no longer an emerging growth company, our independent registered public accounting firm may be required to audit the effectiveness of our internal controls over financial reporting pursuant to Section 404 in future Form 10-K filings. Our independent registered public accounting firm may issue a report that is adverse in the event that it is not satisfied with the level at which our controls are documented, designed or operating. \n\n \n\nFurther, we may need to undertake various actions, such as implementing additional internal controls and procedures and hiring additional accounting or internal audit staff. Testing and maintaining internal controls can divert our management’s attention from other matters that are important to the operation of our business. If we identify material weaknesses in our internal controls over financial reporting or are unable to comply with the requirements of Section 404 or assert that our internal controls over financial reporting are effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources. \n\n \n\n26\n\n[Table of Contents](#toc)\n\n \n\n**Adverse publicity and potential concerns from our customers relating to or arising from the Restatement could have an adverse effect on our business and financial condition.**\n\n \n\nWe could continue to be the subject of negative publicity focusing on the restatement and adjustment of our financial statements, and we may be adversely impacted by negative reactions from our customers or others with whom we do business. Concerns include the perception of the effort required to address our accounting and control environment. Continued adverse publicity and potential concerns from our customers could harm our business and have an adverse effect on our financial condition.\n\n \n\n**Delaware law and provisions in our certificate of incorporation and bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the trading price of our common stock.**\n\n \n\nOur certificate of incorporation and bylaws contain provisions that could depress the trading price of the common stock by acting to discourage, delay, or prevent a change of control of us or changes in our management that our stockholders may deem advantageous. These provisions include, without limitation, the following:\n\n \n\n \n\n●\n\na classified board of directors so that not all members of our Board are elected at one time;\n\n \n\n \n\n●\n\nthe right of the board of directors to establish the number of directors and fill any vacancies and newly created directorships;\n\n \n\n \n\n●\n\ndirector removal by stockholders solely for cause and with the affirmative vote of at least two-thirds (2/3) of the voting power of our then-outstanding shares of capital stock entitled to vote generally in the election of directors;\n\n \n\n \n\n●\n\n“blank check” preferred stock that our Board could use to implement a stockholder rights plan;\n\n \n\n \n\n●\n\nthe right of our Board to issue our authorized but unissued common stock and preferred stock without stockholder approval;\n\n \n\n \n\n●\n\nno ability of our stockholders to call special meetings of stockholders;\n\n \n\n \n\n●\n\nno right of our stockholders to act by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;\n\n \n\n \n\n●\n\nlimitations on the liability of and the provision of indemnification to, our director and officers;\n\n \n\n \n\n●\n\nthe right of the board of directors to make, alter, or repeal our Bylaws; and\n\n \n\n \n\n●\n\nadvance notice requirements for nominations for election to our Board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.\n\n \n\nAny provision of our certificate of incorporation or our bylaws that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of common stock and could also affect the price that some investors are willing to pay for common stock.\n\n \n\n**Our certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders**’**ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.**\n\n \n\nOur Certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the DGCL, our certificate of incorporation or our bylaws or any action asserting a claim against us that is governed by the internal affairs doctrine. These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees and may discourage these types of lawsuits. This provision would not apply to claims brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Our certificate of incorporation provides further that, to the fullest extent permitted by law, the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. However, Section 22 of the Securities Act provides that federal and state courts have concurrent jurisdiction over lawsuits brought under the Securities Act or the rules and regulations thereunder. To the extent the exclusive forum provision restricts the courts in which claims arising under the Securities Act may be brought, there is uncertainty as to whether a court would enforce such a provision. We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Furthermore, the enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings and it is possible that a court could find these types of provisions to be inapplicable or unenforceable. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. If a court were to find the exclusive-forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business.\n\n \n\n**Item** **1B****.****Unresolved Staff Comments**\n\n \n\nNone.\n\n \n\n**Item** **1C****.****Cybersecurity**\n\n \n\nAlternus employs a strategic, multilayered approach to cybersecurity based on the National Institute of Standards and Technology (NIST) framework. The company maintains a dedicated internal cybersecurity team that oversees the development, implementation, and continual improvement of cybersecurity policies, tools, and procedures to identify, prevent, detect, respond to, and recover from evolving cyber threats.\n\n \n\n*27*\n\n \n\n \n\nThe Information Technology team collaborates with key functions across the company, including risk management, legal, finance, and operations to assess organizational exposure to cybersecurity risks. These assessments are integrated into Alternus’ Information Security Policy, which is regularly reviewed and updated in coordination with company leadership.\n\n \n\nCybersecurity risk is managed through multiple, overlapping controls and strategic initiatives, including: ● The implementation of a comprehensive cybersecurity policy addressing acceptable use, data governance, social media, encryption, remote access, authentication, vulnerability management, and incident response; ● Cybersecurity awareness training for all employees; ● A multidisciplinary cybersecurity incident response team with defined protocols and escalation paths; ● Tabletop exercises to test and refine response readiness; ● Continuous integration of intelligence from industry and government sources into internal monitoring and defense processes; ● Ongoing internal reviews of enterprise applications and infrastructure, including access control evaluations and configuration audits. The Chief Information Officer (CIO), with more than 20 years of experience in information and operational technology, holds primary responsibility for the cybersecurity program. Under the CIO’s leadership, the IT team continuously evaluates risk postures and safeguards Alternus’ critical cyber assets. Their efforts are designed to provide resilience against both common and sophisticated cyber threats. The organization has implemented strong internal evaluation mechanisms and governance structures to ensure the integrity and maturity of its cybersecurity position. Risk management of third-party service providers, especially those handling sensitive data or enterprise applications, is carried out through documented access reviews and contractual safeguards, including SOC 2 reporting where applicable.\n\n \n\nAlthough Alternus has not experienced cybersecurity events that have materially impacted the business, like most organizations, it faces ongoing risks such as phishing, malware, and attempted unauthorized access. These are monitored and addressed in accordance with established policies. See “Item 1A. Risk Factors” for additional information regarding our organization’s cybersecurity risks, which should be read together with this “Item 1C. Cybersecurity”."}