Alternus Clean Energy, Inc. Announces 1-for-25 Reverse Stock Split as Part of Nasdaq Compliance Plan

Rhea-AI Summary

Alternus Clean Energy Inc. (NASDAQ: ALCE) has announced a 1-for-25 reverse stock split, effective October 11, 2024. This move aims to increase the stock price and regain compliance with Nasdaq's $1.00 minimum bid price requirement. The company's common stock will continue trading under the symbol 'ALCE' with a new CUSIP number. The reverse split will reduce outstanding shares from approximately 87,288,070 to 3,491,522.

CEO Vincent Browne stated that this restructuring, along with recent balance sheet de-leveraging, will increase access to capital for executing long-term growth strategies. These strategies include partnerships and acquisitions in high-growth renewable energy segments, complementing their existing utility-scale solar IPP business. The company recently announced binding terms for a joint venture with Hover Energy, , and is targeting additional ventures in other energy segments to enhance operational and financial performance.

Positive

• Potential to regain compliance with Nasdaq's $1.00 minimum bid price requirement
• Increased access to capital for executing long-term growth strategies
• Recent de-leveraging of the balance sheet
• Announced binding terms for a joint venture with Hover Energy,
• Plans for additional joint ventures and investments in complementary energy segments

Negative

• Significant reduction in the number of outstanding shares from 87,288,070 to 3,491,522
• Potential shareholder dilution due to the reverse stock split
• Risk of not meeting Nasdaq compliance despite the reverse split

Insights

Financial Analyst

This reverse stock split is a significant move for Alternus Clean Energy, aimed at regaining Nasdaq compliance. The 1-for-25 split will reduce outstanding shares from about 87.3 million to 3.5 million, likely boosting the stock price above the $1 minimum bid requirement. While this doesn't change the company's fundamental value, it's a critical step for maintaining Nasdaq listing and potentially improving investor perception.

The CEO's statement indicates a broader strategy beyond just compliance. The company is focusing on deleveraging its balance sheet and seeking capital for growth initiatives. The mention of partnerships and acquisitions, particularly in high-growth renewable energy segments, suggests a diversification strategy beyond their core utility-scale solar business. The recent joint venture with Hover Energy is a tangible example of this approach.

Investors should note that while reverse splits can be seen as a red flag, in this case, it's part of a larger restructuring effort. The success of this strategy will depend on Alternus's ability to execute on its growth plans and effectively utilize any new capital raised. The stock's performance post-split and the company's progress on announced initiatives will be key indicators to watch in the coming months.

Market Research Analyst

The reverse stock split announcement carries mixed implications for Alternus Clean Energy. On one hand, it's a necessary step to maintain Nasdaq listing, which is important for visibility and liquidity. However, it also signals that the company has been struggling to maintain its stock price, which could be a concern for investors.

The reduction in outstanding shares from 87.3 million to 3.5 million is substantial and will likely lead to increased volatility in the short term. This could present both opportunities and risks for traders. For long-term investors, the focus should be on the company's ability to leverage this move to access capital and execute its growth strategy.

The company's pivot towards diversification in the renewable energy sector, as evidenced by the Hover Energy joint venture, is noteworthy. This approach could potentially open up new revenue streams and mitigate risks associated with being solely focused on utility-scale solar. However, success will depend on effective execution and integration of these new ventures.

Overall, while the reverse split addresses an immediate compliance issue, investors should closely monitor the company's operational performance and progress on strategic initiatives in the coming quarters to gauge the long-term impact of this financial engineering move.

Fort Mill, South Carolina--(Newsfile Corp. - October 9, 2024) - Alternus Clean Energy Inc. (NASDAQ: ALCE) ("Alternus"), a leading utility-scale transatlantic, clean energy independent power producer (IPP), today announced that it will effect a 1-for-25 reverse stock split of its common stock. The reverse stock split will become effective at 12:01 a.m. Eastern Time on Friday, October 11, 2024, and the Company's common stock will commence trading on the Nasdaq Capital Market on a post-split basis at the opening of the market on October 11, 2024, pending confirmation by the Depository Trust Company and the Nasdaq. The Company's common stock will continue to trade on the Nasdaq Capital Market under the Company's existing trading symbol, "ALCE," and a new CUSIP number 02157G 200 has been assigned as a result of the reverse stock split.

The Company expects that the reverse stock split, which was approved by the Company's stockholders at the Annual Meeting of Stockholders held on September 26, 2024, will increase the price per share of the Company's common stock, and is part of the Company's strategy to regain compliance with the $1.00 minimum bid price requirement of the Nasdaq Capital Market.

At the effective time of the reverse stock split, each twenty-five (25) shares of the Company's issued and outstanding common stock will be automatically converted into one (1) issued and outstanding share of common stock without any change in the par value of $0.0001 per share or the total number of authorized shares. The reverse stock split will reduce the Company's number of shares outstanding common stock from approximately 87,288,070 shares to approximately 3,491,522 shares. No fractional shares of common stock will be issued in connection with the reverse stock split, and stockholders who would otherwise be entitled to receive a fractional share will receive a cash payment in lieu thereof.

Stockholders of record as of October 10^th, 2024, will be receiving information regarding their share ownership following the reverse stock split from the Company's transfer agent, Equiniti Trust Company, LLC (formerly known as American Stock Transfer & Trust Company). Equiniti can be reached at (833) 656-0637. Additional information about the reverse stock split can be found in the Company's definitive proxy statement on Schedule 14A, filed with the U.S. Securities and Exchange Commission (the "SEC") on September 6, 2024, and available free of charge at the SEC's website sec.gov.

Vincent Browne, Chief Executive Officer of Alternus: "Effecting this 1-for-25 reverse split was required to regain compliance with Nasdaq. This capital restructuring does not change the fundamental value of the Company, but along with recent actions to de-lever our balance sheet, it does increase our access to the capital we need to execute our long-term growth strategies. These strategies include partnerships and acquisitions to build our presence in high growth renewable energy segments that will complement our existing utility-scale solar IPP business. Our recent announcement of binding terms for a JV with Hover Energy, LLC is an example of this strategy. We are targeting additional joint ventures and investments in other energy segments that are accretive to the group both operationally and financially. We are confident that executing these strategies will provide a strong foundation for long-term shareholder value."

About Alternus Clean Energy:

Alternus is a transatlantic clean energy independent power producer. Headquartered in the United States, we currently develop, install, own, and operate utility scale solar parks in North America and Europe. Our highly motivated and dynamic team at Alternus have achieved rapid growth in recent years. Building on this, our goal is to reach 3GW of operating projects within five years through continued organic development activities and targeted strategic opportunities. Our vision is to become a leading provider of 24/7 clean energy delivering a sustainable future of renewable power with people and planet in harmony.

Forward-Looking Statements and Safe Harbor Notice

Certain information contained in this release, including any information on the Company's plans or future financial or operating performance and other statements that express the Company's management's expectations or estimates of future performance, constitute forward-looking statements. When used in this notice, words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions, as they relate to us or our management team, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company's management. Such statements are based on a number of estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond the control of the Company. The Company cautions that such forward-looking statements involve known and unknown risks and other factors that may cause the actual financial results, performance or achievements of the Company to differ materially from the Company's estimated future results, performance or achievements expressed or implied by the forward-looking statements. These statements should not be relied upon as representing Alternus' assessments of any date after the date of this release. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Investor Contact: ir@alternusenergy.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/226118

FAQ

What is the reverse stock split ratio announced by Alternus Clean Energy (ALCE)?

Alternus Clean Energy (ALCE) announced a 1-for-25 reverse stock split, effective October 11, 2024.

Why is Alternus Clean Energy (ALCE) implementing a reverse stock split?

ALCE is implementing the reverse stock split to increase its stock price and regain compliance with Nasdaq's $1.00 minimum bid price requirement.

How will the reverse split affect Alternus Clean Energy's (ALCE) outstanding shares?

The reverse split will reduce ALCE's outstanding shares from approximately 87,288,070 to 3,491,522.

What growth strategies is Alternus Clean Energy (ALCE) pursuing?

ALCE is pursuing partnerships and acquisitions in high-growth renewable energy segments to complement its existing utility-scale solar IPP business, including a recently announced joint venture with Hover Energy,