Clean Earth Acquisitions (CLIN) - 2024 Q4 - Annual Report

Business Combination and Acquisitions - The company completed a business combination with Alternus Energy Group Plc on December 22, 2023, issuing 2,300,000 shares of common stock [271]. - The company aims to expand its portfolio by acquiring utility-scale clean energy projects and entering complementary market segments through M&A or strategic partnerships [287]. - The company entered into an asset purchase agreement with LiiON LLC for the acquisition of certain assets related to LiiON's Battery Storage Business, but the agreement was rescinded on April 29, 2025 [322][323]. - The company allocates the purchase price of acquired renewable energy facilities to tangible assets, intangible assets, non-controlling interests, and working capital based on their fair values [380]. - The analysis of acquisitions uses income approach valuation methodology, considering market conditions, energy production estimates, and operating costs [381]. Financial Performance - Revenue for the year ended December 31, 2024, was $10.12 million, a decrease of$20.4 million (67%) compared to $30.52 million in 2023 [311]. - The Company reported a net income of$21.08 million for the year ended December 31, 2024, compared to a net loss of $69.46 million in 2023 [309]. - The total megawatt hours (MWh) sold for the year ended December 31, 2024, was 48,247 MWh, down from 165,463 MWh in 2023, representing a decrease of 70$16.57 million, an increase from $13.77 million in 2023 [309]. - The Company experienced a loss from continuing operations of$24.75 million for the year ended December 31, 2024, compared to a loss of $32.61 million in 2023 [309]. - The Company’s discontinued operations reported a total revenue of$9.81 million in 2024, down from $27.04 million in 2023, a decrease of$17.23 million (64%) [311]. - The Company’s cost of revenues for the year ended December 31, 2024, was $4.52 million, a decrease of$4.17 million (48%) from $8.69 million in 2023 [315]. - Selling, general and administrative expenses for continuing operations increased by$7.1 million, or 143%, for the year ended December 31, 2024, driven by higher audit, consulting, legal, and listing costs [320]. - Total selling, general, and administrative expenses for the period increased by $2.3 million, or 21$(3,222) thousand, a decrease of $6,261 thousand compared to 2023 [371]. - The net cash provided by discontinued operating activities increased by$85.4 million, primarily due to a gain of $55.0 million from the sale of operating parks [373]. - The net cash used in continuing investing activities increased by$1.0 million, attributed to construction costs for parks in the US and project developments in Italy and Spain [374]. - The net cash provided by continuing financing activities decreased by $19.9 million, mainly due to a net decrease of$13.8 million in new debt [376]. - The Company issued a senior convertible note of $2,160,000 with an 8$2,000,000 [358]. - The Company entered into a Purchase Agreement for senior convertible notes totaling $2,500,000, with a 12$700,000 [359]. Operational Challenges and Concerns - The company operates with a working capital deficiency and negative equity, raising concerns about its ability to continue as a going concern without planned financing [274]. - The company expects inflation and energy rate fluctuations to significantly affect its results of operations [289]. - The company is currently addressing going concern issues and is working with global banks to secure project financing for its business plan [352]. Market and Risk Factors - The company utilizes annual recurring revenues as a key metric, reflecting long-term stability, based on estimated future revenue from solar parks [272]. - The company has a competitive advantage through its fully integrated clean energy provider model, managing the entire renewable energy value chain [276]. - The company expects to secure strong cash flows via long-term feed-in tariff contracts, allowing for high leverage capacity and flexibility in debt structuring [294]. - The company is exposed to foreign currency risk due to transactions and borrowings in foreign currencies, which affects its financial statements when translated into U.S. dollars [386]. - Interest rate risk arises from fluctuations in interest rates affecting the value of investments and financing activities, with the company monitoring the ratio of fixed and floating rate instruments [389]. Asset Management and Impairment - Impairment loss recognized for continuing operations increased by $3.3 million for the year ended December 31, 2024, primarily due to expected losses on the disposal of Spanish assets [341]. - Impairment losses are recognized if future estimated undiscounted cash flows from an asset are less than its carrying value, with fair values determined through various valuation methods [384]. Tax and Regulatory Matters - Corporate tax expense for continuing operations increased by$0.6 million for the year ended December 31, 2024, reflecting penalties for late tax filings [338]. - Recent accounting pronouncements may impact the company's financial position and results of operations, as disclosed in the significant accounting policies [394].