14. Shareholders’ Equity

Common Stock

As of June 30, 2026 and  December 31, 2025 the Company had a total of 2 billion shares of common stock authorized with 724,658 common shares issued and outstanding. 

Reverse Stock Splits

On September 5, 2025, the Company effected a one-for-two hundred (1:200) reverse stock split of all issued and outstanding shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) effective as of 12:01 a.m. Eastern Time on September 5, 2025 (the “Sept 2025 Reverse Stock Split”), vide a Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation of Alternus Clean Energy, Inc. (the “Certificate of Amendment”) filed with the Secretary of State of Delaware on September 2, 2025, and deemed effective on September 5, 2025 at 12:01 a.m. Eastern Time.

As a result of the Sept 2025 Reverse Stock Split, every two hundred (200) shares of issued and outstanding Common Stock combined into one (1) validly issued, fully paid and nonassessable share of Common Stock. The Sept 2025 Reverse Stock Split uniformly affected all issued and outstanding shares of Common Stock and did not alter any stockholder’s percentage ownership interest in the Company, except to the extent that the Sept 2025 Reverse Stock Split results in fractional interests. No fractional shares were issued in connection with the Sept 2025 Reverse Stock Split. Stockholders who otherwise would have been entitled to receive fractional shares of Common Stock received an amount in cash (without interest or deduction) equal to the fraction of one share to which such stockholder would otherwise be entitled multiplied by the share price, representing the product of the average closing price of the Company’s common stock on the OTCQB Market for the five consecutive trading days immediately preceding the effective date of the Sept 2025 Reverse Stock Split and the inverse of the Sept 2025 Reverse Stock Split ratio. Proportional adjustments have also been made to the Company’s outstanding warrants, stock options, and convertible securities, as well as to the reserves available pursuant to the terms of the Company’s 2023 Equity Incentive Plan to reflect the Sept 2025 Reverse Stock Split, in each case, in accordance with the terms thereof.

All share and per share amounts in the accompanying condensed consolidated financial statements and notes thereto have been retroactively adjusted to reflect the Sept 2025 Reverse Stock Split for all periods presented.

Common Stock Issuances

There were no common stock issuances during the three or six month periods ended June 30, 2026.

Preferred Stock

As of June 30, 2026 and December 31, 2025, the Company had a total of 1,000,000 shares of preferred stock authorized. As of December 31, 2025, there were 60,000 shares of Series A Super Voting Preferred Stock (the “Series A”), 21,150 shares of Series B Convertible Preferred Stock (the "Series B") and 3,150 shares of Series C Convertible Preferred Stock (the "Series C") issued and outstanding.  As of June 30, 2026, there were 60,000 shares of Series A, 21,150 shares of Series B, 6,015 shares of Series C, 9,733 shares of Series D Convertible Preferred Stock (the "Series D"), 684 shares of Series E Convertible Preferred Stock ("Series E"), and 750 shares of Series F Convertible Preferred Stock (the "Series F") issued and outstanding.

The board of directors of the Company has the authority to establish one or more series of preferred stock, fix the voting rights, designations, powers, preferences and any other rights, if any, of each such series and any qualifications, limitations and restrictions thereof.

Series A Super Voting Preferred Stock

Each share of the Series A is entitled to have the right to vote in an amount equal to 10,000 votes per share, voting with the common stock on all matters as a single class. Each share of Series A has a par value of $0.0001 per share. The Series A is not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company. The Series A has no stated maturity and is not subject to any sinking fund. The holders of Series A shall not be entitled to receive any distributions in the event of any liquidation, dissolution or winding up of the Company. The terms of the Series A are set forth in the Certificate of Designation of Series A, filed as part of the Company’s current report on Form 8K filed on February 20, 2025.

Series B Convertible Preferred Stock

Each share of Series B has a par value of $0.0001 per share and a face value of $1,000 per share. The Series B has no stated maturity, is not entitled to receive dividends, and is not subject to any sinking fund.  The Series B is entitled to receive distributions in the event of any liquidation, dissolution or winding up of the Company pari passu with the Common Stock.  During the year ended  December 31, 2025, the Company issued an aggregate of 21,150 shares of Series B to Hover Energy LLC as part of the EverOn Joint Venture (See Note 5).  The terms of the Series B are set forth in detail below and in the Certificate of Designation of Series B, filed as part of the Company’s current report on Form 8K filed on October 6, 2025.

Conversion Right.  Each share of Series B converts into a number of fully paid and non-assessable shares of Common Stock equal to the face value of each share ($1,000) divided by the Conversion Price in effect at the time of conversion, at the option of the Holder, at or after the earlier of (i) six months after the Company’s uplisting to a national exchange (the “Uplist”), or (ii) if no Uplist has occurred within the first nine months, then nine months from the Original Issue Date. The Conversion Price is $1.00 per share, subject to adjustment in accordance with the Certificate of Designation. The Series B ranks senior to the Company’s Series A Super Voting Preferred Stock and pari passu with the Company’s common stock with respect to rights upon liquidation.

Adjustments of Conversion Price. If, from the Original Issue Date to December 31, 2026, the Company has issued any shares of Common Stock or convertible preferred stock (or any securities convertible into or exercisable for Common Stock) at a price per share less than the then-effective Conversion Price (the “Original Conversion Price”) of the Series B (a “Dilutive Issuance”), then the Original Conversion Price shall be reduced to the lowest price per share of Common Stock or convertible preferred stock issued during this period.  As of December 31, 2025 there were not any adjustments to the Original Conversion Price.  As of June 30, 2026 the Conversion Price has been adjusted to $0.10 per share.

Restriction on Conversion. In no event shall the Holder have the right or the Company be required to convert, as applicable, shares of Series B if as a result of such conversion the aggregate number of shares of Common Stock beneficially owned by such Holder and its Affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the shareholder for purposes of Section 13(d) of the 1934 Act, would exceed 19.99% of the outstanding shares of the Common Stock following such conversion.

Restriction on Sales. Beginning on the month after the Holder is able to convert the Series B and utilize an exemption under SEC Rule 144, the Holder may sell a maximum amount of Common Shares per month not to exceed the average daily volume of the Company’s common stock in the prior month.

Voting Rights. Each holder of Series B has full voting rights and powers equal to the voting rights and powers of holders of common stock, and for so long as Series B is issued and outstanding, the holders of Series B shall vote together as a single class with the holders of the Company’s common stock and the holders of any other class or series of shares entitled to vote on all such matters equal to the number of whole shares of Common Stock into which the shares of Series B Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. (For avoidance of doubt, voting rights are on an ‘as-converted’ basis.)

Series C Convertible Preferred Stock 

Each share of Series C shall convert into a number of fully paid and non-assessable shares of Common Stock equal to the value of each share ($1,000) divided by the Conversion Price in effect at the time of conversion, at the option of the Holder, at or after one year from the issuance date. The Conversion Price is $0.10 per share, subject to adjustment in accordance with the Certificate of Designation. As of  December 31, 2025, the Company had issued an aggregate of 3,150 shares of Series C to two accredited debt holders.  During the six months ended June 30, 2026, the Company issued an aggregate of 2,865 additional shares of Series C to seven accredited investors. The terms of the Series C are set forth in detail below and in the Certificate of Designation of Series C, filed as part of the Company’s current report on Form 8K filed on March 9, 2026.

Adjustments of Conversion Price. If, from the Original Issue Date to December 31, 2028, the Company has issued any shares of Common Stock or convertible preferred stock (or any securities convertible into or exercisable for Common Stock) at a price per share less than the then-effective Conversion Price (the "Original Conversion Price") of the Series C (a "Dilutive Issuance"), then the Original Conversion Price shall be reduced to the lowest price per share of Common Stock or convertible preferred stock issued during this period. As of June 30, 2026 the Conversion Price remains at $0.10 per share.

Restriction on Conversion. In no event shall the Holder have the right or the Company be required to convert, as applicable, shares of Series C if as a result of such conversion the aggregate number of shares of Common Stock beneficially owned by such Holder and its Affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the shareholder for purposes of Section 13(d) of the 1934 Act, would exceed 19.99% of the outstanding shares of the Common Stock following such conversion.

Restriction on Sales. Beginning on the month after the Holder is able to convert the Series C and utilize an exemption under SEC Rule 144, the Holder may sell a maximum amount of Common Shares per month not to exceed the average daily volume of the Company’s common stock in the prior month.

Voting Rights. Each holder of Series C has full voting rights and powers equal to the voting rights and powers of holders of common stock, and for so long as Series C is issued and outstanding, the holders of Series C shall vote together as a single class with the holders of the Company’s common stock and the holders of any other class or series of shares entitled to vote on all such matters equal to the number of whole shares of Common Stock into which the shares of Series C Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. (For avoidance of doubt, voting rights are on an ‘as-converted’ basis.)

Dividend Rights. The holders of Series C, as such, will not be entitled to receive dividends of any kind.

Liquidation Preference. The holders of Series C shall be entitled to receive distributions in the event of any liquidation, dissolution or winding up of the Company pari passu with the Common Stock.

    Series D Convertible Preferred Stock:

On March 27, 2026, the board of directors (the “Board”) of the Company declared the formation of an aggregate of up to 20,000 shares of Series D Convertible Preferred Stock, par value $0.0001 per share (“Series D”). The Company has filed a certificate of designation (the “Certificate of Designation”) with the Secretary of State of the State of Delaware therein establishing the Series D Convertible Preferred Stock and describing the rights, obligations and privileges of the Series D. Concurrently, the Company issued 2,150 shares of Series D to an accredited investor for a purchase price of $1,000,000 (net proceeds of $900,000 after issuance costs) and on March 31, 2026 the Company issued 7,583 additional shares to an accredited debt holder. The following description of the Series D does not purport to be complete and is qualified in its entirety by reference to the Certificate of Designation, which is filed as as part of the Company’s current report on Form 8K filed on April 2, 2026.

General. The Series D consists of a total of 20,000 shares authorized and 9,733 shares issued as of the date of this Report. Each share of Series D has a par value of $0.0001 per share and a value of $1,000 per share. The Series D has no stated maturity and is not subject to any sinking fund.

Conversion Right. Each share of Series D shall convert into a number of fully paid and non-assessable shares of Common Stock equal to the value of each share ($1,000) divided by the Conversion Price in effect at the time of conversion, at the option of the Holder, at or after one year from the issuance date. The Conversion Price is $0.10 per share, subject to adjustment in accordance with the Certificate of Designation.

Adjustments of Conversion Price. If, during the period of twelve months from the issuance date, the Company has issued any shares of Common Stock or convertible preferred stock (or any securities convertible into or exercisable for Common Stock) at a price per share less than the then-effective Conversion Price (the "Original Conversion Price") of the Series D (a "Dilutive Issuance"), then the Original Conversion Price shall be reduced to the lowest price per share of Common Stock or convertible preferred stock issued during this period.  As of June 30, 2026 there have not been any adjustments to the Conversion Price.

Restriction on Conversion. In no event shall the Holder have the right or the Company be required to convert, as applicable, shares of Series D if as a result of such conversion the aggregate number of shares of Common Stock beneficially owned by such Holder and its Affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the shareholder for purposes of Section 13(d) of the 1934 Act, would exceed 9.99% of the outstanding shares of the Common Stock following such conversion.

Restriction on Sales. Beginning on the month after the Holder is able to convert the Series D and utilize an exemption under SEC Rule 144, the Holder may sell a maximum amount of Common Shares per month not to exceed the average daily volume of the Company’s common stock in the prior month.

Voting Rights. Each holder of Series D has full voting rights and powers equal to the voting rights and powers of holders of common stock, and for so long as Series D is issued and outstanding, the holders of Series D shall vote together as a single class with the holders of the Company’s common stock and the holders of any other class or series of shares entitled to vote on all such matters equal to the number of whole shares of Common Stock into which the shares of Series D Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. (For avoidance of doubt, voting rights are on an ‘as-converted’ basis.)

Dividend Rights. The holders of Series D, as such, will not be entitled to receive dividends of any kind.

Liquidation Preference. The holders of Series D shall be entitled to receive distributions in the event of any liquidation, dissolution or winding up of the Company pari passu with the Common Stock.

March 27, 2026 Series D Subscription Agreement:

On March 27, 2026 the Company entered into a subscription agreement (the “Subscription Agreement”) with a certain third party accredited investor (the “Purchaser”) pursuant to which the Company sold in a private placement (the “Offering”) an aggregate of 2,150 shares of the Company’s Series D Convertible Preferred Stock, convertible into the Company’s common stock, par value $0.0001 per share (the “Shares”) to the Purchaser. The aggregate gross proceeds to the Company were $1,000,000, all of which were received on March 27, 2026. The Company intends to use the net proceeds from the Offering for working capital and other general corporate purposes.  Simultaneously with the March 27, 2026 Subscription Agreement, the Company also entered into a Put Option Agreement with the Purchaser, pursuant to which the Purchaser has the right, for a period beginning on the date that Company raises a minimum of $8 million through an equity capital raise and ending on the one year anniversary of the March 27, 2026 closing date (i.e., ending March 27, 2027), to require the Company to repurchase up to a maximum of 1,150 Series D shares at a price of $1,000 per Series D share repurchased.

Because the 1,150 shares of Series D underlying the Put Option were considered to have conditions outside of the Company's control that may require the Company to repurchase or redeem these shares, the $451 of proceeds allocated to the shares have been included as temporary equity in the "mezzanine" section of the Company's Condensed Consolidated Balance Sheet between Liabilities and Shareholders' Equity.

      Series E Convertible Preferred Stock:

On March 31, 2026, the board of directors (the “Board”) of the Company declared the formation of an aggregate of up to 20,000 shares of Series E Convertible Preferred Stock, par value $0.0001 per share (“Series E”). The Company has filed a certificate of designation (the “Certificate of Designation”) with the Secretary of State of the State of Delaware therein establishing the Series E Convertible Preferred Stock and describing the rights, obligations and privileges of the Series E. Concurrently, the Company issued 684 shares of Series E to the Purchaser and debt holder on the same date, in book-entry form. The following description of the Series E does not purport to be complete and is qualified in its entirety by reference to the Certificate of Designation, which is filed as part of the Company’s current report on Form 8K filed on April 2, 2026.

General. The Series E consists of a total of 20,000 shares authorized and 684 shares issued as of the date of this Report. Each share of Series E has a par value of $0.0001 per share and a value of $1,000 per share. The Series E has no stated maturity and is not subject to any sinking fund.

Conversion Right. Each share of Series E shall convert into a number of fully paid and non-assessable shares of Common Stock equal to the value of each share ($1,000) divided by the Conversion Price in effect at the time of conversion, at the option of the Holder, at or after the issuance date. The Conversion Price is $0.10 per share, subject to adjustment in accordance with the Certificate of Designation.

Adjustments of Conversion Price. If, during the period of twelve months from the issuance date, the Company has issued any shares of Common Stock or convertible preferred stock (or any securities convertible into or exercisable for Common Stock) at a price per share less than the then-effective Conversion Price (the "Original Conversion Price") of the Series E (a "Dilutive Issuance"), then the Original Conversion Price shall be reduced to the lowest price per share of Common Stock or convertible preferred stock issued during this period. As of June 30, 2026 there have not been any adjustments to the Conversion Price.

Restriction on Conversion. In no event shall the Holder have the right or the Company be required to convert, as applicable, shares of Series E if as a result of such conversion the aggregate number of shares of Common Stock beneficially owned by such Holder and its Affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the shareholder for purposes of Section 13(d) of the 1934 Act, would exceed 4.99% of the outstanding shares of the Common Stock following such conversion.

Piggyback Registration Rights. Each holder of Series E has the right to include the shares of common stock underlying the Series E in any registration statement on SEC Form S-1 that the Company may file.  The Company filed a registration statement, including 6,840,000 shares of common stock underlying the Series E, on August 5, 2026.

Voting Rights. Each holder of Series E has full voting rights and powers equal to the voting rights and powers of holders of common stock, and for so long as Series E is issued and outstanding, the holders of Series E shall vote together as a single class with the holders of the Company’s common stock and the holders of any other class or series of shares entitled to vote on all such matters equal to the number of whole shares of Common Stock into which the shares of Series E Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. (For avoidance of doubt, voting rights are on an ‘as-converted’ basis.)

Dividend Rights. The holders of Series E, as such, will not be entitled to receive dividends of any kind.

Liquidation Preference. The holders of Series E shall be entitled to receive distributions in the event of any liquidation, dissolution or winding up of the Company pari passu with the Common Stock.

Series F Convertible Preferred Stock:

The Board declared the formation of an aggregate of up to 15,750 shares of Series F. The Company has filed a certificate of designation with the Secretary of State of the State of Delaware therein establishing the Series F and describing the rights, obligations and privileges of the Series F. Concurrently, on June 30, 2026, the Company issued 750 shares of Series F to a Purchaser, in book-entry form. The following description of the Series F does not purport to be complete and is qualified in its entirety by reference to the Certificate of Designation, which is filed as an Exhibit to the Company's Current Report on Form 8-K filed on August 5, 2026 and is incorporated herein by reference.

General. The Series F consists of a total of 15,750 shares authorized, 750 shares issued at June 30, 2026 and 15,030 shares issued as of the date of this Report. Each share of Series F has a par value of $0.0001 per share and a value of $1,000 per share. The Series F is not subject to any sinking fund.

Automatic Conversion. Each share of Series F shall automatically convert on the date determined by the Board, in its reasonable discretion, following the Company’s receipt of conditional listing approval from the national stock exchange on which the Common Stock is to be listed (the “Uplist”), which date shall be no fewer than five (5) business days and no more than ten (10) business days prior to the effective date of the Uplist (the “Conversion Date”), and each share of Series F shall convert into a number of fully paid and non-assessable shares of Common Stock equal to the value of each share ($1,000) divided by the closing price of the Company’s Common Stock on the Conversion Date.

Maturity Date.  The Series F has no stated maturity date.

Restriction on Conversion. In no event shall the Holder have the right or the Company be required to convert, as applicable, shares of Series F if as a result of such conversion the aggregate number of shares of Common Stock beneficially owned by such Holder and its Affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the shareholder for purposes of Section 13(d) of the 1934 Act, would exceed 9.99% of the outstanding shares of the Common Stock following such conversion.

Voting Rights. The holders of Series F hold no voting rights, but the Company may not, without the prior written consent of a majority of the outstanding Series F, (i) amend the Certificate of Designation or Certificate of Incorporation in a manner that adversely affects the Series F, (ii) create or authorize senior or pari passu capital stock, (iii) change the authorized number of Series F shares, (iv) effect a merger, consolidation, or sale of substantially all assets, or (v) declare or pay dividends on Common Stock.

Registration Rights. The Company agreed to include the shares of common stock underlying the Series F in a registration statement on SEC Form S-1 within 3 months of issuance.  The Company filed a registration statement, including 150,300,000 shares of common stock underlying the Series F, on August 5, 2026.

Dividend Rights. The holders of Series F will not be entitled to receive dividends of any kind.

Liquidation Preference. The holders of Series F shall be entitled to receive distributions in the event of any liquidation, dissolution or winding up of the Company only after the Series B, C, D and E convertible preferred stock holders and after the Common Stock holders.

Warrants

As of June 30, 2025, warrants to purchase up to 4,135,911 shares of common stock were issued and outstanding. These warrants were related to financing activities. During the six months ended June 30, 2025, the Company issued, 1,199,295 additional warrants to an accredited investor exercisable at $0.85 per share with a 5 year term and 382 additional warrants to the investment bank exercisable at $81.18 with a 5 year term; during the six months ended June 30, 2026, the Company did not issue any additional warrants. As of June 30, 2026, warrants to purchase up to 4,135,911 shares of common stock were issued and outstanding.

2023 Equity Incentive Plan

As of December 31, 2025 and June 30, 2026, there were 11,200 shares of common stock available to be granted under the 2023 Equity Incentive Plan. As of December 31, 2025 and June 30, 2026 no shares were issued or outstanding under the 2023 Equity Incentive Plan.

On March 21, 2025, Mr. Vincent Browne, our CEO and Interim CFO and shareholder with majority voting rights, representing 91% of the shares entitled to vote, approved an amendment to the 2023 Equity Incentive Plan (the “Plan Amendment”) as adopted by the Board upon the recommendation of the Compensation Committee. The Plan Amendment relates to an increase in the number of shares of Common Stock that shall be available for the grant of awards under the Plan from 11,200 shares of Common Stock, so that the maximum aggregate number of shares of Common Stock that may be issued under the Plan is increased each fiscal year (the “Adjustment Date”) by an amount equal to the lesser of (i) that number of shares equal to 15% of the outstanding shares of Common Stock on the applicable Adjustment Date, less (a) the number of shares of Common Stock that may be issued under the Plan prior to the Adjustment Date, and (b) the number of shares of Common Stock that may be issued under any other stock option plan of the Company in effect as of the Adjustment Date; or (ii) such lesser number of shares of Common Stock as may be determined by the Board.