ACLEW 8-K
Alternus Clean Energy, Inc. (ACLEW)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Item 1.01 Entry into a Material Definitive Agreement.
On August 7, 2024, Alternus Clean Energy, Inc. (the “Company”), entered into a ‘Heads of Terms’ for Joint Business Venture (the “Agreement”) with Hover Energy LLC and its affiliates (“Hover”) to establish a joint venture (the “Joint Venture”) for the financing, development, management and operation of ‘Microgrid Projects’ utilizing Hover Wind-Powered Microgrid™ technology, as required.
Pursuant to the Agreement, the Company and Hover have agreed to amend the earlier entered into and currently effective Strategic Alliance Agreement between Hover and Alt Alliance LLC (a Company subsidiary), and the Company has agreed to issue to Hover a non-refundable fee of USD $2.0 million payable in the Company’s shares in the form of either a fresh issuance of 5 million restricted Company shares to Hover, or vide transfer from existing Company’s shares owned by Alternus Energy Group Plc (“AEG”), Company’s parent entity (the “Hover Share Assignment”).
The Agreement provides that the Company will have a 51% interest and Hover will have a 49% interest in the Joint Venture. Further to this, the Company will issue and commit 3,500,000 shares (additional to the Hover Share Assignment) to Hover at the signing of the Joint Venture, for which Hover will contribute 100% of its project pipeline. Additionally, the Company states that if the average price of ALCE stock is less than $1.00 for the 10 trading days prior to the close of the market on the 1-year anniversary of the effective date of such transfer, the Company will issue an additional 2,500,000 shares to Hover. If issued, Hover will use these 2,500,000 shares as required to attract new investment into the Joint Venture from existing and/or new investors and contribute to the Joint Venture. In addition, the Agreement provides that the Joint Venture will be managed by 4 Managers; 2 appointed by the Company and 2 appointed by Hover, and will have Hover’s chief executive officer as its CEO.
The foregoing summary of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is hereby incorporated by reference.
Item 8.01. Other Events.
On August 7, 2024, the Company issued a press release announcing the execution of the Agreement. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Forward Looking Statements
All statements contained in this Current Report on Form 8-K other than statements of historical facts, 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. Forward-looking statements may be identified by the use of 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 the Company or its management team. 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 the Company’s assessments of any date after the date of this Current Report on Form 8-K. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
As described in this Report, the following is filed as part of this Current Report on Form 8-K:
| Exhibit No. | Description | |
| 10.1 | ‘Heads of Terms’ for Joint Business Venture, dated August 7, 2024, by and between the Company and Hover Energy LLC | |
| 99.1 | Press release, dated August 7, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: August 13, 2024 | ALTERNUS CLEAN ENERGY, INC. | |
| By: | /s/ Vincent Browne | |
| Name: | Vincent Browne | |
| Title: | Chief Executive Officer and Chairman of the Board of Directors | |
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Exhibit 10.1
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August 7, 2024
Mr. Chris Griffin,
Chief Executive Officer, Hover Energy LLC,
3811 Turtle Creek Blvd.,Suite 560
Dallas, TX 75219.
‘Heads of Terms’ for Joint Business Venture
Dear Chris,
In furtherance of our recent discussions over the past several weeks. this Letter provides the preliminary terms of a joint business venture between Hover Energy LLC and its affiliates (“Hover”) and Alternus Clean Energy and its affiliates (“ALCE”), (individually as “Party”, collectively “the Parties”) for the financing, development, management and operation of ‘Microgrid Projects’ utilizing Hover Wind-Powered Microgrid™ technology as required.
Hover Programs:
HOVER develops microgrids that combines wind, solar, and storage to deliver a reliable, high volume of power (the “Programs”). Due to its high energy density, Hover’s Wind-Powered Microgrid™ can provide an optimal solution for the built environment and island communities, which have limited area within to create onsite power. At the heart of the Hover microgrid is a smart. or more accurately defined, ‘intelligent’, Renewable Energy Router™ integrated energy management system (lEMS), which combines the energy generated by both wind (AC) and solar (DC) into one clean, 480V 3-Phase power stream.
Alternus Programs:
Alternus is an international independent power producer with offices across Europe and in the United States. Alternus is listed on the Nasdaq with ticker ALCE. Success is built on long-term relationships with landowners, developers, and power off-takers. Alternus and its affiliates are made up of industry leaders and extremely passionate individuals spread across Europe and the US, all focused on delivering optimum renewable energy projects for all parties involved.
| 1. | Existing Agreements; ALCE Stock: In consideration of the market and economic changes that have occurred since the Parties execution of the Strategic Alliance Agreement between Hover and Alt Alliance LLC (an Alternus Affiliate owned by Alternus Clean Energy Inc. Nasdaq: ALCE) dated on or about August 23, 2023 (the “SAA”), and the execution of this Letter Agreement, both Parties hereby mutually agree that: |
| a. | The SAA shall be amended and extended to (i) remove the requirement on Alt Alliance LLC or Alternus company, to pay $500,000 cash payment under the current terms. (ii) extend the current term to 3 years and (iii) that the SAA will terminate commensurate with the completion and formation of the contemplated JV company. There will be no further penalty to either Party, and each Party shall release the other from any obligations thereunder and each Party shall waive all claims or related rights thereunder, on signing of this agreement. In the event the Parties fail to consummate the JV, the SAA will continue under the amended terms as above. |
Alternus Clean Energy, Inc.,
360 Kingsley Park Drive, Suite 250, Fort Mill, SC 29715
EIN: 87-1431377
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| b. | In order to induce Hover to amend the SAA as above and to enter into the JV, the Parties have agreed a non-refundable fee of USD $2.0 million payable in ALCE shares. On the signing of this agreement, ALCE will issue 5 million restricted ALCE shares to Hover (the “Hover Share Assignment”) either from a new issuance from ALCE directly or by transfer from existing ALCE shares owned by Alternus Energy Group (AEG). Such shares are to be delivered within 5 business days after the Securities and Exchange Commission (SEC) declares the current S1/A effective. Hover will become the beneficial owner of such shares on delivery. The sales restriction will apply for an initial 6-month term and thereafter HOVER, or its assigns or transferees, will be free to trade 33% of the shares, with the remainder available I2 months after issuance. |
| c. | The Parties shall complete the amendment to the SAA and ALCE will issue the Hover Share Assignment concurrently with the execution of this Letter Agreement. |
| 2. | Joint Venture Heads of Terms |
Building on the current partnership, the Parties intend to originate, develop, construct, sell and/or operate microgrid projects globally - with initial target markets being the US and Europe - based on a develop-to-own or, in some cases, develop-to-sell model. The Parties have proposed the initial terms for the structure to be incorporated into the JV after further discussion between the parties. The structure shall provide Hover with enhanced funding capabilities to enable an expansion of the business and is intended to provide ALCE with a strong foothold in the Microgrid industry.
The Parties agree to the following Heads of Terms to form the new Joint Venture entity:
| a. | Equity Ownership: ALCE 51% and Hover 49%. |
| b. | Contributions: ALCE will issue 3.500,000 shares (additional to the Hover Share Assignment) to Hover at Closing. Hover will contribute 100% of its project pipeline as outlined in Exhibit A and to be revised at the time. If the average price of ALCE stock is less than $1.00 for the 10 trading days prior to the close of the market on the 1-year anniversary of the effective date of such transfer, Alternus will issue an additional 2,500,000 shares to Hover. If issued, Hover will use these 2,500,000 shares as required to attract new investment into the JV from existing and/or new investors and contribute to SGA of the JV. |
| c. | Board of Managers: 4 Managers; 2 appointed by Alternus and 2 appointed by Hover. |
| d. | Officers: The JV CEO shall be Chris Griffin. |
| e. | Project Development Budget: JV to fund all JV Project development expenses as agreed in the operating budget to be agreed prior to execution of the JV Operating Agreement, but understood to be at least $3 million in the first year. Each Member to fund its pro rata share of the Operating Budget. Subsequent annual operating budgets will be agreed by the Board of Managers. |
| f. | Distributions: Quarterly, as directed by the Board of Managers. |
Alternus Clean Energy, Inc.,
360 Kingsley Park Drive, Suite 250, Fort Mill, SC 29715
EIN: 87-1431377
| 2 | |
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| g. | Equipment Supply Agreement (“ESA”): Parties shall enter into a suitable ESA concurrently with the execution of the JV Operating Agreement. A Cost + structure is contemplated. |
| h. | Management: The Hover development team shall manage the JV at the direction of the Board of Managers. A Management Fee Agreement will be executed concurrently with the JV Operating Agreement. |
| i. | Reporting: Monthly |
| 3. | Governing Law. |
This letter of intent shall be governed by and construed in accordance with the laws of the State of New York without regard to choice of law provisions.
| 4. | Non-Disclosure. |
Except as required by law or in response to a request by regulatory or judicial authorities having jurisdiction over the applicable Party, neither Party will disclose to any third party the terms of the proposed transaction or the nature of the discussions between the Parties without the prior written permission of the other Party, other than information regarding the proposed transaction which becomes generally available to the public without violation of the terms hereof; provided, that no Party is precluded by this Letter of Intent from confidential discussions with such Party’s stockholders, key employees, legal counsel, accountants, banks, representatives and agents as reasonably deemed necessary by such Party, respectively, to facilitate the proposed transaction.
The Parties will cooperate and agree to allow disclosure and joint press releases to the public markets upon mutual consent, which will not be unreasonably withheld.
| 5. | This Letter Agreement and the terms provided herein shall be binding on the Parties until the execution of a definitive JV Operating Agreement. This Agreement shall terminate on the earlier of (i) the mutual written agreement of the Parties, or (ii) full execution of a definitive Joint Venture Operating Agreement. The Parties agree that full execution of a definitive JV Operating Agreement should occur by August 31’\ 2024, and no later than December 31, 2024, unless parties mutually agree to extend this deadline. |
Alternus Clean Energy, Inc.,
360 Kingsley Park Drive, Suite 250, Fort Mill, SC 29715
EIN: 87-1431377
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Please indicate your acceptance of and agreement to the terms and conditions herein by signing below.
| Sincerely, | ||
| ALTERNUS ENERGY GROUP PLC. | ||
| By: | /s/ Vincent Browne | |
| Name: | Vincent Browne | |
| Title: | CEO | |
Accepted and agreed as of the date first written above:
| HOVER ENERGY LLC | ||
| By: | /s/ Christopher Griffin | |
| Name: | Christopher Griffin | |
| Title: | Chief Executive Officer | |
Alternus Clean Energy, Inc.,
360 Kingsley Park Drive, Suite 250, Fort Mill, SC 29715
EIN: 87-1431377
| 4 | |
Exhibit 99.1
Alternus Clean Energy and Hover Energy Announce Exciting New Joint Venture to Deliver
Next Generation Microgrid Solutions to Data Centers
and Corporate Customers
Microgrid Market forecast to reach over $100 Billion by 2032
Fort Mill, SC, August 7, 2024. Alternus Clean Energy [Nasdaq: ALCE](“Alternus”), a transatlantic independent clean energy producer, and Hover Energy (“Hover”), a leading international microgrid solutions provider, are proud to announce the launch of a new joint venture company, specifically formed to help data centers and other commercial and industrial customers achieve net zero carbon emissions.
The joint venture strategically leverages the strengths of both Alternus and Hover, including Hover Energy’s valuable microgrid patented portfolio covering wind generators and energy control systems, combined with Alternus’ experience in solar and project finance, development and acquisition.
As noted by GMI (“Global Market Insights”), the microgrid market size was valued at $17.8 Billion in 2023 and is anticipated to grow at a CAGR of 20.5% between 2024 and 2032, reaching over $100 billion by 2032. Microgrids are localized energy systems capable of operating independently or in conjunction with the main electrical grid. They consist of distributed energy resources, such as solar panels, wind turbines, batteries, and generators, that generate, store, and manage electricity within a defined area. These devices can serve a variety of applications, from residential and commercial buildings to industrial facilities and entire communities. Hover is a leading developer with its own proprietary technology in the industry.
The parties have completed binding terms that will see the formation of the joint venture company where Alternus will own 51% and Hover 49%. This already includes a developed pipeline of over 35 microgrid projects measuring over 60MW’s of capacity with blue chip global clients in the US, UK and Ireland as initial target markets. As part of this new structure, Alternus will recognize all revenue, with distributions made after consideration for reinvestment in the venture. Under the terms of the agreement, Alternus is issuing 5 million restricted ALCE shares to Hover as initial consideration with a further 3.5 million issued at closing and a potential 2.5 million additional shares issuable depending on share price performance after one year from closing. The Company has filed an 8k with the SEC.
“This is the future, and it is available today. The combination of skills and resources under this joint venture company will deliver a previously unavailable solution to the market. We see a future where the grid is connected to hundreds, even thousands, of micro-grids. What has been needed is a one-stop-shop to allow companies achieve Net Zero directly. If your goal is real and tangible decarbonization of your power usage, we will design it, build it, and deliver it to you, either as a capex or opex solution depending on your preference and budget. It’s the reason we chose this path” stated Chris Griffin, CEO of Hover Energy. “We are honored to build on the success we’ve already had with our partners at Alternus. They are an exceptional team with whom we have already delivered meaningful progress in this sector. Given our compelling track record on all fronts, I can’t wait to see what we accomplish together!”
“For Alternus, this is a very exciting expansion into a booming vertical; microgrids. With Hover, we surpassed our current timeline; initially expecting to achieve 60MW of capacity within two years; however this was achieved within just five months. This remarkable achievement underscores our commitment and dedication to this sector. Distributed energy makes the world more resilient, and this joint venture is well positioned to deliver successful economic and 100% green energy projects to our customers in the near term”, offered Alternus CEO Vincent Browne. 80mw over 2 years an we did it in 5 months
“It is very clear that demand is exploding for onsite clean energy delivered through a distributed architecture – particularly within increasingly power hungry data centers who now need more power than ever. Alternus’ reach in the utility-scale solar power industry combined with Hover’s microgrid systems uniquely positions this joint venture to capture its share of this rapidly expanding segment of the power market. We have big plans for this venture and look forward to achieving its full potential with Chris and his team at Hover.” Mr. Browne concluded.
For more information about Hover Energy and its sustainable energy solutions, please visit https://HoverEnergy.com. For more information about Alternus Clean Energy and its sustainable energy solutions, please visit https://alternusce.com.
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.
About Hover Energy:
Hover Energy, LLC is a pioneering provider of sustainable energy solutions committed to driving innovation in the renewable energy sector. With a focus on designing, developing and deploying its patented Wind-Powered MicrogridTM, Hover Energy is dedicated to building a more efficient, cleaner, and more sustainable future for generations to come.
Forward-Looking Statements
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.