Alternus Clean Energy, Inc. 8-K

What Happened
Alternus Clean Energy, Inc. (filed 8-K on March 9, 2026) closed a private placement on March 3, 2026 through its wholly owned subsidiary Alt Alliance LLC (AltA). AltA sold unsecured promissory notes with a 20% original issue discount (aggregate principal $1,250,000) that produced $1,000,000 in gross proceeds. The company also established a Series C Convertible Preferred Stock class and issued Series C shares (the Subscription Agreements provide for 2,625 Series C shares to Purchasers; the Company concurrently issued 5,775 Series C shares in total to purchasers and certain debt holders). The filing states $600,000 of proceeds were transferred at closing; the remaining funds will be delivered in two tranches tied to (i) the Company’s Nasdaq listing application and drafting of an S-1, and (ii) completion of the Company’s 2025 audit. Proceeds are to be used for working capital and general corporate purposes.

Key Details

• Notes: Unsecured promissory notes issued with a 20% original issue discount (aggregate principal $1,250,000) — no interest accrues; maturity is the earlier of six months from issue or upon a capital raise of $5,000,000 or more.
• Security & defaults: Notes are secured by a first-priority pledge of 100% of AltA membership interests; Events of Default include failure to pay, AltA bankruptcy (if not dismissed within 60 days), dissolution, or uncured breaches (typically 60 days). Upon default, holders may exercise remedies.
• Proceeds timing: $1,000,000 gross proceeds; $600,000 transferred at closing; remaining amount payable in two tranches tied to Nasdaq/S‑1 progress and completion of the 2025 audit.
• Series C terms: Up to 12,000 shares authorized; 5,775 issued as of the filing. Each Series C has a $1,000 stated value and converts (at holder’s option after one year) into common stock at a Conversion Price of $0.10 per share (subject to anti-dilution adjustments through Dec 31, 2028). At $0.10 conversion, one Series C share would convert into 10,000 common shares (5,775 issued Series C → up to 57,750,000 common shares if fully converted at $0.10, subject to conversion limits and adjustments). Conversion is limited so any holder cannot exceed 19.99% beneficial ownership post-conversion. Series C carries voting rights on an as-converted basis, no dividends, and liquidation rights pari passu with common stock.

Why It Matters

• Short-term financing: The company secured $1.0M in near-term funding through deeply discounted, short-maturity notes (6 months or until a $5M+ raise). That provides immediate liquidity but creates a near-term pressure point to raise additional capital or refinance the notes.
• Potential dilution: The Series C converts at $0.10 per share (subject to adjustment), which could result in significant dilution to existing common shareholders if converted. Conversion ownership is capped at 19.99% per holder, but the overall issued Series C convertibility can still materially increase share count.
• Security on subsidiary and creditor protections: Notes are secured by AltA membership interests and include customary default remedies for holders, which is important for investor risk assessment.

For full terms, the filing attaches the Certificate of Designation, form of note, securities purchase agreement, and pledge agreement as exhibits.