DEFM14A 1 tm2231344-21_defm14a.htm DEFM14A tm2231344-21_defm14a - none - 130.8123317s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Information Required in Proxy Statement
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Preliminary Proxy Statement

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Definitive Proxy Statement

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Soliciting Material Pursuant to §240.14a-12
Clean Earth Acquisitions Corp.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 
PROXY STATEMENT
CLEAN EARTH ACQUISITIONS CORP.
12600 Hill Country Blvd, Building R, Suite 275
Bee Cave, Texas 78738
Dear Clean Earth Stockholders:
We cordially invite you to attend a special meeting in lieu of the 2023 annual meeting of the stockholders (the “special meeting”) of Clean Earth Acquisitions Corp., a Delaware corporation (“Clean Earth”, “we,” “us,” “our” or the “Company”), which will be held on December 4, 2023 at 10:00 a.m., Eastern Time. The special meeting will be a virtual meeting conducted exclusively via live webcast. You or your proxyholder will be able to attend the virtual special meeting online, vote, view the list of stockholders entitled to vote at the special meeting and submit questions during the special meeting by visiting https://web.lumiagm.com/290463470 (passcode “cleanearth2023”) and using a control number assigned by American Stock Transfer & Trust Company. To register and receive access to the virtual meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in the accompanying proxy statement.
On October 12, 2022, the Company and Alternus Energy Group Plc (“Alternus”) entered into a Business Combination Agreement (the “Business Combination Agreement”), as amended by that certain First Amendment to the Business Combination Agreement, dated as of April 12, 2023, by and among Clean Earth, Alternus and the Sponsor (the “First Amendment to the Business Combination Agreement” or the “BCA Amendment”).
Pursuant to the Business Combination Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, a series of related transactions occurred, or will occur, including the following (the transactions contemplated by the Business Combination Agreement, the “business combination”): upon the terms and subject to the conditions of the Business Combination Agreement, Alternus, as the sole beneficial and record holder of all of the “Alternus Interests” ​(being all of the issued and outstanding equity interests owned by Alternus in its subsidiaries other than certain retained subsidiaries at such time (the “Acquired Subsidiaries”), will transfer to Clean Earth, and Clean Earth will receive from Alternus, all of the Alternus Interests, as consideration in exchange for the issuance and transfer by Clean Earth to Alternus at the Closing (defined below) of a number of shares of Class A common stock of the Company, par value $0.0001 per share (the “Class A common stock”), valued at $10 per share, equal to $275,000,000, or 27,500,000 shares, plus or minus an estimated working capital adjustment (which will be not greater or less than 1,000,000 shares). Alternus will own approximately 62% of Clean Earth at closing, assuming no redemptions by Clean Earth stockholders, in which case the combined company will have approximately $78.0 million of cash available at closing. As a result, Clean Earth will be a “controlled company” within the meaning of the corporate governance standards of the Nasdaq Stock Market (“Nasdaq”). Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements. In addition, at the Closing, 20,000,000 shares of common stock (defined in the accompanying proxy statement) (the “Earnout Shares”) will be deposited into an earnout escrow account and will be released, in whole or part, to Alternus if certain earnout milestones based on “Adjusted EBITDA” ​(as defined in the accompanying proxy statement) and share price or “Calculated Share Price” ​(as defined in the accompanying proxy statement) are met. You are being asked to vote on the business combination. The Business Combination Agreement provides that Alternus’ obligations to consummate the business combination are conditioned on, among other things, the “Available Cash” ​(which is defined to include the amount released from the Company’s trust account, after giving effect to redemptions, payment of Alternus’ and the Company’s transaction expenses and repayment of the Company’s working capital loans, plus any amounts raised by the Company between execution of the Business Combination Agreement and Closing, plus certain amounts raised by Alternus (or its subsidiaries) between execution of the Business Combination Agreement and Closing to the extent such funds are convertible into or payable in equity of the Company or were facilitated by certain specified parties), being at least $25,000,000. The business combination is also subject to the satisfaction or waiver of certain other closing conditions. If these conditions are not met, and such conditions
 

 
are not waived, then the Business Combination Agreement could terminate, and the proposed business combination may not be consummated. There can be no assurance that the parties to the Business Combination Agreement would waive any such provision of the Business Combination Agreement. Furthermore, in no event will we redeem our public shares (defined below) in an amount that would cause our net tangible assets to be less than $5,000,001, in which case the business combination would not be consummated.
At the special meeting, you will be asked to consider and vote upon the following proposals:

Proposal No. 1:   A proposal to approve and adopt the Business Combination Agreement, a copy of which is attached to the accompanying proxy statement as Annex A, and to approve the transactions contemplated by the Business Combination Agreement (the “business combination”), which provides that, among other things, Alternus, as the sole beneficial and record holder of all of the issued and outstanding equity interests in the Acquired Subsidiaries as of immediately prior to the closing of the business combination (the “Closing”), will transfer to Clean Earth, and Clean Earth will receive from Alternus, all of the issued and outstanding equity interests in the Acquired Subsidiaries, as consideration and in exchange for the issuance and transfer by Clean Earth to Alternus of 27,500,000 shares of common stock of Clean Earth, subject to a working capital adjustment of up to 1,000,000 shares, plus up to 20,000,000 Earnout Shares (the “Business Combination Proposal”). The number of shares of common stock was determined based on an equity valuation of $275 million at $10 per share;

Proposal No. 2:   A proposal to amend and restate the Company’s certificate of incorporation, dated February 23, 2022, as amended on May 26, 2023 (as so amended, the “Current Charter”) in the form attached as Annex C (such amended and restated certificate of incorporation referred to herein as the “Proposed Charter”), the “Charter Proposal”);

Proposal No. 3:   Proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with U.S. Securities and Exchange Commission (the “SEC”) guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions, as five sub-proposals (collectively, the “Advisory Governance Proposals”):
A.
Proposal to authorize the issuance of 150,000,000 shares of common stock and 1,000,000 shares of preferred stock.
B.
Proposal to permit the authorized shares of any class to be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Company’s stock entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.
C.
Proposal to elect not to be governed by Section 203 of the DGCL.
D.
Proposal to remove blank check provisions.
E.
Proposal to limit the liability of officers to the fullest extent permitted by law.

Proposal No. 4:   A proposal to approve, for purposes of complying with applicable listing rules of Nasdaq, (x) the issuance of more than 20% of the Company’s issued and outstanding common stock in connection with the business combination, consisting of the issuance of shares of common stock to Alternus pursuant to the terms of the Business Combination Agreement, including any Earnout Shares and shares of common stock issued pursuant to the working capital adjustment, and (y) the issuance of shares of common stock to Alternus in connection with the business combination, including any Earnout Shares and shares of common stock issued pursuant to the working capital adjustment, that would result in Alternus owning more than 20% of our outstanding common stock, or more than 20% of the voting power, which could constitute a “change of control” under Nasdaq rules (the “Stock Issuance Proposal”);

Proposal No. 5:   A proposal to approve and adopt the 2023 Equity Incentive Plan (the “Incentive Plan”), a copy of which is attached to the accompanying proxy statement as Annex F (the “Incentive Plan Proposal”);
 

 

Proposal No. 6:   A proposal to elect seven directors to serve staggered terms on our board of directors until the 2024, 2025 and 2026 annual meeting of stockholders, respectively, or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal (the “Director Election Proposal”); and

Proposal No. 7:   A proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the Condition Precedent Proposals (as defined below) or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived (the “Adjournment Proposal”).
Each of these proposals is more fully described in the accompanying proxy statement, which you are encouraged to read carefully. Under the Business Combination Agreement, the Closing is conditioned upon the approval of the Business Combination Proposal, the Charter Proposal, the Stock Issuance Proposal and the Director Election Proposal (collectively, the “Condition Precedent Proposals”) and each of the Condition Precedent Proposals is cross-conditioned on the approval of each other and the closing of the Business Combination Agreement. The Advisory Governance Proposals, the Incentive Plan Proposal, and the Adjournment Proposal are not conditioned upon the approval of any other proposal. If our stockholders do not approve each of the Condition Precedent Proposals, the business combination may not be consummated. If we do not consummate a business combination by the Termination Date (defined below), we will be required to dissolve and liquidate our trust account. If we liquidate, our warrants will expire worthless and our investors would lose the investment opportunity associated with an investment in the Combined Company, including through any potential price appreciation of our securities. By contrast, approval of each of the other proposals in the proxy statement (i.e., the Advisory Governance Proposals, the Incentive Plan Proposal, and the Adjournment Proposal) is not a condition to the consummation of the business combination.
Our Class A common stock, rights and warrants are currently listed on Nasdaq under the symbols “CLIN,” “CLINR” and “CLINW,” respectively. Certain of our shares of Class A common stock, rights and warrants currently trade as public units (defined below) consisting of one share of Class A common stock, one right and one-half of one redeemable warrant, and are listed on Nasdaq under the symbol “CLINU.” Upon consummation of the transactions contemplated by the Business Combination Agreement, we will change our name to “Alternus Clean Energy, Inc.” We intend to apply to obtain the listing of our common stock and warrants on the Nasdaq under the symbols “ALCE” and “ALCEW,” respectively, upon the Closing.
Only holders of record of shares of our Class A common stock and shares of our Class B common stock, par value $0.0001 per share (the “Class B common stock” or “founder shares”) at the close of business on November 8, 2023 (the “record date”) are entitled to notice of and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting. A complete list of our stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting and electronically during the special meeting at https://web.lumiagm.com/290463470 (passcode “cleanearth2023”).
We are providing the accompanying proxy statement and proxy card to our stockholders in connection with the solicitation of proxies to be voted at the special meeting and at any adjournments or postponements of the special meeting. Whether or not you plan to attend the special meeting, we urge you to read the accompanying proxy statement carefully and submit your proxy to vote on the business combination. Please pay particular attention to the section entitledRisk Factorsbeginning on page 18 of the accompanying proxy statement.
After careful consideration, our board of directors has unanimously approved the Business Combination Agreement and the transactions contemplated thereby and determined that each of the Business Combination Proposal, the Charter Proposal, the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal is in the best interests of the Company and its stockholders, and unanimously recommends that you vote or give instruction to voteFOReach of those proposals andFOReach of the director nominees.
 

 
The existence of financial and personal interests of our directors and officers may result in conflicts of interest, including a conflict between what may be in the best interests of the Company and its stockholders and what may be best for a director’s personal interests when determining to recommend that stockholders vote for the proposals. See the sections entitledInformation About Clean Earth — Conflicts of Interest andBeneficial Ownership of Securitiesin the accompanying proxy statement for a further discussion.
Pursuant to the Current Charter, a public stockholder may request that we redeem all or a portion of such public stockholder’s public shares for cash prior to the business combination being consummated. You will be entitled to receive cash for any public shares to be redeemed only if you:
(i)
(a) hold public shares, or (b) hold public shares through public units and you elect to separate your public units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and
(ii)
prior to 5:00 PM, New York City time, on November 30, 2023 (two business days prior to the scheduled vote at the special meeting), (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to American Stock Transfer & Trust Company, our transfer agent (the “Transfer Agent”), that we redeem your public shares for cash, and (b) deliver your public shares to the Transfer Agent, physically or electronically through The Depository Trust Company (“DTC”).
Holders of public units must elect to separate the underlying shares, rights and warrants included in the units sold by the Company in the IPO (whether purchased in the IPO or thereafter in the secondary market, such units, the “public units,” such shares, the “public shares” and such warrants, the “public warrants”) prior to exercising redemption rights with respect to the public shares. If holders hold their public units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the public units into the underlying public shares and public warrants, or if a holder holds public units registered in its own name, the holder must contact the Transfer Agent directly and instruct it to do so.
Public stockholders may elect to redeem all or a portion of their public shares even if they vote for the Business Combination Proposal.
If the business combination is not consummated, the public shares will not be redeemed for cash. If a public stockholder properly exercises its right to redeem its public shares and timely delivers its shares to the Transfer Agent, we will redeem each public share for a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the consummation of the business combination, including interest earned on the funds held in the trust account (net of amounts which may be withdrawn to pay our taxes (“permitted withdrawals”)), divided by the number of then-outstanding public shares. For illustrative purposes, the fair value of the assets held in the trust account as of June 30, 2023 was approximately $84,940,910, which equates to a per share redemption price of approximately $10.425 per share. If a public stockholder exercises its redemption rights, then it will be exchanging its redeemed public shares for cash and will no longer own such shares. Any request to redeem public shares, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing. Furthermore, if a holder of a public share delivers its shares in connection with an election of its redemption and subsequently decides prior to the applicable date not to elect to exercise such rights, it may simply request that the Company instruct our Transfer Agent to return the shares (physically or electronically). The holder can make such request by contacting the Transfer Agent, at the address or email address listed in the accompanying proxy statement. We will be required to honor such request only if made prior to the deadline for exercising redemption requests. See “Special Meeting — Redemption Rights” in the accompanying proxy statement for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.
Notwithstanding the foregoing, a holder of public shares, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” ​(as defined in Section 13 of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares, without our prior consent. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash, without our prior consent.
 

 
Approval of the Business Combination Proposal, each of the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, and the Adjournment Proposal each require the affirmative vote of a majority of the votes cast by holders of shares of our Class A common stock and Class B common stock present in person (which would include presence at the virtual special meeting) or by proxy at the special meeting and entitled to vote thereon, voting as a single class. Approval of the Charter Proposal requires the affirmative vote of (i) the holders of a majority of the shares of Class A common stock then outstanding, voting separately as a single class, (ii) the holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class and (iii) the holders of a majority of the then outstanding shares of common stock, voting together as a single class. The election of the director nominees pursuant to the Director Election Proposal requires the affirmative vote of a plurality of the shares of our Class A common stock and Class B common stock cast by the Company’s stockholders present in person or by proxy at the virtual special meeting and entitled to vote thereon, voting as a single class.
Clean Earth Acquisitions Sponsor, LLC (the “Sponsor” or our “initial stockholder”) and our officers and directors entered into a letter agreement with us at the time of the IPO and a Sponsor Support Agreement in connection with the Business Combination Agreement, pursuant to which they agreed (i) to vote the founder shares and private shares (defined in the accompanying proxy statement) purchased by them, as well as any public shares purchased by them during or after the IPO, in favor of the Business Combination Proposal and other proposals and (ii) to waive their redemption rights with respect to any founder shares they hold and any public shares they may acquire in connection with the completion of the business combination. As of the date hereof, our initial stockholder owns approximately 51% of our total outstanding shares of common stock.
All our stockholders are cordially invited to attend the special meeting virtually. To ensure your representation at the special meeting, however, you are urged to vote your shares online at www.voteproxy.com or complete, sign, date and return the enclosed proxy card as soon as possible.
If you are a stockholder of record holding shares of common stock, you may also cast your vote virtually at the special meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting virtually, obtain a proxy from your broker or bank.
If you fail to return a proxy card or fail to instruct a broker or other nominee how to vote, and do not attend the special meeting virtually, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If a valid quorum is established, any such failure to vote or to provide voting instructions will have the same effect as a vote “AGAINST” the Charter Proposal, but will have no effect on the outcome of any other proposal in the accompanying proxy statement.
Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please vote online at www.voteproxy.com or sign, date and return the enclosed proxy card as soon as possible in the envelope provided.
If your shares are held in “street name” or are in a margin or similar account, you should contact your bank or broker to ensure that your shares are represented and voted at the special meeting.
On behalf of our board of directors, we would like to thank you for your support of Clean Earth Acquisitions Corp. and look forward to a successful completion of the business combination.
By Order of the Board of Directors,
/s/ Aaron T. Ratner
Aaron T. Ratner
Chief Executive Officer
If you return your proxy card signed and without an indication of how you wish to vote, your shares will be voted in favor of each of the proposals.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST (1) IF YOU HOLD SHARES OF CLASS A COMMON STOCK THROUGH PUBLIC UNITS, ELECT TO SEPARATE YOUR PUBLIC
 

 
UNITS INTO THE UNDERLYING PUBLIC SHARES, RIGHTS AND PUBLIC WARRANTS PRIOR TO EXERCISING YOUR REDEMPTION RIGHTS WITH RESPECT TO THE PUBLIC SHARES, (2) SUBMIT A WRITTEN REQUEST, INCLUDING THE LEGAL NAME, PHONE NUMBER AND ADDRESS OF THE BENEFICIAL OWNER OF THE SHARES FOR WHICH REDEMPTION IS REQUESTED, TO THE TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE SCHEDULED VOTE AT THE SPECIAL MEETING, THAT YOUR PUBLIC SHARES BE REDEEMED FOR CASH, AND (3) DELIVER YOUR SHARES OF CLASS A COMMON STOCK TO THE TRANSFER AGENT, PHYSICALLY OR ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT/WITHDRAWAL AT CUSTODIAN) SYSTEM, IN EACH CASE IN ACCORDANCE WITH THE PROCEDURES AND DEADLINES DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THE PUBLIC SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE “SPECIAL MEETING — REDEMPTION RIGHTS” IN THE ACCOMPANYING PROXY STATEMENT FOR MORE SPECIFIC INSTRUCTIONS.
Neither the SEC nor any state securities commission has approved or disapproved of the transactions described in the accompanying proxy statement, passed upon the merits or fairness of the Business Combination Agreement or the transactions contemplated thereby, or passed upon the adequacy or accuracy of the accompanying proxy statement. Any representation to the contrary is a criminal offense.
The accompanying proxy statement is dated November 13, 2023 and is first being mailed to our stockholders on or about November 13, 2023.
 

 
CLEAN EARTH ACQUISITIONS CORP.
12600 Hill Country Blvd, Building R, Suite 275
Bee Cave, Texas 78738
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
OF CLEAN EARTH ACQUISITIONS CORP.
To Be Held on December 4, 2023
TO THE STOCKHOLDERS OF CLEAN EARTH ACQUISITIONS CORP.:
NOTICE IS HEREBY GIVEN that a special meeting in lieu of the 2023 annual meeting of the stockholders (the “special meeting”) of Clean Earth Acquisitions Corp., a Delaware corporation (“Clean Earth”, “we,” “us,” “our” or the “Company”), will be held on December 4, 2023, at 10:00 a.m., Eastern Time. The special meeting will be a virtual meeting conducted exclusively via live webcast. You are cordially invited to attend the virtual special meeting online, vote, view the list of stockholders entitled to vote at the special meeting and submit questions during the special meeting by visiting https://web.lumiagm.com/290463470 (passcode “cleanearth2023”) and using a control number assigned by American Stock Transfer & Trust Company. To register and receive access to the virtual meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in the accompanying proxy statement.
At the special meeting, you will be asked to consider and vote upon the following proposals:

Proposal No. 1:   A proposal to approve and adopt the Business Combination Agreement, a copy of which is attached to the accompanying proxy statement as Annex A, and to approve the transactions contemplated by the Business Combination Agreement (the “business combination”), which provides that, among other things, Alternus, as the sole beneficial and record holder of all of the issued and outstanding equity interests in the Acquired Subsidiaries as of immediately prior to the closing of the business combination (the “Closing”), will transfer to Clean Earth, and Clean Earth will receive from Alternus, all of the issued and outstanding equity interests in the Acquired Subsidiaries, as consideration and in exchange for the issuance and transfer by Clean Earth to Alternus of 27,500,000 shares of common stock of Clean Earth, subject to a working capital adjustment of up to 1,000,000 shares, plus up to 20,000,000 Earnout Shares (the “Business Combination Proposal”). The number of shares of common stock was determined based on an equity valuation of $275 million at $10 per share;

Proposal No. 2:   A proposal to amend and restate the Company’s certificate of incorporation, dated February 23, 2022, as amended on May 26, 2023 (as so amended, the “Current Charter”) in the form attached as Annex C (such amended and restated certificate of incorporation referred to herein as the “Proposed Charter”) (the “Charter Proposal”);

Proposal No. 3:   Proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with U.S. Securities and Exchange Commission (the “SEC”) guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions, as five sub-proposals (collectively, the “Advisory Governance Proposals”):
(A)
Proposal to authorize the issuance of 150,000,000 shares of common stock and 1,000,000 shares of preferred stock.
(B)
Proposal to permit the authorized shares of any class to be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Company’s stock entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.
(C)
Proposal to elect not to be governed by Section 203 of the DGCL.
(D)
Proposal to remove blank check provisions.
 

 
(E)
Proposal to limit the liability of officers to the fullest extent permitted by law.

Proposal No. 4:   A proposal to approve, for purposes of complying with applicable listing rules of Nasdaq, (x) the issuance of more than 20% of the Company’s issued and outstanding common stock in connection with the business combination, consisting of the issuance of shares of common stock to Alternus pursuant to the terms of the Business Combination Agreement, including any Earnout Shares and shares of common stock issued pursuant to the working capital adjustment, plus any additional shares of common stock or securities convertible into shares of common stock pursuant to arrangements that we may enter into prior to the Closing, and (y) the issuance of shares of common stock to Alternus in connection with the business combination, including any Earnout Shares and shares of common stock issued pursuant to the working capital adjustment, that would result in Alternus owning more than 20% of our outstanding common stock, or more than 20% of the voting power, which could constitute a “change of control” under Nasdaq rules (the “Stock Issuance Proposal”);

Proposal No. 5:   A proposal to approve and adopt the 2023 Equity Incentive Plan (the “Incentive Plan”), a copy of which is attached to the accompanying proxy statement as Annex F (the “Incentive Plan Proposal”);

Proposal No. 6:   A proposal to elect seven directors to serve staggered terms on our board of directors until the 2024, 2025 and 2026 annual meeting of stockholders, respectively, or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal (the “Director Election Proposal”); and

Proposal No. 7:   A proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the Condition Precedent Proposals (as defined below) or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived (the “Adjournment Proposal”).
Each of these proposals is more fully described in the accompanying proxy statement, which you are encouraged to read carefully. Under the Business Combination Agreement, the Closing is conditioned upon the approval of the Business Combination Proposal, the Charter Proposal, the Stock Issuance Proposal and the Director Election Proposal (collectively, the “Condition Precedent Proposals”) and each of the Condition Precedent Proposals is cross-conditioned on the approval of each other and the closing of the Business Combination Agreement. The Advisory Governance Proposals, the Incentive Plan Proposal, and the Adjournment Proposal are not conditioned upon the approval of any other proposal. If our stockholders do not approve each of the Condition Precedent Proposals, the business combination may not be consummated. If we do not consummate a business combination by the Termination Date (defined below), we will be required to dissolve and liquidate our trust account. If we liquidate, our warrants will expire worthless and our investors would lose the investment opportunity associated with an investment in the Combined Company, including through any potential price appreciation of our securities. By contrast, approval of each of the other proposals in the accompanying proxy statement (i.e., the Advisory Governance Proposals, the Incentive Plan Proposal, and the Adjournment Proposal) is not a condition to the consummation of the business combination.
The Business Combination Agreement provides that Alternus’ obligations to consummate the business combination are conditioned on, among other things, the “Available Cash” ​(which is defined to include the amount released from the Company’s trust account, after giving effect to redemptions, payment of Alternus’ and the Company’s transaction expenses and repayment of the Company’s working capital loans, plus any amounts raised by the Company between execution of the Business Combination Agreement and Closing, plus certain amounts raised by Alternus (or its subsidiaries) between execution of the Business Combination Agreement and Closing to the extent such funds are convertible into or payable in equity of the Company or were facilitated by certain specified parties), being at least $25,000,000. The business combination is also subject to the satisfaction or waiver of certain other closing conditions (including, without limitation, certain conditions precedent to the consummation of the business combination) as described in the accompanying proxy statement. If these conditions are not met, and such conditions are not waived, then the Business Combination Agreement could terminate and the proposed business combination may not be consummated.
 

 
There can be no assurance that the parties to the Business Combination Agreement would waive any such provision of the Business Combination Agreement. Furthermore, in no event will we redeem our public shares (defined below) in an amount that would cause our net tangible assets to be less than $5,000,001, in which case the business combination would not be consummated.
Our Class A common stock, par value $0.0001 per share (the “Class A common stock”), rights and warrants are currently listed on Nasdaq under the symbols “CLIN,” “CLINR” and “CLINW,” respectively. Certain of our shares of Class A common stock, rights and warrants currently trade as public units (defined below) consisting of one share of Class A common stock, one right and one-half of one redeemable warrant, and are listed on Nasdaq under the symbol “CLINU.” Upon consummation of the transactions contemplated by the Business Combination Agreement, we will change our name to “Alternus Clean Energy, Inc.” We intend to apply to obtain the listing of our common stock and warrants on the Nasdaq under the symbols “ALCE” and “ALCEW,” respectively, upon the Closing.
Only holders of record of shares of our Class A common stock and shares of our Class B common stock, par value $0.0001 per share (the “Class B common stock” or “founder shares”) at the close of business on November 8, 2023 (the “record date”) are entitled to notice of and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting. A complete list of our stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting and electronically during the special meeting at https://web.lumiagm.com/290463470 (passcode “cleanearth2023”).
Pursuant to the Current Charter, a public stockholder may request that we redeem all or a portion of such public stockholder’s public shares for cash prior to the business combination being consummated. You will be entitled to receive cash for any public shares to be redeemed only if you:
(i)
(a) hold public shares, or (b) hold public shares through public units and you elect to separate your public units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and
(ii)
prior to 5:00 PM, New York City time, on November 30, 2023 (two business days prior to the scheduled vote at the special meeting), (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to American Stock Transfer & Trust Company, our transfer agent (the “Transfer Agent”), that we redeem your public shares for cash, and (b) deliver your public shares to the Transfer Agent, physically or electronically through The Depository Trust Company (“DTC”).
Holders of public units must elect to separate the underlying shares, rights and warrants included in the units sold by the Company in the IPO (whether purchased in the IPO or thereafter in the secondary market, such units, the “public units,” such shares, the “public shares” and such warrants, the “public warrants”) prior to exercising redemption rights with respect to the public shares. If holders hold their public units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the public units into the underlying public shares and public warrants, or if a holder holds public units registered in its own name, the holder must contact the Transfer Agent directly and instruct it to do so.
Public stockholders may elect to redeem all or a portion of their public shares even if they vote for the Business Combination Proposal.
If the business combination is not consummated, the public shares will not be redeemed for cash. If a public stockholder properly exercises its right to redeem its public shares and timely delivers its shares to the Transfer Agent, we will redeem each public share for a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the consummation of the business combination, including interest earned on the funds held in the trust account (net of amounts which may be withdrawn to pay our taxes (“permitted withdrawals”)), divided by the number of then-outstanding public shares. For illustrative purposes, the fair value of the assets held in the trust account as of June 30, 2023 was approximately $84,940,910, which equates to a per share redemption price of approximately $10.425 per share. If a public stockholder exercises its redemption rights, then it will be exchanging its redeemed public shares for cash and will no longer own such shares. Any request to
 

 
redeem public shares, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing. Furthermore, if a holder of a public share delivers its shares in connection with an election of its redemption and subsequently decides prior to the applicable date not to elect to exercise such rights, it may simply request that the Company instruct our Transfer Agent to return the shares (physically or electronically). The holder can make such request by contacting the Transfer Agent, at the address or email address listed in the accompanying proxy statement. We will be required to honor such request only if made prior to the deadline for exercising redemption requests. See “Special Meeting — Redemption Rights” in the accompanying proxy statement for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.
On May 25, 2023, the Company held a special meeting of stockholders (the “May Special Meeting”) at which Clean Earth’s stockholders approved certain proposals giving the Company the right to extend the date by which it has to complete a business combination up to six times, from May 28, 2023 to November 28, 2023, composed of six one-month extensions (each an “Extension,” and the end date of each Extension, the “Extended Date”), provided that the Sponsor (or its affiliates or designees) agrees to deposit into the trust account on the then-applicable Extended Date, for each Extension, the lesser of (i) $195,000 and (ii) $0.04 for each share of the Company’s Class A common stock not redeemed in connection with the May Special Meeting (each an “Extension Payment”) in exchange for a non-interest bearing, unsecured promissory note payable upon consummation of a business combination. As of the date of this proxy statement, in connection with the Company’s exercise of Extensions, the Sponsor has deposited into the trust account $975,000 in Extension Payments, in exchange for non-interest bearing, unsecured promissory notes issued by the Company to the Sponsor, which provide that the Sponsor will not be repaid in the event that the Company is unable to close a business combination, unless there are funds available outside the trust account to do so.
In connection with the May Special Meeting, stockholders properly elected to redeem an aggregate of 14,852,437 shares of Class A common stock, and approximately $154,152,327 was withdrawn from the trust account to pay for such redemptions, leaving approximately $84,562,944 in the trust account following the May Special Meeting, exclusive of any Extension Payments. As a result of the redemptions, Clean Earth now has less liquidity and fewer round-lot holders of public shares, which may make it more difficult for the Company to meet all of the Nasdaq listing requirements. Since it is a condition to closing to receive the approval for listing by Nasdaq of the shares of the Combined Company to be issued in connection with the transactions contemplated by the Business Combination Agreement, the Company’s reduced public float may make it more difficult for Clean Earth to meet all of the Nasdaq listing requirements, and to consummate the Business Combination.
Notwithstanding the foregoing, a holder of public shares, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” ​(as defined in Section 13 of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares, without our prior consent. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash, without our prior consent. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001, in which case the business combination would not be consummated.
Approval of the Business Combination Proposal, each of the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, and the Adjournment Proposal each require the affirmative vote of a majority of the votes cast by holders of shares of our Class A common stock and Class B common stock present in person (which would include presence at the virtual special meeting) or by proxy at the special meeting and entitled to vote thereon, voting as a single class. Approval of the Charter Proposal requires the affirmative vote of (i) the holders of a majority of the shares of Class A common stock then outstanding, voting separately as a single class, (ii) the holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class and (iii) the holders of a majority of the then outstanding shares of common stock, voting together as a single class. The election of the director nominees pursuant to the Director Election Proposal requires the affirmative vote of a plurality of the shares of our Class A common stock and Class B common stock cast by the Company’s stockholders present in person or by proxy at the virtual special meeting and entitled to vote thereon, voting as a single class.
 

 
Clean Earth Acquisitions Sponsor, LLC (the “Sponsor” or our “initial stockholder”) and our officers and directors entered into a letter agreement with us at the time of the IPO and a Sponsor Support Agreement in connection with the Business Combination Agreement, pursuant to which they agreed (i) to vote the founder shares and private shares (defined in the proxy statement) purchased by them, as well as any public shares purchased by them during or after the IPO, in favor of the Business Combination Proposal other proposals and (ii) to waive their redemption rights with respect to any founder shares they hold and any public shares they may acquire in connection with the completion of the business combination. As of the date hereof, our initial stockholder owns approximately 51% of our total outstanding shares of common stock.
All our stockholders are cordially invited to attend the special meeting virtually. To ensure your representation at the special meeting, however, you are urged to vote online at www.voteproxy.com or complete, sign, date and return the enclosed proxy card as soon as possible.
If you are a stockholder of record holding shares of common stock, you may also cast your vote virtually at the special meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting virtually, obtain a proxy from your broker or bank.
If you fail to return a proxy card or fail to instruct a broker or other nominee how to vote, and do not attend the special meeting virtually, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If a valid quorum is established, any such failure to vote or to provide voting instructions will have the same effect as a vote “AGAINST” the Charter Proposal, but will have no effect on the outcome of any other proposal in the accompanying proxy statement.
Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please vote online at www.voteproxy.com or sign, date and return the enclosed proxy card as soon as possible in the envelope provided.
Our board of directors unanimously recommends that you vote or give instruction to voteFOReach of those proposals andFOReach of the director nominees
Your attention is directed to the proxy statement accompanying this notice (including the Annexes thereto) for a more complete description of the proposed business combination and related transactions and each of the proposals. We urge you to read the accompanying proxy statement carefully. If you have any questions or need assistance voting your shares of common stock, please contact Morrow Sodali, LLC (“Morrow”), our proxy solicitor by calling (203) 658-9400, or banks and brokers can call collect at (800) 662-5200, or by emailing CLIN.info@investor.morrowsodali.com. This notice of special meeting and the accompanying proxy statement are available at https://www.astproxyportal.com/ast/26701.
By Order of the Board of Directors,
/s/ Aaron T. Ratner
Aaron T. Ratner
Chief Executive Officer
Important Notice Regarding the Availability of Proxy Materials for the special meeting of stockholders to be held on December 4, 2023: This notice of special meeting and the accompanying proxy statement will be available at https://www.astproxyportal.com/ast/26701.
 

 
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TRADEMARKS
This proxy statement contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this proxy statement may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. The Company does not intend its use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of it by, any other companies.
 
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CERTAIN DEFINED TERMS
Unless otherwise stated in this proxy statement or the context otherwise requires, references to:

Adjournment Proposal” means the proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the Condition Precedent Proposals or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived;

Advisory Governance Proposals” means proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with the SEC guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions;

Alternus” means Alternus Energy Group Plc, a company incorporated under the laws of Ireland

Ancillary Agreements” means the Investor Rights Agreement, the Sponsor Support Agreement and the Escrow Agreement;

BCA” or “Business Combination Agreement” means the Business Combination Agreement, dated as of October 12, 2022, by and between Alternus and Clean Earth, attached to this proxy statement as Annex A, as may be amended or modified from time to time;

board of directors” or “Board” means the board of directors of the Company;

business combination” means the transactions contemplated by the Business Combination Agreement;

Business Combination Proposal” means the proposal to adopt the Business Combination Agreement and approve the Equity Exchange;

Charter Proposal” means the proposal to approve and adopt the Proposed Charter, which, if approved, would amend and restate the Current Charter, and which, if approved, would take effect upon the Closing; which is attached to this proxy statement as Annex C;

Class A common stock” means the Class A common stock of Clean Earth, par value $0.0001 per share;

Class B common stock” means the Class B common stock of Clean Earth, par value $0.0001 per share;

Clean Earth” means Clean Earth Acquisitions Corp., a Delaware corporation;

Clean Earth Material Adverse Effect” means a material adverse effect with respect to Clean Earth as set forth in the section entitled “The Business Combination Proposal — Material Adverse Effect”;

Closing” means the closing of the business combination;

Closing Date” means the date of the Closing;

Code” means the United States Internal Revenue Code of 1986, as amended;

Combined Company” means Clean Earth (renamed Alternus Clean Energy, Inc.), after completion of the business combination.

common stock” means (a) prior to the Closing, Class A common stock and Class B common stock and (b) from and after the Closing, shares of common stock, par value $0.0001 per share, of the Company;

Company”, “we”, “us” and “our” means Clean Earth, including, where applicable, after Clean Earth’s change of name to Alternus Clean Energy, Inc.;

completion window” means the period in which the Company must complete its initial business combination, which is either (i) May 28, 2023, subject to extension by the board of directors for up to six additional thirty day periods or (ii) such other time period in which the Company must
 
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consummate its initial business combination pursuant to an amendment to the Company’s amended and restated certificate of incorporation (the latest of such date is referred to as the “Termination Date”);

Condition Precedent Proposals” means the Business Combination Proposal, the Charter Proposal, the Stock Issuance Proposal and the Director Election Proposal;

COVID-19” means SARS-CoV-2 or COVID-19, and any evolutions or mutations thereof or related or associated epidemics, pandemic or disease outbreaks;

Current Charter” means the Company’s amended and restated certificate of incorporation, dated February 23, 2022, and as amended on May 26, 2023;

DTC” means the Depository Trust Company;

DGCL” means the General Corporation Law of the State of Delaware;

Director Election Proposal” means the proposal to elect the directors who, upon consummation of the business combination, will be the directors of Clean Earth;

Equity Exchange” means the transfer of all of the issued and outstanding Alternus Interests to Clean Earth as consideration and in exchange for the issuance and transfer by Clean Earth to Alternus of shares of common stock of Clean Earth at the Closing of 27,500,000 shares of common stock of Clean Earth, subject to a working capital adjustment of up to 1,000,000 shares, plus up to 20,000,000 Earnout Shares;

ERISA” means the United States Employee Retirement Income Security Act of 1974, as amended;

Escrow Agreement” means the escrow agreement to be entered into at the closing among Clean Earth, Alternus, the Sponsor, in its capacity as the representative of Clean Earth, and an escrow agent to be mutually agreed upon.

Exchange Act” means the United States Securities Exchange Act of 1934, as amended;

First Amendment to the Business Combination Agreement” or “BCA Amendment” means that certain First Amendment to the Business Combination Agreement, dated as of April 12, 2023, by and among Clean Earth, Alternus and the Sponsor, attached to this proxy statement as Annex H;

GAAP” means generally accepted accounting principles in the United States as in effect from time to time;

Governmental Authority” means any federal, state, provincial, municipal, local or foreign government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court or tribunal;

Governmental Order” means any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any Governmental Authority;

Incentive Plan” means the 2023 Equity Incentive Plan, a copy of which is attached to this proxy statement as Annex F, as may be amended and modified from time to time;

Incentive Plan Proposal” means the proposal to adopt the Incentive Plan;

initial stockholder” means Clean Earth Acquisitions Sponsor, LLC.

Investor Rights Agreement” means the Investor Rights Agreement, entered into by and among the Company, the Sponsor and Alternus , a copy of which is attached to this proxy statement as Annex E, as may be amended and modified from time to time;

IPO” means the initial public offering of Clean Earth;

IRS” means the U.S. Internal Revenue Service;

JOBS Act” means the Jumpstart Our Business Startups Act of 2012;

Minimum Cash Condition” means the “Available Cash” ​(which is defined to include the amount released from the Company’s trust account, after giving effect to redemptions, payment of Alternus’
 
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and the Company’s transaction expenses and repayment of the Company’s working capital loans, plus any amounts raised by the Company between execution of the Business Combination Agreement and Closing, plus certain amounts raised by Alternus (or its subsidiaries) between execution of the Business Combination Agreement and Closing to the extent such funds are convertible into or payable in equity of the Company or were facilitated by certain specified parties), being at least $25,000,000.

Morrow” means Morrow Sodali, LLC, the proxy solicitor to Clean Earth;

Nasdaq” means the Nasdaq Stock Market;

private shares” means the shares of Class A common stock sold as part of the private units in a private placement in connection with the IPO;

private warrants” means the warrants to purchase the Company’s Class A common stock purchased in a private placement in connection with the IPO;

private units” means the units purchased from Clean Earth by the Sponsor in a private placement in connection with the IPO, each of which includes one share of the Company’s Class A common stock and one-half of one redeemable warrant;

Proposed Bylaws” means the second amended and restated bylaws of the Company, a copy of which is attached to this proxy statement as Annex D;

Proposed Charter” means the amended and restated certificate of incorporation of the Company, a copy of which is attached to this proxy statement as Annex C;

public shares” means the shares of the Company’s Class A common stock included in the public units sold in the IPO (whether they were purchased in such offering or thereafter in the secondary market, and including the shares included as part of the additional public units sold in connection with the underwriters’ election to exercise their over-allotment option in full);

public stockholders” means the holders of Clean Earth’s public shares, whether acquired in Clean Earth’s IPO or acquired in the secondary market;

public units” means the units sold in the IPO;

public warrants” means the warrants included in the public units sold in the IPO, each of which is exercisable for one share of our Class A common stock, in accordance with its terms;

Regulation S-K” means Regulation S-K under the Securities Act;

Regulation S-X” means Regulation S-X under the Securities Act;

Retained Subsidiaries” means the excluded subsidiaries that would continue to be owned by Alternus after the Closing and will not be part of the Acquired Subsidiaries, consisting of the following: “Altnor AS”, “GHFG Limited”, “Altam Inc.”, “PCG_HoldCo GmbH”, “PCG_GP UG”, “PSM 20 UG”, “PSM 40 UG”, “GRT 1.1 GmbH & Co KG”, “ALTN HoldCo UG”, “GRT 1.7 Gmbh & Co KG”, “AE Europe B.V”.

Sarbanes Oxley Act” means the Sarbanes-Oxley Act of 2002;

SEC” means the United States Securities and Exchange Commission;

Securities Act” means the Securities Act of 1933, as amended;

Solis,” “Solis Bond Company” or “Solis Bond Company DAC” means Solis Bond Company, a Designated Activity Company, which is a subsidiary of Alternus;

Solis Bond” means the 3-year senior secured green bonds which were issued by Solis Bond Company DAC in January 2021, in the maximum amount of $242 million (€200 million) with a stated coupon rate of 6.5% + EURIBOR and quarterly interest payments;

Stock Issuance Proposal” means the proposal to issue shares of common stock in connection with the business combination;

special meeting” means the meeting to be held on December 4, 2023, at 10:00 a.m., Eastern Time, virtually, via live webcast at https://web.lumiagm.com/290463470 (passcode “cleanearth2023”), in lieu of the 2023 annual meeting of the stockholders of Clean Earth;
 
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Sponsor” means Clean Earth Acquisitions Sponsor, LLC, a Delaware limited liability company;

Sponsor Support Agreement” means that certain Support Agreement, dated as of October 12, 2022, by and among the Sponsor, Clean Earth, Alternus Energy Group Plc and certain other parties thereto, attached to this proxy statement as Annex B, as may be amended or modified from time to time;

Subsidiary” means, with respect to a person, a corporation or other entity of which more than 50% of the voting power of the equity securities or equity interests is owned, directly or indirectly, by such person;

Transactions” means, collectively, the business combination, including the Equity Exchange and the other transactions contemplated by the Business Combination Agreement and the Ancillary Agreements;

Transfer Agent” means American Stock Transfer & Trust Company;

trust account” means the Company’s trust account;

Warrant Agreement” means the Warrant Agreement, dated as of February 23, 2022, by and between Clean Earth and American Stock Transfer & Trust Company, as warrant agent;

warrants” means the public warrants and the private warrants, as applicable.
 
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement includes statements that are, or may be deemed to be, “forward-looking statements” within the meaning of the U.S. federal securities laws, including statements under the headings “Summary of the Proxy Statement,” “Risk Factors,” “Clean Earth’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Alternus’ Management’s Discussion and Analysis of Financial Condition and Results of Operations” are statements of future expectations and other forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “opportunity,” “plan,” “potential,” “predict,” “projected,” “should,” “strategy,” “suggests,” “targets,” “will,” “will be” or “would” or similar expressions or the negatives thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this proxy statement and include statements regarding the intentions, beliefs or current expectations of Clean Earth’s or Alternus’ management teams concerning, among other things, their respective results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which they operate.
You are cautioned that forward-looking statements are not guarantees of future performance and that Clean Earth’s and Alternus’ actual results of operations, financial condition and liquidity, and the development of the industry in which Alternus operates, may differ materially from those made in or suggested by the forward-looking statements contained in this proxy statement. In addition, even if Clean Earth’s and Alternus’ results of operations, financial condition and liquidity, and the development of the industry in which Alternus operates are consistent with the forward-looking statements contained in this proxy statement, those results or developments may not be indicative of results or developments in subsequent periods.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and Clean Earth’s and Alternus’ actual financial condition, results of operations and cash flows. The development of the industry in which Alternus operates may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements contained in this proxy statement.
These statements are based on Clean Earth’s or Alternus’ management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated by such statements. You should not place undue reliance on these forward-looking statements in deciding how to vote your proxy or instruct how your vote should be cast on the proposals set forth in this proxy statement. In addition, any projections relating to Alternus have not been audited. None of the independent auditors of Clean Earth or Alternus, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to Alternus’ projections, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the Alternus’ projections. As a result of a number of known and unknown risks and uncertainties, Alternus’ actual results or performance following the business combination may be materially different from those expressed or implied by these forward-looking statements. Factors that could cause such differences in actual results include:

the occurrence of any event, change or other circumstances that could delay the business combination or give rise to the termination of the BCA;

the outcome of any legal proceedings that may be instituted against Clean Earth or Alternus following announcement of the execution of the BCA;

the inability to complete the business combination due to the failure to obtain approval of the stockholders of Clean Earth of the BCA or to satisfy other conditions to the Closing in the BCA, or the failure to complete the business combination for any reason within the completion window;

the amount of cash available in Clean Earth’s trust account, after deducting the amount required to satisfy Clean Earth’s obligations to its stockholders (if any) that exercise their rights to redeem their public shares (but prior to the payment or reimbursement, as applicable, of any (a) deferred
 
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underwriting commissions being held in the Clean Earth’s trust account and (b) transaction expenses of Alternus and its subsidiaries and Clean Earth), may not be sufficient to satisfy the Minimum Cash Condition, in which case the business combination may not be able to be completed unless such condition is waived by Alternus;

the inability to obtain the listing of our shares of common stock on the Nasdaq following the Equity Exchange;

the risk that the business combination disrupts current plans and operations of Alternus as a result of the announcement and consummation of the transactions described herein;

Alternus’ ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition and the ability of Alternus to grow and manage growth profitably following the Equity Exchange;

costs related to the business combination;

changes in applicable laws or regulations;

the impact of the COVID-19 pandemic;

a financial or liquidity crisis;

the effects of inflation and changes in interest rates;

a financial or liquidity crisis; geopolitical factors, including, but not limited to, the Russian invasion of Ukraine;

the risk of global and regional economic downturns;

the projected financial information, anticipated growth rate, and market opportunity of Alternus;

foreign currency, interest rate, exchange rate and commodity price fluctuations;

various environmental requirements;

retention or recruitment of executive and senior management and other key employees;

the possibility that Clean Earth or Alternus may be adversely affected by other economic, business, and/or competitive factors;

the risk that the proposed business combination disrupts current plans and operations of Alternus as a result of the announcement and pendency of the business combination;

the ability of the Company to maintain an effective system of internal controls over financial reporting;

the ability of the Company to manage its growth effectively;

the ability of the Company to achieve and maintain profitability in the future;

the ability of the Company to access sources of capital to finance operations and growth;

the success of strategic relationships with third parties;

the impact of reduction, modification or elimination of government subsidies and economic incentives (including, but not limited to, with respect to solar parks);

the impact of decreases in spot market prices for electricity;

dependence on acquisitions for growth in Alternus’ business;

inherent risks relating to acquisitions and Alternus’ ability to manage its growth and changing business;

risks relating to developing and managing renewable solar projects;

risks relating to photovoltaic plant quality and performance;

risks relating to planning permissions for solar parks and government regulation;
 
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Alternus’ need for significant financial resources (including, but not limited to, for growth in its business);

the need for financing in order to maintain future profitability;

the lack of any assurance or guarantee that Alternus can raise capital or meet its funding needs;

Alternus’ limited operating history; and

other risks and uncertainties described in this proxy statement, including those under “Risk Factors”
The Company and Alternus undertake no obligations to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this proxy statement or to reflect the occurrence of unanticipated events, other than as required by law.
The foregoing factors and others described under “Risk Factors” should not be construed as exhaustive. There are other factors that may cause our actual results to differ materially from the forward-looking statements contained in this proxy statement. Moreover, new risks emerge from time to time and it is not possible for the Company and Alternus to predict all such risks. The Company and Alternus cannot assess the impact of all risks on their respective business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. The Company and Alternus urge you to read the sections of this proxy statement entitled “Summary of the Proxy Statement,” “Risk Factors,” “Clean Earth’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Alternus’ Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for a more complete discussion of the factors that could affect their respective future performance and the industry in which we operate.
The forward-looking statements are based on plans, estimates and projections as they are currently available to the management of the Company and Alternus, and neither undertakes any obligation, and neither expects, to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to the Company and Alternus or to persons acting on behalf of the Company and Alternus are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this proxy statement.
 
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SUMMARY TERM SHEET
This summary term sheet, together with the sections entitled “Questions and Answers for Stockholders of Clean Earth” and “Summary of the Proxy Statement,” summarizes certain information contained in this proxy statement, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the attached Annexes, for a more complete understanding of the matters to be considered at the special meeting. In addition, for definitions used commonly throughout this proxy statement, including this summary term sheet, please see the section entitled “Certain Defined Terms.”

Clean Earth is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

There are currently 16,704,230 shares of our common stock outstanding, consisting of 8,147,563 shares of our Class A common stock, 890,000 Class A common stock in permanent equity and 7,666,667 shares of our Class B common stock, held of record by one holder, our Sponsor, no shares of preferred stock outstanding, 23,000,000 rights, held of record by one holder and 11,945,000 warrants outstanding, consisting of 11,500,000 public warrants held of record by one holder and 445,000 private warrants held of record by one holder, our Sponsor. Each right entitles the holder thereof to receive one-tenth (1/10) of one share of Class A common stock, for no additional consideration, upon the consummation of an initial business combination. As a result, you must have 10 rights in order to receive a share of Class A common stock at the Closing of the initial business combination. Each whole public warrant entitles its holder to purchase one share of our Class A common stock at an exercise price of $11.50 per share, to be exercised only for a whole number of shares of our Class A common stock. The public warrants will become exercisable on the later of 30 days after the Closing of our business combination or 12 months from the closing of the IPO, provided in each case that we have an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement) and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder. The public warrants expire five years after the Closing of our business combination or earlier upon redemption or liquidation. Once the public warrants become exercisable, we may redeem the outstanding public warrants at a price of $0.01 per warrant, if the last sale price of our Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending on the third business day before the Company sends the notice of redemption to the warrant holders. Except as otherwise provided in the warrant agreement, the private warrants, however, are non-redeemable so long as they are held by the Sponsor or its permitted transferees. For more information regarding the warrants, please see the section entitled “Description of Securities.”

In accordance with the terms and subject to the conditions of the Business Combination Agreement, Clean Earth has agreed to pay consideration in the form of 27,500,000 shares of common stock valued at $10.00 per share to Alternus, subject to a working capital adjustment of up to 1,000,000 shares, plus up to 20,000,000 Earnout Shares, in exchange for all of the issued and outstanding equity interests in the Acquired Subsidiaries. The number of shares of common stock was determined based on an equity valuation of $275 million at $10 per share. The following table summarizes the sources and uses of funds for the business combination.
Sources (SM)
Uses (SM)
Alternus Equity Rollover(3)
$ 275.000
Alternus Equity Rollover(3)
$ 275.000
CLIN Sponsor(2)
$ 60.011
CLIN Sponsor(2)
$ 60.011
CLIN Public Equity(1)
$ 84.100
Cash to Balance Sheet(1)
$ 77.441
Additional Cash in Trust(1)
$ 0.841
Fees & Expenses(4)
$ 12.600
Target Cash
$ 5.100
Total $ 425.052 Total $ 425.052
 
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(1)
Assumes no shares of Class A common stock are redeemed by Clean Earth’s public stockholders in connection with the business combination.
(2)
Excludes 2.56mm shares vesting at a share price of $12.50. Includes 890,000 shares from Private Placement Units.
(3)
Excludes 20mm Earnout Shares that will be released from escrow upon meeting targets outlined in the Business Combination Agreement.
(4)
Includes deferred underwriting commissions of $805,000 due to the underwriters from Clean Earth’s IPO. The deferred underwriting commission reflects a reduction in the deferred underwriting commission as agreed by one of the underwriters. In October 2022, one of the underwriters agreed to forfeit a portion of its deferred underwriting commission in connection with the consummation of the business combination, and in April 2023, such underwriter agreed to forfeit the remainder of its deferred underwriting commission. This also reflects a disbursement of cash to Alternus, pursuant to the terms of the Business Combination Agreement, in the amount of $3,750,000 as payment for incurred transaction expenses which are unrelated to Alternus or Alternus’ subsidiaries and which are payable upon Closing. The balance reflects estimated closing transaction costs incurred by Clean Earth in conjunction with the business combination and repayment of related party loans.
The table below presents the trust value per share to a public stockholder that elects not to redeem across a range of varying redemption scenarios. The maximum redemption scenario represents the maximum redemptions that may occur but which would still allow for the satisfaction of the Minimum Cash Condition. This trust value per share includes the per share cost of the deferred underwriting commission.
As of
June 30, 2023
Trust Value
$ 84,940,910
Total shares of Class A common stock post Special Meeting Redemptions
8,147,563
Trust Value per share of Class A common stock
$ 10.425
Assuming no
Redemptions
Assuming 25%
Redemptions
Assuming 50%
Redemptions
Assuming Max
Redemptions
Redemptions ($)
21,235,253 42,470,505 50,398,997
Redemptions (Shares)
2,036,891 4,073,782 4,834,285
Deferred underwriting commission(1)
805,000 805,000 805,000 805,000
Cash left in trust account post redemption minus deferred underwriting commission
84,135,910 62,900,657 41,665,405 33,736,913
Class A common stock post redemption
8,147,563 6,110,672 4,073,781 3,313,278
Trust Value Per Share
$ 10.33 $ 10.29 $ 10.23 $ 10.18
(1)
The deferred underwriting commission gives effect to the reduction of the deferred underwriting commission in connection with the business combination agreed to by one of the underwriters. In October 2022, one of the underwriters agreed to forfeit a portion of its deferred underwriting commission in connection with the consummation of the business combination, and in April 2023, such underwriter agreed to forfeit the remainder of its deferred underwriting commission.
The table below presents possible sources of dilution and the extent of such dilution that non-redeeming public stockholders could experience in connection with the Closing across a range of varying redemption scenarios. The maximum redemption scenario represents the maximum redemptions that may occur but which would still allow for the satisfaction of the Minimum Cash Condition. In an effort to illustrate the extent of such dilution, the table below assumes (i) the exercise of all 11,500,000 public warrants and 445,000 private warrants, (ii) issuance of 2,300,000 shares of common stock upon the automatic conversion of all 23,000,000 rights, (iii) the conversion of 5,111,111 founder shares into shares of Class A common stock on a one-for-one basis, (iv) the issuance of 27,500,000 shares of common stock to Alternus in the Equity
 
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Exchange, (v) the full vesting of all 20,000,000 Earnout Shares, (vi) the full vesting of all 2,555,556 founder shares that will become subject to vesting following the Closing, and (vii) shares issuable on exercise of warrants to purchase (a) 100,000 shares of Class A common stock at an exercise price of $11.50 per share and (b) 300,000 shares of Class A common stock at an exercise price of $0.01, the issuance of such warrants conditioned upon, and only issued upon, the close of the Business Combination, as more fully described in the subsection entitled “Alternus’ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Financing Activities.” The table below does not assume (i) the issuance of any equity awards under the Incentive Plan or any issuance of shares pursuant to the working capital adjustment, (ii) the issuance of up to 150,000 shares and up to 75,000 warrants, which the Sponsor has the right to receive upon conversion of up to $1.5 million of the Working Capital Note into units with terms equivalent to the private units and (iii) with respect to convertible notes issued by Alternus to non-related-party investors having principal amounts of $922,000 (the “First Note”) and $1.1 million (€1 million) (the “Second Note”) and upon the exercise of the respective note holder’s option, beginning 90 days after the Closing, to convert the full principal balance of such note and any accrued but unpaid interest thereon, (a) the potential issuance of 1,320,000 shares pursuant to the First Note and (b) in the case of the Second Note, the potential issuance of a number of shares equal in market value, at the time of exercise, to the full principal balance of and any then-accrued but unpaid interest on the Second Note, as more fully described in the subsection entitled “Alternus’ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Financing Activities.”
Assuming No
Redemptions
Assuming 25%
Redemptions
Assuming 50%
Redemptions
Assuming
Maximum
Redemptions
Shares
%
Shares
%
Shares
%
Shares
%
Public shares(1)
10,447,563 13.25% 8,410,672 10.95% 6,373,781 8.52% 5,613,278 7.58%
Shares issued to Alternus
27,500,000 34.88% 27,500,000 35.80% 27,500,000 36.78% 27,500,000 37.15%
Shares issued to Clean Earth’s initial stockholder(2)
6,001,111 7.61% 6,001,111 7.81% 6,001,111 8.03% 6,001,111 8.11%
Earnout Shares
20,000,000 25.36% 20,000,000 26.04% 20,000,000 26.75% 20,000,000 27.02%
Founder shares that become subject to vesting on Closing
2,555,556 3.24% 2,555,556 3.33% 2,555,556 3.42% 2,555,556 3.45%
Shares underlying public warrants
11,500,000 14.58% 11,500,000 14.97% 11,500,000 15.38% 11,500,000 15.54%
Shares underlying private warrants
445,000 0.56% 445,000 0.58% 445,000 0.60% 445,000 0.60%
Shares underlying certain other warrants(3)
400,000 0.52% 400,000 0.52% 400,000 0.52% 400,000 0.55%
Fully diluted shares
78,849,230 100% 76,812,339 100% 74,775,448 100% 74,014,945 100%
(1)
Includes 2,300,000 shares issuable on automatic conversion of rights on Closing.
(2)
Includes 5,111,111 founder shares and 890,000 private shares underlying the private units.
(3)
Includes shares issuable on exercise of warrants to purchase (a) 100,000 shares of Class A common stock at an exercise price of $11.50 per share and (b) 300,000 shares of Class A common stock at an exercise price of $0.01, the issuance of such warrants conditioned upon, and only issued upon, the close of the Business Combination, as more fully described in the subsection entitled “Alternus’ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Financing Activities.”
The deferred underwriting commissions in connection with the IPO will be released to the underwriters only on completion of the business combination. The deferred underwriting commission is payable if a business combination is consummated without regard to the number of public shares redeemed by holders in connection with a business combination. The following table presents the deferred underwriting commission as a percentage of the cash left in the trust account following redemptions across a range of varying redemption scenarios. The maximum redemption scenario represents the maximum redemptions that may occur but which would still provide for the satisfaction of the Minimum Cash Condition.
 
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Assuming No
Redemptions
Assuming 25%
Redemptions
Assuming 50%
Redemptions
Assuming Maximum
Redemptions
Deferred Underwriting Commission(1)
$ 805,000 $ 805,000 $ 805,000 $ 805,000
Deferred Underwriting Commission as a percentage of cash left in the trust account following redemptions and payment of deferred underwriting commission
1% 1% 2% 2%
(1)
The deferred underwriting commission gives effect to the reduction of the deferred underwriting commission in connection with the business combination agreed to by one of the underwriters. In October 2022, one of the underwriters agreed to forfeit a portion of its deferred underwriting commission in connection with the consummation of the business combination, and in April 2023, such underwriter agreed to forfeit the remainder of its deferred underwriting commission.

Our management and board of directors considered various factors in determining whether to approve the Business Combination Agreement and the business combination. For more information about our decision-making process, see the section entitled “The Business Combination Proposal — Clean Earth’s Board of Directors’ Reasons for the Approval of the Business Combination”.

Pursuant to the Current Charter, in connection with the business combination, holders of our public shares may elect to have their Class A common stock redeemed for cash at the applicable redemption price per share calculated in accordance with the Current Charter. As of June 30, 2023, this would have amounted to approximately $10.425 per share. If a holder exercises his, her, or its redemption rights, then the holder will exchange his, her, or its public shares for cash and will no longer own shares of the post-business combination company and will not participate in the future growth of the post-business combination company, if any. Such a holder will be entitled to receive cash for his, her, or its public shares only if he, she, or it properly demands redemption and delivers his, her, or its shares (either physically or electronically) to the Transfer Agent at least two business days prior to the scheduled vote at the special meeting. Please see the section entitled “Special Meeting of Clean Earth Stockholders — Redemption Rights.”

In addition to voting on the Business Combination Proposal, stockholders are being asked to vote on the following proposals at the special meeting:
(A)
Proposal No. 2 — The Charter Proposal:   A proposal to amend and restate the Current Charter;
(B)
Proposal No. 3 — The Advisory Governance Proposals:   Proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with the SEC guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions;
1.
Proposal to authorize the issuance of 150,000,000 shares of common stock and 1,000,000 shares of preferred stock.
2.
Proposal to permit the authorized shares of any class to be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Company’s stock entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.
3.
Proposal to elect not to be governed by Section 203 of the DGCL.
4.
Proposal to remove blank check provisions.
5.
Proposal to limit the liability of officers to the fullest extent permitted by law.
(C)
Proposal No. 4 — The Stock Issuance Proposal:   for purposes of complying with applicable listing rules of the Nasdaq, (x) the issuance of more than 20% of the Company’s issued and outstanding common stock in connection with the business combination, consisting of the
 
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issuance of shares of common stock to Alternus pursuant to the terms of the Business Combination Agreement, including any Earnout Shares and shares of common stock issued pursuant to the working capital adjustment, plus any additional shares of common stock or securities convertible into shares of common stock pursuant to arrangements that we may enter into prior to the Closing, and (y) the issuance of shares of common stock to Alternus in connection with the business combination, including any Earnout Shares and shares of common stock issued pursuant to the working capital adjustment, that would result in Alternus owning more than 20% of our outstanding common stock, or more than 20% of the voting power, which could constitute a “change of control” under Nasdaq rules;
(D)
Proposal No. 5 — The Incentive Plan Proposal:   A proposal to approve and adopt the Incentive Plan, a copy of which is attached to this proxy statement as Annex F;
(E)
Proposal No. 6 — The Director Election Proposal:   A proposal to elect seven directors to serve staggered terms on our board of directors until the 2024, 2025 and 2026 annual meeting of stockholders, respectively, or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal; and
(F)
Proposal No. 7 — The Adjournment Proposal:   A proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the Condition Precedent Proposals or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived.
Please see sections entitled “The Business Combination Proposal,” “The Charter Proposal,” “The Advisory Governance Proposals,” “The Incentive Plan Proposal,” “The Director Election Proposal” and “The Adjournment Proposal.” Under the Business Combination Agreement, the Closing is conditioned upon the approval of the Condition Precedent Proposals and each of the Condition Precedent Proposals is cross-conditioned on the approval of each other and the Closing of the Business Combination Agreement. The Advisory Governance Proposals, the Incentive Plan Proposal, and the Adjournment Proposal are not conditioned upon the approval of any other proposal. If our stockholders do not approve each of the Condition Precedent Proposals, the business combination may not be consummated. If we do not consummate a business combination by the Termination Date (defined below), we will be required to dissolve and liquidate our trust account. If we liquidate, our warrants will expire worthless and our investors would lose the investment opportunity associated with an investment in the Combined Company, including through any potential price appreciation of our securities. By contrast, approval of each of the other proposals in this proxy statement (i.e., the Advisory Governance Proposals, the Incentive Plan Proposal, and the Adjournment Proposal) is not a condition to the consummation of the business combination.

Our board of directors has decided to increase the size of the board of directors from four to seven directors if the business combination is completed. For more information, please see the section entitled “Management of the Company following the Business Combination.”

Unless waived by the parties to the Business Combination Agreement, and subject to applicable law, the Closing is subject to a number of conditions set forth in the Business Combination Agreement including, among others, the receipt of certain stockholder approvals contemplated by this proxy statement. For more information about the closing conditions to the business combination, please see the section entitled “The Business Combination Proposal — The Business Combination Agreement — Conditions to the Completion of the Business Combination.”

The Business Combination Agreement may be terminated at any time prior to the consummation of the business combination upon agreement of the parties thereto, or by the Company or Alternus in specified circumstances. For more information about the termination rights under the Business Combination Agreement, please see the section entitled “The Business Combination Proposal — Termination; Effectiveness.

The business combination involves numerous risks. For more information about these risks, please see the section entitled “Risk Factors.”
 
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When you consider the recommendation of our board of directors that you vote in favor of approval of the business combination, you should be aware that the initial stockholder and the Company’s directors and officers, have interests in the business combination that may be different from, or in addition to, the interests of the Company’s other stockholders and warrant holders. These interests include:

The Sponsor and our officers and directors will lose their entire investment in us if we do not complete a business combination within the completion window.

On August 17, 2021, the Sponsor paid $25,000 in consideration for 5,750,000 founder shares, or approximately $0.004 per share, to cover certain of our offering costs in connection with the IPO. On February 7, 2022, the Company effected a 1:1.33333339 stock split of its Class B common stock, resulting in our initial stockholder holding 7,666,667 founder shares. The 7,666,667 founder shares have an aggregate market value of approximately $81,496,670 based upon the closing per share price of $10.63 on Nasdaq on November 10, 2023.

On February 28, 2022, in connection with the closing of the IPO, the Sponsor purchased 890,000 private units from the Company at a price of $10.00 per private unit, for an aggregate purchase price of $8,900,000. Each private unit consists of one share of Class A common stock and one-half of one warrant. The 890,000 private units have an aggregate market value of approximately $9,478,500 based upon the closing per public share price of $10.63 and the public warrant price of $0.04 on Nasdaq on November 10, 2023.

On May 25, 2023, the Company held a special meeting of stockholders (the “May Special Meeting”) at which Clean Earth’s stockholders approved certain proposals giving the Company the right to extend the date by which it has to complete a business combination up to six times, from May 28, 2023 to November 28, 2023, composed of six one-month extensions (each an “Extension,” and the end date of each Extension, the “Extended Date”), provided that the Sponsor (or its affiliates or designees) agrees to deposit into the trust account on the then-applicable Extended Date, for each Extension, the lesser of (i) $195,000 and (ii) $0.04 for each share of the Company’s Class A common stock not redeemed in connection with the May Special Meeting (each an “Extension Payment”) in exchange for a non-interest bearing, unsecured promissory note payable upon consummation of a business combination. As of the date of this proxy statement, in connection with the Company’s exercise of Extensions, the Sponsor has deposited into the trust account $975,000 in Extension Payments, in exchange for non-interest bearing, unsecured promissory notes issued by the Company to the Sponsor, which provide that the Sponsor will not be repaid in the event that the Company is unable to close a business combination, unless there are funds available outside the trust account to do so. In connection with the May Special Meeting, stockholders properly elected to redeem an aggregate of 14,852,437 shares of Class A common stock, and approximately $154,152,327 was withdrawn from the trust account to pay for such redemptions, leaving approximately $84,562,944 in the trust account following the May Special Meeting, exclusive of any Extension Payments. As a result of the redemptions, Clean Earth now has less liquidity and fewer round-lot holders of public shares, which may make it more difficult for the Company to meet all of the Nasdaq listing requirements. Since it is a condition to closing to receive the approval for listing by Nasdaq of the shares of the Combined Company to be issued in connection with the transactions contemplated by the Business Combination Agreement, the Company’s reduced public float may make it more difficult for Clean Earth to meet all of the Nasdaq listing requirements, and to consummate the Business Combination.

In the event that the Company does not complete a business combination within the completion window, the 7,666,667 founder shares and 890,000 private units, for which the Sponsor has invested a total of $8,925,000 and which have an approximate aggregate market value of $90,975,170 as of November 10, 2023, (a portion of which is allocable to each of our officers and directors who made capital contributions to the Sponsor), will expire worthless, the Company may be unable to pay up to $1,500,000 in working capital loans used expected to be repaid by the Company to the Sponsor and our officers and directors upon consummation of the business combination. After the business combination, assuming no redemptions, the Sponsor will
 
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beneficially own approximately 2,555,556 shares of common stock which will be unvested and that will become subject to vesting upon the occurrence of certain stock price milestones or upon the occurrence of certain events.

The initial stockholder and our officers and directors have agreed to waive their redemption rights with respect to their founder shares and any public shares they hold in connection with the completion of the business combination. In addition, the initial stockholder and our officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if the Company fails to complete a business combination within the completion window. There will be no redemption rights or liquidating distributions with respect to the warrants, which will expire worthless if we fail to complete our initial business combination within the completion window. Our initial stockholder and our officers and directors did not receive separate consideration for their waiver of redemption rights other than the receipt of founder shares for a nominal purchase price.

The nominal purchase price paid by the Sponsor and our officers and directors for the founder shares may result in significant dilution to the implied value of the public shares upon consummation of the business combination. In addition, the value of the founder shares following the Closing is likely to be substantially higher than the nominal price paid for them, even if the trading price of our common stock is substantially less than $10.00 per share. As a result, the Sponsor and our officers and directors are likely able to recoup their investment in us and make a substantial profit on that investment, even if our public shares have lost significant value. Accordingly, the Sponsor and our officers and directors may have an economic incentive that differs from that of our public stockholders to pursue and consummate an initial business combination rather than to liquidate and to return all of the cash in the trust account to the public stockholders, even if that business combination were with a riskier or less-established target business.

Following the consummation of the business combination, we will continue to indemnify our existing directors and officers and will maintain a directors’ and officers’ liability insurance policy which is consistent with other comparable public companies.

Upon the Closing, Aaron T. Ratner, our chief executive officer, Nicholas Parker, Chairman of the board of directors and Candice Beaumont, a director, are expected to serve on the Company’s board of directors. As such, in the future they may receive any cash fees, stock options or stock awards that the Company and its board of directors determines to pay to its directors and/or officers.

In connection with the Business Combination Agreement, we entered into the Investor Rights Agreement, which will provide certain of the Company’s stockholders, including the Sponsor and holders of the founder shares, private shares, private warrants and shares of common stock issuable upon conversion of the founder shares and private warrants, with certain rights, including registration rights.

Upon the Closing, subject to the terms and conditions of the Business Combination Agreement, the Company’s officers and directors are entitled to reimbursement for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. As of November 13, 2023, the total aggregate amount of such out-of-pocket expenses expected to be repaid by the Company upon consummation of the business combination is approximately $1,500,000 in total allowed working capital loans.

In connection with the Closing, the Sponsor and our officers and directors would be entitled to the repayment of any working capital loans and advances that have been made to the Company and remain outstanding. If we do not complete an initial business combination within the completion window, we may use a portion of our working capital held outside the trust account to repay the working capital loans, but no proceeds held in the trust account would be used to repay any working capital loans.
 
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In order to protect the amounts held in the trust account, the Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or Business Combination Agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.10 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act.

Alternus will be the controlling shareholder of the Company post-Closing. Alternus will own, assuming no redemptions by Clean Earth’s stockholders, approximately 62% of Clean Earth at closing. As a result, Clean Earth will be a “controlled company” within the meaning of the corporate governance standards of Nasdaq. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:
(i)
the requirement that a majority of our board of directors consist of “independent directors” as defined under the rules of Nasdaq;
(ii)
the requirement that we have a compensation committee that is composed entirely of directors who meet the Nasdaq independence standards for compensation committee members; and
(iii)
the requirement that our director nominations be made, or recommended to our full board of directors, by our independent directors or by a nominations committee that consists entirely of independent directors
Following the Closing, we are permitted to utilize these exemptions. If we utilize such exemptions available to controlled companies, we may not have a majority of independent directors, our nominations committee and compensation committee may not consist entirely of independent directors and such committees may not be subject to annual performance evaluations. Accordingly, under these circumstances, you will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.
 
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QUESTIONS AND ANSWERS FOR STOCKHOLDERS OF CLEAN EARTH
The questions and answers below highlight only selected information from this proxy statement and only briefly address some commonly asked questions about the special meeting and the proposals to be presented at the special meeting, including with respect to the business combination. The following questions and answers do not include all the information that is important to our stockholders. Stockholders are urged to read carefully this entire proxy statement, including the Annexes and the other documents referred to herein, to fully understand the business combination and voting procedures for the special meeting.
Q:
Why am I receiving this proxy statement?
A:
Our stockholders are being asked to consider and vote upon a proposal to adopt the Business Combination Agreement and approve the Transactions contemplated thereby, including the business combination, among other proposals. As contemplated by the terms of the Business Combination Agreement, Alternus will effect a series of Transactions that will result at the Closing in (i) Alternus transferring to Clean Earth all of the Alternus’ interests held by it in the Acquired Subsidiaries in exchange for the issuance and transfer by Clean Earth to Alternus of 27,500,000 shares of common stock of Clean Earth (which was determined based on an equity valuation of $275 million at $10 per share), subject to a working capital adjustment of up to 1,000,000 shares, plus up to 20,000,000 Earnout Shares, (ii) the Acquired Subsidiaries becoming direct or indirect wholly owned subsidiaries of Clean Earth (except for one of the Acquired Subsidiaries which is currently only 60% owned by Alternus) and (iii) Clean Earth changing its name to “Alternus Clean Energy, Inc.” A copy of the Business Combination Agreement is attached to this proxy statement as Annex A.
This proxy statement and its Annexes contain important information about the proposed business combination and the other matters to be acted upon at the special meeting. You should read this proxy statement and its Annexes carefully and in their entirety.
Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement and its Annexes.
Q:
When and where is the special meeting?
A:
The special meeting will be held on December 4, 2023, at 10:00 a.m., Eastern Time, virtually, via live webcast at https://web.lumiagm.com/290463470 (passcode “cleanearth2023”).
The special meeting will be a virtual meeting conducted exclusively via live webcast. You will be able to attend the special meeting online, vote, view the list of stockholders entitled to vote at the special meeting and submit your questions during the special meeting by visiting https://web.lumiagm.com/290463470 (passcode “cleanearth2023”). To participate in the virtual meeting, you will need a 12-digit control number assigned by American Stock Transfer & Trust Company. The meeting webcast will begin promptly at 10:00 a.m., Eastern Time. We encourage you to access the meeting prior to the start time and you should allow ample time for the check-in procedures. Because the special meeting will be a completely virtual meeting, there will be no physical location for stockholders to attend.
Beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) who wish to attend the virtual special meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to proxy@astfinancial.com. Beneficial stockholders who e-mail a valid legal proxy will be issued a meeting control number that will allow them to register to attend and participate in the special meeting. After contacting American Stock Transfer & Trust Company, a beneficial holder will receive an e-mail prior to the meeting with a link and instructions for entering the virtual special meeting. Beneficial stockholders should contact American Stock Transfer & Trust Company at least five business days prior to the meeting date in order to ensure access.
 
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Q:
What are the specific proposals on which I am being asked to vote at the special meeting?
A:
At the special meeting, you will be asked to consider and vote upon the following proposals:
(1)
Proposal No. 1 — The Business Combination Proposal:   A proposal to approve and adopt the Business Combination Agreement, a copy of which is attached to the accompanying proxy statement as Annex A, and to approve the business combination, which provides that, among other things, Alternus, as the sole beneficial and record holder of all of the issued and outstanding equity interests in the Acquired Subsidiaries as of immediately prior to the Closing, will transfer to Clean Earth, and Clean Earth will receive from Alternus, all of the issued and outstanding equity interests in the Acquired Subsidiaries, as consideration and in exchange for the issuance and transfer by Clean Earth to Alternus at the Closing of shares of common stock of Clean Earth at the Closing of 27,500,000 shares of common stock of Clean Earth, subject to a working capital adjustment of up to 1,000,000 shares, plus up to 20,000,000 Earnout Shares. The number of shares of common stock was determined based on an equity valuation of $275 million at $10 per share;
(2)
Proposal No. 2 — The Charter Proposal:   A proposal to amend and restate the Current Charter;
(3)
Proposal No. 3 — The Advisory Governance Proposals:   Proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with the SEC guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions:
a.
Proposal to authorize the issuance of 150,000,000 shares of common stock and 1,000,000 shares of preferred stock.
b.
Proposal to permit the authorized shares of any class to be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Company’s stock entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.
c.
Proposal to elect not to be governed by Section 203 of the DGCL.
d.
Proposal to remove blank check provisions.
e.
Proposal to limit the liability of officers to the fullest extent permitted by law.
(4)
Proposal No. 4 — The Stock Issuance Proposal:   A proposal to approve, for purposes of complying with applicable listing rules of the Nasdaq, (x) the issuance of more than 20% of the Company’s issued and outstanding common stock in connection with the business combination, consisting of the issuance of shares of common stock to Alternus pursuant to the terms of the Business Combination Agreement , including any Earnout Shares and shares of common stock issued pursuant to the working capital adjustment, that would result in Alternus owning more than 20% of our outstanding common stock, or more than 20% of the voting power, which could constitute a “change of control” under Nasdaq rules;
(5)
Proposal No. 5 — The Incentive Plan Proposal:   A proposal to approve and adopt the Incentive Plan, a copy of which is attached to the accompanying proxy statement as Annex F;
(6)
Proposal No. 6 — The Director Election Proposal:   A proposal to elect seven directors to serve staggered terms on our board of directors until the 2024, 2025 and 2026 annual meetings of stockholders, respectively, or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal; and
(7)
Proposal No. 7 — The Adjournment Proposal:   A proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the Condition Precedent Proposals or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived.
 
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Q:
Are the proposals conditioned on one another?
A:
Yes. Under the Business Combination Agreement, the Closing is conditioned upon the approval of the Condition Precedent Proposals and each of the Condition Precedent Proposals is cross-conditioned on the approval of each other and the Closing of the Business Combination Agreement. The Advisory Governance Proposals, the Incentive Plan Proposal, and the Adjournment Proposal are not conditioned upon the approval of any other proposal. If our stockholders do not approve each of the Condition Precedent Proposals, the business combination may not be consummated. By contrast, approval of each of the other proposals in this proxy statement (i.e., the Advisory Governance Proposals, the Incentive Plan Proposal, and the Adjournment Proposal) is not a condition to the consummation of the business combination.
Q:
Why is the Company providing stockholders with the opportunity to vote on the business combination?
A:
Under the Current Charter, we must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of our initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote, rather than a tender offer. Therefore, we are seeking to obtain the approval of our stockholders of the Business Combination Proposal in order to allow our public stockholders to effectuate redemptions of their public shares in connection with the Closing. The adoption of the Business Combination Agreement is required under Delaware law and the approval of the business combination is required under the Current Charter. In addition, such approval is also a condition to the Closing under the Business Combination Agreement.
Q:
What will happen in the business combination?
A:
Under the terms of the Business Combination Agreement, at the Closing,(i) Alternus will transfer to Clean Earth all of the Alternus’ interests held by it in the Acquired Subsidiaries in exchange for the issuance and transfer by Clean Earth to Alternus at the Closing of 27,500,000 shares of common stock of Clean Earth, subject to a working capital adjustment of up to 1,000,000 shares, plus up to 20,000,000 Earnout Shares, (ii) the Acquired Subsidiaries will become direct or indirect wholly owned subsidiaries of Clean Earth (except for one of the Acquired Subsidiaries which is currently only 60% owned by Alternus) and (ii) Clean Earth will change its name to “Alternus Clean Energy, Inc.”
Q:
Following the business combination, will the Company’s securities continue to trade on a stock exchange?
A:
Yes. We intend to apply to obtain listing of the post-business combination company’s common stock and warrants on the Nasdaq under the symbols “ALCE” and “ALCEW,” respectively, upon the Closing.
Q:
How has the announcement of the business combination affected the trading price of the Company’s common stock?
A:
On October 11, 2022, the trading date before the public announcement of the business combination, the Company’s public units, Class A common stock, rights and warrants closed at $9.99, $9.88, $0.16 and $0.17, respectively. On November 10, 2023, the trading date immediately prior to the date of this proxy statement, the Company’s public units, Class A common stock, rights and warrants closed at $10.72, $10.63, $0.09 and $0.04, respectively.
Q:
How will the business combination impact the shares of the Company outstanding after the business combination?
A:
Immediately after the business combination and the consummation of the Transactions contemplated thereby, including the shares of common stock issuable on automatic conversion of the rights, the amount of common stock issued and outstanding will increase to 43,948,674 shares of common stock (excluding 2,555,556 founder shares that will become subject to vesting following the closing of the business combination upon the occurrence of certain stock price milestones or upon the occurrence of certain events, and excludes any shares of common stock issuable upon the exercise of any warrants which may be exercisable following the Closing and assuming that no shares of common stock are
 
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redeemed). Additional shares of common stock may be issuable in the future as a result of the issuance of additional shares that are not currently outstanding. The issuance and sale of these shares in the public market could adversely impact the market price of our common stock, even if our business is doing well.
Q:
Is the business combination the first step in agoing privatetransaction?
A:
No. The Company does not intend for the business combination to be the first step in a “going private” transaction. One of the primary purposes of the business combination is to provide a platform for Alternus to access the U.S. public markets.
Q:
Will the management of the Acquired Subsidiaries change in the business combination?
A:
We anticipate that all of the executive officers of Alternus will become executive officers of the Company and continue to be management of the Acquired Subsidiaries. Four of the director nominees will be designated by Alternus and three of the director nominees will be designated by Clean Earth in accordance with the terms of the Investor Rights Agreement. Please see the sections entitled “Management of the Company Following the Business Combination” and “The Director Election Proposal” for additional information.
Q:
Who will be controlling shareholder of the Company post-Closing?
A:
Alternus will be the controlling shareholder of the Company post-Closing. Alternus will own approximately 62% of Clean Earth at closing, assuming no redemptions by Clean Earth shareholders, in which case the Combined Company will have approximately $78.0 million of cash available at closing. Having an authorized share capital of €1,000,000 ($1,136,000), divided into one hundred million shares, each with a par value of €0.01 ($0.012), and the issued and outstanding share capital of €261,822 ($314,187), divided into 26,365,738 shares, each with a par value of €0.01 ($0.012), Alternus is currently listed on the Euronext Growth Market Oslo Børs, or OSE, under the symbol “ALT.” Alternus has one class of shares and is not currently and will not at closing, be majority controlled by any single shareholder.
Q:
What happens if the business combination is approved, and a substantial number of the Clean Earth public stockholders exercise their redemption rights?
A:
Clean Earth stockholders who vote in favor of the business combination may also nevertheless exercise their redemption rights. Accordingly, the business combination may be consummated even though the funds available from the trust account and the number of public stockholders are reduced as a result of redemptions by public stockholders. The consummation of the business combination is conditioned upon, among other things, on, among other things, on the “Available Cash” ​(which is defined to include the amount released from the Company’s trust account, after giving effect to redemptions, payment of Alternus’ and the Company’s transaction expenses and repayment of the Company’s working capital loans, plus any amounts raised by the Company between execution of the Business Combination Agreement and Closing, plus certain amounts raised by Alternus (or its subsidiaries) between execution of the Business Combination Agreement and Closing to the extent such funds are convertible into or payable in equity of the Company or were facilitated by certain specified parties), being at least $25,000,000, although this conditioned may be waived by Alternus. In addition, with fewer public shares and public stockholders, the trading market for Class B common stock may be less liquid than the market for Class A common stock was prior to consummation of the business combination.
For more information, please see the sections entitled “Summary of the Proxy Statement — Ownership of the Company following the Business Combination and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.
The table below presents the trust value per share to a public stockholder that elects not to redeem across a range of varying redemption scenarios. The maximum redemption scenario represents the maximum redemptions that may occur, but which would still allow for the satisfaction of the Minimum Cash Condition. This trust value per share includes the per share cost of the deferred underwriting commission.
 
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As of
June 30, 2023
Trust Value
$ 84,940,910
Total shares of Class A common stock post Special Meeting Redemptions
8,147,563
Trust Value per share of Class A common stock
$ 10.425
Assuming no
Redemptions
Assuming 25%
Redemptions
Assuming 50%
Redemptions
Assuming Max
Redemptions
Redemptions ($)
21,235,253 42,470,505 50,398,997
Redemptions (Shares)
2,036,891 4,073,782 4,834,285
Deferred underwriting commission(1)
805,000 805,000 805,000 805,000
Cash left in trust account post redemption minus deferred underwriting commission
84,135,910 62,900,657 41,665,405 33,736,913
Class A common stock post redemption
8,147,563 6,110,672 4,073,781 3,313,278
Trust Value Per Share
$ 10.33 $ 10.29 $ 10.23 $ 10.18
(1)
The deferred underwriting commission gives effect to the reduction of the deferred underwriting commission in connection with the business combination agreed to by one of the underwriters. In October 2022, one of the underwriters agreed to forfeit a portion of its deferred underwriting commission in connection with the consummation of the business combination, and in April 2023, such underwriter agreed to forfeit the remainder of its deferred underwriting commission.
The table below presents possible sources of dilution and the extent of such dilution that non-redeeming public stockholders could experience in connection with the Closing across a range of varying redemption scenarios. The maximum redemption scenario represents the maximum redemptions that may occur but which would still allow for the satisfaction of the Minimum Cash Condition. In an effort to illustrate the extent of such dilution, the table below assumes (i) the exercise of all 11,500,000 public warrants and 445,000 private warrants, (ii) issuance of 2,300,000 shares of common stock upon the automatic conversion of all 23,000,000 rights, (iii) the conversion of 5,111,111 founder shares into shares of Class A common stock on a one-for-one basis, (iv) the issuance of 27,500,000 shares of common stock to Alternus in the Equity Exchange (v) the full vesting of all 20,000,000 Earnout Shares, (vi) the full vesting of all 2,555,556 founder shares that will become subject to vesting following the Closing, and (vii) shares issuable on exercise of warrants to purchase (a) 100,000 shares of Class A common stock at an exercise price of $11.50 per share and (b) 300,000 shares of Class A common stock at an exercise price of $0.01, the issuance of such warrants conditioned upon, and only issued upon, the close of the Business Combination, as more fully described in the subsection entitled “Alternus’ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Financing Activities.” The table below does not assume (i) the issuance of any equity awards under the Incentive Plan or any issuance of shares pursuant to the working capital adjustment, (ii) the issuance of up to 150,000 shares and up to 75,000 warrants, which the Sponsor has the right to receive upon conversion of up to $1.5 million of the Working Capital Note into units with terms equivalent to the private units and (iii) upon the exercise of the respective holder’s option, beginning 90 days after the Closing, to convert the full principal balance of such note and any accrued but unpaid interest thereon, (a) the potential issuance of 1,320,000 shares pursuant to the First Note and (b) in the case of the Second Note, the potential issuance of a number of shares equal in market value, at the time of exercise, to the full principal balance of and any then-accrued but unpaid interest on the Second Note, as more fully described in the subsection entitled “Alternus’ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources —  Financing Activities.
 
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Assuming No
Redemptions
Assuming 25%
Redemptions
Assuming 50%
Redemptions
Assuming Maximum
Redemptions
Shares
%
Shares
%
Shares
%
Shares
%
Public shares(1)
10,447,563 13.25% 8,410,672 10.95% 6,373,781 8.52% 5,613,278 7.58%
Shares issued to Alternus
27,500,000 34.88% 27,500,000 35.80% 27,500,000 36.78% 27,500,000 37.15%
Shares issued to Clean Earth’s initial stockholder(2)
6,001,111 7.61% 6,001,111 7.81% 6,001,111 8.03% 6,001,111 8.11%
Earnout Shares
20,000,000 25.36% 20,000,000 26.04% 20,000,000 26.75% 20,000,000 27.02%
Founder shares that become subject to vesting on Closing
2,555,556 3.24% 2,555,556 3.33% 2,555,556 3.42% 2,555,556 3.45%
Shares underlying public warrants
11,500,000 14.58% 11,500,000 14.97% 11,500,000 15.38% 11,500,000 15.54%
Shares underlying private warrants
445,000 0.56% 445,000 0.58% 445,000 0.60% 445,000 0.60%
Shares underlying certain other warrants(3)
400,000 0.52% 400,000 0.52% 400,000 0.52% 400,000 0.55%
Fully diluted shares
78,849,230 100% 76,812,339 100% 74,775,448 100% 74,014,945 100%
(1)
Includes 2,300,000 shares issuable on automatic conversion of rights on Closing.
(2)
Includes 5,111,111 founder shares and 890,000 private shares underlying the private units.
(3)
Includes shares issuable on exercise of warrants to purchase (a) 100,000 shares of Class A common stock at an exercise price of $11.50 per share and (b) 300,000 shares of Class A common stock at an exercise price of $0.01, the issuance of such warrants conditioned upon, and only issued upon, the close of the Business Combination, as more fully described in the subsection entitled “Alternus’ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Financing Activities.”
The deferred underwriting commissions in connection with the IPO will be released to the underwriters only on completion of the business combination. The deferred underwriting commission is payable if a business combination is consummated without regard to the number of public shares redeemed by holders in connection with a business combination. The following table presents the deferred underwriting commission as a percentage of the cash left in the trust account following redemptions across a range of varying redemption scenarios. The maximum redemption scenario represents the maximum redemptions that may occur but which would still provide for the satisfaction of the Minimum Cash Condition.
Assuming No
Redemptions
Assuming 25%
Redemptions
Assuming 50%
Redemptions
Assuming Maximum
Redemptions
Deferred Underwriting Commission(1)
$ 805,000 $ 805,000 $ 805,000 $ 805,000
Deferred Underwriting Commission as a percentage of cash left in the trust account following redemptions and payment of deferred underwriting commission
1% 1% 2% 2%
(1)
The deferred underwriting commission gives effect to the reduction of the deferred underwriting commission in connection with the business combination agreed to by one of the underwriters. In October 2022, one of the underwriters agreed to forfeit a portion of its deferred underwriting commission in connection with the consummation of the business combination, and in April 2023, such underwriter agreed to forfeit the remainder of its deferred underwriting commission.
Q:
What conditions must be satisfied to complete the business combination?
A:
There are a number of closing conditions that must be satisfied or waived in the Business Combination Agreement, including, among others, the approval of the Condition Precedent Proposals by the stockholders of the Company and the satisfaction of the Minimum Cash Condition. For a summary of the conditions that must be satisfied or waived prior to completion of the business combination, please see the section entitled “The Business Combination Proposal — The Business Combination Agreement.”
 
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Q:
Why is the Company proposing the Charter Proposal?
A:
We are proposing the Charter Proposal in order to approve the Proposed Charter, substantially in the form attached to this proxy statement as Annex C. In the judgment of the board of directors, the Proposed Charter is necessary to address the needs of the post-business combination Company.
Pursuant to Delaware law and the Business Combination Agreement, we are required to submit the Charter Proposal to the Company’s stockholders for approval. Please see the section entitled “The Charter Proposal” for more information.
Q:
Why is the Company proposing the Advisory Governance Proposals?
A:
We are requesting that our stockholders vote upon, on a non-binding advisory basis, a series of proposals to approve certain amendments contained in the Proposed Charter that materially affect stockholder rights, which are those amendments that will be made to the Current Charter as reflected in the Proposed Charter if the Charter Proposal is approved.
These separate votes are not otherwise required by Delaware law separate and apart from the Charter Proposal, but pursuant to SEC guidance, the Company is required to submit these provisions to our stockholders separately for approval. Please see the section entitled “The Advisory Governance Proposals” for additional information.
Q:
Why is the Company proposing the Stock Issuance Proposal?
A:
We are seeking stockholder approval in order to comply with Nasdaq Listing Rules 5635(a), (b) and (d), which require stockholder approval of certain transactions that result in the issuance of 20% or more of the outstanding voting power or shares of common stock outstanding before the issuance of stock or securities. Assuming no redemptions, 27,500,000 shares of common stock will be issued to Alternus in connection with the business combination, subject to a working capital adjustment of up to 1,000,000 shares, plus up to 20,000,000 Earnout Shares (and, plus any additional shares of common stock or securities convertible into shares of common stock we may issue pursuant to arrangements that we may enter into prior to the Closing). Because we may issue 20% or more of our outstanding common stock as consideration in the business combination, which would constitute 20% or more of the voting power, and therefore a “change of control” under Nasdaq Listing Rules 5635(a), (b) and (d), we are required to obtain stockholder approval of such issuance. For more information, please see the section entitled “The Stock Issuance Proposal.”
Q:
Why is the Company proposing the Incentive Plan Proposal?
A:
The purpose of the Incentive Plan is to further align the interests of the eligible participants with those of stockholders by providing long-term incentive compensation opportunities tied to the performance of the Company. Please see the section entitled “The Incentive Plan Proposal” for additional information.
Q:
Why is the Company proposing the Director Election Proposal?
A:
Upon the Closing, our stockholders are being asked to consider and vote upon a proposal to elect seven directors to our board of directors, effective immediately upon the Closing of the business combination, with each Class I director having a term that expires at our annual meeting of stockholders in 2024, each Class II director having a term that expires at our annual meeting of stockholders in 2025 and each Class III director having a term that expires at our annual meeting of stockholders in 2026, or, in each case, when his or her respective successor is duly elected and qualified, or upon his or her earlier death, resignation, retirement or removal. Four of the directors were nominated by Alternus and three of the directors were nominated by Clean Earth.
The Company believes it is in the best interests of stockholders to allow stockholders to vote upon the election of newly appointed directors. Please see the section entitled “The Director Election Proposal” for additional information.
 
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Q:
Why is the Company proposing the Adjournment Proposal?
A:
We are proposing the Adjournment Proposal to allow our board of directors to adjourn the special meeting to a later date or dates to permit further solicitation of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Condition Precedent Proposals or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived. Please see the section entitled “The Adjournment Proposal” for additional information.
Q:
What happens if I sell my shares of Class A common stock before the special meeting?
A:
The record date for the special meeting is earlier than the date that the business combination is expected to be completed. If you transfer your shares of Class A common stock after the record date, but before the special meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting. However, you will not be able to seek redemption of your shares of Class A common stock because you will no longer be able to deliver them for cancellation upon consummation of the business combination. If you transfer your shares of Class A common stock prior to the record date, you will have no right to vote those shares at the special meeting or redeem those shares for a pro rata portion of the proceeds held in our trust account.
Q:
What constitutes a quorum at the special meeting?
A:
A majority of the issued and outstanding shares of common stock entitled to vote as of the record date at the special meeting must be present, in person (which would include presence at the virtual special meeting) or represented by proxy, at the special meeting to constitute a quorum and in order to conduct business at the special meeting. For the Charter Proposal, a quorum will be present at the special meeting if the holders of a majority of the Class A common stock and a majority of the Class B common stock outstanding and entitled to vote at the special meeting is represented in person (which would include presence at a virtual meeting) or by proxy at the special meeting. Abstentions will be counted as present for the purpose of determining a quorum. Shares held by the Sponsor, who currently beneficially owns approximately 51% of our issued and outstanding shares of common stock, will count towards this quorum. In the absence of a quorum, the chairman of the special meeting has the power to adjourn the special meeting. As of the record date for the special meeting, 8,352,115 shares of our common stock would be required to achieve a quorum.
Q:
What vote is required to approve the proposals presented at the special meeting?
A:
Approval of the Business Combination Proposal, the Advisory Governance Proposals (each of which is a non-binding vote), the Stock Issuance Proposal, the Incentive Plan Proposal, and the Adjournment Proposal each requires the affirmative vote of holders of a majority of the votes cast by our stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Approval of the Charter Proposal requires the affirmative vote of (i) the holders of a majority of the shares of Class A common stock then outstanding, voting separately as a single class, (ii) the holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class and (iii) the holders of a majority of the then outstanding shares of common stock, voting together as a single class.
The election of directors is decided by a plurality of the votes cast by the stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote on the election of directors. This means that each of the director nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors.
A stockholder’s failure to vote by proxy or to vote in person at the special meeting (which would include voting at the virtual special meeting) will not be counted towards the number of shares of common stock required to validly establish a quorum. Abstentions will be counted in connection with the determination of whether a valid quorum is established. Each of the failure to vote by proxy or to vote in person (which would include voting at the virtual special meeting) and an abstention from voting on any of the Business Combination Proposal, the Advisory Governance Proposals, the Stock
 
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Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal will have no effect on the outcome of any such proposal, but will have the same effect as a vote “AGAINST” the Charter Proposal.
Q:
What happens if the Business Combination Proposal is not approved or it otherwise not consummated?
A:
If the Business Combination Proposal is not approved or is otherwise not consummated, we will continue our operations and continue to seek a business combination. If the Business Combination Proposal is not approved and we do not consummate a business combination by the Termination Date, we will be required to dissolve and liquidate its trust account. If we liquidate, our warrants will expire worthless and our investors would lose the investment opportunity associated with an investment in the Combined Company, including through any potential price appreciation of our securities.
Q:
May the Sponsor, the initial stockholder or the Company’s directors or officers or their affiliates purchase shares or public warrants in connection with the business combination?
A:
Our initial stockholder and our directors, officers, advisors and their affiliates will not purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of the business combination and have not formulated any terms or conditions for any such transactions.
Q:
How many votes do I have at the special meeting?
A:
Our stockholders are entitled to one vote on each proposal presented at the special meeting for each share of common stock held of record as of November 8, 2023, the record date for the special meeting. As of the close of business on the record date, there were 16,704,230 outstanding shares of our common stock.
Q:
What interests do the Sponsor and the Company’s officers and directors have in the business combination?
A:
When you consider the recommendation of our board of directors that you vote in favor of approval of the business combination, you should be aware that the initial stockholder and the Company’s directors and officers, have interests in the business combination that may be different from, or in addition to, the interests of the Company’s other stockholders and warrant holders. Our board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the business combination, and in recommending to our stockholders that they vote in favor of the proposals presented at the special meeting, including the Business Combination Proposal. Please see the section entitled “ Information About Clean Earth — Conflicts of Interest” for additional information.
Q:
Did the board of directors obtain a third-party fairness opinion in determining whether or not to proceed with the business combination?
A:
Yes. Clean Earth retained Cabrillo Advisors, Inc., which we refer to as Cabrillo Advisors, to evaluate the fairness of the potential business combination of Clean Earth and Alternus. On October 9, 2022, Cabrillo Advisors rendered its opinion to the Clean Earth board of directors as to the fairness, from a financial point of view, to Clean Earth’s stockholders of the acquisition of the Acquired Subsidiaries by means of a share acquisition pursuant to the Business Combination Agreement. Prior to the Business Combination, Cabrillo Advisors did not perform any work for Clean Earth, Alternus or any of their affiliates. The fairness opinion rendered by Cabrillo Advisors was given as of the date of such opinion and does not take into account subsequent developments, including the updates to Alternus’ financial projections delivered to Clean Earth in May 2023 or the amended terms contained in the First Amendment to the Business Combination Agreement.
Q:
What happens if I vote against the Business Combination Proposal?
A:
If you vote against the Business Combination Proposal but the Business Combination Proposal still obtains the requisite vote at the special meeting, then the Business Combination Proposal will be approved and, assuming the approval of the other Condition Precedent Proposals and the satisfaction or waiver of the other conditions to closing, the business combination will be consummated in accordance with the terms of the Business Combination Agreement.
 
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If you vote against the Business Combination Proposal and the Business Combination Proposal does not obtain the affirmative vote of a majority of the votes cast by our stockholders at the special meeting, then the Business Combination Proposal will fail and we will not consummate the business combination. If we do not consummate a business combination by the Termination Date (defined below), we will be required to dissolve and liquidate our trust account. If we liquidate, our warrants will expire worthless and our investors would lose the investment opportunity associated with an investment in the Combined Company, including through any potential price appreciation of our securities.
Q:
Do I have redemption rights?
A:
Under the Current Charter, we must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of our initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than a tender offer. If you are a holder of public shares, you may redeem your public shares for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the trust account as of two business days prior to the consummation of the business combination, including interest not previously released to us to pay our taxes, by (ii) the total number of then-outstanding public shares; provided, that, the Company will not redeem any shares of Class A common stock issued in the IPO to the extent that the redemption would result in the Company having net tangible assets of less than $5,000,001, in which case the business combination would not be consummated. A public stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” ​(as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of our Class A common stock included in the public units sold in our IPO without the prior consent of the Company. Holders of our outstanding public warrants do not have redemption rights in connection with the business combination. The Sponsor and our directors and officers have agreed to waive their redemption rights with respect to any public shares they may hold in connection with the consummation of the business combination, and the founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price. For illustrative purposes, the fair value of the assets held in the trust account as of June 30, 2023 was approximately $84,940,910, which equates to a per share redemption price of approximately $10.425 per share.
You will be entitled to receive cash for any public shares to be redeemed only if you:
(i)
(a) hold public shares or (b) hold public shares through public units and you elect to separate your public units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and
(b) prior to 5:00 PM, New York City time, on November 30, 2023 (two business days prior to the scheduled vote at the special meeting), (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to the Transfer Agent that the Company redeem your public shares for cash and (b) deliver your public shares to the Transfer Agent, physically or electronically through DTC.
Holders of public units must elect to separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing.
Additionally, shares properly tendered for redemption will only be redeemed if the business combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the trust account, including interest not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses) in connection with the liquidation of the trust account, unless we complete an alternative business combination within the completion window.
 
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Q:
Can the initial stockholder and our officers and directors redeem their founder shares or private shares in connection with consummation of the business combination?
A:
No. The initial stockholder and our officers and directors have agreed to waive their redemption rights with respect to their founder shares and any public shares they may hold in connection with the consummation of our business combination.
Q:
Is there a limit on the number of shares I may redeem?
A:
Yes. A public stockholder, together with any affiliate of the stockholder or any other person with whom the stockholder is acting in concert or as a “group” ​(as defined under Section 13 of the Exchange Act), is restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in our IPO without the prior consent of the Company. Accordingly, all shares in excess of 15% owned by a holder will not be redeemed for cash without the prior consent of the Company. On the other hand, a public stockholder who holds less than 15% of the public shares of Class A common stock may redeem all of the public shares held by the stockholder for cash.
Q:
Is there a limit on the total number of shares that may be redeemed?
A:
Yes. The Current Charter provides that we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001, in which case the business combination would not be consummated. Other than this limitation, the Current Charter does not provide a specified maximum redemption threshold.
Q:
Will how I vote affect my ability to exercise redemption rights?
A:
No. You may exercise your redemption rights whether you vote your shares of common stock for or against, or whether you abstain from voting on the Business Combination Proposal or any other proposal described by this proxy statement.
Q:
How do I exercise my redemption rights?
A:
In order to exercise your redemption rights, you must: (i) (a) hold public shares or (b) hold public shares through public units and you elect to separate your public units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and (ii) prior to 5:00 PM, New York City time, on November 30, 2023 (two business days prior to the scheduled vote at the special meeting), (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to the Transfer Agent that the Company redeem your public shares for cash and (b) deliver your public shares to the Transfer Agent, physically or electronically through the DTC's Deposit/Withdrawal At Custodian (DWAC) system. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing.
The Transfer Agent’s address is as follows:
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his, her, or its or any other person with whom he, she, or it is acting in concert or as a “group” ​(as defined in Section 13d-3 of the Exchange Act) will be restricted from seeking redemption rights with respect to more than 15% of the shares of Class A common stock included in the public units sold in our IPO without the prior consent of the Company, which we refer to as the “15% threshold.” Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public stockholder or group will not be redeemed for cash without the prior consent of the Company.
The requirement for physical or electronic delivery prior to the special meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the business combination is approved.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically
 
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charge a tendering broker a fee and it is in the broker’s discretion whether or not to pass this cost on to the redeeming stockholder. However, this fee would be incurred regardless of whether or not we require stockholders seeking to exercise redemption rights to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when delivery must be effectuated.
Q:
What are the material U.S. federal income tax consequences of exercising my redemption rights?
A:
The U.S. material federal income tax consequences of exercising your redemption rights depends on the particular facts and circumstances. Please see the section entitled “Material U.S. Federal Income Tax Considerations.” The discussion of the U.S. federal income tax consequences contained in this proxy statement is intended to provide only a general discussion and is not a complete analysis or description of all of the U.S. federal income tax considerations that are applicable to you in respect of exercising the redemption rights, nor does it address any tax considerations arising under U.S. state or local or non-U.S. tax laws. We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights.
Q:
Do I have appraisal rights if I object to the business combination?
A:
No. Appraisal rights are not available to holders of our common stock in connection with the business combination.
Q:
What happens to the funds held in the trust account upon consummation of the business combination?
A:
If the business combination is consummated, the funds held in the trust account will be used to: (i) pay our stockholders who properly exercise their redemption rights and (ii) pay certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees and other professional fees) that were incurred by the Company and other parties to the Business Combination Agreement in connection with the business combination. Taxes will also be paid out of interest income earned on the trust account.
Q:
When is the business combination expected to be completed?
A:
The Closing is expected to take place in the third quarter of 2023, subject to the satisfaction or waiver of the conditions described in the section entitled “The Business Combination Proposal — The Business Combination Agreement — Conditions to the Completion of the Business Combination.” The Business Combination Agreement may be terminated by the parties thereto if the Closing has not occurred by November 28, 2023. For a description of the conditions to the completion of the business combination, see the section entitled “The Business Combination Proposal — The Business Combination Agreement —  Conditions to the Completion of the Business Combination.”
Q:
What do I need to do now?
A:
You are urged to read carefully and consider the information contained in this proxy statement, including the Annexes, and to consider how the business combination will affect you as a stockholder.
You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.
Q:
How do I vote?
A:
If you were the record holder of shares of our common stock as of the record date, you may submit your proxy to vote such shares online, by mail or at the special meeting.
To submit your proxy by mail, simply mark your proxy card, date and sign it and return it in the postage-paid envelope. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted.
If you vote by mail, your proxy card must be received no later than December 2, 2023.
 
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To submit your proxy online, visit www.voteproxy.com and enter the control number found on your proxy card, voting instruction form or notice included in the proxy materials. Votes submitted electronically must be received by 11:59 p.m., Eastern Time, on December 3, 2023.
Please carefully consider the information contained in this proxy statement and, whether or not you plan to virtually attend the special meeting, please vote online or by mail so that your shares will be voted in accordance with your wishes even if you later decide not to virtually attend the special meeting.
We encourage you to vote online or by mail. If you virtually attend the special meeting, you may also submit your vote at the special meeting via the special meeting website at https://web.lumiagm.com/290463470 (passcode “cleanearth2023”) in which case any votes that you previously submitted by mail will be superseded by the vote that you cast at the special meeting. If your proxy is properly completed and submitted, and if you do not revoke it prior to or at the special meeting, your shares will be voted at the special meeting in the manner set forth in proxy statement or as otherwise specified by you. Again, your paper proxy card must be received by mail no later than 11:59 p.m., New York City time, on December 2, 2023, and, if voting electronically, your online vote must be received by 11:59 p.m., Eastern Time, on December 3, 2023.
If your shares are held in an account at a broker, bank, or nominee (i.e., in “street name”), you must provide the record holder of your shares with instructions on how to vote the shares. Please follow the voting instructions provided by the broker, bank, or nominee. See the section entitled “Special Meeting of Clean Earth Stockholders — Voting Shares Held in Street Name” for more information.
Q:
What is the difference between a stockholder of record and astreet nameholder?
A:
If your shares are registered directly in your name with the Transfer Agent, you are considered the stockholder of record with respect to those shares, and the proxy materials are being provided directly to you. If your shares are held in a stock brokerage account or by a bank or other nominee, then you are considered the beneficial owner of those shares, which are considered to be held in “street name.” The proxy materials are being provided to you by your broker, bank or other nominee who is considered the stockholder of record with respect to those shares.
Q:
If my shares are held instreet name,will my broker, bank or nominee automatically vote my shares for me?
A:
No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe all of the proposals presented to the stockholders at this special meeting will be considered non-discretionary and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction on any of the proposals presented at the special meeting. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.
Q:
What will happen if I abstain from voting or fail to vote at the special meeting?
A:
At the special meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, a failure to vote or an abstention to vote at the special meeting will have no effect on any of the Business Combination Proposal, the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal, and will have the same effect as a vote “AGAINST” the Charter Proposal.
Q:
What will happen if I sign and return my proxy card without indicating how I wish to vote?
A:
Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders and “FOR” each of the director nominees. The proxyholders may use their discretion to vote on any other matters which properly come before the special meeting.
 
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Q:
How can I vote my shares without attending the special meeting?
A:
If you are a stockholder of record of our common stock as of the close of business on the record date, you can vote by proxy online at www.voteproxy.com or by mail by following the instructions provided in the enclosed proxy card or at the special meeting. Please note that if you are a beneficial owner of our common stock, you may vote by submitting voting instructions to your broker, bank or nominee, or otherwise by following instructions provided by your broker, bank or nominee. Telephone and internet voting may be available to beneficial owners. Please refer to the vote instruction form provided by your broker, bank or nominee. For additional information, including proxy submission deadlines, please see “How do I vote?
Q:
May I change my vote after I have returned my proxy card or voting instruction form?
A:
Yes. If you are a holder of record of our common stock as of the close of business on the record date, you can change or revoke your proxy before it is voted at the special meeting by:

delivering a signed written notice of revocation to our Secretary at Clean Earth Acquisitions Corp., 12600 Hill Country Blvd, Building R, Suite 275, Bee Cave, Texas 78738, bearing a date later than the date of the proxy, stating that the proxy is revoked;

signing and delivering a new proxy, relating to the same shares and bearing a later date; or

virtually attending and voting at the special meeting and voting, although attendance at the special meeting will not, by itself, revoke a proxy.
If you are a beneficial owner of our common stock as of the close of business on the record date, you must follow the instructions of your broker, bank or other nominee to revoke or change your voting instructions.
Q:
What should I do if I receive more than one set of voting materials?
A:
You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.
Q:
Who will solicit and pay the cost of soliciting proxies for the special meeting?
A:
The Company will pay the cost of soliciting proxies for the special meeting. The Company has engaged Morrow to assist in the solicitation of proxies for the special meeting. The Company has agreed to pay Morrow a fee of $17,500, plus disbursements, and will reimburse Morrow for its reasonable out-of-pocket expenses and indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. The Company will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of common stock for their expenses in forwarding soliciting materials to beneficial owners of common stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.
Q:
Who can help answer my questions?
A:
If you have questions about the business combination or if you need additional copies of this proxy statement or the enclosed proxy card you should contact:
Clean Earth Acquisitions Corp.
12600 Hill Country Blvd, Building R, Suite 275
Bee Cave, Texas 78738
Attn: Aaron T. Ratner
Tel: (212) 739-7860
 
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You may also contact our proxy solicitor at:
Morrow Sodali LLC
333 Ludlow Street, 5th Floor, South Tower
Stamford, CT 06902
Individuals call toll-free (800) 662-5200
Banks and brokers call (203) 658-9400
Email: CLIN.info@investor.morrowsodali.com
To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the special meeting.
You may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”
If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to our Transfer Agent prior to the special meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your stock, please contact our Transfer Agent:
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, New York 11219
Attention: Proxy Dept
Email: Proxy@astfinancial.com
 
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SUMMARY OF THE PROXY STATEMENT
This summary highlights selected information from this proxy statement and does not contain all of the information that is important to you. You should read this entire document and its annexes and the other documents to which we refer before you decide how to vote with respect to the proposals to be considered and voted on at the special meeting.
Information about the Parties to the Business Combination
Clean Earth Acquisitions Corp.
12600 Hill Country Blvd, Building R, Suite 275
Bee Cave, Texas 78738
(800) 508-1531
Clean Earth Acquisitions Corp. is a blank check company formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
Alternus Energy Group Plc
Suite 9-10 Plaza 212
Blanchardstown Corporate Park 2
Dublin 15, D15 PK64, Ireland
(+353) 190 73445
Headquartered in Ireland, Alternus Energy Group Plc is an international independent clean energy producer, listed on the Oslo Bors (“OSE”). Alternus develops, installs, owns and operates a diverse portfolio of utility scale solar photovoltaic power stations (“PV parks”) in Europe and in the USA as a long-term owner. The solar parks benefit from long-term government offtake contracts and/or Power Purchase Agreements (“PPAs”) with investment grade off-takers, plus energy sales to local power grids.
Having started in early 2017 with two parks and a 6 megawatts peak (MWp) capacity and approximately $1 million a year in revenues, Alternus’ current operational portfolio now consists of over 47 individual operating solar parks across Poland, Romania, Italy, Netherlands, and Germany, totaling 168MWp in operation, and $30 million of estimated recurring annual revenues. Alternus works closely with local and international high-quality development partners that help to provide a consistent pipeline of new projects for acquisition and construction. Alternus’ goal is to own and operate over 3.5 GWs of solar parks by the end of 2025 and to become one of the largest pan-European independent power producers (“IPPs”) by the end of the decade. Alternus’ current focus is on the European solar PV market. However, Alternus is also actively exploring opportunities in other countries outside of Europe, such as the United States.
If the Business Combination Agreement is approved and adopted and the business combination is consummated, Alternus will transfer to Clean Earth its following subsidiaries, namely: Alternus LUX 01 S.a.r.l. and all of its subsidiaries, including its holding companies and special purpose vehicles (“SPVs”) which own its development assets; Solis Bond Company, a Designated Activity Company (or hereinafter “Solis Bond Company DAC”) and its SPVs which own its operating assets in Italy, Romania, Poland and the Netherlands; AEG JD 02 Limited and its SPV which owns an operating asset in the Netherlands; Alternus Energy Americas Inc. and its holding companies and SPVs which own installation and operating assets in the United States; and Unisun Energy Holding B.V. and its service companies which provide our installation services and operations and maintenance (“O&M”) services.
When approved, the subsidiaries shall amount to 230 MW of operating solar parks, 98 MW of construction in process and approximately 680 MWs of owned solar parks, in various stages of development across Poland, Romania, Italy, Netherlands, and the United States.
Further to that, however, Alternus will retain Altam Inc. and its several subsidiaries in Germany and Netherlands, and Altnor AS, and GHFG Limited (the “Retained Subsidiaries”), which Alternus will either continue to operate, potentially sell, liquidate and/or wind down (as required).
 
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The Business Combination and the Business Combination Agreement
The terms and conditions of the business combination are contained in the Business Combination Agreement, which is attached as Annex A to this proxy statement. We encourage you to read the Business Combination Agreement carefully and in its entirety, as it is the legal document that governs the business combination.
If the Business Combination Agreement is approved and adopted and the business combination is consummated, Alternus will transfer to Clean Earth, and Clean Earth will receive from Alternus, all of the issued and outstanding equity interests in the Acquired Subsidiaries, as consideration and in exchange for the issuance and transfer by Clean Earth to Alternus at the Closing of 27,500,000 shares of common stock of Clean Earth, subject to a working capital adjustment of up to 1,000,000 shares, plus up to 20,000,000 Earnout Shares (the “Equity Exchange”).
Structure of the Business Combination
Pursuant to the terms of the Business Combination Agreement, the business combination will be effected as follows:

The Equity Exchange:   At the Closing, Alternus will transfer to Clean Earth all of the Alternus Interests held by it in exchange for the issuance and transfer to Alternus of 27,500,000 shares of common stock of Clean Earth at the Closing, subject to a working capital adjustment of up to 1,000,000 shares, plus up to 20,000,000 Earnout Shares. The number of shares of common stock was determined based on an equity valuation of $275 million at $10 per share.

In addition, at the Closing, 20,000,000 shares of Class A common stock (the “Earnout Shares”) will be deposited into an earnout escrow account and will be released, in whole or part, to Alternus if certain earnout milestones are met at the end of fiscal years ending December 31, 2023, December 31, 2024 and December 31, 2025. The earnout milestones are: (i) if the Adjusted EBITDA (as defined below) for the fiscal year ending on December 31, 2023 is at least $16,000,000 and Clean Earth’s share price is at least $11.00 for a minimum number of trading days (as set forth in the Business Combination Agreement), then 6,000,000 Earnout Shares will be released to Alternus, (ii) if Adjusted EBITDA for the fiscal year ending on December 31, 2024 is at least $52,000,000 and Clean Earth’s share price is at least $13.00 for a minimum number of trading days (as set forth in the Business Combination Agreement), then 6,000,000 Earnout Shares will be released to Alternus, and (iii) if Adjusted EBITDA for the fiscal year ending on December 31, 2025 is at least $156,000,000 and Clean Earth’s share price is at least $15.00 for a minimum number of trading days (as set forth in the Business Combination Agreement), then 8,000,000 Earnout Shares will be released to Alternus. If any of the earnout milestones are not met, the Earnout Shares that would have been released to Alternus will be released to Alternus if a subsequent earnout milestone is met. In addition, if any earnout milestone based on Adjusted EBITDA has been met, but the corresponding earnout milestone based on share price has not been met, Earnout Shares may be released to Alternus if share price targets or a calculated share price based on a multiple of Adjusted EBITDA reduced by net debt are met during the five-year period from the date of the applicable milestone (i.e., 5 years after 2023 for the first earnout milestone, 5 years after 2024 for the second earnout milestone and 5 years after 2025 for the third earnout milestone). Any Earnout Shares remaining in the earnout escrow account that have not been released to Alternus will be cancelled or held as treasury shares. Adjusted EBITDA, which is defined as “Adjusted EBITDA” as set forth in Clean Earth’s Annual Report on Form 10-K in the Management’s Discussion and Analysis, is a non-GAAP measure and should not be construed as more relevant measures of operational performance than financial information under generally accepted accounting principles (GAAP).
Upon consummation of the Equity Exchange each of the Acquired Subsidiaries will become direct or indirect wholly owned subsidiaries of the Company (except for one of the Acquired Subsidiaries which is currently only 60% owned by Alternus). In addition, immediately prior to the consummation of the business combination, the Company will amend and restate the Current Charter to be the Proposed Charter which will, among other things, change the name of the Company to “Alternus Clean Energy, Inc.”, as described in the sections of this proxy statement titled “Description of Securities” and “The Charter Proposal.”
 
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The following diagrams illustrate in simplified terms the current structure of Clean Earth and Alternus and the expected structure of the Company upon the Closing.
Simplified Pre-Business Combination Structure
The following diagram depicts a simplified version of the current ownership structure of Clean Earth.
[MISSING IMAGE: tm2231344d1-fc_earth4c.jpg]
Simplified Post-Business Combination Structure
The diagram below depicts a simplified version of the Company’s organizational structure immediately following the consummation of the Equity Exchange.
[MISSING IMAGE: tm2231344d1-fc_business4c.jpg]
Business Combination Consideration
In accordance with the terms and subject to the conditions of the Business Combination Agreement, Clean Earth has agreed to pay consideration of 27,500,000 shares of common stock of Clean Earth, subject
 
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to a working capital adjustment of up to 1,000,000 shares, plus up to 20,000,000 Earnout Shares to Alternus in exchange for all of the issued and outstanding equity interests in the Acquired Subsidiaries.
The following table summarizes the sources and uses of funds for the business combination.
Sources ($M)
Uses ($M)
Alternus Equity Rollover(3)
$ 275.000
Alternus Equity Rollover(3)
$ 275.000
CLIN Sponsor(2)
$ 60.011
CLIN Sponsor(2)
$ 60.011
CLIN Public Equity(1)
$ 84.100
Cash to Balance Sheet(1)
$ 77.441
Additional Cash in Trust(1)
$ 0.841
Fees & Expenses(4)
$ 12.600
Target Cash
$ 5.100
Total $ 425.052 Total $ 425.052
(1)
Assumes no shares of Class A common stock are redeemed by Clean Earth’s public stockholders in connection with the business combination.
(2)
Excludes 2.56mm shares vesting at a share price of $12.50. Includes 890,000 shares of Class A common stock from private units.
(3)
Excludes 20mm Earnout Shares that will be released from escrow upon meeting targets outlined in the Business Combination Agreement.
(4)
Includes deferred underwriting commissions of $805,000 due to the underwriters from Clean Earth’s IPO. The deferred underwriting commission reflects a reduction in the deferred underwriting commission as agreed by one of the underwriters. October 2022, one of the underwriters agreed to forfeit a portion of its deferred underwriting commission in connection with the consummation of the business combination, and in April 2023, such underwriter agreed to forfeit the remainder of its deferred underwriting commission. This also reflects a disbursement of cash to Alternus, pursuant to the terms of the Business Combination Agreement, in the amount of $3,750,000 as payment for incurred transaction expenses which are unrelated to Alternus or Alternus’ subsidiaries and which are payable upon Closing. The balance reflects estimated closing transaction costs incurred by Clean Earth in conjunction with the business combination and repayment of related party loans.
Ownership of the Company following the Business Combination
As of the date of this proxy statement, there are 16,704,230 shares of common stock issued and outstanding, which includes 7,666,667 shares of Class B common stock and 890,000 shares of Class A common stock held by the Sponsor of Clean Earth and 8,147,563 shares of Class A common stock held by the public stockholders. As of the date of this proxy statement, there is an aggregate of 11,945,000 warrants issued and outstanding, which includes the 445,000 private warrants held by the Sponsor and 11,500,000 public warrants (each of which shall become exercisable 30 days following the closing of the business combination) and 23,000,000 rights (which convert into Class A common stock on closing of the business combination on a 10 for 1 basis).
In connection with the business combination, Alternus will transfer all of the issued and outstanding Alternus Interests to Clean Earth in exchange for the issuance of shares of common stock of Clean Earth. Immediately prior to the Equity Exchange, each share of Class B common stock that is issued and outstanding as of such time will automatically convert into one (1) share of Class A common stock. At the Closing Date, Alternus will transfer to Clean Earth, and Clean Earth will receive from Alternus, all of the issued and outstanding Alternus Interests, as consideration and in exchange for the issuance and transfer to Alternus of shares of common stock of Clean Earth at the Closing of 27,500,000 shares of common stock of Clean Earth, subject to a working capital adjustment of up to 1,000,000 shares, plus up to 20,000,000 Earnout Shares. Following the Equity Exchange, the Acquired Subsidiaries will be a direct or indirect wholly owned subsidiary of Clean Earth, except for one of the Acquired Subsidiaries which is currently only 60% owned by Alternus.
It is anticipated that, immediately following the Equity Exchange and related transactions, (1) Alternus will own approximately 62% of all outstanding common stock, (2) Sponsor will own approximately 14% of
 
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all outstanding common stock (excluding 33.3% of the founder shares which become subject to vesting on closing of the business combination), (3) existing public stockholders of Clean Earth will own approximately 24% of all outstanding common stock (including 2,300,000 shares of common stock which will be issuable on conversion of rights which will automatically convert on closing of the business combination) (4) existing holders of the public warrants and private warrants, by virtue of such ownership only, will own none of the outstanding common stock (as such warrants will not be exercisable into shares of Class A common stock until 30-days following the closing of the business combination) and (5) the Company will own 100% of all Alternus Interests. These percentages assume that no public stockholders of Clean Earth exercise their redemption rights in connection with the business combination that no equity awards are issued at the Closing and exclude Earnout Shares and issuance of shares pursuant to the working capital adjustment.
The following table illustrates varying ownership levels in Clean Earth immediately following the consummation of the business combination based on the assumptions above.
Assuming No
Redemptions
Assuming 25%
Redemptions
Assuming 50%
Redemptions
Assuming
Maximum
Redemptions
Shares
%
Shares
%
Shares
%
Shares
%
Public shares(1)
10,447,563 23.77% 8,410,672 20.07% 6,373,781 15.98% 5,613,278 14.35%
Shares issued to Alternus(2)
27,500,000 61.57% 27,500,000 65.61% 27,500,000 68.97% 27,500,000 70.31%
Shares issued to Clean Earth’s initial
stockholder(3)
6,001,111 13.66% 6,001,111 14.32% 6,001,111 15.05% 6,001,111 15.34%
Earnout shares(4)
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Founder shares that become subject to vesting on
Closing(5)
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Shares underlying public warrants(6)
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Shares underlying private warrants(7)
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Shares underlying certain other warrants(2)
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Fully diluted shares
43,948,674 100% 41,911,783 100% 39,874,892 100% 39,114,389 100%
(1)
Includes 2,300,000 shares of common stock issuable on automatic conversion of rights on Closing.
(2)
Excludes, (a) shares issuable on exercise of warrants to purchase (i) 100,000 shares of Class A common stock at an exercise price of $11.50 per share and (ii) 300,000 shares of Class A common stock at an exercise price of $0.01, the issuance of such warrants conditioned upon, and only issued upon, the close of the Business Combination and (b) upon the exercise of the respective note holder’s option, beginning 90 days after the Closing, to convert the full principal balance of such note and any accrued but unpaid interest thereon, (i) the potential issuance of 1,320,000 shares pursuant to the First Note and (ii) in the case of the Second Note, the potential issuance of a number of shares equal in market value, at the time of exercise, to the full principal balance of and any then-accrued but unpaid interest on the Second Note, as each of (a) and (b) of this Footnote 2 are more fully described in the subsection entitled “Alternus’ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Financing Activities.”
(3)
Includes 5,111,111 founder shares and 890,000 private shares underlying the private units and excludes the issuance of up to 150,000 shares and up to 75,000 warrants, which the Sponsor has the right to receive upon conversion of up to $1.5 million of the Working Capital Note into units with terms equivalent to the private units.
(4)
Excludes 20,000,000 Earnout Shares which may be released to Alternus upon the occurrence of certain Earnout Milestones following the closing of the business combination.
(5)
Excludes 2,555,556 founder shares that will become subject to vesting following the closing of the business combination upon the occurrence of certain stock price milestones or upon the occurrence of certain events.
(6)
Excludes 11,500,000 shares of common stock underlying public warrants, each of which will become exercisable 30-days following the closing of the business combination.
(7)
Excludes 445,000 shares of common stock underlying private warrants, each of which will become exercisable 30-days following the closing of the business combination.
 
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Ancillary Agreements
In connection with the transactions contemplated by the Business Combination Agreement, the parties have also entered into, or will enter into in connection with the Closing, the following ancillary agreements.
Investor Rights Agreement
Simultaneous with the execution of the Business Combination Agreement, Alternus, the Sponsor, and Clean Earth entered into the Investor Rights Agreement in the form attached as Annex E to this proxy statement, pursuant to which they agreed (i) that the initial board of directors of the Company following the Closing will consist of seven directors, three of which will be designated by Clean Earth and four of which will be designated by Alternus and provides, among other things (ii) to customary demand and piggyback registration rights to Alternus and the Sponsor. Pursuant to the Investor Rights Agreement, Clean Earth agreed to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of common stock of Clean Earth and other equity securities of Clean Earth that are held by the parties thereto from time to time. The Investor Rights Agreement contains a twelve-month lock-up period, pursuant to which, subject to certain exceptions, Alternus will be restricted from transferring the shares of common stock of Clean Earth it will own immediately following the Closing until the date that is twelve months after the Closing Date, subject to certain exceptions. The Investor Rights Agreement amends and restates the registration rights agreement that was entered into by Clean Earth, the Sponsor and the other parties thereto in connection with Clean Earth’s IPO
For additional information, see the section entitled, “The Business Combination Proposal — Ancillary Agreements — Investor Agreement.
Sponsor Support Agreement
In connection with the entry into the Business Combination Agreement the Sponsor, the Company and Alternus entered into the Sponsor Support Agreement, in the form attached as Annex B to this proxy statement. Pursuant to the terms of the Sponsor Support Agreement, the Sponsor agreed to, among other things, (i) vote all of its shares of common stock in favor of the Business Combination Proposal and each of the other proposals presented by the Company at the special meeting, (ii) waive their redemption rights with respect to their shares of common stock in connection with the business combination, (iii) not transfer any securities of the Company until the Closing or termination of the Business Combination Agreement (except in limited circumstances) and (iv) waive any anti-dilution or similar protection with respect to its common stock.
For additional information, see the section entitled “The Business Combination Proposal — Ancillary Agreements — Sponsor Support Agreement.
Special Meeting of Stockholders and the Proposals
The special meeting will convene on December 4, 2023 at 10:00 a.m., Eastern Time, exclusively in virtual format. Stockholders may attend, vote and examine the list of the Company’s stockholders entitled to vote at the special meeting by visiting https://web.lumiagm.com/290463470 (passcode “cleanearth2023”) and entering the control number found on their proxy card, voting instruction form or notice they previously received. The purpose of the special meeting is to consider and vote on the Business Combination Proposal, the Charter Proposal, the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal.
Approval of the Condition Precedent Proposals is a condition to the obligations of the parties to complete the business combination.
Only holders of record of issued and outstanding common stock as of the close of business on November 8, 2023, the record date for the special meeting, are entitled to notice of, and to vote at, the special meeting or any adjournment or postponement of the special meeting. The Company’s stockholders are entitled to one vote for each share of our common stock that they owned as of the close of business on the record date. If their shares are held in “street name” or are in a margin or similar account, they should contact their broker, bank or other nominee to ensure that votes related to the shares they beneficially own
 
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are properly counted. On the record date, there were 16,704,230 shares of common stock outstanding, of which 8,147,563 are public shares, 890,000 are Class A common stock in permanent equity held by the Sponsor and 7,666,667 are founder shares held by the Sponsor.
A quorum of stockholders is necessary to hold a valid meeting. A quorum will exist at the special meeting with respect to each matter to be considered at the special meeting if the holders of a majority of the outstanding shares of common stock as of the record date present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting. All shares represented by proxy are counted as present for purposes of establishing a quorum. As of the record date for the special meeting, 8,352,115 shares of common stock would be required to achieve a quorum. For the Charter Proposal, a quorum will be present at the special meeting if the holders of a majority of the Class A common stock and a majority of the Class B common stock outstanding and entitled to vote at the special meeting is represented in person (which would include presence at a virtual meeting) or by proxy at the special meeting.
Approval of the Business Combination Proposal requires the affirmative vote of a majority of the votes cast by the Company’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.
Approval of the Charter Proposal requires the affirmative vote of holders of (i) the holders of a majority of the shares of Class A common stock then outstanding, voting separately as a single class, (ii) the holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class and (iii) the holders of a majority of the then outstanding shares of common stock, voting together as a single class.
Approval of each of the Advisory Governance Proposals, each of which is a non-binding vote, requires the affirmative vote of a majority of the votes cast by the Company’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.
Approval of the Stock Issuance Proposal requires the affirmative vote of a majority of the votes cast by the Company’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.
Approval of the Incentive Plan Proposal requires the affirmative vote of a majority of the votes cast by the Company’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.
The election of directors is decided by a plurality of the votes cast by the stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote on the election of directors. This means that each of the director nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors. Abstentions and broker non-votes have no effect on the outcome of the proposal.
Approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the Company’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.
With respect to each proposal in this proxy statement, you may vote “FOR,” “AGAINST” or “ABSTAIN.”
Recommendation of Clean Earth’s Board of Directors
The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We sought to
 
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do this by utilizing the networks and industry experience of our management team, advisors and the Sponsor to identify and acquire one or more target businesses. Our board of directors considered and evaluated several factors in evaluating and negotiating the business combination and the Business Combination Agreement. After careful consideration, our board of directors has unanimously approved the Business Combination Agreement and the Transactions contemplated thereby and determined that each of the Business Combination Proposal, the Charter Proposal, the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal is in the best interests of the Company and its stockholders, and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals and “FOR” each of the director nominees. For additional information relating to our board of directors’ evaluation of the business combination and the factors it considered in connection therewith, please see the section entitled “The Business Combination Proposal — Clean Earth’s Board of Directors’ Reasons for the Approval of the Business Combination.”
Opinion of Cabrillo Advisors, Inc.
Clean Earth retained Cabrillo Advisors, Inc. (“Cabrillo Advisors”) to provide to the board of directors a fairness opinion with respect to the acquisition of certain subsidiaries of Alternus Group Plc by means of a share acquisition (the “Transaction”). On October 9, 2022, Cabrillo Advisors delivered its fairness opinion, dated October 9, 2022 (the “Opinion”), to our board of directors that, as of the date of the Opinion and subject to and based on the assumptions made, procedures followed, other matters considered, limitations of the review undertaken and qualifications contained in such Opinion, the Transaction was fair, from a financial point of view to all holders of Clean Earth’s common stock as a group and not only those shareholders unaffiliated with the sponsor or its affiliates. The Opinion rendered by Cabrillo Advisors was given as of the date of such Opinion and does not take into account subsequent developments, including the updates to Alternus’ financial projections delivered to Clean Earth in May 2023 or the amended terms contained in the First Amendment to the Business Combination Agreement.
In selecting Cabrillo Advisors, our board of directors considered, among other things, the fact that Cabrillo Advisors is a reputable valuation and investment banking firm with experience in providing strategic advisory services. Cabrillo Advisors is engaged in the valuation of businesses and their securities in connection with corporate and financial reporting purposes. Prior to the business combination, Cabrillo Advisors had not performed any work for Clean Earth, Alternus or any of their affiliates.
The full text of the Opinion is attached hereto as Annex G and is incorporated into this document by reference. The summary of the Opinion set forth herein is qualified in its entirety by reference to the full text of the Opinion. Stockholders are urged to read the Opinion carefully and in its entirety for a discussion of the assumptions made, procedures followed, other matters considered, limitations of the review undertaken and qualifications by Cabrillo Advisors in connection with such Opinion. Cabrillo Advisors’ Opinion was approved by its fairness committee. The Opinion was provided for the information of, and directed to, our board of directors for its information and assistance in connection with its consideration of the financial terms of the business combination.
For more information, see the section of this proxy statement captioned “The Business Combination Proposal — Opinion of Cabrillo Advisors.”
Regulatory Matters
At any time before or after consummation of the business combination the Department of Justice or the FTC, or any state or foreign governmental authority could take such action under applicable antitrust laws as such authority deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the business combination, conditionally approving the business combination upon divestiture of assets, subjecting the completion of the business combination to regulatory conditions or seeking other remedies. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. Clean Earth cannot assure you that the Antitrust Division, the FTC, any state attorney general or any other government authority will not attempt to challenge the business combination on antitrust grounds, and, if such a challenge is made, Clean Earth cannot assure you as to its result.
 
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Neither Clean Earth nor Alternus are aware of any material regulatory approvals or actions that are required for completion of the business combination. It is presently contemplated that if any regulatory approvals or actions are required, those approvals or actions will be sought in due course. There can be no assurance, however, that any additional approvals or actions will be obtained.
Conditions to the Completion of the Business Combination
The business combination is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval by Clean Earth’s stockholders of the proposals included herein other than the Advisory Governance Proposal and the Adjournment Proposal and (ii) the absence of any injunctions. In addition, pursuant to the Current Charter, in no event will Clean Earth redeem public shares in an amount that would result in the Company having net tangible assets of less than $5,000,001, in which case the business combination would not be consummated.
Conditions to Clean Earth’s obligations to consummate the business combination include, among others that there will not have occurred a Seller Material Adverse Effect after the signing of the Business Combination Agreement and Alternus shall have delivered to Clean Earth a closing certificate required under the Business Combination Agreement.
Conditions to Alternus’ obligations to consummate the business combination include, among other things, that as of the Closing Date, there will not have occurred a Clean Earth Material Adverse Effect after the signing of the Business Combination Agreement; Clean Earth shall have delivered to Alternus a closing certificate required under the Business Combination Agreement; and the Minimum Cash Condition shall have been satisfied. The Minimum Cash Condition is for the sole benefit of Alternus. If such condition is not met, and such condition is not or cannot be waived under the terms of the Business Combination Agreement, then the Business Combination Agreement could terminate and the business combination may not be consummated.
For additional information, see the section entitled, “The Business Combination Proposal — Conditions to the Completion of the Business Combination.
Termination
The Business Combination Agreement may be terminated, and the Equity Exchange abandoned at any time prior to the Closing:

by mutual written consent of Clean Earth and Alternus;

(upon any injunction or other Governmental Order preventing the consummation of the transactions which shall have become final and nonappealable;

(upon a material breach of any representation, warranty, covenant or agreement (subject to an opportunity to cure, if such violation or breach is capable of being cured); or

if the business combination has not been consummated by November 28, 2023, and such failure in closing on or before such date is not due to the breach of the Business Combination Agreement by the party seeking to terminate;
by Clean Earth, if Alternus fails to consummate the Transactions following the satisfaction of the conditions to Alternus’ Closing and Clean Earth has irrevocably confirmed that it is ready, willing and able to consummate the Transactions. For additional information, see the section entitled, “The Business Combination Proposal — Termination and Effect of Termination.
Redemption Rights
Pursuant to the Current Charter, a holder of public shares may demand that Clean Earth redeem such public shares for cash if the business combination is consummated. Holders of public shares or public units who wish to exercise their redemption rights must, (i) if they hold their public shares through public units, elect to separate their public units into the underlying public shares and warrants and (ii) prior to 5:00 PM, Eastern Time, on November 30, 2023, (A) submit a written request to the Transfer Agent that Clean
 
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Earth redeem their public shares for cash and (B) deliver their public shares to the Transfer Agent physically or electronically using DTC’s DWAC (Deposit and Withdrawal at Custodian) system. Any holder of public shares will be entitled to demand that such holder’s public shares be redeemed for a full pro rata portion of the amount then in the trust account, including interest earned on the trust account (which, as of June 30, 2023, was approximately $84,940,910, or approximately $10.425 per public share). Such amount, less any owed but unpaid taxes on the funds in the trust account, will be paid promptly upon consummation of the business combination.
Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the deadline for submitting redemption requests and thereafter, with Clean Earth’s consent, until the Closing. If a holder delivers their public shares for redemption to the Transfer Agent and later decides to withdraw such request prior to the deadline for submitting redemption requests, the holder may request that the Transfer Agent return the shares (physically or electronically).
Any corrected or changed written demand of redemption rights must be received by the Transfer Agent prior to the vote taken on the Business Combination Proposal at the special meeting. No demand for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to the Transfer Agent prior to the deadline for submitting redemption requests.
Notwithstanding the foregoing, a holder of public shares, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” ​(as defined in Section 13 of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares, without our prior consent. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash, without our prior consent.
See the section entitled “Special Meeting of Clean Earth Stockholders — Redemption Rights” for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.
Holders of the 11,945,000 currently outstanding warrants will not have redemption rights with respect to the warrants. Accordingly, they may sell their warrants freely in the open market. As of the record date, the reported last sale price of the warrants was $0.04 per warrant, representing an aggregate value of the warrants of approximately $477,800. The aggregate value of the warrants represents the value of the warrants retained by redeeming stockholders, assuming maximum redemptions.
The potential for the issuance of a substantial number of common stock upon exercise of the outstanding warrants could make the business combination less attractive to investors. Any such issuance will increase the number of issued common stock, which will result in dilution to the holders of Clean Earth’s common stock and increase the number of shares eligible for resale in the public market. Furthermore, the outstanding warrants could have the effect of depressing the per share price for the shares of common stock.
No Delaware Appraisal Rights
Neither our stockholders nor warrant holders have appraisal rights in connection with the business combination under the DGCL.
Proxy Solicitation
Proxies may be solicited by mail, telephone or in person. Clean Earth has engaged Morrow to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares at the special meeting if it revokes its proxy before the special meeting. A stockholder also may change its vote by submitting a later-dated proxy as described in the section entitled “The Special Meeting — Revoking Your Proxy”.
Interests of Clean Earth’s Directors and Officers in the Business Combination
When you consider the recommendation of our board of directors that you vote in favor of approval of the business combination, you should be aware that the initial stockholder and the Company’s directors
 
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and officers, have interests in the business combination that may be different from, or in addition to, the interests of the Company’s other stockholders and warrant holders. These interests include:
The Sponsor and our officers and directors will lose their entire investment in us if we do not complete a business combination within the completion window.
On August 17, 2021, the Sponsor paid $25,000 in consideration for 5,750,000 founder shares, or approximately $0.004 per share, to cover certain of our offering costs in connection with the IPO. On February 7, 2022, the Company effected a 1:1.33333339 stock split of its Class B common stock, resulting in our initial stockholder holding 7,666,667 founder shares. The 7,666,667 founder shares have an aggregate market value of approximately $81,496,670 based upon the closing per share price of $10.63 on Nasdaq on November 10, 2023.
On February 28, 2022, in connection with the closing of the IPO, the Sponsor purchased 890,000 private units from the Company at a price of $10.00 per private unit, for an aggregate purchase price of $8,900,000. Each private unit consists of one share of Class A common stock and one-half of one warrant. The 890,000 private units have an aggregate market value of approximately $9,478,500 based upon the closing per public share price of $10.63 and the public warrant price of $0.04 on Nasdaq on November 10, 2023.
On May 25, 2023, at the May Special Meeting, Clean Earth’s stockholders approved certain proposals giving the Company the right to extend the date by which it has to complete a business combination up to six times, from May 28, 2023 to November 28, 2023, composed of six one-month Extensions provided that the Sponsor (or its affiliates or designees) agrees to deposit into the trust account on the then-applicable Extended Date, for each Extension, the lesser of (i) $195,000 and (ii) $0.04 for each share of the Company’s Class A common stock not redeemed in connection with the May Special Meeting in exchange for a non-interest bearing, unsecured promissory note payable upon consummation of a business combination. As of the date of this proxy statement, in connection with the Company’s exercise of Extensions, the Sponsor has deposited into the trust account $975,000 in Extension Payments, in exchange for non-interest bearing, unsecured promissory notes issued by the Company to the Sponsor, which provide that the Sponsor will not be repaid in the event that the Company is unable to close a business combination, unless there are funds available outside the trust account to do so. In connection with the May Special Meeting, stockholders properly elected to redeem an aggregate of 14,852,437 shares of Class A common stock, and approximately $154,152,327 was withdrawn from the trust account to pay for such redemptions, leaving approximately $84,562,944 in the trust account following the May Special Meeting, exclusive of any Extension Payments. As a result of the redemptions, Clean Earth now has less liquidity and fewer round-lot holders of public shares, which may make it more difficult for the Company to meet all of the Nasdaq listing requirements. Since it is a condition to closing to receive the approval for listing by Nasdaq of the shares of the Combined Company to be issued in connection with the transactions contemplated by the Business Combination Agreement, the Company’s reduced public float may make it more difficult for Clean Earth to meet all of the Nasdaq listing requirements, and to consummate the Business Combination.
Upon the Closing, subject to the terms and conditions of the Business Combination Agreement, the Company’s officers and directors are entitled to reimbursement for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. As of November 13, 2023, the total aggregate amount of such out-of-pocket expenses expected to be repaid by the Company upon consummation of the business combination is approximately $1,500,000 in total allowed working capital loans.
In connection with the Closing, the Sponsor and our officers and directors would be entitled to the repayment of any working capital loans and advances that have been made to the Company and remain outstanding. If we do not complete an initial business combination within the completion window, we may use a portion of our working capital held outside the trust account to repay the working capital loans, but no proceeds held in the trust account would be used to repay any working capital loans.
In the event that the Company does not complete a business combination within the completion window, the 7,666,667 founder shares and 890,000 private units, consisting of 890,000 private shares and 445,000 private warrants, for which the Sponsor has invested a total of $8,925,000 and which have an
 
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approximate aggregate market value of $90,975,170 as of November 10, 2023 (a portion of which is allocable to each of our officers and directors who made capital contributions to the Sponsor), will expire worthless, the Company may be unable to pay up to $1,500,000 in working capital loans used expected to be repaid by the Company to the Sponsor and our officers and directors upon consummation of the business combination. After the business combination, assuming no redemptions, the Sponsor will beneficially own approximately 2,555,556 founder shares that will become subject to vesting upon the occurrence of certain stock price milestones or upon the occurrence of certain events. As a result, the Sponsor and our officers and directors have an aggregate of up to $92,475,170 at risk that depends on the completion of a business combination within the completion window.
The initial stockholder and our officers and directors have agreed to waive their redemption rights with respect to their founder shares and any public shares they hold in connection with the completion of the business combination. In addition, the initial stockholder and our officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if the Company fails to complete a business combination within the completion window. There will be no redemption rights or liquidating distributions with respect to the warrants, which will expire worthless if we fail to complete our initial business combination within the completion window. Our initial stockholder and our officers and directors did not receive separate consideration for their waiver of redemption rights other than the receipt of founder shares for a nominal purchase price.
The nominal purchase price paid by the Sponsor and our officers and directors for the founder shares may result in significant dilution to the implied value of the public shares upon consummation of the business combination. In addition, the value of the founder shares following the Closing is likely to be substantially higher than the nominal price paid for them, even if the trading price of our common stock is substantially less than $10.00 per share. As a result, the Sponsor and our officers and directors are likely able to recoup their investment in us and make a substantial profit on that investment, even if our public shares have lost significant value. Accordingly, the Sponsor and our officers and directors may have an economic incentive that differs from that of our public stockholders to pursue and consummate an initial business combination rather than to liquidate and to return all of the cash in the trust account to the public stockholders, even if that business combination were with a riskier or less-established target business.
Following the consummation of the business combination, we will continue to indemnify our existing directors and officers and will maintain a directors’ and officers’ liability insurance policy.
Upon the Closing, Aaron T. Ratner, our chief executive officer, Nicholas Parker, Chairman of the board of directors and Candice Beaumont, a director, are expected to serve on the Company’s board of directors. As such, in the future they may receive any cash fees, stock options or stock awards that the Company and its board of directors determines to pay to its directors and/or officers.
In connection with the Business Combination Agreement, we entered into the Investor Rights Agreement, which will provide certain of the Company’s stockholders, including the holders of the founder shares, private warrants and shares of common stock issuable upon conversion of the founder shares and private warrants, with registration rights.
In order to protect the amounts held in the trust account, the Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or Business Combination Agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.10 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. Please see the section entitled “Information About Clean Earth — Conflicts of Interest” for additional information.
 
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Reasons for the Approval of the Business Combination
The board of directors considered and evaluated several factors in evaluating and negotiating the business combination and the Business Combination Agreement. For additional information relating to the board of directors’ evaluation of the transaction and the factors it considered in connection therewith, please see the section entitled “The Business Combination Proposal — Clean Earth’s Board of Directors Reasons for the Approval of the Business Combination.
After careful consideration, the Clean Earth board unanimously (i) declared the advisability of the business combination and the other Transactions contemplated by the Business Combination Agreement, (ii) determined that the business combination and the other Transactions contemplated by the Business Combination Agreement are in the best interests of the stockholders of Clean Earth and (iii) resolved to recommend that the Clean Earth stockholders approve the business combination and the other proposals set forth in this proxy statement.
Stock Exchange Listing
Our Class A common stock, rights and warrants are currently listed on Nasdaq under the symbols “CLIN,” “CLINR” and “CLINW,” respectively. Certain of our shares of Class A common stock and warrants currently trade as units consisting of one share of Class A common stock, rights and one-half of one redeemable warrant, and are listed on Nasdaq under the symbol “CLINU.” Upon consummation of the Transactions contemplated by the Business Combination Agreement, we will change our name to “Alternus Clean Energy, Inc.” We intend to apply to obtain the listing of our common stock and warrants on the Nasdaq under the symbols “ALCE” and “ALCEW,” respectively, upon the Closing.
On June 13, 2023, Clean Earth received a letter (the “Notification Letter”) from the Listing Qualifications Department of NASDAQ Stock Market (the “Staff”) notifying Clean Earth that the $575,000.00 aggregate market value of Clean Earth’s outstanding public warrants, ticker symbol CLINW, as reported in Clean Earth’s Quarterly Report on Form 10-Q for the period ended March 31, 2023, was below the minimum aggregate market value of $1,000,000.00 required for continued listing on the NASDAQ Global Market as set forth in NASDAQ listing rule 5452(b)(C) (the “Rule”). The Notification Letter only applies to Clean Earth’s public warrants and has no immediate effect on the listing or trading of the public warrants and the public warrants will continue to trade on the NASDAQ Global Market at this time.
On July 28, 2023, Clean Earth submitted its plan to regain compliance with the Rule. On August 9, 2023, Clean Earth received notice from the Staff indicating that the Staff determined to grant Clean Earth an extension to regain compliance with the Rule on or before December 11, 2023.
While Clean Earth is exercising diligent efforts to maintain the listing of its public warrants on NASDAQ and intends to timely regain compliance with the Rule, there can be no assurance that Clean Earth will be able to regain compliance with the Rule.
In the event Clean Earth fails to demonstrate compliance with the Rule during the extension period, Clean Earth expects the Staff to provide written notification to the Company that its public warrants will be delisted from the NASDAQ Global Market (a “Delisting Notice”). If Clean Earth receives a Delisting Notice, Clean Earth may appeal the Staff’s determination to delist its public warrants to a NASDAQ hearings panel. If our public warrants were to be delisted from Nasdaq, our public warrants could begin to trade on an over-the-counter market. Nevertheless, there can be no assurance that our public warrants would be eligible for trading on any such alternative exchange or markets. See “Risk Factors — Clean Earth’s public warrants may be unable to regain compliance with Nasdaq’s continued listing standards”.
Accounting Treatment
Notwithstanding the legal form, the business combination will be accounted for as a reverse acquisition in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Under this method of accounting, Clean Earth will be treated as the acquired company for financial reporting purposes, whereas Alternus will be treated as the accounting acquiror. In accordance with this accounting method, the business combination will be treated as the equivalent of Alternus issuing stock for the net assets of Clean Earth, accompanied by a recapitalization. The net assets of Alternus will be stated at historical cost, with no goodwill
 
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or other intangible assets recorded, and operations prior to the business combination will be those of Alternus. Alternus has been determined to be the accounting acquiror for purposes of the business combination based on an evaluation of the following facts and circumstances:

Persons affiliated with Alternus will control a majority of the governing body of the Combined Company;

Operations of Alternus prior to the business combination will comprise the ongoing operations of the Combined Company; and

Existing senior management team of Alternus will comprise the senior management team of the Combined Company.
Summary of Risk Factors
You should consider all the information contained in this proxy statement in deciding how to vote for the proposals presented in the proxy statement. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may harm Clean Earth’s and Alternus’ business, financial condition and operating results. Such risks include, but are not limited to:

The delay between making significant upfront investments in Alternus’ solar parks and receiving revenue could materially and adversely affect Alternus’ liquidity, business and results of operations;

Alternus’ limited operating history may not serve as an adequate basis to judge its prospects and results of operations;

A significant part of Alternus’ strategy is the acquisition of renewable energy facilities or of companies that own and operate renewable energy facilities and there are inherent risks in these acquisitions;

Alternus’ business as an independent power producer (IPP) requires significant financial resources and the growth prospects and future profitability of Alternus depends on the availability of additional funding options with acceptable terms, and there can be no assurance that it will be successful in obtaining such financing on acceptable terms;

The development of solar projects involves numerous risks and uncertainties and requires extensive research, planning and due diligence;

If sufficient demand for solar parks does not develop or takes longer than anticipated to develop, Alternus’ business, financial condition, results of operations and prospects could be materially and adversely affected;

Alternus may be subject to unforeseen costs, liabilities or obligations when operating and maintaining solar parks;

Alternus may be subject to the impact of reduction, modification or elimination of government subsidies and economic incentives (including, but not limited to, with respect to on solar parks);

Alternus may be affected by the impact of decreases in spot market prices for electricity;

Refurbishment of renewable energy facilities involve significant risks that could result in unplanned power outages or reduced output;

Business interruptions, whether due to catastrophic disasters or other events, could adversely affect Alternus’ operations, financial condition, and cash flows;

Fluctuations in foreign currency exchange rates may negatively affect the Alternus’ revenue, cost of sales and gross margins and could result in exchange losses;

Alternus has substantial operations outside of the United States which presents specific risks to its business;

Alternus’ business, results of operations, financial condition and cash flows has been and may continue to be materially and adversely affected by the outbreak of COVID-19;
 
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Alternus’ business and results of operations may be affected by inflation and changes in interest rates, an economic slowdown, recession or contraction of the global economy, a financial or liquidity crisis, geopolitical factors, including, but not limited to, the Russian invasion of Ukraine, global supply chain concerns, and the status of debt and equity markets (including, without limitation, market volatility and uncertainty);

Alternus is subject to counterparty risks under our Feed in Tariff (FiT) price support schemes and Green Certificates (GC) schemes;

Failure to comply with laws and regulations in each of the jurisdictions where Alternus develops, constructs and operates solar power projects may materially and adversely affect our business, results of operations and financial condition;

Alternus’ substantial indebtedness could adversely affect its business, financial condition, and results of operations;

If the ownership of Solis and all of its subsidiaries were to be transferred to the Solis bondholders in connection with an event of default under the Solis Bond, the majority of Alternus’ operating assets and related revenues and EBIDTA would be eliminated;

Alternus’ business as an independent power producer requires significant financial resources, and the growth prospects and future profitability of Alternus depends to a significant extent on the availability of additional funding options with acceptable terms.

The seasonality of the Alternus’ subsidiaries’ operations may materially affect the Company’s business, results of operations, cash flow, and financial condition.

We may be subject to stockholder claims, private rights of action, or an enforcement action in connection with a previously contemplated non-redemption incentive.

Our stockholders will experience immediate dilution as a consequence of the issuance of common stock as consideration in the business combination. Having a minority share position may reduce the influence that our current stockholders have on the management of the Company;

Concentration of ownership in Alternus, a public company, with its common shares traded on Euronext Oslo, which will own a majority of our common stock, may affect demand for our common stock and result in conflicts of interest;

The fact that the Sponsor and our officers and directors can earn a positive return on their investment, even if the Public Stockholders have a negative return on their investment in Clean Earth;

The benefits of the business combination may not be realized;

Our actual financial position and results of operations may differ materially from the unaudited pro forma financial information included in this proxy statement;

The business combination is subject to conditions, including certain conditions that may not be satisfied on a timely basis, if at all;

The ability of Clean Earth’s public warrants to regain compliance with Nasdaq’s continued listing standards;

An active market for our common stock may not develop following the closing of the business combination, which would adversely affect the liquidity and price of our securities; and

Other risks and uncertainties described in this proxy statement, including those under “Risk Factors”.
Emerging Growth Company
Clean Earth is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Section 102(b)(1) of the JOBS Act. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared
 
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effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. Clean Earth has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, Clean Earth, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of Clean Earth’s financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Upon completion of the business combination, the Combined Company will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of Clean Earth’s IPO, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.
Material U.S. Federal Income Tax Considerations
For a discussion summarizing the United States material federal income tax considerations of an exercise of redemption rights, please see “Material U.S. Federal Income Tax Considerations.
 
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MARKET PRICE, TICKER SYMBOL AND DIVIDEND INFORMATION
The Company
Market Price and Ticker Symbol
The Company’s public units, common stock, rights and warrants are currently listed on Nasdaq Global Market under the symbols “CLINU,” “CLIN” “CLINR,” and “CLINW,” respectively.
On October 11, 2022, the trading date before the public announcement of the business combination, the Company’s public units, Class A common stock, rights and warrants closed at $9.99, $9.88, $0.16 and $0.17, respectively. As of November 10, 2023, the trading date immediately prior to the date of this proxy statement, the Company’s public units, Class A common stock, rights and warrants closed at $10.72, $10.63, $0.09 and $0.04, respectively.
Holders
As of November 8, 2023, the record date for the special meeting, there was 1 holder of record of our public units, 1 holder of record of our common stock, 1 holder of record of our warrants, and 1 holder of record of our rights. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose public units, common stock and warrants are held of record by banks, brokers and other financial institutions.
Dividend Policy
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of the business combination. The payment of any cash dividends subsequent to the business combination will be within the discretion of the Combined Company’s board of directors at such time. We currently expect that the Combined Company will retain future earnings to finance operations and grow its business, and we do not expect the Combined Company to declare or pay cash dividends for the foreseeable future.
 
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RISK FACTORS
Risks Related to Alternus’ Business and Industry
Unless the context otherwise requires, references in this subsection “— Risks Related to Alternus’ Business and Industry” to “we”, “us”, “our”, and the “Company” generally refer to Alternus in the present tense or the Company from and after the business combination, as applicable. Because the Retained Subsidiaries are immaterial to the principal business of Alternus, and all but an insignificant few of Alternus’ existing operating subsidiaries will become direct or indirect subsidiaries of the Company following the business combination, all of the risks discussed below in this subsection apply to both Alternus before the business combination and to the Company after the closing of the business combination.
You should carefully consider the following risks. However, the risks set forth below are not the only risks that we face, and we face other risks which have not yet been identified or which are not yet otherwise predictable. If any of the following risks occur or are otherwise realized, our business, financial condition, and results of operations could be materially adversely affected. You should carefully consider the risks described below and all other information in this filing, including our consolidated financial statements and the related notes to consolidated financial statements and schedules thereto.
Alternus’ limited operating history may not serve as an adequate basis to judge its future prospects and results of operations.
Alternus was founded in 2019, and therefore, has limited operating history. Since its inception, Alternus has experienced net losses and has not achieved profitability. For the period ended June 30, 2023 Alternus had a net loss of $10,424,927. For the years ended December 31, 2022 and 2021, Alternus had net losses of $36,283,804 and $18,932,731, respectively. Alternus expects to incur additional losses as it implements its strategy of expanding business operations in Europe, the United States and other select geographies. Alternus’ rapidly evolving business and, in particular, its relatively limited operating history may not be an adequate basis for evaluating its business prospects and financial performance Thus, it is difficult to predict the future results of operations. There can be no guarantee that Alternus will ever achieve profitability.
We cannot assure you that we will achieve or maintain profitability and our auditor has expressed substantial doubt about our ability to continue as a going concern.
We will need to raise additional working capital to continue our normal and planned operations. We will need to generate and sustain significant revenue levels in future periods in order to become profitable, and, even if we do, we may not be able to maintain or increase our level of profitability. In addition, as a public company, we will incur accounting, legal and other expenses. These expenditures will make it necessary for us to continue to raise additional working capital. Our efforts to grow our business may be costlier than we expect, and we may not be able to generate sufficient revenue to offset our increased operating expenses. We may incur significant losses in the future for a number of reasons, including unforeseen expenses, difficulties, complications and delays and other unknown events. Accordingly, substantial doubt exists about our ability to continue as a going concern and we cannot assure you that we will achieve sustainable operating profits as we continue to expand our business, and otherwise implement our growth initiatives.
The financial statements included with this proxy statement have been prepared on a going concern basis. We may not be able to generate profitable operations in the future and/or obtain the necessary financing to meet our obligations and pay liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time. These factors raise substantial doubt that we will be able to continue as a going concern. We plan to continue to provide for our capital needs through sales of our securities and/or other financing activities. Our financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.
Alternus’ substantial indebtedness could adversely affect its business, financial condition and results of operations.
Alternus believes that its substantial indebtedness will increase as an independent power producer (“IPP”). As of June 30, 2023 Alternus had $183.8 million in outstanding short-term borrowing and
 
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$12.9 million in outstanding long-term bank borrowing. Alternus is, and following the business combination, the Company will continue to be, highly leveraged. The degree to which Alternus remains or becomes leveraged following the business combination could have important consequences to stockholders of the Company, including, but not limited to:

making it more difficult for the Company to satisfy its obligations with respect to its other debt and liabilities;

increasing the Company’s vulnerability to, and reducing its flexibility to respond to, general adverse economic and industry conditions;

requiring the dedication of a substantial portion of the cash flow of the Company from operations to the repayment of principal of, and interest on, indebtedness, thereby reducing the availability of such cash flow and limiting the ability to obtain additional financing to fund working capital, capital expenditures, acquisitions, joint ventures or other general corporate purposes, such as payments to suppliers for PV modules and balance-of-system components and contractors for design, engineering, procurement, and construction services;

limiting the Company’s flexibility in planning for, or reacting to, changes in its business and the competitive environment and the industry in which it operates; and

placing the Company at a competitive disadvantage as compared to its competitors, to the extent that they are not as highly leveraged.
If Alternus or the Company incurs new debt or other obligations, the related risks the Company now faces, as described in this risk factor and elsewhere in these “Risk Factors,” could intensify.
Alternus’ business as an independent power producer requires significant financial resources, and the growth prospects and future profitability of Alternus depends to a significant extent on the availability of additional funding options with acceptable terms. If the Company does not successfully undertake subsequent financing plan(s), it may have to sell certain of its solar parks.
Alternus’ principal resources of liquidity to date have been cash from its operations and borrowings from banks and its shareholders. Alternus has leveraged bank facilities in certain countries in order to meet working capital requirements for its activities. Alternus’ principal use of cash has been for pipeline development, working capital, and general corporate purposes.
Alternus, and subsequently the Company, will require significant amounts of cash to fund the acquisition, development, installation, and construction of Alternus’ projects and other aspects of Alternus’ operations. The Company may also require additional cash due to changing business conditions or other future developments, including any investments or acquisitions it may decide to pursue in order to remain competitive. Historically, Alternus has used bank loans, bridging loans, and third-party equity contributions to fund its project acquisition and development. The Company expects to seek to expand Alternus’ business with third-party financing options, including bank loans, equity partners, financial leases, and securitization. However, it cannot be guaranteed that the Company will be successful in locating additional suitable sources of financing in the time periods required or at all, or on terms or at costs that it finds attractive or acceptable, which may render it impossible for the Company to fully execute its growth plan with regard to Alternus.
Any debt financing may require restrictive covenants and additional funds may not be available on terms commercially acceptable to the Company, vis-à-vis Alternus’ acquired assets and subsidiaries. Failure to manage discretionary spending and raise additional capital or debt financing as required may adversely impact the Company’s ability to achieve its intended business objectives.
Alternus is a holding company that relies on distributions and other payments, advances and transfers of funds from its subsidiaries to meet its obligations.
Alternus has no direct operations and derives all its revenue and cash flow from its subsidiaries. Because Alternus conducts its operations through its subsidiaries, it depends on those entities for payments or distributions in order to meet its obligations. The deterioration of the earnings from, or other available
 
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assets of, its subsidiaries for any reason could limit or impair their ability to pay Alternus and/or the Company and adversely affect the Company’s operations.
The reduction, modification or elimination of government subsidies and economic incentives may reduce the economic benefits of existing solar parks and the opportunities to develop or acquire suitable new solar parks.
Government subsidies and incentives have primarily been in the form of FiT price support schemes, tax credits, net metering, and other incentives to end-users, distributors, system integrators and manufacturers of solar energy products. The availability and size of such subsidies and incentives depend, to a large extent, on political and policy developments relating to environmental concerns in a given country. Changes in policies could lead to a significant reduction in, or discontinuation of, the support for renewable energies in such country, which could, in turn, have a material adverse effect on Alternus, and in turn, the Company’s business, financial condition, results of operations, and prospects.
Decreases in the spot market price of electricity could harm Alternus’ revenue and reduce the competitiveness of solar parks in grid-parity markets.
The price of electricity from Alternus’ solar parks is fixed through PPAs or FiTs for a majority of its owned capacity. A FiT is a policy designed to support the development of renewable energy sources by providing a guaranteed, above-market price for producers. FiTs usually involve long-term contracts, anywhere from 15 to 20 years, whereas the PPAs that currently provide the additional revenue are typically renewed and may be terminated annually. In countries where the price of electricity is sufficiently high such that solar parks can be profitably developed without the need for government price supports, solar parks may choose not to enter into PPAs and would instead sell based on the spot market price of electricity. Revenue for Alternus’ solar parks in Italy and Romania could fluctuate with the electricity spot market after the expiration of any PPA, unless it is renewed. The market price of electricity can be subject to significant fluctuations.
Decreases in the spot price of electricity in such countries could render PV energy less competitive compared to other forms of electricity. Thus, the spot market price of electricity may have a material adverse effect on Alternus, and in turn, Company’s business, results of operations, cash flows, and financial condition.
Alternus’ power purchase agreements may not be successfully completed.
Payments by power purchasers under a PPA may provide the majority of a Subsidiary’s or a project’s cash flows. There can be no assurance that any or all of the power purchasers will fulfill their obligations under their PPAs or that a power purchaser will not become bankrupt, or that upon any such bankruptcy, its obligations under its respective PPA will not be rejected by a bankruptcy trustee. There are also additional risks relating to PPAs, including the occurrence of events beyond the control of a power purchaser that may excuse it from its obligation to accept and pay for the delivery of energy generated by the project company’s plant. The failure of a power purchaser to fulfill its obligations under any PPA or the termination of any PPA may have a material adverse effect on the respective project or project company and therefore on Alternus, and in turn, the Company.
The seasonality of the Alternus’ Subsidiaries’ operations may materially affect the Company’s business, results of operations, cash flow, and financial condition.
The energy production industry is subject to seasonal variations as well as other significant events. For instance, the amount of electricity and revenues generated by Alternus’ solar generation facilities is dependent in part, on the amount of sunlight, or irradiation, where the assets are located. Due to shorter daylight hours in winter months, there is less irradiation and the generation produced by these facilities will vary depending on the season.
The seasonality of Alternus’ energy production may create increased demands on liquidity during periods when cash generated from operating activities are lower and Alternus, and in turn, the Company may also require additional equity or debt financing to maintain its solvency, which may not be available when
 
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required or available on commercially favorable terms. Thus, the Company may struggle to maintain sufficient financial liquidity to absorb the impact of seasonal variations in energy productions. Other significant events and seasonal variations may adversely affect the Company’s business, results of operations, cash flow, and financial condition.
The acquisition of renewable energy facilities or of companies that own and operate renewable energy facilities is subject to substantial risk.
A significant part of Alternus’ business model has been to acquire new renewable energy facilities and companies that own and operate renewable energy facilities. Acquisition of renewable energy facilities or of companies that own and operate renewable energy facilities is subject to substantial risk. While Alternus believes that it has performed adequate due diligence on prospective acquisitions, it may not have been able to discover all potential operational deficiencies in such renewable energy facilities. In addition, Alternus’ expectations for the operating performance of newly constructed renewable energy facilities as well as those under construction are based on assumptions and estimates made without the benefit of an operating history.
If the Company consummates any future acquisitions, in line with Alternus’ business model, its capitalization and results of operations may change significantly, and shareholders will generally not have the opportunity to evaluate the economic, financial and other relevant information that the Company considers in determining the application of these funds and other resources. As a result, the consummation of acquisitions may have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.
Further, the Company may not be able to successfully integrate acquired businesses and, where desired, their product portfolios, and therefore the Company may not be able to realize the intended benefits of such acquisitions. The failure to integrate acquired businesses effectively may adversely impact the Company’s business, results of operations or financial condition.
The delay between making significant upfront investments in solar parks and receiving revenue could materially and adversely affect the Company’s liquidity, business and results of operations.
There are generally multiple months between the initial significant upfront investments in solar parks, solar park development and obtaining permits to build solar parks which Alternus expects to own and operate and when it begins to receive revenues from the sale of electricity generated by such solar parks after grid connection. Historically, Alternus has relied on third-party equity contribution, bridging and bank loans to pay for costs and expenses incurred during project development, especially to third parties for PV modules and balance-of-system components and EPC and O&M services. Such investments may be non-refundable. Solar parks typically generate revenue only after becoming commercially operational and once they are able to sell electricity to the power grid. Between Alternus’ initial investments in the development of solar parks (through its model of working with local developers) and their connection to the transmission grid, there may be adverse developments impacting such solar parks. The timing gap between its upfront investments and actual generation of revenue, or any added delay due to unforeseen events, could put strains on Alternus’ liquidity and resources and materially and adversely affect its profitability and results of operations.
The Company may experience delays related to developing and maintaining renewable energy projects.
Development of solar power projects can take many months or years to complete and may be delayed for reasons beyond its control. Development usually requires a company to make some up-front payments for, among other things, land/rooftop use rights and permitting in advance of commencing construction, and revenue from these projects may not be recognized for several additional months following contract signing. Furthermore, a company may become constrained in its ability to simultaneously fund other investments in such projects.
Development, operation and maintenance of renewable energy projects and related infrastructure expose Alternus to numerous risks, including construction, environmental, regulatory, permitting, commissioning, start-up, operating, economic, commercial, political and financial risks. This involves risks
 
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of failure to obtain or substantial delays in obtaining: (i) regulatory, environmental or other approvals or permits; (ii) financing; (iii) leasing; and (iv) suitable equipment supply, operating and off-take contracts. Moreover, renewable energy assets are subject to energy regulation and require governmental licenses and approval for their operation. The failure to obtain, maintain or comply with the licenses and approvals relating to Alternus’ assets and the resulting costs, fines and penalties, could materially and adversely affect the Company’s ability to operate the assets. Renewable energy projects also require significant expenditure before the assets begin to generate income and often require long-term investment to enable projects to generate expected levels of income. The development of solar power projects also requires significant management attention to negotiate the terms of engagement and monitor the progress of the projects which may divert management’s attention from other matters.
Solar project development is challenging and may ultimately not be successful and miscalculations in planning a project may negatively affect engineering procurement and construction (“EPC”) prices, all of which could increase the costs, delay or cancel a project, and have a material adverse effect on its business, financial condition, results of operations and profit margins.
The development of solar projects involves numerous risks and uncertainties and requires extensive research, planning and due diligence. Alternus, and in turn, the Company may be required to incur significant amounts of capital expenditure for land/rooftop use rights, interconnection rights, preliminary engineering, permits, legal and other expenses before it can determine whether a solar power project is economically, technologically or otherwise feasible. Success in developing a solar power project is contingent upon, among other things:

securing investment or development rights;

securing suitable project sites, necessary rights of way, satisfactory land/rooftop use or access rights in the appropriate locations with capacity on the transmission grid and related permits, including completing environmental assessments and implementing any required mitigation measures;

rezoning land, as necessary, to support a solar power project;

negotiating satisfactory EPC agreements;

negotiating and receiving required permits and approvals for project development from government authorities on schedule;

completing all required regulatory and administrative procedures needed to obtain permits and agreements;

procuring rights to interconnect the solar power project to the electric grid or to transmit energy;

paying interconnection and other deposits, some of which are non-refundable;

signing grid connection and dispatch agreements, power purchase agreements, or PPAs, or other arrangements that are commercially acceptable, including adequate for providing financing;

obtaining project financing, including debt financing and own equity contribution;

negotiating favorable payment terms with suppliers; and

completing construction on schedule in a satisfactory manner.
Successful completion of a particular solar project may be adversely affected by numerous factors, including without limitation:

unanticipated changes in project plans or defective or late execution;

difficulties in obtaining and maintaining governmental permits, licenses and approvals required by existing laws and regulations or additional regulatory requirements not previously anticipated;

potential challenges from local residents, environmental organizations, and others who may not support the project;

uncertainty in the timing of grid connection;
 
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the inability to procure adequate financing with acceptable terms;

unforeseeable engineering problems, construction or other unexpected delays and contractor performance shortfalls;

labor, equipment and materials supply delays, shortages or disruptions, or work stoppages;

adverse weather, environmental and geological conditions, force majeure and other events outside of owner’s control; and

cost overruns, due to any one or more of the foregoing factors.
Accordingly, some of the solar power projects in Alternus’ pipeline may not be completed or even proceed to construction. If several solar power projects are not completed, Alternus’ business, financial condition and results of operations could be materially and adversely affected.
Development activities may be subject to cost overruns or delays, which may materially and adversely affect the Company’s financial results and results of operations.
Development of Alternus’ solar power projects may be adversely affected by circumstances outside of its control, including inclement weather, a failure to receive regulatory approvals on schedule or third-party delays in providing solar modules, inverters or other materials. Obtaining full permits for solar power projects is time consuming and Alternus may not be able to meet the expected timetable for obtaining full permits for solar power projects in the pipeline. In addition, Alternus usually relies on external contractors for the development and construction of solar power projects and may not be able to negotiate satisfactory agreements with them. If contractors do not satisfy their obligations or do not perform work that meets Alternus’ quality standards or if there is a shortage of third-party contractors or if there are labor strikes that interfere with the ability of employees or contractors to complete their work on time or within budget, Alternus could experience significant delays or cost overruns. Changes in project plans or designs, or defective or late execution may increase Alternus’ costs and cause delays. Increases in the prices of solar products and balance-of-system components may increase procurement costs. Labor shortages, work stoppages or labor disputes could significantly delay a project or otherwise increase costs. In addition, delays in obtaining, Alternus’ inability to obtain, or a lack of proper construction permits or post-construction approvals could delay or prevent the construction of solar power projects, commencing operation and connecting to the relevant grid.
Alternus may not be able to recover any of these losses in connection with construction cost overruns or delays. In addition, in certain cases of delay, Alternus might not be able to obtain any FiT or PPA at all, as certain FiTs or PPAs require that it connects to the transmission grid by a certain date. A reduction or forfeiture of FiT or PPA payments would materially and adversely affect the financial results and results of operations for that solar power project.
Impact of RePowerEU programme on Alternus’ business and future prospects.
In May 2022, the European Commission published “REPowerEU”, billed as “a plan to rapidly reduce dependence on Russian fossil fuels and fast forward the green transition”. The plan involves a number of initiatives to achieve this goal, including energy savings, identifying alternative sources of natural gas procurement like LNG imports, and expanded use of heat pumps in buildings. But the largest and most ambitious portion of the plan involves a “massive scaling up and speeding up of renewable energy in power generation, industry, buildings, and transport.” Such a large and ambitious plan comes with numerous associated risks and uncertainties as further described below.
Specifics related to accelerated renewable deployment include:

A dedicated EU Solar Strategy to double solar photovoltaic capacity by 2025 and install 600 GW by 2030 (in other words, building the same amount of solar in Europe in the next 3 years as built in the last 20)

This growth strategy will increase the solar industries’ dependency on raw materials and components being sourced from outside Europe. Diversification of the supply chain may delay implementation
 
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and increase costs. Additionally, implementation may result in political and regulatory bottlenecks at the country level with key stakeholder support critical within individual markets, which may be difficult to achieve.

A commission recommendation to tackle slow and complex permitting for major renewable energy projects, and recognition of renewable energy as an overriding public interest. This includes proposals to cut the permitting time for major renewable projects by half and a targeted amendment to the Renewable Energy Directive to recognize renewable energy as an overriding public interest;

The Renewable Energy Directive is applied differently across member states which could prove to be a barrier in tackling development timelines. Additionally, permitting is just one component of the project development cycle. Significant infrastructural upgrades such as those envisaged under major renewable energy projects, for example increasing grid availability may take longer than expected within the individual markets which reduces grid capacity in the medium term. This may affect the Company’s planned developments depending on the market, particularly those projects which are in the early stages of development.

Dedicated “go-to” areas for renewables to be put in place by member states, with shortened and simplified permitting processes in areas with lower environmental risks. The commission is making available datasets for its digital mapping tool to help member states quickly identify such “go-to” areas.

The Company may not have any development projects located in these “go-to” areas, and the Company would therefore not benefit from the shortened and simplified permitting processes.
PV plants quality or PV plants performance.
Insufficient quality of installed solar modules and other equipment resulting in faster than estimated degradation may lead to lower revenues and higher maintenance costs, particularly if the product guarantees have expired or the supplier is unable or unwilling to respect its obligations. Even well-maintained high-quality PV solar power plants may, from time to time, experience technical breakdown. Furthermore, widespread PV plant failures may damage Alternus’ market reputation, reduce its market share and cause a decline of construction projects. Although a defect in Alternus’ PV plants may be caused by defects in products delivered by its sub-suppliers which are incorporated into its PV plants, there can be no assurance that the Company will be entitled to or successful in claiming reimbursement, repair, replacement or damages from its sub-suppliers relating to such defects.
The holding companies in Alternus have a significant number of foreign subsidiaries with whom they have entered into many related party transactions. The relationship of such holding companies with these entities could adversely affect Alternus in the event of their bankruptcy or similar insolvency proceeding.
Any reductions or modifications to, or the elimination of, governmental incentives or policies that support solar energy, including, but not limited to, tax laws, policies and incentives, renewable portfolio standards or feed-in-tariffs, or the imposition of additional taxes or other assessments on solar energy, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new solar energy projects, our abandoning the development of solar energy projects, a loss of our investments in solar energy projects and reduced project returns, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
We depend heavily on government policies that support utility scale renewable energy and enhance the economic feasibility of developing and operating solar energy projects in regions in which we operate or plan to develop and operate renewable energy facilities. The federal government and a majority of state governments in the United States provide incentives, such as tax incentives, renewable portfolio standards or feed-in-tariffs, that support or are designed to support the sale of energy from utility scale renewable energy facilities, such as wind and solar energy facilities. As a result of budgetary constraints, political factors or otherwise, governments from time to time may review their laws and policies that support renewable energy and consider actions that would make the laws and policies less conducive to the development and operation of renewable energy facilities. Any reductions or modifications to, or the elimination of, governmental incentives or policies that support renewable energy or the imposition of additional taxes or other assessments on renewable energy, could result in, among other items, the lack of a satisfactory market
 
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for the development and/or financing of new renewable energy projects, our abandoning the development of renewable energy projects, a loss of our investments in the projects and reduced project returns, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
For example, in Q4 2022, the Polish parliament unilaterally decided to implement a lower price cap rather than the proposed European Commission recommended price cap. This specific price cap, in addition to the uncertainty created by differing government guidance and subsequent amendments to the timing and implementation of the price cap, had a material adverse impact on the ability of Alternus to optimize the government linked Contracts for Difference (CfD) scheme on certain Polish projects it intended to acquire, which in turn significantly reduced the forecasted revenues for the Polish solar park portfolio in the near term. As a result of the above, and combined with other factors, Alternus was unable to close this acquisition within the expected time frame. It is possible that policy changes such as these may continue or be adopted by other countries in the future such that they could materially adversely affect our business, financial condition, results of operations and prospects.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act (the “IRA”), which extends the availability of investment tax credits (“ITCs”) and production tax credits (“PTCs”). For our US operations, we expect to claim ITCs with respect to qualifying solar energy projects. In this we may also structure tax equity partnerships, and may rely upon applicable tax law and published Internal Revenue Service (“IRS”) guidance. However, the application of law and guidance regarding ITC eligibility to the facts of particular solar energy projects is subject to a number of uncertainties, in particular with respect to the new IRA provisions for which Department of Treasury regulations (“Treasury Regulations”) are forthcoming, and there can be no assurance that the IRS will agree with our approach in the event of an audit. The Department of Treasury is expected to issue Treasury Regulations and additional guidance with respect to the application of the newly enacted IRA provisions, and the IRS and Department of Treasury may modify existing guidance, possibly with retroactive effect. Any of the foregoing items could reduce the amount of ITCs or, if applicable, PTCs available to us and/or our tax equity partners. In this event, we could be required to adjust the terms of future tax equity partnerships, or seek alternative sources of funding for solar energy projects, each of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Holding companies within Alternus have historically entered into multiple transactions with their affiliates. These transactions include financial guarantees and other credit support arrangements, including letters of comfort to such affiliates pursuant to which the holding companies undertake to provide financial support to these affiliates and adequate resources as required to ensure that they are able to meet certain liabilities and local solvency requirements. These holding companies are currently party to many such affiliate transactions, and it is likely they will enter into new and similar affiliate transactions in the future.
In the event that any of these affiliates become bankrupt or insolvent, there can be no assurance that a court or other foreign tribunal, liquidator, monitor, trustee or similar party would not seek to enforce these intercompany arrangements and guarantees or otherwise seek relief against the holding companies and their other affiliates. If any of Alternus’ material foreign subsidiaries (e.g., subsidiaries that hold a significant number of customer contracts, or that are the parent company of other material subsidiaries) become subject to a bankruptcy, liquidation or similar insolvency proceeding, such proceeding could have a material adverse effect on the business and results of operations of Alternus.
Alternus is in a highly competitive marketplace.
The renewable energy industry is highly competitive and Alternus faces significant competition in the markets in which it operates. Some of our competitors may have advantages over us in terms of greater operational, financial and technical management as well as additional resources in particular markets or in general. Alternus’ competitors may also enter into strategic alliances or form affiliates with other competitors to its detriment. Suppliers or contractors may merge with Alternus’ competitors which may limit its choices of contractors and hence the flexibility of its overall project execution capabilities. Increased competition may result in price reductions, reduced profit margins and loss of market share.
 
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Moreover, Alternus’ current business strategy is to become a global IPP and to own and operate all of the solar parks which it develops and acquires. As part of Alternus’ growth plan, it may, in the future, acquire solar parks in various development stages through a competitive bidding process as part of the auction schemes in the various jurisdictions it plans to grow and establish itself in as well as the current countries it operates in. The bidding and selection process is affected by a number of factors, including factors that may be beyond Alternus’ control, such as market conditions or government incentive programs. Alternus’ competitors may have greater financial resources, a more effective or established localized business presence or a greater willingness or ability to operate with little or no operating margins for sustained periods of time. Any increase in competition during such bidding processes or reduction in its competitive capabilities could have a significant adverse impact on its market share and on the margins it generates from its solar parks.
Further, large, utility-scale solar parks must be interconnected to the power grid in order to deliver electricity, which requires Alternus, through its local partnerships, to find suitable sites with capacity on the power grid available. Alternus’ competitors may impede its development efforts by acquiring control of all or a portion of a PV site it seeks to develop. Even when Alternus has identified a desirable site for a solar park, its ability to obtain site control with respect to the site is subject to its ability to finance the transaction and growing competition from other solar power producers that may have better access to local government support, financing or other resources. If Alternus is unable to find or obtain site control for suitable PV sites on commercially acceptable terms, its ability to develop new solar parks on a timely basis or at all might be harmed, which could have a material adverse effect on Alternus’ business, financial condition and results of operations.
We depend on certain key personnel and loss of these key personnel could have a material adverse effect on our business, financial condition and results of operations.
The success of Alternus depends to a significant degree on the services rendered to it by its key employees. Due to the level of technical expertise necessary to support its business strategy, the success of the Company will depend upon its ability to attract and retain highly skilled and seasoned professionals in the solar industry for which competition is intense. In particular, Alternus is heavily dependent on the continued services of Mr. Vincent Browne, its Chief Executive Officer. The loss of any key employee, including executive officers or members of senior management teams, and the failure to attract, train and retain highly skilled personnel with sufficient experience in the industry to replace them, could harm the Company’s prospects, business, financial condition, and the results of operations will be materially affected.
If sufficient demand for solar parks does not develop or takes longer to develop than anticipated, Alternus’ business, financial condition, results of operations and prospects could be materially and adversely affected.
The PV market is at a relatively early stage of development in some of the markets that the Company may intend to enter. The PV industry continues to experience lower costs, improved efficiency and higher electricity output. However, trends in the PV industry are based only on limited data and may not be reliable. Many factors may affect the demand for solar parks including, among others, cost and availability of financing for solar parks, fluctuations in economic and market conditions, competition from non-solar energy sources, environmental concerns, public perception and regulations and policies governing the electric power industry and the broader energy industry.
If market demand for solar parks fails to develop sufficiently, Alternus’ business, financial condition, results of operations and prospects could be materially and adversely affected.
Alternus is subject to risks associated with fluctuations in the prices of PV modules and balance-of-system components or in the costs of design, construction and labor.
Alternus procures supplies for solar park construction, such as PV modules and balance-of-system components, from third-party suppliers. Alternus typically enters into contracts with its suppliers and contractors on a project-by-project basis or a project portfolio basis. Alternus generally does not maintain long-term contracts with its suppliers. Therefore, Alternus is exposed to fluctuations in prices for its PV modules and balance-of-system components. Increases in the prices of PV products or balance-of-system
 
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components or fluctuations in design, construction, labor and installation costs may increase the cost of procuring equipment and engaging contractors and hence materially and adversely affect its results of operations.
Refurbishment of renewable energy facilities involve significant risks that could result in unplanned power outages or reduced output.
Alternus’ facilities may require periodic upgrading and improvement. Any unexpected operational or mechanical failures, such as the failure of a single inverter, or other failures associated with breakdowns and forced outages generally, and any decreased operational or management performance, could reduce its facilities’ generating capacity below expected levels, reducing its revenues. Unanticipated capital expenditures associated with upgrading or repairing its facilities may also reduce our profitability.
Alternus may also choose to refurbish or upgrade its facilities based on its assessment that such activity will provide adequate financial returns and key assumptions underpinning a decision to make such an investment may prove incorrect, including assumptions regarding construction costs, timing, available financing and future power prices. This could have a material adverse effect on Alternus’ business, financial condition, results of operations and cash flows.
Moreover, spare parts for solar facilities and key pieces of equipment may be hard to acquire or unavailable to Alternus. Sources of some significant spare parts and other equipment are located outside of the jurisdictions in which it operates. Suppliers of some spare parts have filed, or may in the future file for, bankruptcy protection, potentially reducing the availability of parts that it requires to operate certain of its power generation facilities. Other suppliers may for other reasons cease to manufacture parts that it requires to operate certain of its power generation facilities. If Alternus was to experience a shortage of or inability to acquire critical spare parts, it could incur significant delays in returning facilities to full operation, which could negatively impact its business financial condition, results of operations and cash flows.
Alternus’ project operations may be adversely affected by weather and climate conditions, natural disasters and adverse work environments.
Alternus may operate in areas that are under the threat of floods, earthquakes, landslides, mudslides, sandstorms, drought, or other inclement weather and climate conditions or natural disasters. If inclement weather or climatic conditions or natural disasters occur in areas where its solar parks and project teams are located, project development, connectivity to the power grid and the provision of O&M services may be adversely affected. In particular, materials may not be delivered as scheduled and labor may not be available. As some of its solar parks are located in the same region, such solar parks may be simultaneously affected by weather and climate conditions, natural disasters and adverse work environments.
Moreover, natural disasters which are beyond Alternus’ control may adversely affect the economy, infrastructure and communities in the countries and regions where it conducts its business operations. Such conditions may have an adverse effect on its work performance, progress and efficiency or even result in personal injuries or fatalities.
Business interruptions, whether due to catastrophic disasters or other events, could adversely affect Alternus’ operations, financial condition and cash flows.
Alternus’ operations and those of its contract manufacturers and outsourced service providers are vulnerable to interruption by fire, earthquake, hurricane, flood or other natural disaster, power loss, computer viruses, computer systems failure, telecommunications failure, quarantines, national catastrophe, terrorist activities, war and other events beyond its control. For instance, some of Alternus’ solar parks are located in Italy near medium risk areas regarding seismic activity and may be vulnerable to damage from earthquakes. If any disaster were to occur, Alternus’ ability and the ability of its contract manufacturers and outsourced service providers to operate could be seriously impaired and it could experience material harm to its business, operating results and financial condition. In addition, the coverage or limits of its business interruption insurance may not be sufficient to compensate for any losses or damages that may occur.
Any such terrorist acts, environmental repercussions or disruptions, natural disasters, theft incidents or other catastrophic events could result in a significant decrease in revenues or significant reconstruction,
 
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remediation or replacement costs, beyond what could be recovered through insurance policies, which could have a material adverse effect on its operating results and financial condition.
Global economic conditions and any related ongoing impact of supply chain constraints and the market of our product and service could adversely affect our results of operations.
Due to the specific nature of solar photovoltaic industry, we depend on a limited number of suppliers of solar panels, batteries, and other system components needed to expand, operate and function our solar parks, thus making us susceptible to quality issues, shortages, bottlenecks, and price changes. The uncertain condition of the global economy as well as the current conflict between Russia and Ukraine, including the retaliatory economic measures taken by United States, European, and others continue impacting businesses around the world, and has and may continue to impact several components producers and suppliers that form part of our supply chain; impacting products, materials, components, and parts required to operate our solar parks and expand our solar offering, both in the Europe, in the US and globally. In times of rapid industry growth or regulatory change such as current times, any further deterioration of the geopolitical, socio-economic conditions or financial uncertainty to provide our services could reduce customers’ confidence and affect negatively our sales and results of operations.
Although we have implemented policies and procedures to maintain compliance with applicable laws and regulations, these and other similar trade restrictions that may be imposed in the future could cause installation and capacity expansion delay, amidst restrictions on the global supply of polysilicon and solar products. This could result in near-term supply crunch in solar energy systems despite higher costs, as well as increased costs of polysilicon and the overall cost of solar energy systems, potentially translating into a material adverse effect on our business, financial condition, results of operations and prospects.
Fluctuations in foreign currency exchange rates may negatively affect Alternus’ revenue, cost of sales and gross margins and could result in exchange losses.
Alternus’ business and operational activities are dispersed and subsidiaries within it trade in their functional currencies in the course of their business operations. Alternus’ investment holding companies transact in functional currencies of their subsidiaries. Alternus’ investment holding companies may have foreign financing and investing activities, which exposes it to foreign currency risk. Any increased costs or reduced revenue as a result of foreign exchange rate fluctuations could adversely affect its profit margins.
Although Alternus has access to a variety of financing solutions that are tailored to the geographic location of its projects and local regulations, it has not entered into any hedging transactions to reduce the foreign exchange rate fluctuation risks, but may do so in the future when it is deemed appropriate to do so in light of the significance of such risks. However, if Alternus decides to hedge its foreign exchange exposure in the future, it cannot be assured that it will be able to reduce its foreign currency risk exposure in an effective manner, at reasonable costs, or at all.
If Alternus fails to comply with financial and other covenants under debt arrangements, its financial condition, results of operations and business prospects may be materially and adversely affected.
Alternus has a number of covenants related to certain debt arrangements that require it to maintain certain financial ratios.
These restrictions could affect Alternus’ ability to operate its business and may limit the ability to react to market conditions or take advantage of potential business opportunities as they arise. For example, such restrictions could adversely affect Alternus’ ability to finance its operations, make strategic acquisitions, investments or alliances, restructure its organization or finance its capital needs. Additionally, Alternus’ ability to comply with these covenants may be affected by events beyond its control. These include prevailing economic, financial and industry conditions. Failure to comply with financial and other covenants may potentially result in increased financial costs, the requirement for additional security or cancellation of loans, which in turn may have a material adverse effect on its results of operations, cash flow and financial condition.
Any default under debt arrangements could lead to an event of default and acceleration under other debt instruments that contain cross default or cross acceleration provisions, as applicable at any given time.
 
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If the creditors of Alternus accelerate the payment of those amounts, investors cannot be assured that the Company’s assets would be sufficient to repay in full those amounts, to satisfy all other liabilities which would be due and payable and to ensure that net assets will be available to the shareholders. For example, Alternus’ subsidiary, Solis Bond Company DAC, breached all three financial covenants under its bond terms: (i) the minimum liquidity covenant, (ii) the minimum equity ratio covenant, and (iii) the leverage ratio. In April of 2023 Solis Bond Company DAC received a temporary waiver from its bondholders, in which the bondholders approved to extend to September 30, 2023. On October 16, 2023, the bondholders approved resolutions to further extend the temporary waiver to December 16, 2023 (the “Solis Extension”).
Pursuant to the Solis Extension, Solis Bond Company DAC must fully repay the Solis Bond by December 16, 2023. If Solis is unable to fully repay the Solis Bond by December 16, 2023, Solis’ bondholders will have the right to immediately transfer ownership of Solis and all of its subsidiaries to the bondholders and proceed to sell Solis’ assets to recoup the full amount owed to the bondholders, which is as of June 30, 2023 €147,000,000 (approximately $158,000,000). If the ownership of Solis and all of its subsidiaries were to be transferred to the Solis bondholders, the majority of Alternus’ operating assets and related revenues and EBIDTA would be eliminated.
In addition, Alternus typically pledges its solar park assets or account or trade receivables to raise debt financing, and it is restricted from creating additional security over its assets. If Alternus is in breach of one or more financial or other covenants or negative pledge clauses under any of its loan agreements and are not able to obtain waivers from the lenders or prepay such loan, repayment of the indebtedness under the relevant loan agreement may be accelerated, which may in turn require Alternus to repay the entire principal amount including interest accrued, if any, of certain of its other existing indebtedness prior to their maturity under cross-default provisions of other loan agreements. If Alternus lacks sufficient financial resources to make required payments, the pledgees may auction or sell the assets or interest of Alternus’ solar parks to enforce their rights under the pledge contracts and loan agreements. Any of those events could have a material adverse effect on its financial condition, results of operations and business prospects.
If the ownership of Solis and all of its subsidiaries were to be transferred to the Solis bondholders in connection with an event of default under the Solis Bond, the majority of Alternus’ operating assets and related revenues and EBIDTA would be eliminated.
Alternus’ subsidiary, Solis, breached three financial covenants under its bond terms and has received a waiver from its bondholders, which extended the date on which Solis must repay its bonds to September 30, 2023. On October 16, 2023, the Solis bondholders approved resolutions to further extend the temporary waiver to December 16, 2023.
There is no assurance that Solis will meet the terms of the Solis Extension. If Solis is unable to fully repay the bonds, which is as of June 30, 2023 €147,000,000 (approximately $158,000,000), by December 16, 2023, Solis will be in an event of default under its bond terms and Solis’ bondholders have the right to immediately transfer ownership of Solis and all of its subsidiaries to the bondholders for €1.00 and proceed to sell Solis’ assets to recoup the full amount owed to the bondholders. If the ownership of Solis and all of its subsidiaries were to be transferred to the Solis bondholders, the majority of Alternus’ current operating assets and related revenues would be eliminated immediately upon the date of any ownership change and Alternus would no longer be able to book the associated EBIDTA. This would have a material adverse effect on Alternus’ results of operations, cash flow and financial condition.
If the ownership of Solis and all of its subsidiaries were to be transferred to the Solis bondholders in connection with an event of default under the Solis Bond, the majority of Alternus’ operating assets and related revenues and EBIDTA would be eliminated and the Company’s stockholders may be negatively impacted.
If the ownership of Solis and all of its subsidiaries were to be transferred to the Solis bondholders, the majority of Alternus’ current operating assets and related revenues would be eliminated immediately upon the date of any ownership change and Alternus would no longer be able to book the associated EBIDTA. This would have a material adverse effect on Alternus’ results of operations, cash flow and financial condition. While the board of directors of the Company considered this in their recommendation that stockholders vote for the business combination, the of occurrence of this material adverse effect could have far-reaching and unpredictable outcomes on the stockholders of the Company, post business combination. As an example, if
 
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Alternus is unable to expand and replace assets which were sold off in connection with Alternus’ default under the Solis Bond, it may not be able to reach its current level of revenues or EBITDA for a substantial period of time, extending to a period of years, if ever. As such, stockholders of the post-combination Company may never receive dividends or the value of the Combination Company’s stock may be significantly lower than $10.00, the initial price of the public units.
Alternus is subject to counterparty risks under our FiT price support schemes and Green Certificates (“GC”) Schemes.
As an IPP, Alternus generates electricity income primarily pursuant to FiT price support schemes or GCs, which subjects it to counterparty risks with respect to regulatory regimes. Its FiT price support schemes in one region or country are generally signed with a limited number of electric utilities. Alternus relies on these electric utilities to fulfill their responsibilities for the full and timely payment of its tariffs. In addition, the relevant regulatory authorities may retroactively alter their FiT price support regimes or GC schemes in light of changing economic circumstances, changing industry conditions or for any number of other reasons. If the relevant government authorities or the local power grid companies do not perform their obligations under the FiT or GC price support schemes and it is unable to enforce its contractual rights, Alternus’ results of operations and financial condition may be materially and adversely affected.
Alternus’ international operations require significant management resources and present legal, compliance and execution risks in multiple jurisdictions.
Alternus has adopted a business model under which it maintains significant operations and facilities through its subsidiaries located in Europe while its corporate management team and directors are primarily based in Ireland and the U.S. The nature of Alternus’ business may stretch its management resources thin as well as make it difficult for its’s corporate management to effectively monitor local execution teams. The nature of Alternus’ operations and limited resources of its management may create risks and uncertainties when executing its strategy and conducting operations in multiple jurisdictions, which could adversely affect the costs and results of operations of Alternus.
The development and installation of solar energy systems is highly regulated; the Company may fail to comply with laws and regulations in the countries where it develops, constructs and operates solar power projects and the government approval process may change from time to time, which could severely disrupt our business operations.
The development and installation of solar energy systems is subject to oversight and regulation under local ordinances; building, zoning and fire codes; utility interconnection requirements for metering; and other rules and regulations. We attempt to keep apprised on these requirements on a national, state and local level and must design and install our solar energy systems to comply with varying standards. Certain jurisdictions may have ordinances that prevent or increase the cost of installation of our solar energy systems. New government regulations or utility policies pertaining to the installation of solar energy systems are unpredictable and might result in significant additional expenses or delays, which could cause a significant reduction in demand for solar energy systems.
The Company conducts its business in many countries and jurisdictions that are governed by different laws and regulations, including national and local regulations relating to building codes, taxes, safety, environmental protection, utility interconnection and metering and other matters. The Company has established subsidiaries in these countries and jurisdictions which were required to comply with various local laws and regulations. While the Company strives to work with its local counsel and other advisers to comply with the laws and regulations of each jurisdiction in which it has operations, there may be instances of non-compliance, which may result in fines, sanctions and other penalties against the non-complying subsidiaries and its directors and officers. For example, in 2020, the Company’s Romanian subsidiary, LJG Green Source Energy Beta S.r.l. had an ANRE investigation resulting from actions of the previous owner related to the breach of Article 5 of the EU Regulation No. 1227/2011 on wholesale energy market integrity and transparency by engaging in market manipulation or attempted market manipulation on the wholesale energy markets following transactions concluded between January 1, 2019 to March 31, 2020. This investigation resulted in a penalty of RON 400,000 (approximately $80,000). The Company cannot make
 
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any assurances that other instances of non-compliance will not occur in the future which may materially and adversely affect its business, financial condition or results of operations.
In order to develop solar power projects, the Company must obtain a variety of approvals, permits and licenses from various authorities. The procedures for obtaining such approvals, permits and licenses vary from country to country, making it onerous and costly to track the requirements of individual localities and comply with the varying standards. Moreover, sovereign states retain the power to adjust their energy policies and alter approval procedures applicable to the Company. If the regulatory requirements become more stringent or the approval process becomes less efficient, the key steps in the Company’s business operations including project development, facility upgrading a