| Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Basis of Presentation The Company prepares its consolidated
financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Basis of Consolidation The consolidated financial
statements include the financial statements of the Company and its subsidiaries. All intercompany accounts and transactions have been
eliminated in consolidation. The results of subsidiaries acquired or disposed of during the respective periods are included in the consolidated
financial statements from the effective date of acquisition or up to the effective date of disposal, as appropriate. Related Party Transactions A Related Party transaction
is any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which (i) the
Company or any of its subsidiaries is or will be a participant, and (ii) any Related Party has or will have a direct or indirect interest.
A Related Party is any person who is or was (since the beginning of the last fiscal year even if such person does not presently serve
in that role) an executive officer or director of the Company, any shareholder owning more than 5% of any class of the Company’s voting
securities, or an immediate family member of any such person. Financial assets and financial liabilities are recognized when the Company
becomes a party to the contractual provisions of the instrument. Refer to Footnote 25 for more details. Use of Estimates The preparation of consolidated financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues
and expenses for the periods presented. Significant items subject to such estimates include, but are not limited to, the assumptions utilized
in the valuation of the assets acquired and liabilities assumed, determination of a business combination or asset acquisition, impairment
of long-lived assets, measurement of level 3 fair value assets, and recovery of capitalized cost. Management evaluates
its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment,
and makes adjustment when facts and circumstance dictate. These estimates are based on information available as of the date of financial
statements; therefore, actual results could differ from these estimates. S egments The Company has two operating
segments, U.S. Operations and European Operations, and the decision-making group is the CEO and CFO of the Company (as a group). The CODM
regularly review the Reporting Packs that contain financial and operational results aggregated by geography as well as consolidated income
statement, balance sheet, and equity of the overall company. Cash and Cash Equivalents The Company considers cash
and highly liquid investments with original maturities of three months or less to be cash and cash equivalents. The Company maintains
cash and cash equivalents with major financial institutions, the largest concentration in JP Morgan in the U.S, Ireland, and Italy, Unicredit
in Romania, and with ING in Poland and the Netherlands. The Company may at times exceed federally insured limits or statutorily insured
limits in a foreign jurisdiction. The Company periodically assesses the financial condition and due to the size and stability of the institutions
believes the risk of loss to be remote. Restricted Cash Restricted cash relates to
balances that are in the bank accounts for specific defined purposes and cannot be used for any other undefined purposes. Restricted cash
is primarily restricted stemming from requirements under the Green Bond terms. The balance has a debt service reserve account, per the
requirements from the Bond Trustee, that issues quarterly coupons to the Bond holders. Accounts Receivable Accounts receivable are uncollateralized
customer obligations due under normal trade terms requiring payment within that period. Accounts receivables are presented net of allowance
for doubtful accounts. The Company establishes an allowance for doubtful customer accounts, through a review of historical losses, customer
balances, and industry economic conditions. Under the expected loss model, a loss (or allowance) is recognized upon initial recognition
of the asset that reflects all future events that may lead to a loss being realized, regardless of whether it is probable that the future
event will occur. The Company extends credit based on an evaluation of customers’ financial condition and determines any additional
collateral requirements. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The
Company considers invoices past due when they are outstanding longer than the stated term. Under the expected loss model, a loss (or allowance)
is recognized upon initial recognition of the asset that reflects all future events that may lead to a loss being realized, regardless
of whether it is probable that the future event will occur. Management considers the carrying value of accounts receivable to be fully
collectible. If amounts become uncollectible, they are charged to operations in the period in which that determination is made. The allowance for credit losses
was $7 thousand an $0 as of December 31, 2023 and 2022 respectively. Concentration of Credit Risk At times, the Company maintains
cash balances in financial institutions which may exceed federally insured limits. The Company maintains cash balances in all countries
in which it operates and in Ireland where the Company is headquartered. Government coverage for the Company’s cash balances are
as follows:
● European Union - $105,841 (€100,000) per account is
covered for operations in Romania, Poland, Italy, the Netherlands, and the Company’s headquarters in Ireland.
● United States - $250,000 The Company has four cash
accounts across the European countries and a net of $18.8 million above government insurance amounts. The Company has six cash accounts
across the United States and a net of $2.5 million above the government insurance amounts. The Company has not experienced any losses
relating to such accounts and believes it is not exposed to significant credit risk on its cash and cash equivalents or restricted cash. Additionally, one customer
represented 35% of continuing operational revenues during the year ended December 31, 2023 and three customers represented 61% of the
Company’s continuing operational accounts receivable for the year ended December 31, 2023. These concentrations represent a risk
to revenues and cash flows should these customers face financial difficulties. Economic Concentrations The Company and its subsidiaries
own and operate solar generating facilities installed on buildings and land located across Europe and the US. Future operations could
be affected by changes in the economy, other conditions in those geographic areas or by changes in the demand for renewable energy. Property and Equipment Property and equipment are
stated at cost less accumulated depreciation, amortization and impairment. The cost of an asset comprises its purchase price and any directly
attributable costs of bringing the asset to its present working condition and location for its intended use. Depreciation is computed
on a straight-line basis over the estimated useful lives. The useful lives per asset class are as follows:
● Solar Energy Facilities carry a useful life of the lesser of 35 years from the original placed in-service
date or the lease term of the land on which they are built.
● Leasehold improvements are amortized over the shorter of the lease term or their estimated useful file.
● Furniture and fixtures carry a useful life of 3 years.
● Software and computer equipment carry a useful life of 3 and 5 years respectively. Expenditures for major renewals
and betterments which substantially extend the useful life of assets are capitalized. Expenditures for maintenance and repairs, which
do not materially extend the useful lives of assets, are charged to expense as incurred. Upon retirement, sale or other disposition of
equipment, the cost and accumulated depreciation are removed from the respective accounts and a gain or loss, if any, is recognized in
income/(loss) from operations in the Consolidated Statements of Operations and Comprehensive Loss during the year of disposal. When the
Company abandons the anticipated construction of a new solar energy facility during the development phase, costs previously capitalized
to development in progress are written off at the parent company. Capitalized Development Cost Capitalized development cost
relates to various projects that are under development for the period. As management determines to proceed with the development of a new
solar park, or purchase an existing construction project of a solar park, cost toward the final value of that project are recorded in
Capitalized Development Cost on the Consolidated Balance Sheet. Cost can include, but are not limited to, financial, technical and legal
due diligence costs. As the Company closes either
the purchase or development of new solar parks and begins construction in process and then are added to the final asset displayed in Property,
and Equipment. If the Company does not close on the prospective project, these costs are written off to Development Cost on the Consolidated
Statement Operations and Comprehensive Loss. Impairment of Solar Energy Facilities The
Company reviews its investments in property and equipment for impairment whenever events or changes in circumstances indicate that the
carrying value of an asset may not be recoverable. Impairment is evaluated at the asset group level, which is determined based upon the
lowest level of separately identifiable cash flows. When evaluating for impairment, if the estimated undiscounted cash flows from the
use of the asset group are less than the asset group’s carrying amount, then the asset group is deemed to be impaired and is written
down to its fair value. Fair value is determined by net realizable value of the assets using ASC 820. The amount of the impairment loss
is equal to the excess of the asset group’s carrying value over its estimated fair value During the year ended December
31, 2023, the Company recorded an impairment loss of $11.8 million in the Consolidated Statement of Operations and Comprehensive Loss
related to the Polish assets held for sale to reduce the carrying amount of the assets in the disposal group to their fair value less
costs to sell. This was recognized in discontinued operations on the Consolidated Statement of Operations and Comprehensive Loss. Deferred Financing Costs and Debt Discount Amortization The Company incurs expenses related to debt arrangements.
These deferred financing costs and debt discount costs are capitalized and amortized over the term of the related debt or revolving credit
facilities and netted against the related debt. Asset Retirement Obligations In connection with the acquisition
or development of solar energy facilities, the Company may have the legal requirement to remove long-lived assets constructed on leased
property and to restore the leased property to its condition prior to the construction of the long-lived assets. This legal requirement
is referred to as an asset retirement obligation (ARO). If the Company determines that an ARO is required for a specific solar energy
facility, the Company records the present value of the estimated future liability when the solar energy facility is placed in service
as an ARO liability. The discount rate used to estimate the present value of the expected future cash flows for the year ended December
31, 2023 and 2022 was 7.3% and 7.1% respectively. The Company accretes the ARO liability to its future value over the solar energy facility’s
useful life and records the related interest expense to amortization expense on the consolidated statement of operations. Solar facilities
that require AROs are recorded as part of the carrying value of property and depreciated over the solar energy facility’s useful
life. Leases In February 2016, the FASB
established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance
sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical
Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted
Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability
on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification
affecting the pattern and classification of expense recognition in the income statement. A modified retrospective transition approach
is required, applying the new standard to all leases existing at the date of initial application. The Company adopted the new standard
on January 1, 2022 and used the effective date as our date of initial application. Consequently, financial information will not be updated
and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2022. The new standard
provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which
permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct
costs. Upon adoption the company recognized $8.8 million of Right of Use Assets and $8.7 million of associated liabilities. Lease assets and liabilities
are recognized based on the present value of the future lease payments over the lease term at the lease commencement date and are presented
on the consolidated statements of financial condition. The Company estimates its incremental borrowing rate based on information available
at the commencement date in determining the present value of future payments. For additional information, see Footnote 16 - Leases. Operating lease expense attributable
to site leases is reported within cost of revenues in the Company’s Statement of Operations and Comprehensive Loss; whereas lease
expense attributable to all other operating leases is reported within selling, general, and administrative expense in the Company’s
Statement of Operations and Comprehensive Loss. Revenue Recognition The Company follows the guidance
of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue
from Contracts with Customers (“ASC 606”). The core principle underlying revenue recognition under ASC 606 is that revenue
should be recognized as goods or services are transferred to customers in an amount that reflects the consideration to which the Company
expects to be entitled. ASC 606 defines a five-step process to achieve this core principle. ASC 606 also mandates additional
disclosure about the nature, amount, timing and uncertainty of revenues and cash flows arising from customer contracts, including significant
judgments, and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The Company derives revenues
through its subsidiaries from the sale of electricity and the sale of solar renewable energy credits (RECs) in Romania and guarantees
of origin certificates (GoOs) in Poland. The Company receives Green Certificates based on the amount of energy produced in Romania. Energy
generation revenue and solar renewable energy credits revenue are recognized as electricity generated by the Company’s solar energy
facilities is delivered to the grid, at which time all performance obligations have been delivered. Revenues are based on actual output
and contractual sale prices set forth its customer contracts. The Company’s current
portfolio of renewable energy facilities is generally contracted under long-term Country Renewable Programs (FIT programs) in Italy or
Energy Offtake Agreements (PPAs/VPPAs) with creditworthy counterparties in Poland, Romania and the United States. Pricing of the electricity
sold under these FITs and PPAs is generally fixed for the duration of the contract, although some of its PPAs have price escalators based
on an index (such as the consumer price index) or other rates specified in the applicable PPA. One solar park in the Netherlands
receives pre-payments calculated at the beginning of the year and based on the previous years’ production (MWhs produced) multiplied
by a calculated average price per MWh for the year and divided by twelve. The Company books revenue monthly by multiplying actual production
per the Company’s meters by the average price provided by the Offtaker at the beginning of the year to estimate revenue for the
month. There is a true-up performed in June of the following year using actual power produced for the previous year multiplied by the
average EPEX price (average actual market price per KWh for the year) less the prepayment for the year. If the true-up calculation is
positive, The Offtaker settles with a payment to the Company. If the true-up is negative, the Company settles with a payment to Offtaker. Disaggregated Revenues The following table shows the Company’s revenues
disaggregated by country and contract type:
Year Ended December 31,
Revenue by Country 2023 2022
(in thousands)
Italy $ 3,360 $ 3,354
Romania 16,608 13,710
United States 116 25
Total for continuing operations $ 20,084 $ 17,089
Discontinued Operations:
Netherlands $ 2,840 $ 1,596
Poland 7,593 10,709
Total for discontinued operations $ 10,433 $ 12,305
Total for the period $ 30,517 $ 29,394
Year Ended December 31,
Revenue by Offtake Type 2023 2022
(in thousands)
Country Renewable Programs $ 2,972 $ 2,885
Green Certificates 10,548 9,409
Energy Offtake Agreements 6,560 4,795
Other Revenue 4 -
Total for continuing operations $ 20,084 $ 17,089
Discontinued Operations:
Country Renewable Programs $ 5,499 $ 6,994
Guarantees of Origin 129 44
Energy Offtake Agreements 4,805 5,267
Total for discontinued operations $ 10,433 $ 12,305
Total for the period $ 30,517 $ 29,394 One customer represented 35%
of continuing operational revenues during the year ended December 31, 2023 compared to two customers that represented 29% for the year
ended December 31, 2022. The revenues from these customers accounted for $11.4 million and $9.7 million of revenue for the year ended
December 31, 2023 and 2022 respectively. Two customers represented
34% of the discontinued operational revenues during the year ended December 31, 2023 compared to two customers that represented 42% for
the year ended December 31, 2022. The revenues from these customers accounted for $11.2 million and $14.2 million of revenue for the year
ended December 31, 2023 and 2022 respectively. Three customers represented
61% of the Company’s continuing operational accounts receivable for the year ended December 31, 2023. One customer represented 23%
of the Company’s discontinued operational accounts receivable for the year ended December 31, 2023. The company did not have any
customers who represented more than 10% of accounts receivable for the year ended December 31, 2022. Unbilled Energy Incentives Earned The Company derives revenues
from the sale of green certificates for the Romania projects. The green certificates revenues are recognized in the month they are generated
by the solar project and registered with the local authority. The Company considers them unbilled at the end of the period if they have
not been invoiced to a third-party customer. Cost of Revenue Cost of revenue primarily
consists of operations and maintenance expense, insurance premiums, property taxes and other miscellaneous costs associated with the operations
of solar energy facilities. Costs are charged to expense as incurred. Taxes Recoverable and Payable The Company records taxes
recoverable when there has been an overpayment of taxes due to timing of the Value Added Tax (VAT) between vendors and customers. The
VAT tax can also be offset against a Country’s income taxes where the VAT was registered. Development Cost Development costs are incurred
when the Company abandons the development or acquisition of renewable energy projects. The Company depends heavily on government policies
that support our business 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 Company can decide to abandon a project if it becomes uneconomic
due to various factors, for example, a change in market conditions leading to higher costs of construction, lower energy rates, or
other factors that change the expected returns on the project. In addition, political factors or otherwise where 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 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. At the time
The Company decides to abandon a project, Development Cost are recognized on the Consolidated Statements of Operations and Other Comprehensive
Income/(Loss) Risks and Uncertainties The Company’s operations are
subject to significant risks and uncertainties including financial, operational, technological, and regulatory risks and the potential
risk of business failure. See Note 2 regarding going concern matters. Fair Value of Financial Instruments The Company measures its financial
instruments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a fair
value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value
hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest
priority to unobservable inputs. The three (3) levels of fair value hierarchy are described below: Level 1 – Quoted market prices
available in active markets for identical assets or liabilities as of the reporting date. Level 2 – Pricing inputs other
than quoted prices in active markets included in Level 1 that are either directly or indirectly observable as of the reporting date. Inputs
are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or
similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable
market data for substantially the full term of the related assets or liabilities. Level 3 – Pricing inputs that
are unobservable. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash
flow methodologies or similar techniques, and at least one significant model assumption or input is unobservable. The Company holds various
financial instruments that are not required to be measured at fair value. For cash and cash equivalents, restricted cash, accounts receivable,
various debt instruments, prepayments and other current assets, accounts payable, accrued liabilities and other current liabilities, the
carrying value approximated their fair values due to the short-term maturity of these instruments. The Company’s forward purchase
agreement asset is considered a Level 3 financial instrument at fair value and is described below (see Note 5). Business Combinations and Acquisition of Assets The Company applies the definition
of a business in ASC 805, Business Combinations, When an acquired group of
assets does not constitute a business, the transaction is accounted for as an asset acquisition. The cost of assets acquired, and liabilities
assumed in asset acquisitions is allocated based upon relative fair value. The fair value measurements of the solar facilities acquired,
and asset retirement obligations assumed were derived utilizing an income approach and based, in part, on significant inputs not observable
in the market. These inputs include, but are not limited to, estimates of future power generation, commodity prices, operating costs,
and appropriate discount rates. These inputs require significant judgments and estimates at the time of the valuation. Transaction costs,
including legal and financing fees directly related to the acquisition, incurred are capitalized as a component of the assets acquired. The allocation of the purchase price directly affects the
following items in the Company’s consolidated financial statements:
● The amount of purchase price allocated to the various tangible and intangible assets and liabilities on
the Company Balance Sheet,
● The amounts allocated to all other tangible assets and intangibles are amortized to depreciation or amortization
expense, with the exception of favorable and unfavorable rate land leases and unfavorable rate Operation and Maintenance (O&M) contracts
which are amortized to cost of revenue; and The period of time over which
tangible and intangible assets and liabilities are depreciated or amortized varies, and thus, changes in the amounts allocated to these
assets and liabilities will have a direct impact on the Company’s results of operations. Income Taxes Deferred taxes are determined
using the asset and liability method; whereby, deferred tax assets are recognized for deductible temporary differences, operating loss
and tax credit carry forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are
the differences between the reported amounts of assets and liabilities and their tax basis. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment. The Company evaluated the
provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in the financial statements. ASC 740 prescribes
a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the company has taken or expects
to take in its return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination
by taxing authorities. Differences between the positions taken or expected to be taken in a tax return and the benefit recognized and
measured pursuant to the interpretation are referred to as “unrecognized benefits”. A liability is recognized for an unrecognized
tax benefit because it represents an enterprise’s potential future obligation to the taxing-authority for a tax position that was
not recognized as a result of applying the provisions of ASC 740. As a result of the Tax Cuts
and Jobs Act (TCJA) of 2017, the Company analyzed if a liability needed to be recorded for the deemed repatriation of undistributed earnings.
It was determined that there is no outstanding liability associated with this based on overall negative undistributed earnings (accumulated
deficit) in the consolidated foreign group. An additional provision of the TCJA is the implementation of the Global Intangible-Low Taxed
Income Tax, or “GILTI.” The Company has elected to account for the impact of GILTI in the period in which the tax actually
applies to the Company. Penalties and interest assessed
by income tax authorities would be included in income tax expense. For the period ended December 31, 2023, the Company did not incur any
penalties or interest. Stock-Based Compensation The Company accounts for stock-based
compensation in accordance with ASC 718. Stock-based compensation expense for equity instruments issued to employees and non-employees
is measured based on the grant-date fair value of the awards. The fair value of each stock unit is determined based on the valuation of
the Company’s stock on the date of grant. The fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton
stock option pricing valuation model. The Company uses the simplified method for calculating the expected term of their options. The Company
recognizes compensation costs using the straight-line method for equity compensation awards over the requisite service period of the awards,
which is generally the awards’ vesting period. The Company accounts for forfeitures of awards in the period they occur. Use of the Black-Scholes-Merton
option-pricing model requires the input of highly subjective assumptions, including (1) the expected terms of the option, (2) the expected
volatility of the price of the Company’s common stock, and (3) the expected dividend yield of our common stock. The assumptions
used in the option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application
of management’s judgments. If factors change and different assumptions are used, the Company’s stock-based compensation expense
could be materially different in the future. Additional inputs to the Black-Scholes-Merton option-pricing model include the risk-free
interest rate and the fair value of the Company’s common stock. The Company determines the risk-free interest rate by using the
U.S. Treasury Rates of the same period as the expected term of the stock-option. Net Loss Per Share Net loss per share is computed
pursuant to ASC 260, Earnings per Share
Year Ended December 31,
2023 2022
(in thousands)
Warrants 12,345 11,945
Total 12,345 11,945 Foreign Currency Transactions and Other Comprehensive
Loss Foreign currency transactions
are those transactions whose terms are denominated in a currency other than the currency of the primary economic environment in which
the Company operates, which is referred to as the functional currency. The functional currency of the Company’s foreign subsidiaries
is typically the applicable local currency which is Romanian Lei (RON), Polish Zloty (PLN) or European Union Euros (EUR). Transactions
denominated in foreign currencies are remeasured to the functional currency using the exchange rate prevailing at the balance sheet date
for balance sheet accounts and using an average exchange rate during the period, which approximates the daily exchange rate, for income
statement accounts. Foreign currency gains or losses resulting from such remeasurement are included in the Consolidated Statement of Operations
in the period in which they arise. Transaction gains and losses
are recognized in the Company’s Results of Operations based on the difference between the foreign exchange rates on the transaction
date and on the reporting date. The Company had an immaterial net foreign exchange loss for the year ended December 31, 2023 and 2022. The translation from functional
foreign currency to United States Dollars (U.S. Dollar) is performed for balance sheet accounts using current exchange rates in effect
at the balance sheet date and using an average exchange rate during the period, which approximates the daily exchange rate, for income
statement accounts. The effects of translating financial statements from functional currency to reporting currency are recorded in other
comprehensive income. For the years ended December 31, 2023 and 2022, the increase/(decrease) in comprehensive loss related to foreign
currency translation gains was $0.7 million and ($1.0) million, respectively. Recently Adopted Accounting Pronouncements In June 2016, the F |
