Contract analysis

I. Executive Summary Purpose. This memorandum analyzes whether Calloway-Briggs Renewables Inc. qualifies as an "emerging growth company" ("EGC") as defined in Section 2(a)(19) of the Securities Act of 1933, as amended (the "Securities Act"), as added by Section 101(a) of the Jumpstart Our Business Startups Act of 2012 (Pub. L. 112-106) (the "JOBS Act"), and identifies the scaled disclosure accommodations and regulato

II. Background — The Company and the Proposed Offering A. The Company Calloway-Briggs Renewables Inc. is a corporation organized under the laws of the State of Delaware, with its principal executive offices located at 4200 Ridgeline Parkway, Suite 1100, Austin, Texas 78746 (Employer Identification Number: 83-4027615). The Company was founded in 2014 by Garrett Calloway and Elaine Briggs (the "Founders") and has since

III. Statutory Definition of Emerging Growth Company A. Section 2(a)(19) of the Securities Act The term "emerging growth company" is defined in Section 2(a)(19) of the Securities Act, which was added by Section 101(a) of the JOBS Act. As originally enacted, the statute defined an EGC as an issuer that had "total annual gross revenues" of less than $1,070,000,000 during its most recently completed fiscal year. The def

1. Revenue Threshold Exceeded. The last day of the fiscal year during which the issuer has total annual gross revenues of $1.235 billion or more (as adjusted for inflation; see Section III.C below).

2. Five-Year Sunset. The last day of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under the Securities Act. For a company that completes its IPO in calendar year 2022, this sunset would occur on the last day of fiscal year 2027 (i.e., December 31, 2027, assuming a calendar-year fiscal year).

3. Non-Convertible Debt Issuance. The date on which the issuer has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt. For purposes of this test, the SEC staff has confirmed that only debt securities issued pursuant to a registration statement under the Securities Act (i.e., registered public debt offerings) are counted toward the $1.0 billion threshold. Privately placed deb

4. Large Accelerated Filer Status. The date on which the issuer becomes a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Under Rule 12b-2, an issuer is a large accelerated filer if, among other things, it has an aggregate worldwide market value of voting and non-voting common equity held by non-affiliates (i.e., "public float") of $700 mi

Section 2(a)(19)(D) of the Securities Act directs the SEC to index the EGC revenue threshold for inflation every five years. Pursuant to this directive, the SEC issued Release No. 33-10332 (March 31, 2017), which adjusted the revenue threshold from the original $1.07 billion to $1.235 billion, effective as of April 12, 2017. This adjusted threshold of $1.235 billion is the operative threshold for purposes of CBR's EG

IV. Application to Calloway-Briggs Renewables Inc. A. Revenue Test CBR's total annual gross revenues for FY 2021, as reported in the Company's audited consolidated financial statements prepared in accordance with GAAP and audited by Ashford & Pemberton LLP (Gregory Sondheim, lead engagement partner), were $487.3 million. This figure represents the Company's total consolidated revenues for the twelve-month period ende

1. CBR's total annual gross revenues for FY 2021, its most recently completed fiscal year, were $487.3 million, which is substantially below the $1.235 billion statutory threshold.

2. CBR has not previously sold common equity securities pursuant to an effective registration statement under the Securities Act, and the five-year sunset provision has not been triggered.

3. CBR has not issued more than $1.0 billion in registered non-convertible debt securities during the prior three-year period. All of CBR's outstanding indebtedness consists of private bank facilities, project-finance debt, and tax-equity investments.

4. CBR is not a reporting company and does not have a public float, and therefore is not and cannot currently be a large accelerated filer. Accordingly, CBR is entitled to avail itself of the full suite of scaled disclosure and regulatory accommodations available to emerging growth companies under the JOBS Act and related SEC rules, as described in Section V below.

V. Available Scaled Disclosure Accommodations This Section V describes each of the principal accommodations available to CBR by virtue of its EGC status and sets forth our recommendation regarding CBR's election with respect to each accommodation. A. Confidential Submission of Draft Registration Statement Under Section 6(e) of the Securities Act, as added by Section 106(a) of the JOBS Act, an emerging growth company

VI. Disclosure Requirements in the S-1 A. Required Disclosure of EGC Status The S-1 registration statement must include specific disclosures regarding CBR's EGC status and the accommodations that the Company has elected or intends to elect. The SEC staff expects EGC issuers to provide clear and prominent disclosure so that investors are fully informed about the nature and extent of the scaled disclosures in the regis

1. Prospectus Cover Page or Summary. The prospectus cover page or the prospectus summary section should include a clear statement that CBR is an "emerging growth company" as defined in the JOBS Act. This statement should be prominent and easily identifiable.

2. Extended Transition Period Election. If CBR opts out of the extended transition period for new accounting standards (as we recommend), the S-1 must disclose this irrevocable election in accordance with Section 107(b) of the JOBS Act. The disclosure should clearly state that CBR has irrevocably elected not to take advantage of the extended transition period and will comply with new GAAP standards on the same timeta

3. Description of Accommodations. The S-1 should include a description of each EGC accommodation relied upon by the Company, including the reduced financial statement periods (if elected), the scaled executive compensation disclosure, the SOX 404(b) auditor attestation exemption, and the exemptions from Dodd-Frank say-on-pay and related votes. The disclosure should explain the impact of each accommodation on the comp

4. Risk Factors. The S-1 risk factors should include one or more risk factors addressing CBR's EGC status, as discussed in Section VI.B below. B. Risk Factor Considerations The S-1 risk factors section (see the separate Risk Factors drafting file maintained by the engagement team) should include a dedicated risk factor addressing CBR's EGC status. The risk factor should cover the following topics: • Reduced Disclosur

VII. Duration of EGC Status — Projected Timeline CBR will retain its EGC status until the earliest occurrence of any of the four disqualification events described in Section III.B above. Based on the information currently available, we project the following timeline for CBR's EGC period: A. Revenue Trajectory Analysis CBR's historical revenue growth has been significant, reflecting the Company's expansion of its oper

VIII. Interaction with Controlled-Company Exemption Following the consummation of the IPO, CBR expects to qualify as a "controlled company" under Section 303A.00 of the NYSE Listed Company Manual. Under the NYSE rules, a company is a "controlled company" if more than 50% of its voting power for the election of directors is held by an individual, a group, or another company. Based on the pre-IPO ownership structure an

IX. Impact on Comfort Letter and Audit Procedures CBR's EGC status has certain implications for the scope of the engagement with Ashford & Pemberton LLP, the Company's independent registered public accounting firm. We summarize these implications below: • SOX 404(b) Attestation. As discussed in Section V.D above, Ashford & Pemberton LLP will not be required to perform an attestation engagement on the effectiveness of

X. Recommendations and Action Items Based on the analysis set forth in this memorandum, we recommend the following actions:

1. Elect EGC Accommodations. CBR should affirmatively elect all available EGC accommodations in the S-1 registration statement and related filings, as described in Section V above. The specific accommodations to be elected include confidential submission, scaled executive compensation disclosure, the SOX 404(b) auditor attestation exemption, exemptions from Dodd-Frank say-on-pay and related voting requirements, and t

2. Irrevocably Opt Out of Extended Transition Period. CBR should irrevocably opt out of the extended transition period for new or revised accounting standards under Section 107(b) of the JOBS Act, electing to adopt all new GAAP standards on the public-company timetable to maintain comparability with public-company peers in the renewable energy sector. This election should be disclosed in the S-1.

3. Use Scaled Executive Compensation Disclosure. CBR should follow the executive compensation disclosure requirements applicable to smaller reporting companies under Item 402 of Regulation S-K, as permitted for EGCs. This includes providing a Summary Compensation Table for three named executive officers covering two fiscal years, without a CD&A, Compensation Committee Report, pay-versus-performance disclosure, or CEO

4. Rely on SOX 404(b) Exemption. CBR should rely on the EGC exemption from the auditor attestation requirement on internal controls during the EGC period. The Company should continue its SOX 404(a) readiness preparation, including the remediation of control deficiencies identified in the IPO Readiness Assessment Memorandum.

5. Prepare Testing-the-Waters Materials. CBR and the underwriting syndicate should prepare testing-the-waters materials for use with QIBs and IAIs prior to the formal roadsho