Sandra,
I wanted to send a comprehensive summary of where things stand following the discussions today among the Company, our team, and Hargrove Keating. This is a longer email than usual, but given the number of workstreams in flight, I wanted to make sure we have a single reference point for the current status and the path forward. A more detailed dormancy memorandum and reactivation readiness checklist will follow from Brendan and me early next week.
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**1. Confirmation of Dormant Status**
Following discussions earlier today between the Company and Hargrove Keating & Co. (Oliver Marchetti), the parties have mutually agreed to postpone the proposed initial public offering of common stock of Calloway-Briggs Renewables Inc. (CIK 0001948372; proposed NYSE ticker "CBRI") and to place the offering in dormant status effective today, June 17, 2022.
The decision reflects the meaningful deterioration in market conditions for renewables-sector IPOs over the past several weeks and is consistent with the underwriters' recommendation. While disappointing, I believe it is the prudent course.
Importantly, no public filing of the S-1 registration statement has been made with the SEC. The registration statement was never declared effective, and no pricing occurred. Accordingly, there is no public disclosure obligation or market expectation to manage. The SEC did indicate oral clearance on June 14, 2022 (subject to the pricing amendment), which means the regulatory review process is substantially complete — a significant advantage that positions CBR well for a swift reactivation when market conditions improve.
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**2. Current Status of Key Workstreams**
Below is a summary of where each major workstream stands as of today.
**a. Registration Statement**
Amendment No. 2 to the draft registration statement was confidentially submitted to the SEC on June 10, 2022 (EDGAR Accession No. 0001948372-22-000003). This followed the initial DRS-1 submission on April 11, 2022 (Accession No. 0001948372-22-000001), the SEC's first-round comment letter on May 6 (18 comments), Amendment No. 1 on May 20 (Accession No. 0001948372-22-000002), and the SEC's second-round comment letter on June 3 (7 comments). All 25 SEC comments have been fully resolved. The SEC indicated oral clearance on June 14, subject only to the pricing amendment. The S-1 is substantially complete.
As a reminder, CBR qualifies as an emerging growth company under the JOBS Act (FY 2021 revenue of $487.3 million, below the $1.235 billion threshold), which permitted confidential submission and will continue to afford certain accommodations upon reactivation.
**b. Offering Structure**
The offering was structured as follows (all based on the assumed midpoint price of $22.00 per share):
- Aggregate offering size: approximately $600 million ($521.7 million base offering; $78.3 million overallotment) - Base shares: 23,713,636 shares - Primary/secondary split: $371.7 million primary (Company) / $150.0 million secondary (Pinnacle Vista Capital Partners III, LP — 6,818,182 shares) - 15% overallotment option - Pre-IPO shares outstanding: approximately 100,000,000 - Post-IPO shares outstanding (full exercise of overallotment): approximately 127,272,727 - Pinnacle Vista pre-IPO ownership: approximately 62% - Planned use of proceeds: approximately $200 million for Term Loan B repayment, approximately $100 million for Cimarron Solar construction, and approximately $71.7 million for general corporate purposes - Implied valuation at midpoint: approximately 19.4x EV/EBITDA
**c. Underwriting Agreement**
A near-final draft was negotiated among CBR, Pinnacle Vista Capital Partners III, LP (as selling stockholder), and the underwriters — Hargrove Keating & Co. (as representative), together with Linden Pratt Securities LLC, Graymont Brothers Inc., Barfield Stuart & Co., and Crane Whitley Capital LLC. Key negotiated terms include a 5.50% gross spread, 180-day lock-up, and 15% overallotment option. The underwriting agreement was never executed.
**d. Lock-Up Agreements**
Fifteen of eighteen identified lock-up signatories have executed the form of lock-up agreement. Three remain outstanding; execution was paused when the offering was postponed this morning.
**e. Comfort Letter**
An initial draft comfort letter was received from Ashford & Pemberton LLP (Gregory Sondheim) on June 8, 2022, covering FY 2019–2021 audited financial statements and Q1 2022 interim data. The three planned circle-ups (initial, bring-down, and pricing) were not completed.
**f. Lender Consents**
Draft consent request letters were prepared and transmitted to Veltrano National Bank with respect to the corporate credit facility ($400 million Revolver and $650 million Term Loan B). Notice letters were also prepared for Prairie Commercial Bank, N.A. with respect to the Mesquite Wind ($165 million) and Cimarron Solar ($143 million) construction facilities. Consent from Veltrano was in process but not finalized. A tax-equity consent request to Veltara Basin Financial LLC (the $280 million Solaris West partnership) was also in draft form. None of these consents were finalized or delivered.
**g. NYSE Listing Application**
A draft listing application (Application No. NYSE-2022-04218) was submitted on April 11, 2022. The application remains pending.
**h. FINRA Filing**
The corporate financing application (Filing No. 20221129-01) was submitted and remains pending.
**i. Corporate Governance Documents**
The following documents are in substantially final form: Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, Amended and Restated Stockholders' Agreement, Registration Rights Agreement, 2022 Omnibus Equity Incentive Plan (12,727,273-share reserve), 2022 Employee Stock Purchase Plan (2,545,455-share reserve), and forms of indemnification agreements. Board and stockholder resolutions — including written consent of Pinnacle Vista and the Founders representing greater than 90% of voting power — have been adopted. None of these documents have been filed or become effective, as effectiveness was conditioned on IPO closing.
**j. Negative Assurance / Legal Opinions**
Draft 10b-5 letters (from both Calderwood & Harkness and Prescott, Danforth & Yee LLP as underwriters' counsel) and draft legal opinions are substantially complete but have not been issued.
**k. D&O Insurance**
A $50 million aggregate D&O tower is in place:
- Primary: Meridian National Assurance Company (Policy No. DNO-22-048871) - Excess layers: Stonebridge Indemnity Corp. and Commonwealth Omnivrel Insurance Ltd. - Annual premium: $1.87 million
Current policy terms and renewal dates should be monitored during dormancy. I recommend that Dravello Place Insurance Advisors (Nina Radcliffe) be notified of the dormant status.
**l. Selling Stockholder Documentation**
The questionnaire and representation letter from Pinnacle Vista were completed. The custody agreement and power of attorney remain in draft.
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**3. File Preservation**
Calderwood & Harkness will maintain all work product, drafts, and correspondence in the firm's document management system under Matter No. 1015-00001. All documents remain subject to attorney-client privilege and work-product protection.
A few specific recommendations:
- The data room containing due diligence materials should remain accessible but can be placed in read-only mode. I recommend that your internal team coordinate with Priya Anand and Tomás Quintero to ensure underlying source materials — permits, contracts, financial records — remain organized and current during the dormancy period. - No public disclosure or press release is needed, since the S-1 was never publicly filed. - We should notify the broader working group of the dormant status, including the underwriters and their counsel at Prescott, Danforth & Yee, Pinnacle Vista's counsel at Whitfield Archer & Doss, auditors at Ashford & Pemberton, tax advisors at Kessler McBride, the transfer agent at Continental Shareowner Services, the financial printer at Ridgeway Financial Printing, and the IR advisor at Broadmark Strategic Communications. Calderwood & Harkness is happy to handle notifications to the professional advisors if CBR would prefer — just let me know.
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**4. Key Documents Requiring Updating Upon Reactivation**
When the time comes to reactivate the offering, the following workstreams will need attention:
**a. Financial Statements** — This is the most significant updating requirement. Under Regulation S-X Rule 8-08, if the offering is relaunched more than 135 days after CBR's fiscal year-end (December 31, 2021 — i.e., after approximately mid-May 2022, which we have now passed), audited FY 2022 financial statements will need to be included. Separately, interim financial statements will need to be updated for the most recently completed fiscal quarter at the time of relaunch. I recommend keeping Ashford & Pemberton (Gregory Sondheim and Irene Valdez) apprised of potential relaunch timing so they can plan their audit and review schedule accordingly.
**b. S-1 Amendment** — A new amendment will be required incorporating updated financial statements, refreshed MD&A, updated risk factors reflecting any material changes to the business, projects, regulatory landscape, or market conditions, and any changes to the capitalization table, use of proceeds, or other sections.
**c. Comfort Letter** — An entirely new comfort letter package from A&P will be required, covering the updated financial periods. All three circle-ups (initial, bring-down, pricing) will need to be completed fresh.
**d. Lock-Up Agreements** — The three outstanding lock-ups will need to be executed. The existing 15 executed lock-ups should be reviewed for continued validity; if stale or if signatories' circumstances have changed, re-execution may be needed.
**e. D&O Insurance** — Updated quotes may be needed depending on market conditions and policy renewal cycles. Fenwick Place should be engaged to refresh the placement.
**f. Lender Consents** — Consent processes with Veltrano National Bank, Prairie Commercial Bank, and Veltara Basin Financial will need to be re-initiated or refreshed, as the consents were tied to a specific offering timeline. Underlying debt balances and covenant compliance will also need to be verified at the time of relaunch (for reference, Term Loan B outstanding was $612.5 million as of the most recent reporting date; the Mesquite Wind facility conversion is due December 2024; the Cimarron Solar facility conversion is due March 2025).
**g. NYSE and FINRA Filings** — The listing application and FINRA corporate financing application will likely need to be amended or re-submitted.
**h. Legal Opinions and 10b-5 Letters** — These will need to be re-prepared and re-dated as of the new closing date.
**i. SEC Review** — Depending on the length of dormancy, the SEC may treat an updated filing as a new review or may expedite based on prior clearance. We will monitor SEC guidance and staff practice on this point.
**j. Project Status Updates** — Construction status for Mesquite Wind (expected COD Q3 2022) and Cimarron Solar (expected COD Q1 2023) should be updated. The development pipeline (currently 6.2 GW) and any new projects or changes should be reflected. CBR's operating portfolio (currently 3.8 GW operating, 1.4 GW under construction) will need to be refreshed.
**k. Section 409A and Equity Matters** — Any new equity grants or valuation events during the dormancy period will need to be analyzed for 409A compliance and cheap-stock exposure.
**l. Valuation / Pricing** — Market conditions and comparable company valuations will need to be reassessed by the underwriters. The assumed $22.00 midpoint and implied 19.4x EV/EBITDA multiple will be revisited at that time.
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**5. Quarterly Check-Ins**
I recommend scheduling quarterly check-in calls — tentatively early October 2022, early January 2023, early April 2023, and so on — among you, me, and Brendan Walsh to:
- Monitor market conditions and the IPO window for renewables-sector companies - Track any material changes to CBR's business, financial condition, or project portfolio - Assess relevant regulatory developments (ITC/PTC legislation, FERC/NERC matters) - Confirm financial-statement staleness timelines - Coordinate with Hargrove Keating (Oliver Marchetti) on market readiness
Calderwood & Harkness will prepare a brief written template for these quarterly status updates to keep the record organized and current.
On engagement matters: our engagement will continue on a reduced-activity basis during the dormancy period. The monthly retainer of $125,000 will be discussed separately between Ted Langston and Marcus with respect to any appropriate modification during dormancy. The success fee of $1,750,000 remains payable only upon pricing, consistent with our engagement letter.
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**6. Closing Thoughts**
Sandra, I want to acknowledge the extraordinary work your team put in — you, Marcus, Priya, and Garrett — to bring this offering from engagement on March 10 to SEC oral clearance in approximately three months. That is an exceptional pace for an IPO of this complexity, and the substantially complete registration statement, fully resolved SEC comments, and near-final transaction documents position CBR very well for a swift reactivation when the market turns.
This is a postponement, not an ending. The work product is preserved, the regulatory pathway is largely cleared, and the Company's fundamentals — 3.8 GW of operating capacity, strong contracted revenues, and a deep development pipeline — have not changed. We will be ready when you are.
I am available by phone over the weekend or early next week if you, Garrett, or Marcus would like to discuss any of the above. Please do not hesitate to reach out.
Best regards,
**Jennifer Kwon** Partner Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022 T: (212) 506-7200 jennifer.kwon@calderwoodharkness.com
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