Sandra,
I wanted to flag that we received the SEC Division of Corporation Finance's second-round comment letter on CBR's draft registration statement on Form S-1 this afternoon. The letter contains 7 follow-up comments on Amendment No. 1 (filed May 20, 2022, EDGAR Accession No. 0001948372-22-000002). I've attached the full comment letter for your review.
The good news is that 7 comments is a significant reduction from the 18 comments we received in the first round on May 6, which suggests the Staff is generally satisfied with the direction of the revisions in Amendment No. 1. The remaining comments are focused and, in our view, manageable. Below is our initial assessment, grouped by topic, along with a proposed response strategy.
**C&H Matter No. 1015-00001**
---
**1. HLBV Methodology (Comments 1–3)**
The Staff is requesting additional clarification on the Hypothetical-Liquidation-at-Book-Value methodology used for accounting for the Solaris West tax-equity partnership with Veltara Basin Financial LLC ($280 million invested, flip expected 2028). Specifically, they want more granular disclosure explaining how HLBV allocations affect reported revenue and earnings, including sensitivity to key assumptions.
As you know, Leonard Cross and Natasha Forbes have been coordinating with Ashford & Pemberton (Gregory Sondheim / Irene Valdez) and Kessler McBride & Associates (Alan Kessler / Linda McBride) on HLBV-related matters since the first round. We will need to circle back with both firms early next week to develop enhanced disclosure language.
*Proposed response:* Expand the HLBV methodology discussion in the critical accounting policies section of the MD&A and add a more detailed quantitative illustration of HLBV allocations, including a sensitivity table addressing the key assumptions the Staff has identified.
**2. PPA Revenue Detail (Comments 4–5)**
The Staff is requesting enhanced disclosure regarding the composition of revenue from power purchase agreements across CBR's 3.8 GW operating portfolio. They want a breakout of fixed-price versus market-indexed PPA revenue, weighted average remaining PPA terms, and counterparty concentration data.
*Proposed response:* Add a table or enhanced narrative in both the Business section and MD&A showing the PPA revenue breakdown. To prepare this, we will need data from Marcus and Priya — specifically, revenue by project, PPA terms, and counterparty information for Solaris West, Red Mesa Wind, Painted Rock Solar, Pronghorn Wind, and Brazos Storage. I will send a more specific data request separately by Monday at the latest.
**3. Non-GAAP Reconciliation (Comment 6)**
The Staff has follow-up comments on the Adjusted EBITDA reconciliation to GAAP net income. They are requesting clearer labeling and more prominent presentation of the reconciliation, consistent with SEC guidance on non-GAAP financial measures. As a reminder, our FY 2021 figures show $487.3 million in revenue, $218.6 million in Adjusted EBITDA, and $41.7 million in net income — the Staff wants the reconciling items between net income and Adjusted EBITDA broken out more granularly than what we currently present.
*Proposed response:* Revise the non-GAAP reconciliation table in MD&A and coordinate with A&P on presentation. This should be a relatively straightforward revision.
**4. Lock-Up Carve-Out Disclosure (Comment 7)**
The Staff is requesting enhanced disclosure regarding the carve-outs to the 180-day lock-up period. Specifically, they want a clearer description of the carve-outs for (a) transfers to affiliates, (b) estate-planning transfers, (c) 10b5-1 plan adoption (but not execution during the lock-up period), and (d) pledges to lenders. The Staff also wants disclosure of the early release mechanism — i.e., that release requires written consent of Hargrove Keating & Co. or the occurrence of a Change of Control.
*Proposed response:* Expand the lock-up discussion in both the "Shares Eligible for Future Sale" section and the "Underwriting" section of the prospectus. I will coordinate with Margaret Yee and Scott Halverson at Prescott, Danforth & Yee on the underwriting-section language, since these provisions derive from the underwriting agreement and lock-up agreement forms.
For everyone's awareness, 15 of 18 lock-up agreements have been executed as of today. This is a disclosure-only comment — it does not require any renegotiation of the lock-up terms themselves.
---
**Proposed Timeline and Next Steps**
We are targeting **June 10, 2022** — one week from today — for filing Amendment No. 2 and the response letter. This timeline is aggressive but achievable given the relatively focused nature of the comments.
Immediate action items:
1. **Sandra / Marcus:** Compile the PPA revenue detail and counterparty concentration data described above. I will circulate a specific data request by Monday. 2. **Leonard Cross:** Coordinate with A&P (Gregory Sondheim) and Kessler McBride (Alan Kessler) on enhanced HLBV disclosure language. Let's get a working session on the calendar for early next week. 3. **Natasha Forbes:** Prepare initial drafts of the revised non-GAAP reconciliation table and the expanded lock-up carve-out disclosure. 4. **Brendan:** Coordinate with Margaret Yee at PD&Y on the underwriting-section lock-up language. 5. **Jennifer Kwon:** Review and sign off on the consolidated response letter and Amendment No. 2 before filing.
One additional note: if the Staff is satisfied with our response and Amendment No. 2, we could receive oral clearance relatively quickly thereafter. I'd encourage everyone to be thinking about readiness for potential pricing discussions with the underwriters on a compressed timeline once we file. We should keep Hargrove Keating in the loop accordingly.
I'd like to suggest a **call Monday morning** — Sandra, Marcus, Jennifer, Leonard, Natasha, and I — to walk through the response strategy in detail and assign drafting responsibilities. I'll have my assistant send around a calendar invite shortly. Amendment No. 2 will be filed under EDGAR Accession No. 0001948372-22-000003.
Sandra, we are of course available over the weekend if you or Marcus would like to discuss any of this before Monday. Please don't hesitate to call or email.
Best regards,
**Brendan Walsh** Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022 T: (212) 479-6300 bwalsh@calderwoodharkness.com
**Attachment:** SEC Division of Corporation Finance Comment Letter dated June 3, 2022 (7 comments) — Amendment No. 1 to the Draft Registration Statement on Form S-1 of Calloway-Briggs Renewables Inc. (SEC CIK 0001948372)
---
*CONFIDENTIALITY NOTICE: This email and any attachments are confidential, may be protected by the attorney-client privilege and/or the work product doctrine, and are intended solely for the use of the individual or entity to whom they are addressed. If you are not the intended recipient, please notify the sender immediately and delete this message and any attachments. Any unauthorized review, use, disclosure, or distribution is strictly prohibited. Thank you.*