PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT
QUARTERLY STATUS UPDATE
Proposed Initial Public Offering of Common Stock of [Insert Issuer Full Legal Name]
Prepared by
CALDERWOOD & HARKNESS LLP 599 Lexington Avenue New York, NY 10022
Matter No. [Insert C&H Matter Number]
Template Classification: This document is a template for periodic written status updates from Calderwood & Harkness LLP to issuer management during the dormancy period of a postponed initial public offering. It is intended for quarterly distribution by the responsible partner or lead associate assigned to the matter. All bracketed fields should be completed with current information prior to distribution.
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT
[Insert Date of Update]
TO: [Insert Name], General Counsel & Corporate Secretary, [Insert Issuer Short Name]
CC: [Insert Name], Chairman & Chief Executive Officer [Insert Name], Chief Financial Officer [Insert Name], Senior Vice President, Finance & Treasurer
FROM: [Insert Name], Responsible Partner, Capital Markets, Calderwood & Harkness LLP
RE: Quarterly Status Update — Proposed Initial Public Offering of Common Stock of [Insert Issuer Full Legal Name] (C&H Matter No. [Insert Matter Number])
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT
This memorandum and all attachments hereto are protected by the attorney-client privilege and/or constitute attorney work product. This communication is intended solely for the use of the addressees identified above and other authorized representatives of [Insert Issuer Short Name]. Unauthorized disclosure, copying, distribution, or use of this memorandum or any information contained herein is strictly prohibited. If you have received this communication in error, please notify Calderwood & Harkness LLP immediately at (212) 558-4000.
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I. INTRODUCTION AND SUMMARY
Calderwood & Harkness LLP ("C&H" or the "Firm") represents [Insert Issuer Full Legal Name] ("[Insert Issuer Short Name]" or the "Company") in connection with the proposed initial public offering (the "Offering" or the "IPO") of approximately $[Insert Aggregate Offering Size] of shares of the Company's common stock, par value $0.01 per share, on the [Insert Exchange Name] under the proposed ticker symbol "[Insert Ticker]." Our representation is governed by the terms of the engagement letter dated [Insert Engagement Date] between Calderwood & Harkness LLP and the Company (as amended from time to time, the "Engagement Letter").
As the addressees are aware, the Offering was placed in dormant status on [Insert Dormancy Date] (the "Dormancy Date") following the closing of the [Insert Industry]-sector IPO window and a material deterioration in broader equity capital markets conditions. At the time the Offering was placed in dormancy, market volatility, compressed valuations across the renewable energy sector, and reduced institutional investor appetite for growth-stage issuers in the [Insert Industry] space rendered it inadvisable to proceed with the marketing and pricing of the Offering.
Prior to the Dormancy Date, the Company confidentially submitted a draft registration statement on Form S-1 (the "Registration Statement") to the U.S. Securities and Exchange Commission (the "SEC") pursuant to Section 6(e) of the Securities Act of 1933, as amended (the "Securities Act"), in reliance on the accommodations available to emerging growth companies under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). The Company's SEC Central Index Key is [Insert CIK]. The staff of the SEC's Division of Corporation Finance (the "Staff") indicated oral clearance on [Insert Clearance Date], subject to the filing of a pricing amendment reflecting the final offering terms. However, no public filing of the Registration Statement has been made, no pricing of the Offering has occurred, and the Registration Statement has not been declared effective by the SEC. Accordingly, no shares of the Company's common stock have been offered or sold in the Offering, and the Company remains a non-reporting issuer under the Securities Exchange Act of 1934, as amended.
The purpose of this communication is to provide [Insert Issuer Short Name] management with a quarterly status update on matters relevant to the dormant Offering, including: (i) an overview of current equity capital markets conditions and sector-specific IPO activity; (ii) a summary of relevant regulatory and legislative developments; (iii) a monitoring assessment of financial statement staleness under Regulation S-X; (iv) a status report on key transaction documents and third-party engagements; (v) a request for information regarding Company developments that may necessitate disclosure updates to the Registration Statement; and (vi) recommended action items and reactivation planning considerations.
This update is based on information available to the Firm as of [Insert Cut-off Date] (the "Cut-off Date") and is intended to keep [Insert Issuer Short Name] management informed so that the Offering can be recommenced expeditiously when market conditions improve and the Company determines that it is in the best interests of the Company and its stockholders to proceed. We note that the dormant status of the Offering does not terminate or suspend the attorney-client relationship between the Firm and the Company. Our engagement under Matter No. [Insert Matter Number] remains open and active, and the Firm continues to monitor developments relevant to the Offering on an ongoing basis.
We recommend that the Company's management review this update carefully and contact the undersigned or any member of the Calderwood & Harkness working group identified in Section X below with any questions, corrections, or additional information.
II. MARKET CONDITIONS SUMMARY
A. General Equity Capital Markets Overview
[Instruction to Drafting Attorney: Insert a summary of overall equity capital markets activity during the quarter covered by this update. The summary should address, at a minimum, the following topics: (i) aggregate IPO volume (number of offerings and aggregate proceeds raised) during the quarter, with comparison to the prior quarter and the same quarter of the prior year; (ii) average deal sizes and pricing performance (e.g., percentage of deals pricing within, above, or below the filing range); (iii) aftermarket performance of recent IPOs (e.g., average first-day returns and performance relative to broader indices through the end of the quarter); (iv) general investor appetite for new issue equity, including any notable trends in institutional allocation, retail participation, or geographic demand; and (v) any significant macroeconomic factors influencing market conditions (e.g., interest rate environment, inflation data, geopolitical events, Federal Reserve policy).]
[Instruction: Data for this section should be drawn from the lead book-running manager's ([Insert Lead-Left Book-Runner Name]) quarterly equity capital markets reports, market update presentations, or similar internal publications. The lead associate should request the most recent ECM market update from [Insert Lead-Left Book-Runner Name]'s ECM desk (contact: [Insert ECM Contact Name], [Insert Phone], [Insert Email]) in advance of preparing this update.]
[Instruction: In addition, the lead associate should coordinate with the Company's investor relations advisor, [Insert IR Advisor Name] (contact: [Insert Contact Name], [Insert Phone], [Insert Email]), for supplemental market intelligence, including investor sentiment data, sector-specific demand indicators, and any feedback from the Company's ongoing investor relations activities that may be relevant to assessing the timing of a potential relaunch.]
B. Renewable Energy / Clean Energy Sector IPO Activity
[Instruction to Drafting Attorney: Insert a summary of IPO and follow-on equity offering activity specifically within the renewable energy, clean energy, and utility-scale power sectors during the quarter. This summary should address: (i) the number and size of IPOs by companies in the renewable energy or adjacent sectors, if any; (ii) the pricing and aftermarket performance of any such offerings; (iii) trading multiples for publicly listed comparable companies in the sector (e.g., EV/EBITDA, EV/Revenue, Price/Earnings) and any changes in those multiples during the quarter; and (iv) the general state of the "IPO window" for renewable energy companies.]
[Instruction: When discussing comparable company trading multiples, include a comparison to [Insert Issuer Short Name]'s implied valuation at the filing-range midpoint. As of the Dormancy Date, the implied FY [Insert Year] EV/EBITDA multiple for [Insert Issuer Short Name] was approximately [Insert Multiple]x based on the filing-range midpoint price of $[Insert Price] per share and the Company's projected Adjusted EBITDA for FY [Insert Year]. The lead associate should update this comparison using the most recently available consensus estimates and comparable company data.]
[Instruction: The lead associate should provide an assessment of whether the IPO window for renewable energy companies has reopened (i.e., whether multiple comparable companies have successfully completed IPOs at or above their filing ranges with positive aftermarket performance), remains partially open (i.e., some activity but limited to best-in-class issuers with highly differentiated stories), or remains unfavorable (i.e., no meaningful IPO activity in the sector, compressed valuations, and limited investor engagement). This assessment should be informed by conversations with the underwriter syndicate and the IR advisor.]
C. Market Conditions Affecting [Insert Issuer Short Name] Specifically
[Instruction to Drafting Attorney: Insert a discussion of any developments during the quarter that specifically affect [Insert Issuer Short Name]'s market positioning and the attractiveness of its investment thesis to potential IPO investors. This discussion should address, as applicable: (i) movements in relevant commodity prices (e.g., natural gas prices, wholesale power prices, renewable energy certificate prices) and the impact on the Company's revenue projections and contracted PPA economics; (ii) changes in the interest rate environment and the impact on the Company's cost of capital, project-finance economics, and the relative attractiveness of yield-oriented infrastructure investments; (iii) federal and state policy developments affecting renewable energy demand, subsidies, or regulatory treatment (cross-reference to Section III.D below for detailed discussion); (iv) competitive developments, including announcements by peer companies regarding new project awards, financing transactions, M&A activity, or operational milestones; and (v) any other sector-specific or Company-specific developments that may affect investor perception or valuation.]
[Instruction: The lead associate should note any communications received from the underwriter syndicate during the quarter regarding market readiness for the Company's Offering. This includes any formal or informal communications from the lead-left book-running manager, [Insert Lead-Left Name], the joint book-running managers, [Insert Joint Book-Runners], or the co-managers, [Insert Co-Managers]. If no communications have been received, state that no communications regarding market readiness have been received from the underwriter syndicate during the quarter. If the lead associate has proactively contacted any syndicate member for a market check, summarize the substance of those conversations here.]
III. REGULATORY AND LEGISLATIVE DEVELOPMENTS
A. SEC Regulatory Developments
[Instruction to Drafting Attorney: Insert a summary of any SEC rulemaking actions, proposed rules, final rules, staff guidance, no-action letters, staff legal bulletins, or other SEC pronouncements issued during the quarter that are relevant to the Registration Statement, the Company's IPO disclosure obligations, or the Company's status as an emerging growth company ("EGC") under the JOBS Act. Topics to address include, as applicable:]
(i) Any amendments or proposed amendments to Regulation S-K (disclosure requirements for non-financial statement information in registration statements and periodic reports), including changes to the description of business, risk factors, MD&A, executive compensation, or related-party transaction disclosure requirements;
(ii) Any amendments or proposed amendments to Regulation S-X (financial statement requirements), including changes to the age of financial statements, interim financial data requirements, pro forma financial information requirements, or acquired business financial statement requirements;
(iii) Any changes to EGC accommodations, including changes to the revenue threshold for EGC qualification (currently $1.235 billion, as adjusted by the SEC pursuant to the JOBS Act inflation-indexing provision), changes to the reduced financial statement presentation requirements, or changes to the exemption from the auditor attestation requirement under Section 404(b) of the Sarbanes-Oxley Act of 2002;
(iv) Any SEC guidance regarding confidential draft registration statement submissions under Section 6(e) of the Securities Act, including any changes to the Staff's approach to the timing of public filing relative to the commencement of a roadshow;
(v) Any SEC enforcement actions, Staff speeches, or SEC releases that may affect IPO practices, underwriter due diligence standards, or disclosure norms for companies in the renewable energy sector; and
(vi) Any other SEC developments that the Firm believes are relevant to the Company's Offering.
[Instruction: The lead associate should confirm whether the Company continues to qualify as an EGC. As of the Dormancy Date, the Company qualified as an EGC based on total annual gross revenues below the $1.235 billion threshold for the most recently completed fiscal year (FY [Insert Year] total revenues: $[Insert Amount]). The lead associate should verify whether the Company's revenues for any subsequently completed fiscal year have exceeded this threshold or whether any other EGC disqualification event has occurred (e.g., the Company has issued more than $1.0 billion in non-convertible debt during the prior three-year period, or the Company has become a "large accelerated filer").]
B. FINRA Developments
[Instruction to Drafting Attorney: Insert a summary of any changes to the Financial Industry Regulatory Authority ("FINRA") rules or interpretations relevant to the underwriting of the Company's Offering during the quarter. In particular, address the following:]
(i) Any amendments or proposed amendments to FINRA Rule 5110 (Corporate Financing Rule — Underwriting Terms and Arrangements), including changes to the underwriting compensation limits, lock-up provisions, venture-capital or private-equity exceptions, or the valuation methodology for non-cash compensation items;
(ii) Any amendments or proposed amendments to FINRA Rule 5121 (Public Offerings of Securities with Conflicts of Interest) that may be relevant if any member of the underwriter syndicate has a conflict of interest (e.g., due to an affiliation with a significant stockholder of the Company);
(iii) Any FINRA regulatory notices, interpretive letters, or staff guidance addressing IPO practices, free-riding and withholding restrictions, or other matters relevant to the distribution of the Company's shares; and
(iv) Any developments affecting the status of the FINRA corporate financing filing for the Company's Offering (Filing No. [Insert FINRA Filing No.]).
[Instruction: The lead associate should confirm that the FINRA filing remains on file and has not been withdrawn or closed. If the filing has been inactive for an extended period, the lead associate should consider whether FINRA may have administratively closed the filing and whether a new filing or supplemental filing would be required upon reactivation.]
C. NYSE Listing Standards
[Instruction to Drafting Attorney: Insert a summary of any changes to the New York Stock Exchange ("NYSE") listing standards, corporate governance requirements, or related rules or guidance during the quarter that are relevant to the Company's planned listing. Topics to address include:]
(i) Any changes to the NYSE's quantitative listing standards, including the minimum market capitalization, minimum share price, minimum number of publicly held shares, minimum number of round lot holders, and pre-tax earnings requirements (or alternatives);
(ii) Any changes to the NYSE's qualitative listing standards or corporate governance requirements, including board independence requirements, audit committee requirements (including the financial expert requirement), compensation committee requirements, nominating/corporate governance committee requirements, code of business conduct requirements, or stockholder approval requirements;
(iii) Any changes to the NYSE's controlled-company exemption (the Company may qualify for this exemption if [Insert Controlling Stockholder Name] retains more than 50% of the combined voting power of the Company's outstanding capital stock following the Offering);
(iv) Any changes to the NYSE's policies regarding dual-class share structures or unequal voting rights, if applicable to the Company's proposed capital structure; and
(v) Any developments affecting the status of the Company's NYSE listing application (Application No. [Insert NYSE Application No.]).
[Instruction: The lead associate should confirm that the NYSE listing application remains on file and that the NYSE has not indicated any concerns about the dormancy period. If the application has been inactive for an extended period, the lead associate should consider whether the NYSE may require a supplemental application or updated financial and operating data upon reactivation.]
D. Tax and Energy Policy Developments
[Instruction to Drafting Attorney: Insert a summary of legislative and regulatory developments during the quarter affecting the renewable energy sector's federal and state tax incentive framework. This section is critically important to the Company's investment thesis and should be prepared with input from the Company's tax advisor and the Firm's tax specialist. Topics to address include:]
(i) Any changes (enacted, proposed, or under active consideration) to the Investment Tax Credit ("ITC") under Section 48 of the Internal Revenue Code of 1986, as amended (the "Code"), or the clean energy investment tax credit under Section 48E of the Code, including changes to the credit rate, eligible technologies, placed-in-service deadlines, safe-harbor provisions, domestic content requirements, energy community bonus credit requirements, or prevailing wage and apprenticeship requirements;
(ii) Any changes (enacted, proposed, or under active consideration) to the Production Tax Credit ("PTC") under Section 45 of the Code or the clean electricity production tax credit under Section 45Y of the Code, including changes to the credit rate, eligible technologies, inflation adjustments, or placed-in-service deadlines;
(iii) Any changes to transferability provisions under Section 6418 of the Code or direct pay (elective payment) provisions under Section 6417 of the Code, which may affect the monetization of tax credits by the Company or its project subsidiaries;
(iv) Any IRS guidance, Treasury regulations, proposed regulations, or notices relevant to the Company's tax-equity partnership structures, including guidance on the hypothetical liquidation at book value ("HLBV") methodology, allocation of tax credits among partners, and the economic substance of partnership flip structures;
(v) Any safe-harbor guidance or changes affecting the Company's ability to satisfy safe-harbor requirements for projects currently under development or construction (e.g., the "begun construction" safe harbor under IRS Notice 2013-29 and subsequent guidance);
(vi) Any state-level tax or incentive program changes affecting the Company's project portfolio (e.g., changes to state renewable portfolio standards, clean energy standards, or state-level tax credits); and
(vii) Any broader tax reform proposals or legislation that could affect the Company's effective tax rate, deferred tax assets/liabilities, or the valuation of the Company's project portfolio.
[Instruction: The lead associate should coordinate with the Company's external tax advisor, [Insert Tax Advisor Name] (contacts: [Insert Contact Names]), and Calderwood & Harkness tax specialist, [Insert Tax Partner Name], for input on this section. Given the complexity of the renewable energy tax incentive framework and the centrality of tax-equity financing to the Company's business model, this coordination is essential. The lead associate should request a written summary of tax developments from the tax advisor and tax specialist at least two weeks before the target distribution date for this update.]
[Instruction: Note any developments that could trigger an ITC recapture event or otherwise adversely affect the Company's existing tax-equity partnership structures or the economics of the Company's project portfolio. Also note any developments affecting the Company's ability to structure future tax-equity partnerships on terms consistent with historical practice.]
E. Environmental and Permitting Developments
[Instruction to Drafting Attorney: Insert a summary of any changes to federal or state environmental regulations, permitting requirements, or enforcement trends during the quarter that affect utility-scale renewable energy projects, including solar, wind, and energy storage facilities. Topics to address include:]
(i) Any changes to the National Environmental Policy Act ("NEPA") review process for energy projects on federal lands or requiring federal permits;
(ii) Any changes to Endangered Species Act ("ESA") compliance requirements, including changes to critical habitat designations, species listings, or incidental take permit processes relevant to wind or solar development;
(iii) Any changes to Clean Water Act Section 404 permitting requirements, stormwater permitting, or wetlands mitigation requirements affecting project siting and development;
(iv) Any changes to Federal Aviation Administration ("FAA") obstruction evaluation or lighting requirements for wind energy projects;
(v) Any changes to state or local permitting processes, zoning requirements, or siting standards for utility-scale renewable energy projects in states where the Company has active projects or development pipeline;
(vi) Any environmental enforcement actions, consent decrees, or regulatory settlements involving renewable energy companies that may signal changes in enforcement priorities or compliance expectations; and
(vii) Any developments related to interconnection queue reform, transmission planning, or grid reliability standards that may affect the Company's ability to interconnect new projects or the timeline for achieving commercial operation.
[Instruction: The lead associate should coordinate with the Company's environmental consultant, [Insert Environmental Consultant Name] (contact: [Insert Contact Name], [Insert Phone], [Insert Email]), for input on this section. Any project-specific environmental or permitting developments should be cross-referenced with the Company's project portfolio status updates discussed in Section VII below.]
IV. REGISTRATION STATEMENT AND SEC CORRESPONDENCE STATUS
A. Current Status of Registration Statement
The following is a summary of the current status of the Registration Statement as of the Cut-off Date:
Confidential Submissions: The Company has made [Insert number] confidential draft registration statement ("DRS") submissions and amendments to the SEC pursuant to Section 6(e) of the Securities Act and the JOBS Act.
SEC Comment Letters: The Staff issued [Insert number] comment letter(s) containing a total of [Insert total number of comments] comments across all rounds. The Company responded to each round of comments with a corresponding amendment to the DRS and a responsive letter prepared by the Firm.
Oral Clearance: The Staff indicated oral clearance of the Registration Statement on [Insert Clearance Date], subject to the filing of a pricing amendment (reflecting the final public offering price, underwriting discounts and commissions, and net proceeds) and any conforming changes. Oral clearance was communicated by [Insert Staff Examiner Name], Senior Staff Attorney, Office of [Insert Office Name], Division of Corporation Finance, to [Insert C&H Attorney Name] of Calderwood & Harkness.
Effectiveness: The Registration Statement has not been declared effective by the SEC. No request for acceleration of effectiveness has been filed.
Public Filing: No public filing of the Registration Statement has been made. All submissions to date have been made on a confidential basis under the JOBS Act.
Most Current Version: The most current version of the Registration Statement is Amendment No. [Insert Number] to the DRS (EDGAR Accession No. [Insert Accession Number]), which was submitted to the SEC on [Insert Date].
B. SEC Comment Resolution Status
All [Insert total number] SEC comments received across [Insert number] rounds of the Staff review process have been fully resolved as of the most recent amendment (Amendment No. [Insert Number]). The Staff's indication of oral clearance on [Insert Clearance Date] confirmed the resolution of all outstanding comments, subject to the pricing amendment.
During the dormancy period (from the Dormancy Date through the Cut-off Date), no additional SEC comment letters, telephone calls, or other communications have been received from the Staff regarding the Registration Statement. The Firm has not received any indication from the Staff that it intends to reopen its review or raise additional comments.
[Instruction: If any new SEC correspondence has been received during the quarter, describe it here in detail, including the date received, the nature of the communication, the Staff member involved, and the substance of any comments or concerns raised. If a responsive action was taken, describe that action and its current status.]
C. Outstanding SEC Matters
[Instruction to Drafting Attorney: Insert a discussion of any outstanding SEC matters, including: (i) whether the Staff has made any inquiries or expressed any concerns about the extended dormancy period or the staleness of the confidential submission; (ii) whether the Staff has indicated that it may conduct a "re-review" or "targeted review" of the Registration Statement upon resubmission after a prolonged dormancy period; (iii) whether any changes in SEC personnel (e.g., assignment of a new examiner or change in the reviewing office) may affect the review process upon reactivation; and (iv) whether any pending SEC rulemaking or guidance (as discussed in Section III.A above) would require substantive changes to the Registration Statement that could trigger additional Staff comments upon resubmission.]
[Instruction: If there are no outstanding SEC matters to report, state that there are no outstanding SEC matters as of the Cut-off Date, but note the possibility that a prolonged dormancy period may result in a targeted re-review upon resubmission, particularly if the updated Registration Statement contains substantive changes to the risk factors, business description, MD&A, or financial statements.]
V. FINANCIAL STATEMENT STALENESS MONITORING
A. Current Financial Statements in the Registration Statement
The financial statements currently included in the most recent draft of the Registration Statement (Amendment No. [Insert Number]) are as follows:
Audited Financial Statements: Audited consolidated financial statements of [Insert Issuer Full Legal Name] for the fiscal years ended [Insert Years] (e.g., December 31, 20XX and December 31, 20XX), including the consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income (loss), consolidated statements of changes in stockholders' equity (deficit), and consolidated statements of cash flows, together with the notes thereto and the report of the independent registered public accounting firm.
Auditor: [Insert Auditor Name] (PCAOB ID No. [Insert PCAOB ID]); lead engagement partner: [Insert Partner Name].
Unaudited Interim Financial Data: Unaudited condensed consolidated financial statements for the [Insert Interim Period] (e.g., the six months ended June 30, 20XX and the comparative prior-year period), including the condensed consolidated balance sheet, condensed consolidated statements of operations, condensed consolidated statements of comprehensive income (loss), condensed consolidated statements of changes in stockholders' equity (deficit), and condensed consolidated statements of cash flows, together with the notes thereto. These interim financial statements were reviewed (but not audited) by [Insert Auditor Name] in accordance with the standards of the Public Company Accounting Oversight Board.
B. Staleness Rules Under Regulation S-X
The financial statements included in a registration statement on Form S-1 are subject to the "age of financial statements" requirements set forth in Rule 8-08 of Regulation S-X (applicable to smaller reporting companies and, by Staff practice, generally applied to EGC issuers relying on the scaled disclosure accommodations of the JOBS Act) and related Staff guidance. These rules establish the deadlines by which financial statements included in a registration statement become "stale" and must be updated before the registration statement can be declared effective and the offering can proceed. The applicable staleness framework is summarized below.
Audited Annual Financial Statements. If the registration statement is expected to become effective (or, in the case of a confidential submission, be publicly filed and subsequently become effective) more than 135 days after the end of the registrant's most recently completed fiscal year, the registration statement must include audited financial statements for that fiscal year. For example, if the Company's fiscal year ends on December 31 and the Offering is relaunched after May 15 of the following year (i.e., more than 135 days after December 31), the Registration Statement must include audited consolidated financial statements for the fiscal year ended December 31 of the most recently completed year.
Unaudited Interim Financial Statements. If the registration statement is expected to become effective more than 135 days after the end of the most recently completed interim period (for this purpose, interim periods end on March 31, June 30, and September 30 for a December 31 fiscal-year-end issuer), the registration statement must include unaudited interim financial statements for that interim period (or a subsequent interim period). This requirement ensures that investors have access to financial data that is no more than approximately 135 days old at the time of effectiveness.
Based on these rules and the Company's fiscal year ending December 31, the specific staleness dates for the financial statements currently included in the draft Registration Statement are as follows:
[Instruction: Insert the specific staleness date for the audited annual financial statements currently in the S-1. For example: "The audited consolidated financial statements for FY 20XX and FY 20XX currently included in the Registration Statement will become stale on [Insert Date] (i.e., 135 days after December 31, 20XX). After that date, audited consolidated financial statements for FY 20XX must be included in the Registration Statement before it can be declared effective."]
[Instruction: Insert the specific staleness date for the unaudited interim financial statements currently in the S-1. For example: "The unaudited condensed consolidated financial statements for the six months ended June 30, 20XX currently included in the Registration Statement will become stale on [Insert Date] (i.e., 135 days after June 30, 20XX). After that date, unaudited condensed consolidated financial statements for the nine months ended September 30, 20XX (or a subsequent interim period) must be included in the Registration Statement before it can be declared effective."]
Assessment as of the Cut-off Date. [Instruction: Insert an assessment of whether the financial statements currently in the Registration Statement are stale as of the Cut-off Date. If they are stale, identify the updated financial periods that must be reflected in the Registration Statement before the Offering can be relaunched. If they are not yet stale, identify the upcoming staleness date and the amount of time remaining before the current financial statements become stale.]
C. Required Financial Statement Updates for Reactivation
Based on the staleness analysis above, the following table identifies the updated financial statements that would need to be prepared and audited or reviewed for reactivation of the Offering as of the Cut-off Date:
[Instruction: For each financial period identified as "Required" in the table above, insert the estimated timeline for [Insert Auditor Name] to complete the required audit or review, based on the most recent discussions with the auditor. Include any known dependencies (e.g., completion of year-end close, availability of project-level financial data, resolution of any accounting issues identified by the auditor) and any preliminary timeline estimates provided by the auditor.]
Comfort Letter. Upon reactivation of the Offering, a refreshed comfort letter (the [Insert Number, e.g., "third"] circle-up to the original comfort letter) will be required from [Insert Auditor Name] pursuant to the terms of the underwriting agreement. The comfort letter will need to cover the updated financial periods, any "capsule" financial information included in the prospectus, and the customary negative assurance and specified procedures deliverables. The Firm will coordinate with [Insert Auditor Name] (contact: [Insert Contact Name], [Insert Phone], [Insert Email]) and the underwriter syndicate regarding the scope and timing of the refreshed comfort letter once a reactivation timeline is established.
VI. KEY DOCUMENT STATUS AND PRESERVATION
A. Registration Statement and Prospectus
The substantially complete draft of the Registration Statement (Amendment No. [Insert Number] to the DRS) is preserved in the Firm's document management system (DMS) under Matter No. [Insert Matter Number], Document ID [Insert Document ID]. A complete set of all prior versions, blackline comparisons, SEC comment letters, and response letters is also maintained in the DMS under the same matter number.
Upon reactivation of the Offering, the following sections of the Registration Statement will require substantive updating, at a minimum:
• Financial Statements: Updated audited annual and unaudited interim financial statements, as described in Section V above.
• Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"): Updated discussion of results of operations, liquidity and capital resources, and critical accounting estimates for the updated financial periods.
• Risk Factors: Review and update of all risk factors to reflect current conditions, including any new risks arising from developments during the dormancy period.
• Capitalization Table: Updated capitalization table reflecting any changes in the Company's capital structure since the Dormancy Date, including new equity issuances, debt incurrence or repayment, and equity award grants or exercises.
• Dilution Analysis: Updated dilution analysis based on the updated capitalization and any changes in net tangible book value.
• Selected Consolidated Financial Data: Updated selected financial data for the additional reporting periods.
• Pro Forma Financial Information: Updated pro forma financial information, if applicable, to reflect any transactions completed since the Dormancy Date that would require pro forma presentation.
• Project Portfolio Status: Updated descriptions of the Company's operating, construction-stage, and development-stage projects, including any projects that have achieved commercial operation, entered construction, been delayed, or been cancelled since the Dormancy Date.
• Use of Proceeds: Review and potential update of the use of proceeds disclosure to reflect current plans.
• Description of Material Indebtedness: Updated descriptions of the Company's credit facilities, project-finance arrangements, and tax-equity partnerships to reflect any amendments, refinancings, or new arrangements.
• Business Section: General review and update of the business description to reflect current operations, strategy, and competitive positioning.
• Cover Page and Summary: Conforming updates to reflect any changes in the foregoing sections.
B. Underwriting Agreement
The underwriting agreement (the "Underwriting Agreement") among the Company, [Insert Selling Stockholder Name(s), if any], and the underwriters named therein is in near-final draft form as of the Dormancy Date. The Underwriting Agreement has not been executed.
The pricing agreement (the "Pricing Agreement"), which is a separate agreement to be entered into at the time of pricing and which sets forth the public offering price, the underwriting discounts and commissions, and the number of shares to be sold, remains in blank template form.
Upon reactivation, the following provisions of the Underwriting Agreement may need to be reviewed and updated:
• Representations and warranties regarding the accuracy and completeness of the Registration Statement and the financial statements included therein (to be updated to refer to the current financial periods and any new information).
• Bring-down conditions (to the extent tied to specific dates or periods that will have changed).
• Material adverse change/material adverse effect ("MAC/MAE") representations and conditions (to the extent referencing specific dates or baseline periods).
• Indemnification provisions (routine review for any changes in law or practice).
• Lock-up provisions (to the extent referencing specific dates or release mechanisms).
• Any provisions referencing specific third-party agreements, consents, or approvals that may have changed.
The Firm will circulate an updated draft of the Underwriting Agreement to counsel for the underwriters ([Insert Underwriters' Counsel Name], contacts: [Insert Contact Names]) at the appropriate time upon reactivation.
C. Lock-Up Agreements
As of the Dormancy Date, [Insert Number] of [Insert Total Number] lock-up agreements (the "Lock-Up Agreements") had been executed and delivered by the Company's directors, executive officers, and significant stockholders. The following [Insert Number] Lock-Up Agreements remain outstanding:
[Instruction: Insert a list of the parties who have not yet executed Lock-Up Agreements, together with their title/position and the reason for non-execution, if known. For example:]
1. [Insert Name], [Insert Title] — Lock-Up Agreement circulated on [Insert Date]; execution deferred pending completion of personal estate-planning review.
2. [Insert Name], [Insert Title] — Lock-Up Agreement circulated on [Insert Date]; execution deferred due to [Insert Reason].
The Lock-Up Agreements are in the standard form required by the lead book-running manager and provide for a lock-up period of [Insert Number] days following the date of the final prospectus, subject to customary exceptions. Because the Lock-Up Agreements reference the date of the final prospectus (which has not yet been issued), the lock-up period has not commenced.
If the Offering is relaunched after a significant period of dormancy, the underwriter syndicate may require that all Lock-Up Agreements be re-executed or re-dated to ensure that the lock-up period is measured from the date of the final prospectus issued in connection with the relaunched Offering. The Firm will coordinate with the lead book-running manager and underwriters' counsel on this matter upon reactivation.
D. Corporate Governance Documents
The following corporate governance documents were prepared in connection with the Offering and are maintained in the Firm's DMS under Matter No. [Insert Matter Number]:
• Amended and Restated Certificate of Incorporation: Final draft, to be filed with the Secretary of State of the State of [Insert State] immediately prior to the closing of the Offering.
• Amended and Restated Bylaws: Final draft, to be adopted by the board of directors immediately prior to the closing of the Offering.
• Stockholders' Agreement: Near-final draft, to be entered into among the Company, [Insert Controlling Stockholder Name], and certain other stockholders at the closing of the Offering.
• Registration Rights Agreement: Near-final draft, to be entered into among the Company and certain stockholders at the closing of the Offering.
• [Insert Year] Equity Incentive Plan: Adopted by the board of directors on [Insert Date]; stockholder approval obtained on [Insert Date]. [Instruction: Confirm that stockholder approval remains valid and has not lapsed.]
• [Insert Year] Employee Stock Purchase Plan: Adopted by the board of directors on [Insert Date]; stockholder approval obtained on [Insert Date]. [Instruction: Confirm that stockholder approval remains valid and has not lapsed.]
• Board and Stockholder Resolutions: Resolutions authorizing the Offering, the filing of the Registration Statement, and the execution of the transaction documents were adopted by the board of directors on [Insert Date] and by the stockholders on [Insert Date]. [Instruction: Confirm that these resolutions remain valid and have not been superseded.]
[Instruction: Identify any corporate governance documents that may require updating upon reactivation, including: (i) if there have been changes in board composition, updated references to directors and committee memberships; (ii) if new equity grants have been made under the equity incentive plan, updated share reserve calculations and disclosure; (iii) if stockholder approvals have lapsed or been superseded, any need for re-approval; and (iv) any other governance changes that would require document updates.]
E. Lender Consents and Notices
The following lender consent requests and notices were prepared in connection with the Offering:
• Credit Facility Consent: Draft consent request to [Insert Administrative Agent Name], as administrative agent under the Company's $[Insert Amount] [Insert Type] Credit Agreement dated [Insert Date] (the "Credit Agreement"), requesting consent to the Offering and related transactions. Status: [Instruction: Insert current status — e.g., "Draft circulated to administrative agent's counsel on [Insert Date]; consent not yet obtained" or "Consent obtained on [Insert Date]; confirm whether consent remains valid."]
• Project-Finance Lender Notices: Draft notice letters to [Insert Project-Finance Lender Name], as lender under the project-finance facilities for [Insert Project Names], notifying the lender of the proposed change of control or change of ownership structure resulting from the Offering. Status: [Instruction: Insert current status.]
• Tax-Equity Investor Consent: Draft consent request to [Insert Tax-Equity Investor Name], as tax-equity investor under the [Insert Partnership Name] tax-equity partnership agreement dated [Insert Date], requesting consent to the Offering and related transactions. Status: [Instruction: Insert current status.]
[Instruction: Note whether any consents previously obtained have expired by their terms (e.g., consents conditioned on the Offering closing within a specified period after the consent date) or would need to be refreshed upon reactivation. Also note whether any new credit agreements, project-finance facilities, or tax-equity arrangements entered into during the dormancy period would require additional consents or notices.]
F. D&O Insurance
The Company's directors' and officers' liability insurance program (the "D&O Insurance") was structured in connection with the Offering to provide appropriate coverage for a public-company board and management team. The D&O Insurance tower consists of the following:
• Aggregate Limit: $[Insert Aggregate Amount]
• Primary Carrier: [Insert Carrier Name], Policy No. [Insert Policy Number]
• Excess Carriers: [Insert Names of Excess Carriers and Policy Numbers]
• Policy Period: [Insert Policy Period, e.g., "[Insert Start Date] to [Insert End Date]"]
• Insurance Broker: [Insert Insurance Broker Name] (contact: [Insert Contact Name], [Insert Phone], [Insert Email])
• Annual Premium (Last Quote): $[Insert Amount]
[Instruction: Confirm whether the current D&O policy has been renewed since the Dormancy Date. If the policy period has expired and the policy has not been renewed on IPO-ready terms, note that updated quotes and policy terms should be obtained from the insurance broker in advance of reactivation. If the policy has been renewed, confirm the terms of the renewal (including any changes in premiums, retentions, coverage terms, or carrier composition) and whether the renewal policy provides adequate coverage for a public-company IPO.]
G. Third-Party Engagements
The following table summarizes the status of the Company's engagements with key third-party advisors and service providers in connection with the Offering:
[Instruction: For each engagement listed above, confirm whether the engagement letter or retainer arrangement remains in effect. If any engagement letters have lapsed during the dormancy period (e.g., due to expiration of a term, non-payment of retainers, or termination by either party), note the need to renew or re-execute the engagement letter prior to reactivation. Also note any changes in the key contacts at each third-party firm.]
VII. COMPANY DEVELOPMENTS REQUIRING S-1 DISCLOSURE UPDATES
The Firm respectfully requests that [Insert Issuer Short Name] management inform Calderwood & Harkness promptly of any material developments during the quarter (or since the last update) that would require updates to the disclosure in the Registration Statement. Timely disclosure of such developments is essential to ensure that the Registration Statement can be updated efficiently upon reactivation and that the Company's S-1 disclosure remains accurate and complete when the Offering is relaunched.
Without limiting the generality of the foregoing, the Firm specifically requests that [Insert Issuer Short Name] management notify us of any of the following types of developments:
• Material Changes in Business Operations, Financial Condition, or Results of Operations. Any material changes in the Company's business operations, financial condition, or results of operations since the periods covered by the financial statements in the Registration Statement, including any changes in revenue trends, operating margins, liquidity position, or capital expenditure plans.
• New Material Agreements, Amendments, or Terminations. Any new material agreements entered into by the Company or its subsidiaries, or any material amendments to or terminations of existing agreements, including power purchase agreements ("PPAs"), engineering, procurement, and construction ("EPC") contracts, operations and maintenance ("O&M") agreements, interconnection agreements, land leases, equipment supply agreements, financing agreements, and off-take arrangements.
• Changes in Project Portfolio Status. Any changes in the status of the Company's renewable energy project portfolio, including: (i) projects that have achieved commercial operation date ("COD"); (ii) new projects entering the construction phase; (iii) new development-stage projects added to the pipeline; (iv) project delays, cost overruns, or schedule changes; (v) project cancellations or dispositions; and (vi) any changes in expected capacity, generation output, or revenue projections for existing projects.
• Litigation, Regulatory Proceedings, or Government Investigations. Any new litigation, arbitration, regulatory proceedings, or government investigations involving the Company or its subsidiaries, or any material developments in existing proceedings, including any settlements, judgments, or enforcement actions.
• Changes in Senior Management or Board Composition. Any changes in the Company's senior management team (including the CEO, CFO, COO, General Counsel, and other named executive officers) or the composition of the board of directors, including resignations, appointments, terminations, or retirements.
• Changes in Capitalization. Any changes in the Company's capitalization, including new equity issuances (whether pursuant to the equity incentive plan or otherwise), debt incurrence or repayment, convertible instrument issuances, warrant exercises, stock splits, or recapitalizations. Also note any changes in the ownership interests of significant stockholders.
• Related-Party Transactions. Any new related-party transactions or amendments to existing related-party transactions that would require disclosure under Item 404 of Regulation S-K.
• Insurance Claims or Changes in Coverage. Any material insurance claims filed by the Company or its subsidiaries, or any material changes in the Company's insurance coverage (including D&O insurance, property insurance, and liability insurance).
• Environmental or Permitting Developments. Any environmental incidents, permitting delays, permit revocations, or other environmental or permitting developments affecting the Company's projects or operations.
• Tax Developments. Any tax-related developments affecting the Company, including ITC recapture events, tax-equity partnership milestone events (e.g., partnership flips), changes in the Company's tax positions, IRS examinations or audits, or changes in the Company's deferred tax assets or liabilities.
[Instruction: If the Company has reported any material developments during the quarter, summarize those developments here and identify the sections of the Registration Statement that will need to be updated to reflect those developments. If no material developments have been reported, state that no material developments have been reported to the Firm during the quarter, but reiterate the request that management continue to notify the Firm promptly of any such developments.]
VIII. ACTION ITEMS AND RECOMMENDATIONS
A. Immediate Action Items
[Instruction to Drafting Attorney: Insert a checklist of any items requiring prompt attention from [Insert Issuer Short Name] management or the working group. Examples of immediate action items may include:]
[ ] Execute outstanding Lock-Up Agreements (see Section VI.C above) — [Insert Number] agreements remain outstanding.
[ ] Provide updated financial data for the quarter ended [Insert Date] to Calderwood & Harkness for purposes of monitoring financial statement staleness and prospectus disclosure updating.
[ ] Notify Calderwood & Harkness of any material developments during the quarter as described in Section VII above.
[ ] Confirm the status of the D&O insurance policy renewal and provide copies of any updated or renewed policy documents (see Section VI.F above).
[ ] Confirm the status of all third-party engagements identified in Section VI.G above and notify Calderwood & Harkness of any lapsed or terminated engagements.
[ ] [Insert any additional immediate action items identified during the quarter.]