1015-00001 · Graymont Brothers Inc · Diligence

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PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 599 Lexington Avenue New York, New York 10022

MEMORANDUM

TO: Jennifer Kwon, Responsible Partner, Capital Markets

FROM: Brendan Walsh, Lead Associate, Capital Markets Natasha Forbes, Working Associate, Capital Markets

DATE: April 25, 2022

RE: Due Diligence Memorandum — Intellectual Property and Technology Calloway-Briggs Renewables Inc. — Proposed Initial Public Offering

MATTER NO.: C&H Matter No. 1015-00001

CLIENT: Calloway-Briggs Renewables Inc. ("CBR" or the "Company")

This memorandum is prepared in connection with the representation of Calloway-Briggs Renewables Inc. by Calderwood & Harkness LLP and is protected by attorney-client privilege and the work-product doctrine. This memorandum reflects the mental impressions, conclusions, opinions, and legal theories of counsel and has been prepared in anticipation of securities-law compliance obligations and potential litigation. This memorandum shall not be disclosed to any third party, including the Company's auditors, underwriters, or underwriters' counsel, without the prior written authorization of Jennifer Kwon or another authorized partner of Calderwood & Harkness LLP. Any such disclosure could result in a waiver of applicable privileges.

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I. Executive Summary

This memorandum summarizes the findings of our intellectual property and technology due diligence review conducted in connection with the proposed initial public offering (the "IPO" or the "Offering") by Calloway-Briggs Renewables Inc. ("CBR" or the "Company") of shares of its common stock on the New York Stock Exchange under the proposed ticker symbol "CBRI." The anticipated gross proceeds of the Offering are approximately $600,000,000, consisting of a combination of primary shares to be issued by the Company and secondary shares to be sold by Pinnacle Vista Capital Partners III, LP ("Pinnacle Vista"), the Company's principal stockholder. The Offering is expected to be underwritten by Pinnacle Capital Markets, Ashford Bancorp, and Dunmore Savings Bank, as joint book-running managers, with a syndicate of additional underwriters.

Scope of Review. Our review encompassed all intellectual property ("IP") assets held by CBR and its direct and indirect subsidiaries, including without limitation: (a) registered and unregistered trademarks and service marks; (b) trade secrets and proprietary know-how; (c) proprietary software platforms and applications; (d) Supervisory Control and Data Acquisition ("SCADA") systems and related operational technology; (e) domain names and internet properties; (f) copyrights and copyright registrations; and (g) third-party technology license agreements. We also reviewed IP-related provisions contained in the Company's material commercial contracts, including power purchase agreements ("PPAs"), engineering, procurement, and construction ("EPC") agreements, operations and maintenance ("O&M") agreements, and tax-equity partnership agreements.

Sources Reviewed. Our findings are based on the following sources:

• Responses to the Due Diligence Request List — Intellectual Property (Document 12 of the Due Diligence Request List), as provided by the Company through its legal counsel and uploaded to the virtual data room maintained by Sundial Technologies;

• Interviews conducted with Sandra Haverford, General Counsel and Corporate Secretary of CBR; Dale Renfroe, Chief Operating Officer of CBR; and Tomás Quintero, Senior Vice President, Project Development of CBR;

• Review of documents posted to the virtual data room, including corporate formation documents, intercompany agreements, license agreements, employee agreements, and contractor agreements;

• Searches of the United States Patent and Trademark Office ("USPTO") Trademark Electronic Search System ("TESS") database, conducted on April 11, 2022, and supplemented on April 19, 2022; and

• Review of publicly available domain-name registration records (WHOIS databases) and the Uniform Domain-Name Dispute-Resolution Policy ("UDRP") complaint databases maintained by the World intellectual Property Organization ("WIPO") and the National Arbitration Forum.

Overall Assessment. Based on our review, CBR's intellectual property and technology portfolio is consistent with that of a utility-scale renewable-energy developer, owner, and operator of its size and scale. The Company does not rely on patented core technology, which is typical for companies occupying this position in the renewable-energy value chain. Rather, the Company's core generation and storage technology — including wind turbines, solar photovoltaic panels and inverters, and battery-storage cells — is sourced from third-party equipment manufacturers. The Company does, however, maintain material proprietary software assets (including its internally developed Asset Performance Platform), trade secrets related to project optimization and predictive maintenance, and a well-maintained portfolio of registered trademarks protecting its brand identity.

No material IP disputes — whether involving claims by or against the Company — have been identified through our review. The Company's IP protection program, including employee confidentiality and invention-assignment agreements, contractor nondisclosure agreements, and electronic access controls, is adequate for a company of CBR's size and complexity, though certain housekeeping items and best-practice recommendations are noted herein.

We have also reviewed IP-related provisions in the Company's third-party technology license agreements to assess whether the proposed IPO would trigger any change-of-control provisions. As discussed in detail in Section VIII below, we have concluded that the IPO is unlikely to trigger any change-of-control provision in any material technology license, though we recommend providing precautionary notice to the Company's primary SCADA platform vendor.

Finally, we provide recommendations for the intellectual property and technology disclosure to be included in the Business and Risk Factors sections of the Company's Registration Statement on Form S-1 (the "S-1" or the "Registration Statement").

Key Areas of Focus. The principal areas addressed in this memorandum are as follows:

(a) SCADA systems and operational technology;

(b) proprietary monitoring and analytics software, including the Asset Performance Platform;

(d) trade secrets and know-how;

(e) third-party technology licenses;

(f) domain names and internet properties;

(g) IP-related provisions in the Company's material commercial contracts;

(h) cybersecurity considerations related to operational technology;

(i) employee and contractor IP assignment matters; and

(j) adequacy of proposed S-1 disclosure regarding intellectual property and technology.

II. Corporate Structure Context for IP Ownership

An understanding of the Company's corporate structure is necessary to evaluate the ownership and allocation of IP assets across the CBR enterprise. As detailed in the Due Diligence Memorandum — Corporate Structure (Document 3), the Company operates through a multi-tiered holding-company and subsidiary structure that is typical for utility-scale renewable-energy platforms. IP assets are held at multiple levels of this structure, with the allocation generally tracking the functional use of the relevant IP by the applicable entity.

Calloway-Briggs Renewables Inc. CBR is incorporated as a Delaware corporation and serves as the ultimate parent entity of the CBR enterprise. CBR directly holds the Company's portfolio of registered trademarks and service marks, including the "CALLOWAY-BRIGGS" word mark, the "CBR" word mark, the CBR stylized sunburst logo, and the "CALLOWAY-BRIGGS RENEWABLES" word mark. CBR is also the registrant of the Company's primary domain names. In its capacity as the holder of the brand-related IP, CBR licenses these marks on an intercompany basis to its operating subsidiaries, as described below.

CBR Holdings LLC. CBR Holdings LLC is a Delaware limited liability company and a direct, wholly owned subsidiary of CBR. CBR Holdings serves as an intermediate holding company and does not directly hold any IP assets.

Calloway-Briggs Operating Company LLC ("CB Operating"). CB Operating is a Texas limited liability company, a direct, wholly owned subsidiary of CBR Holdings LLC, and the principal operating entity within the CBR enterprise. CB Operating holds the Company's proprietary software assets, including the Asset Performance Platform ("APP"), all proprietary SCADA customizations and integration layers, and the enterprise-level third-party technology licenses (including the primary SCADA platform enterprise license and related software subscriptions). CB Operating employs the approximately 1,240 employees of the CBR enterprise, including the Company's software engineering and data-science team. Accordingly, CB Operating is the beneficiary of all employee confidentiality and invention-assignment agreements, and all employee-created IP vests in CB Operating.

Project Special-Purpose Vehicles ("SPVs"). The Company's individual operating and under-construction projects are held through separate project-level SPVs, each of which is a direct or indirect subsidiary of CB Operating. These SPVs include the following:

• Solaris West Solar LLC (Kern County, California; 500 MW AC)

• Red Mesa Wind Energy LLC (Caddo County, Oklahoma; 400 MW)

• Painted Rock Solar LLC (Maricopa County, Arizona; 350 MW AC)

• Pronghorn Wind LLC (Carson County, Texas; 300 MW)

• Brazos Energy Storage LLC (Fort Bend County, Texas; 200 MW / 800 MWh)

• Mesquite Wind Holdings LLC (Crockett County, Texas; 420 MW; under construction)

• Cimarron Solar Development LLC (Doña Ana County, New Mexico; 350 MW AC; under construction)

Each project SPV holds project-specific technology licenses (to the extent not held at the CB Operating level), site-level SCADA control-system configurations, and project-specific engineering deliverables and design documents received from EPC contractors. The SPVs also hold the project-specific environmental assessments and permitting deliverables prepared by Greenridge Environmental Sciences LLC and other consultants.

CBR Development Co. LLC ("CBR Development"). CBR Development is a Texas limited liability company and a direct, wholly owned subsidiary of CB Operating. CBR Development holds the Company's development-stage IP assets, including the proprietary GIS-based development-pipeline analytics tool and related resource-assessment models and data layers. CBR Development employs the Company's project-development team and is the entity through which the Company evaluates and advances its approximately 6.2 GW development-stage pipeline.

Pinnacle Vista Capital Partners III, LP. Pinnacle Vista is the Company's principal stockholder, having acquired its majority interest in 2016. We confirmed that no IP assets of any kind are held by Pinnacle Vista or any of its affiliated entities. All IP assets reside within the CBR corporate structure.

Intercompany IP License Agreements. CBR, as the owner of the registered trademarks, has entered into an Intercompany Trademark License Agreement (dated January 15, 2017, as amended March 1, 2020) with CB Operating, pursuant to which CBR grants to CB Operating a non-exclusive, royalty-free, perpetual, irrevocable license to use the CALLOWAY-BRIGGS, CBR, and related trademarks and service marks in connection with the operation of the Company's renewable-energy projects and the conduct of its business. This license extends to sublicensing by CB Operating to the project SPVs. The intercompany license is on arm's-length terms and does not present any issues for purposes of the Offering. There are no other intercompany IP license agreements within the CBR structure.

III. Trademarks and Brand Identity

A. Registered Trademarks

The Company maintains a portfolio of four registered trademarks with the USPTO, all of which are owned by Calloway-Briggs Renewables Inc. (the parent entity). The table below summarizes the registered marks:

With respect to the registered trademarks, we note the following:

• Class 40 (Energy Generation): All four marks are registered in International Class 40, which covers treatment of materials, including the generation of electricity from renewable sources. This is the primary classification for the Company's core business activity.

• Class 42 (Engineering Services): The CALLOWAY-BRIGGS word mark and the CBR stylized sunburst design logo are additionally registered in International Class 42, covering scientific and technological services, including engineering design and consulting services related to renewable-energy projects.

• Maintenance Filings: All registrations are current. Sections 8 and 15 affidavits (declarations of continued use and incontestability) have been timely filed for the CALLOWAY-BRIGGS word mark. Maintenance filings for the remaining marks are not yet due based on their registration dates. The Company's General Counsel, Sandra Haverford, has confirmed that the Company utilizes an automated docketing system to track renewal deadlines.

• No Oppositions or Cancellation Proceedings: Our search of the USPTO Trademark Trial and Appeal Board ("TTAB") records revealed no pending opposition proceedings, cancellation proceedings, or other contested matters involving any of the Company's registered marks.

B. Unregistered Marks and Common-Law Rights

In addition to its registered trademark portfolio, the Company uses a number of unregistered marks in connection with its business. Most notably, the Company uses project-specific names as identifiers for its individual renewable-energy projects, both in commercial relationships (e.g., in PPAs and interconnection agreements) and in marketing and public-relations materials. These project names include the following:

"Solaris West," "Red Mesa," "Painted Rock," "Pronghorn," "Brazos Storage," "Mesquite Wind," "Cimarron Solar," "Silverleaf Wind," and "Copper Basin"

These names are used as project identifiers in the ordinary course of business but are not registered as trademarks with the USPTO or any state trademark registry. The Company has acquired common-law trademark rights in these project names through their continuous use in commerce in the states in which the respective projects are located and where the Company's business is conducted, including Texas, Oklahoma, Arizona, New Mexico, and California.

Recommendation: While the lack of registration for project-specific names does not present a material risk to the Offering, we recommend that the Company consider registering certain key project names if the Company intends to use them prominently in public-company marketing, branding, or investor-relations materials following the IPO. Federal registration would provide nationwide constructive notice of the Company's claims to these marks and would strengthen enforcement rights. This is not a gating issue for the S-1 filing or effectiveness.

C. Domain Names

The Company maintains the following primary domain names, all of which are registered to Calloway-Briggs Renewables Inc.:

All domain-name registrations are current through at least 2025. The Company's primary corporate website is hosted at calloway-briggs.com, and the remaining domains redirect to this primary site. We confirmed through a review of WIPO and National Arbitration Forum records that no UDRP proceedings or other domain-name disputes have been filed involving any of the Company's domain names. Similarly, the Company has not initiated any UDRP proceedings against third parties.

D. Trademark-Related Risks

Based on our review, the Company's trademark portfolio is well-maintained and presents no material risk to the Offering. Specifically:

• No Pending Trademark Litigation. The Company is not a party to any pending litigation involving trademark infringement, dilution, unfair competition, or related claims.

• No Cease-and-Desist Letters. The Company has neither received nor sent any cease-and-desist letters related to trademark matters within the past three years. Sandra Haverford confirmed this during our interview on April 8, 2022.

• Clearance Search Results. We conducted a comprehensive clearance search of the USPTO TESS database and commercially available trademark databases for marks that are identical or confusingly similar to the Company's registered marks in the renewable-energy sector. Our search did not identify any marks that present a material risk of confusion or that would support a third-party claim against the Company's registered marks.

S-1 Disclosure Recommendation: The Registration Statement should include a standard risk factor regarding the possibility that third parties may assert intellectual property claims against the Company, including trademark infringement claims. However, based on our review, no company-specific trademark risk warrants individualized disclosure in the risk factors or elsewhere in the S-1.

IV. SCADA Systems and Operational Technology

A. Overview of SCADA Infrastructure

CBR utilizes Supervisory Control and Data Acquisition ("SCADA") systems across its entire portfolio of operating and under-construction renewable-energy projects. SCADA technology is central to the Company's ability to monitor, control, and optimize the performance of its utility-scale solar, wind, and battery-storage assets in real time. As of the date of this memorandum, the Company's operating portfolio comprises 22 projects with an aggregate capacity of approximately 3.8 gigawatts ("GW"), and the Company has two projects under construction — Mesquite Wind (420 MW, Crockett County, Texas) and Cimarron Solar (350 MW AC, Doña Ana County, New Mexico) — for which SCADA systems are being commissioned as part of the construction process.

The Company's SCADA infrastructure is organized around a distributed architecture. Each project site is equipped with local control systems, including programmable logic controllers ("PLCs"), remote terminal units ("RTUs"), and site-level servers that collect and process operational data from individual generation units (e.g., wind turbines, solar inverters, battery racks) and balance-of-plant equipment (e.g., substations, meteorological stations, tracker systems). This site-level data is transmitted via secure telecommunications links to the Company's centralized operations center, located at CBR's corporate headquarters at 4200 Ridgeline Parkway, Suite 1100, Austin, Texas 78746 (the "Operations Center"). The Operations Center is staffed 24 hours a day, 7 days a week, and serves as the command center for real-time monitoring, alarm management, remote dispatch, and coordination with grid operators (principally ERCOT, SPP, CAISO, and WAPA, depending on project location).

The SCADA systems are integral to the Company's operations in several critical respects: they enable real-time performance monitoring and anomaly detection; they support automated and manual curtailment management in response to grid-operator instructions; they collect the operational data that forms the basis for revenue reporting, lender reporting, and tax-equity partner reporting; and they provide the raw data feeds that are processed by the Company's proprietary Asset Performance Platform (discussed in Section V below).

B. Third-Party SCADA Platforms

The Company does not develop its own base-level SCADA platform software. Rather, CBR licenses SCADA platform software from established third-party vendors under multi-year enterprise license agreements. The principal third-party SCADA-related licenses are as follows:

Primary SCADA Platform Enterprise License. CB Operating is a party to an Enterprise Software License Agreement (the "SCADA License") with a leading provider of SCADA and energy-management software for the utility and renewable-energy sectors. The SCADA License covers the core software platform used across the Company's wind and solar generation assets for real-time monitoring, alarm management, data historian functions, and reporting. The material terms of the SCADA License are as follows:

• Term: Seven (7) years from the effective date of the agreement, with automatic renewal for successive one-year periods unless either party provides written notice of non-renewal at least 180 days prior to the expiration of the then-current term. The initial seven-year term commenced on September 1, 2017, and accordingly, the first renewal period commenced on September 1, 2024 (projected); based on the current date, the initial term remains in effect with approximately two years and four months remaining.

• License Grant: Non-exclusive, non-transferable (except as permitted under the change-of-control provisions), enterprise-wide license to install and use the SCADA platform software at all project sites owned or operated by CB Operating and its subsidiaries.

• License Fees: Annual license fees are payable in advance on September 1 of each year. The current annual fee is approximately $1.8 million, subject to annual CPI-based escalation not to exceed 3% per year. License fees include standard maintenance, software updates, patches, and technical support during business hours. Premium 24/7 technical support is available at an additional cost; CBR has elected this option.

• No Sublicense Rights: CB Operating may not sublicense the SCADA platform software to any third party without the prior written consent of the licensor. However, the license expressly permits use by CB Operating's direct and indirect subsidiaries (including project SPVs) without the need for separate sublicenses.

• Data Ownership: The license agreement expressly provides that all operational data generated by the SCADA systems, including generation data, weather data, equipment-performance data, and alarm logs, is and shall remain the sole property of CB Operating. The licensor has no rights to use, access, or exploit such data except as necessary to provide maintenance and support services under the agreement.

• Change-of-Control Provisions: Analyzed separately in Section VIII.A below.

Battery Management System License (Brazos Storage). Brazos Energy Storage LLC, the project SPV for the Company's 200 MW / 800 MWh battery-storage facility in Fort Bend County, Texas, is a party to a separate Software License and Services Agreement (the "BMS License") with the manufacturer and integrator of the battery-storage system. The BMS License covers the proprietary battery management system ("BMS") software that controls the charging, discharging, thermal management, and degradation monitoring of the battery-storage facility. The material terms of the BMS License are as follows:

• Term: Ten (10) years from the commercial operation date ("COD") of the Brazos Storage facility. COD was achieved on August 15, 2021; accordingly, the BMS License extends through August 15, 2031.

• License Grant: Non-exclusive, non-transferable license to use the BMS software solely in connection with the operation of the Brazos Storage facility.

• License Fees: A one-time upfront license fee was paid at COD, with ongoing annual maintenance and support fees of approximately $320,000 per year, subject to annual escalation.

• Firmware Updates: The license includes all firmware updates and security patches during the term, delivered remotely or through on-site service visits.

• Change-of-Control Provisions: Analyzed separately in Section VIII.B below.

Key Observations Regarding Third-Party SCADA Licenses. We have reviewed the complete terms of the SCADA License and BMS License and note the following:

• Both licenses are non-exclusive, meaning that the Company's competitors may (and likely do) license the same or similar SCADA and BMS platforms. The Company does not derive a competitive advantage from its access to these base-level platforms; rather, the Company's competitive differentiation in technology lies in its proprietary customizations, overlays, and analytics capabilities built on top of these platforms (see Sections IV.C and V below).

• The data-ownership provisions in both licenses expressly confirm that CBR and its subsidiaries retain full ownership of all operational data generated by the licensed systems. This is a critical provision, as the operational data is the foundation for the Company's proprietary analytics and reporting capabilities.

• Neither license includes a source-code escrow arrangement. In the event that the primary SCADA vendor or the BMS vendor were to become insolvent or cease operations, the Company would not have access to the source code of the licensed platforms, which could present operational continuity risks. We discuss this further in Section XIV (Open Items and Recommendations) below.

C. Proprietary SCADA Customizations

CBR's internal engineering and software-development team has developed a substantial body of proprietary customizations, overlays, and integration layers that sit on top of the third-party SCADA platforms described above. These proprietary elements are a significant component of the Company's technology portfolio and represent a meaningful area of competitive differentiation relative to other utility-scale renewable-energy developers and operators.

The proprietary SCADA customizations are owned by CB Operating and constitute trade secrets of the Company. The customizations were developed by CB Operating employees under the terms of the Company's standard confidentiality and invention-assignment agreements, and all IP rights therein have been assigned to CB Operating. No portion of the proprietary SCADA customizations has been disclosed to any third party other than on a need-to-know basis under the protection of nondisclosure agreements.

The principal categories of proprietary SCADA customizations include:

(a) Site-Specific Alarm Configurations. The Company has developed customized alarm hierarchies and escalation protocols for each project site, tailored to the specific equipment mix, environmental conditions, and grid-operator requirements applicable to each project. These configurations go beyond the standard alarm functionality provided by the third-party SCADA platform and reflect the Company's accumulated operational experience across its 22-project portfolio.

(b) Predictive-Maintenance Algorithms. The Company's engineering team has developed proprietary algorithms that analyze SCADA data streams to predict equipment failures before they occur. Specific applications include wind-turbine gearbox failure prediction models (based on vibration-analysis data, oil-temperature trends, and historical failure patterns) and solar-panel degradation modeling (based on IV-curve analysis and performance-ratio trends). These algorithms enable the Company to schedule maintenance proactively, reducing unplanned downtime and extending equipment useful life.

(c) Curtailment-Optimization Protocols. When grid operators (e.g., ERCOT, CAISO) issue curtailment instructions, the Company's proprietary optimization protocols determine the most economically efficient allocation of curtailment across generation units within a project, taking into account individual-unit performance characteristics, PPA pricing structures, tax-equity allocation requirements, and real-time weather conditions. This functionality is particularly important for the Company's Texas-based wind projects, which are subject to periodic curtailment by ERCOT due to transmission congestion.

(d) Grid-Interconnection Management Modules. The Company has developed proprietary software modules that manage the interface between the project-level SCADA systems and the grid-operator control systems. These modules handle automated generation of telemetry data required by the grid operator, management of ramp-rate constraints, and coordination of reactive-power support obligations.

Approximately 12 full-time software engineers and data scientists employed by CB Operating are dedicated to the ongoing maintenance, enhancement, and development of these proprietary SCADA customizations. The team is led by the Company's Director of Technology and reports to Dale Renfroe, the Chief Operating Officer.

We note that no patent applications have been filed on any of the proprietary SCADA customizations. The Company's decision not to seek patent protection for these innovations is deliberate and reflects the view that trade-secret protection is more appropriate for software and algorithmic innovations in this context, given the difficulty of detecting patent infringement in proprietary internal systems and the disclosure requirements associated with the patent-prosecution process. We concur with this assessment, as discussed further in Section XII below.

V. Proprietary Monitoring and Analytics Software

A. CBR Asset Performance Platform ("APP")

The Company's most significant proprietary software asset is an internally developed platform referred to as the Asset Performance Platform, or "APP." The APP is a comprehensive, enterprise-wide software system that aggregates, processes, and presents operational and financial data from across the Company's entire portfolio of renewable-energy projects.

Functionality. The APP provides the following principal capabilities:

(a) Real-Time and Historical Data Aggregation. The APP ingests data feeds from all project-level SCADA systems and consolidates them into a unified data warehouse. This enables portfolio-level visibility into the real-time performance of all 22 operating projects and, once commissioned, the projects currently under construction.

(b) Performance Dashboards. The APP provides interactive, web-based dashboards that display key performance indicators ("KPIs") at the portfolio, project, and individual-equipment levels. KPIs include generation output (MW and MWh), capacity factor, availability, performance ratio (for solar projects), curtailment statistics, and weather conditions. Dashboards are configurable by user role and can be accessed by authorized personnel at the Operations Center or remotely via VPN.

(c) Automated Reporting. The APP generates automated periodic reports for multiple stakeholder audiences, including: (i) management reports for CBR's executive team and Board of Directors; (ii) lender reports required under the Company's project-finance credit facilities; and (iii) tax-equity partner reports required under the Company's tax-equity partnership agreements. The automated reporting functionality reduces manual data compilation and transcription errors and ensures consistency across reporting channels.

(d) Revenue Forecasting and Budget Variance Analysis. The APP incorporates proprietary forecasting models that project revenue based on weather forecasts, historical generation patterns, PPA pricing terms, and merchant-price curves. The platform also tracks actual results against budget and provides variance analysis at the project and portfolio levels.

Development History. The APP was developed in-house by CBR's technology team beginning in approximately 2018, shortly after Pinnacle Vista's investment in the Company. The platform has been iteratively enhanced through 2022, with major releases occurring approximately semi-annually. The current version of the APP (v4.2) was deployed in February 2022. The total cumulative investment in APP development, including personnel costs and third-party infrastructure costs, is estimated at approximately $8.5 million, based on information provided by the Company's finance team.

Ownership. The APP is owned by Calloway-Briggs Operating Company LLC. All development work was performed by employees of CB Operating under the terms of the Company's standard confidentiality and invention-assignment agreements. No third-party contractors or consultants contributed to the development of the APP's core functionality; certain infrastructure-related services (e.g., cloud hosting configuration) were provided by third-party consultants under work-for-hire agreements that include IP assignment provisions.

Commercial Licensing. The APP is not commercially licensed to any third party and is used solely for the Company's internal operations. The Company has not evaluated the APP for potential commercialization, and we are not aware of any plans to do so. In her interview, Sandra Haverford confirmed that the APP is treated as a proprietary internal tool and is not available to the Company's offtake counterparties, lenders, or tax-equity partners.

intellectual Property Protection. No patent applications have been filed covering the APP or any of its components. The APP is protected as a trade secret under the Company's comprehensive trade-secret protection program (see Section VI below) and as proprietary software under common-law copyright. No formal copyright registrations have been filed with the U.S. Copyright Office (see Section V.C below).

B. Development Pipeline Analytics Tool

In addition to the APP, the Company maintains a proprietary geographic information system ("GIS")-based analytics tool used by the CBR Development team to evaluate and prioritize prospective project sites within the Company's approximately 6.2 GW development-stage pipeline. The tool is owned by CBR Development Co. LLC.

Functionality. The development-pipeline analytics tool integrates multiple layers of geospatial and resource data into a unified analytical framework. The principal data layers include:

(a) Solar Irradiance Data. The tool incorporates high-resolution solar irradiance data, including global horizontal irradiance ("GHI"), direct normal irradiance ("DNI"), and diffuse horizontal irradiance, sourced from third-party data providers (licensed under the subscription agreements described in Section VII.A below) and supplemented by the Company's proprietary ground-based measurement stations.

(b) Wind-Resource Data. For wind-project development, the tool integrates mesoscale wind-resource data, including wind-speed distributions, wind-direction profiles, and turbulence-intensity estimates, from third-party providers, correlated with the Company's proprietary on-site meteorological tower data.

(c) Land-Availability Databases. The tool maintains a proprietary database of land availability, including ownership records, lease-rate benchmarks, existing land-use restrictions, environmental-sensitivity overlays (e.g., endangered-species habitats, wetlands, cultural-resource areas), and proximity to existing infrastructure.

(d) Transmission-Interconnection Queue Data. The tool tracks the status and position of interconnection-queue entries across the relevant transmission operators (ERCOT, SPP, CAISO, WAPA), enabling the development team to assess interconnection feasibility and timeline for prospective project sites.

(e) Permitting-Risk Scoring Algorithms. The Company has developed proprietary algorithms that assign permitting-risk scores to prospective project sites based on factors including local zoning requirements, historical permitting timelines in the applicable jurisdiction, proximity to military installations and airports (relevant for radar and aviation-safety assessments), and community-opposition risk indicators.

Competitive Assessment. Similar GIS-based site-selection tools are available commercially from third-party providers. However, the Company's tool is differentiated by the proprietary data layers and scoring algorithms developed by the CBR Development team based on the Company's experience in developing and operating projects across multiple markets. Tomás Quintero, SVP of Project Development, characterized the tool as a "moderate but meaningful competitive advantage" in our interview on April 12, 2022, noting that the tool enables the Company to identify and prioritize high-quality development sites more efficiently than competitors who rely solely on off-the-shelf commercial products.

intellectual Property Protection. The development-pipeline analytics tool is protected as a trade secret of CBR Development Co. LLC. No patent applications or copyright registrations have been filed.

C. Software Copyright Registrations

The Company has not filed any formal copyright registrations with the U.S. Copyright Office for the APP, the development-pipeline analytics tool, the proprietary SCADA customizations, or any other software developed by the Company. Under U.S. copyright law, copyright protection attaches automatically upon the creation and fixation of an original work of authorship, including software code. Accordingly, the Company's software assets are protected by common-law copyright even absent formal registration.

Recommendation: While formal copyright registration is not required for copyright protection to exist, registration confers certain significant benefits, including (a) the ability to bring a federal copyright-infringement action (registration is a prerequisite to suit for works of U.S. origin), (b) eligibility for statutory damages and attorney's fees (available only if registration is obtained prior to infringement or within three months of first publication), and (c) establishment of a public record of the copyright claim. We recommend that the Company consider filing copyright registrations for the APP and other key software assets as a defensive measure. This is a best-practice recommendation and is not a gating issue for the IPO.

VI. Trade Secrets and Know-How

A. Categories of Trade Secrets

CBR and its subsidiaries maintain a substantial body of trade secrets and proprietary know-how that has been developed over the course of the Company's more than ten years of operation in the utility-scale renewable-energy sector. The Company's trade secrets span the full range of its business functions, from project development through construction, operation, and financial management. The principal categories of trade secrets identified through our review include the following:

(a) SCADA Customization Code and Configuration Files. As described in Section IV.C above, the Company has developed extensive proprietary customizations to its third-party SCADA platforms, including site-specific alarm configurations, integration layers, and automated control protocols. The source code, configuration files, and related documentation for these customizations constitute trade secrets of CB Operating.

(b) Predictive-Maintenance Algorithms. The Company's proprietary algorithms for predicting equipment failures — including wind-turbine gearbox failure prediction models and solar-panel degradation models — represent significant trade secrets. These algorithms are based on the Company's analysis of multi-year operational data sets collected from its portfolio and incorporate machine-learning techniques and statistical models developed by the Company's data-science team.

(c) Curtailment-Optimization and Dispatch Protocols. The proprietary protocols used by the Company to optimize the allocation of grid-operator-mandated curtailment across its generation fleet, as well as the dispatch algorithms used to optimize the charging and discharging cycles of the Brazos Storage facility, constitute trade secrets.

(d) Project-Development Site-Selection Methodologies. The proprietary methodologies and scoring algorithms used in the Company's GIS-based development-pipeline analytics tool (see Section V.B above), including the permitting-risk scoring algorithms and the Company's proprietary data layers, constitute trade secrets of CBR Development.

(e) Financial Modeling Templates for Tax-Equity Structuring. The Company has developed sophisticated financial models for structuring tax-equity partnerships, including models that implement the hypothetical liquidation at book value ("HLBV") methodology for allocating partnership income and losses. These models were developed in coordination with Kessler McBride & Associates LLP, the Company's independent tax advisors, and reflect the Company's accumulated experience in negotiating and structuring tax-equity transactions. The models are considered proprietary and confidential.

(f) Vendor Pricing Data and Equipment Procurement Strategies. The Company maintains detailed proprietary databases of vendor pricing for key equipment categories, including wind turbines, solar panels, inverters, tracker systems, battery cells, and transformers. These databases, together with the Company's procurement strategies and negotiating playbooks, constitute trade secrets.

(g) Operational Best Practices and Maintenance Protocols. The Company has accumulated a significant body of operational know-how across its 22 operating projects, including best practices for vegetation management at solar sites, cold-weather operations protocols for wind projects, and preventive-maintenance schedules that have been optimized based on the Company's field experience. These protocols and best practices are documented in internal manuals and procedures that constitute trade secrets.

B. Protection Measures

The Company maintains a comprehensive trade-secret protection program that includes contractual, physical, and electronic measures designed to safeguard the confidentiality of its proprietary information. We have reviewed the principal components of this program and assess them as adequate for a company of CBR's size and complexity. The key elements of the program are as follows:

Employee Confidentiality and Invention-Assignment Agreements. All employees of CB Operating are required to sign a standard form of Confidentiality, Non-Disclosure, and Invention Assignment Agreement (the "CIAA") upon hire. The CIAA requires each employee to maintain the confidentiality of all proprietary information of the Company during and after employment, to assign to the Company all inventions, improvements, works of authorship, and other intellectual property created during the employee's employment and related to the Company's business, and to cooperate with the Company in obtaining intellectual-property protections for such inventions. We reviewed the current form of CIAA and confirmed that it is comprehensive and enforceable under applicable law (subject to the state-specific limitations discussed below). We reviewed human-resources records in coordination with Rachel Whitmore, the Company's Chief People Officer, and confirmed that approximately 1,240 employees have executed the CIAA or its predecessor form. (See Section XI below for a discussion of a limited gap identified with respect to certain pre-2016 employees.)

Exit-Interview Protocols and Return-of-Materials Certifications. The Company has established formal procedures for departing employees, including mandatory exit interviews conducted by the Human Resources department and, for employees with access to material trade secrets, by the Legal department. Departing employees are required to return all Company property, including laptops, mobile devices, access badges, and physical documents, and to execute a Return of Materials and Reaffirmation of Obligations certification confirming the return of all materials and the employee's continuing obligations under the CIAA.

Non-Compete and Non-Solicitation Agreements. Key technical employees, including members of the engineering, software development, and project-development teams, are subject to non-competition and non-solicitation agreements with a 12-month post-termination restrictive period. These agreements are generally enforceable in Texas, where the majority of the Company's technical employees are based, provided that the restrictions are reasonable in scope, geography, and duration and are supported by adequate consideration. However, we note that California law generally renders non-competition agreements unenforceable (Cal. Bus. & Prof. Code § 16600), and this limitation affects a subset of the Company's employees, including certain members of the team based at the Solaris West project in Kern County, California. The Company should be mindful of this limitation in assessing the risk of competitive hiring of California-based employees.

Physical and Electronic Access Controls. The Company maintains role-based access controls for its information-technology systems. Access to the SCADA systems, the APP, and the development-pipeline analytics tool is restricted to authorized personnel on a need-to-know basis. Multi-factor authentication is required for all access to the Company's IT systems, and remote access is permitted only through the Company's virtual private network ("VPN"). The Operations Center in Austin is secured with badge-access entry, 24/7 surveillance, and restricted-access zones for server rooms and network infrastructure.

Third-Party NDAs. All third-party consultants, contractors, and service providers are required to execute nondisclosure agreements ("NDAs") before receiving access to any proprietary information of the Company. The Company's standard-form NDA was reviewed and is consistent with market practice. The NDA covers all proprietary and confidential information, survives termination of the engagement, and includes customary remedies (including injunctive relief) for breach.

Board-Level IP and Trade-Secret Protection Policies. The Company's Board of Directors has adopted a formal intellectual Property and Trade Secret Protection Policy (the "IP Policy"), which was most recently updated on November 14, 2021, as part of the Company's IPO-readiness assessment. The IP Policy establishes standards for the identification, classification, and protection of the Company's trade secrets and other proprietary information; designates the General Counsel as the officer responsible for IP protection; and requires annual reviews of the Company's trade-secret protection program.

C. Risk Assessment

Based on our review, the Company's trade-secret protection program is functioning effectively. We note the following findings:

• No Known Misappropriation Incidents. There have been no known incidents of trade-secret misappropriation involving the Company's proprietary information within the past five years. The Company has not initiated any trade-secret misappropriation claims, and no such claims have been asserted against the Company.

• 2021 Employee Departure. In 2021, a senior engineer in the Company's SCADA customization team departed to accept a position with a competing utility-scale renewable-energy developer. Sandra Haverford's team conducted a review of the circumstances surrounding the departure, including an analysis of the departing employee's access to proprietary information, a review of the employee's electronic files and communications in the period preceding departure, and consultations with the employee's former supervisor. Based on this review, the Company determined that there was no evidence of actionable misappropriation of trade secrets. The departing employee executed the standard Return of Materials and Reaffirmation of Obligations certification, and the Company returned all Company-owned devices. The Company continues to monitor publicly available information regarding the competing employer's technology offerings. As of the date of this memorandum, no further action has been taken.

S-1 Disclosure Recommendation: The Registration Statement should include a risk factor addressing the Company's reliance on trade secrets and proprietary information to protect its competitive position, the inherent limitations of trade-secret protection (including the risk that trade secrets may be independently developed by competitors or inadvertently disclosed), the Company's dependence on key technical personnel for institutional know-how, and the enforceability limitations of non-competition agreements in certain jurisdictions (particularly California).

VII. Third-Party Technology Licenses

A. Inventory of Material Technology Licenses

The Company is a party to a number of third-party technology license and subscription agreements that support its operations. In addition to the primary SCADA platform enterprise license and the BMS license discussed in Section IV.B above, the following material technology licenses were identified and reviewed:

Enterprise Resource Planning (ERP) Software License. CB Operating subscribes to a cloud-based ERP platform for financial management, human-capital management, procurement, and supply-chain management. The subscription is on an annual-renewal basis, with the current term running through December 31, 2022. License fees are approximately $780,000 per year. The ERP platform is provided on a software-as-a-service ("SaaS") basis and does not involve on-premises installation.

Geographic Information System (GIS) Base Platform License. CBR Development Co. LLC licenses a commercial GIS platform from a leading provider, which serves as the foundational software layer for the Company's proprietary development-pipeline analytics tool. The license is on a multi-year enterprise basis with a current term expiring on June 30, 2024, and automatic annual renewal thereafter. Annual license fees are approximately $210,000.

Weather and Resource-Data Subscription Agreements. The Company subscribes to multiple third-party data services that provide real-time and historical solar irradiance, wind-speed, and meteorological data. These data feeds are integrated into both the SCADA systems and the APP. The principal data subscriptions include: (a) a solar irradiance data service providing satellite-derived irradiance measurements and forecasts, with an annual subscription fee of approximately $175,000; and (b) a wind-resource data service providing mesoscale wind modeling and on-demand resource assessments, with an annual subscription fee of approximately $140,000. Both subscriptions are on annual-renewal terms.

Cybersecurity Monitoring and Intrusion-Detection Software. The Company licenses an enterprise cybersecurity platform that provides continuous monitoring of the Company's IT and operational-technology ("OT") networks, including intrusion detection, vulnerability scanning, and security-event logging. The license is on an annual subscription basis with a current annual fee of approximately $420,000.

Standard Commercial Software. The Company maintains volume licensing agreements for standard commercial software products, including Ashgrove Software, Crestline Systems cloud services, and related productivity tools. These licenses are on standard commercial terms and do not present any material issues.

B. License Terms Review Summary

We have reviewed the terms of all material technology licenses identified above, as well as the SCADA License and BMS License discussed in Section IV.B. The key findings of our license-terms review are as follows:

• Non-Exclusive Licenses. All material technology licenses held by the Company and its subsidiaries are non-exclusive. No license contains exclusivity provisions that would restrict the Company's competitors from accessing the same or similar technology from the same vendors.

• Assignment and Change-of-Control Provisions. The SCADA License and BMS License contain change-of-control provisions that are analyzed in detail in Section VIII below. The ERP subscription, GIS platform license, weather-data subscriptions, and cybersecurity platform license do not contain change-of-control provisions that would be triggered by the IPO.

• Expiration and Renewal. No material technology license is approaching expiration within the next 12 months without an auto-renewal mechanism in place. The ERP subscription renews annually (current term through December 31, 2022); the GIS license term extends through June 30, 2024; the weather-data subscriptions and cybersecurity subscription are all on auto-renewal. The SCADA License initial term extends through September 1, 2024, and the BMS License term extends through August 15, 2031. Accordingly, there is no near-term risk of license expiration that would create a material operational disruption.

• No Material Disputes. The Company has confirmed that there are no pending disputes, claims, or controversies with any of its technology licensors. All license fees are current, and there are no outstanding defaults or notices of default under any technology license agreement.

• Aggregate Annual Technology License Spend. Based on information provided by the Company's finance team and our review of the license agreements, the Company's aggregate annual spend on technology licenses is approximately $4.2 million for fiscal year 2021. This figure includes the SCADA License, BMS License, ERP subscription, GIS platform, weather-data subscriptions, cybersecurity platform, and standard commercial software licenses.

VIII. IPO-Related Change-of-Control Analysis for IP/Technology Agreements

A critical component of the IP and technology due diligence review in the context of the proposed IPO is the analysis of whether the Offering would trigger any change-of-control or assignment provisions in the Company's material technology license agreements. Such triggers, if applicable, could require the Company to obtain third-party consents, provide notices, or face the risk of license termination in connection with the IPO. We have reviewed all material technology licenses and provide the following analysis.

A. SCADA Platform Enterprise License

The SCADA License contains a change-of-control provision at Section 14.3 of the agreement, which provides as follows (paraphrased):

"In the event of a Change of Control of [CB Operating], [CB Operating] shall provide [Licensor] with written notice of such Change of Control within thirty (30) days following the occurrence thereof. For purposes of this Section, 'Change of Control' means any transaction or series of related transactions resulting in a change in more than fifty percent (50%) of the voting control of [CB Operating]."

Notably, the SCADA License provision requires only notice — not consent — upon a change of control. The licensor does not have a termination right triggered by a change of control, nor does the provision alter the economic terms of the license upon a change of control.

Analysis. The proposed IPO involves the issuance of primary shares of common stock by CBR (the ultimate parent of CB Operating) and the sale of secondary shares by Pinnacle Vista Capital Partners III, LP. CB Operating is a wholly owned indirect subsidiary of CBR, and its direct equity ownership will not change in connection with the IPO. The question is whether the change in the ownership of CBR's common stock at the public-company level constitutes a change in the "voting control" of CB Operating for purposes of the change-of-control definition.

Based on our analysis, the IPO is unlikely to constitute a "Change of Control" of CB Operating as defined in the SCADA License. Following the base Offering (without exercise of the underwriters' overallotment option), Pinnacle Vista is expected to retain approximately 49% of the voting power of CBR's outstanding common stock, and no single third-party investor will acquire more than 50% of the voting power. Even if the overallotment option is exercised in full, Pinnacle Vista is expected to retain approximately 47% of the voting power. At no point during the Offering will a new third party acquire more than 50% of CBR's voting control, and accordingly, the change-of-control threshold is not triggered.

Recommendation. Although we do not believe the IPO triggers the change-of-control provision, we recommend providing precautionary notice to the SCADA licensor in connection with the IPO closing. This serves to maintain a transparent commercial relationship with a critical technology vendor and to eliminate any argument that the Company failed to comply with the notice provision. We recommend that the notice letter be drafted in coordination with Dale Renfroe (COO) and reviewed by this firm prior to delivery. The notice should be delivered no later than the closing date of the Offering.

B. Battery Management System License (Brazos Storage)

The BMS License contains a more restrictive change-of-control provision at Section 11.2 of the agreement, which provides as follows (paraphrased):

"[Brazos Energy Storage LLC] shall not undergo a Change of Control without the prior written consent of [Licensor], which consent shall not be unreasonably withheld, conditioned, or delayed. For purposes of this Section, 'Change of Control' means the acquisition, directly or indirectly, by a third party of more than fifty percent (50%) of the voting securities or equity interests of [Brazos Energy Storage LLC]."

Unlike the SCADA License, the BMS License requires prior written consent of the licensor in the event of a change of control. However, the definition of "Change of Control" is focused on the acquisition by a third party of more than 50% of the voting securities of Brazos Energy Storage LLC specifically (not CBR or CB Operating).

Analysis. The IPO does not constitute a change of control under the BMS License definition. The IPO involves the issuance and sale of shares of CBR (the ultimate parent) at the public-company level. Brazos Energy Storage LLC is an indirect subsidiary of CBR, and the indirect equity ownership of Brazos will not change in connection with the IPO — CBR and its wholly owned subsidiaries will continue to hold 100% of the equity interests in Brazos Energy Storage LLC both before and after the IPO. The change-of-control definition requires acquisition of the equity interests of Brazos itself by a third party, which is not occurring. No consent is required under the BMS License in connection with the IPO.

Recommendation. No action is required at this time with respect to the BMS License. However, we recommend that the Company monitor any subsequent transactions that could affect the ownership of Brazos Energy Storage LLC, including any future secondary offerings by Pinnacle Vista that reduce its holdings below 50% of CBR's voting power, or any potential disposition of the Brazos Storage facility or the SPV that holds it, as such transactions could potentially trigger the change-of-control provision.

C. Other Technology Licenses

We reviewed the ERP subscription, GIS platform license, weather-data subscription agreements, cybersecurity platform license, and standard commercial software volume licenses for change-of-control, assignment, and anti-assignment provisions. None of these agreements contain change-of-control provisions that would be triggered by the IPO. The ERP subscription and weather-data subscriptions are cloud-based SaaS arrangements that do not include change-of-control provisions. The GIS platform license and cybersecurity license include standard anti-assignment clauses that restrict assignment of the license to a third party without consent but do not define an IPO or change in the licensee's parent-company ownership as an "assignment" or a "change of control."

Conclusion. No consent or notice is required under any of the Company's other technology licenses in connection with the IPO.

IX. IP Provisions in Material Commercial Contracts

In addition to the technology licenses reviewed above, we examined the IP-related provisions contained in the Company's other material commercial contracts to identify any potential issues that could affect the Company's IP rights or create obligations to third parties with respect to the Company's proprietary technology.

A. Power Purchase Agreements (PPAs)

We reviewed the PPAs across the Company's operating portfolio, including the long-term fixed-price PPAs, corporate PPAs, and any merchant arrangements. The PPAs reviewed generally do not contain IP-related provisions beyond standard confidentiality obligations that protect both parties' proprietary and commercial informat

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 599 Lexington Avenue New York, New York 10022
MEMORANDUM
TO: Jennifer Kwon, Responsible Partner, Capital Markets
FROM: Brendan Walsh, Lead Associate, Capital Markets Natasha Forbes, Working Associate, Capital Markets
DATE: April 25, 2022
RE: Due Diligence Memorandum — Intellectual Property and Technology Calloway-Briggs Renewables Inc. — Proposed Initial Public Offering
MATTER NO.: C&H Matter No. 1015-00001
CLIENT: Calloway-Briggs Renewables Inc. ("CBR" or the "Company")
This memorandum is prepared in connection with the representation of Calloway-Briggs Renewables Inc. by Calderwood & Harkness LLP and is protected by attorney-client privilege and the work-product doctrine. This memorandum reflects the mental impressions, conclusions, opinions, and legal theories of counsel and has been prepared in anticipation of securities-law compliance obligations and potential litigation. This memorandum shall not be disclosed to any third party, including the Company's auditors, underwriters, or underwriters' counsel, without the prior written authorization of Jennifer Kwon or another authorized partner of Calderwood & Harkness LLP. Any such disclosure could result in a waiver of applicable privileges.
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I. Executive Summary
This memorandum summarizes the findings of our intellectual property and technology due diligence review conducted in connection with the proposed initial public offering (the "IPO" or the "Offering") by Calloway-Briggs Renewables Inc. ("CBR" or the "Company") of shares of its common stock on the New York Stock Exchange under the proposed ticker symbol "CBRI." The anticipated gross proceeds of the Offering are approximately $600,000,000, consisting of a combination of primary shares to be issued by the Company and secondary shares to be sold by Pinnacle Vista Capital Partners III, LP ("Pinnacle Vista"), the Company's principal stockholder. The Offering is expected to be underwritten by Pinnacle Capital Markets, Ashford Bancorp, and Dunmore Savings Bank, as joint book-running managers, with a syndicate of additional underwriters.
Scope of Review. Our review encompassed all intellectual property ("IP") assets held by CBR and its direct and indirect subsidiaries, including without limitation: (a) registered and unregistered trademarks and service marks; (b) trade secrets and proprietary know-how; (c) proprietary software platforms and applications; (d) Supervisory Control and Data Acquisition ("SCADA") systems and related operational technology; (e) domain names and internet properties; (f) copyrights and copyright registrations; and (g) third-party technology license agreements. We also reviewed IP-related provisions contained in the Company's material commercial contracts, including power purchase agreements ("PPAs"), engineering, procurement, and construction ("EPC") agreements, operations and maintenance ("O&M") agreements, and tax-equity partnership agreements.
Sources Reviewed. Our findings are based on the following sources:
• Responses to the Due Diligence Request List — Intellectual Property (Document 12 of the Due Diligence Request List), as provided by the Company through its legal counsel and uploaded to the virtual data room maintained by Sundial Technologies;
• Interviews conducted with Sandra Haverford, General Counsel and Corporate Secretary of CBR; Dale Renfroe, Chief Operating Officer of CBR; and Tomás Quintero, Senior Vice President, Project Development of CBR;
• Review of documents posted to the virtual data room, including corporate formation documents, intercompany agreements, license agreements, employee agreements, and contractor agreements;
• Searches of the United States Patent and Trademark Office ("USPTO") Trademark Electronic Search System ("TESS") database, conducted on April 11, 2022, and supplemented on April 19, 2022; and
• Review of publicly available domain-name registration records (WHOIS databases) and the Uniform Domain-Name Dispute-Resolution Policy ("UDRP") complaint databases maintained by the World intellectual Property Organization ("WIPO") and the National Arbitration Forum.
Overall Assessment. Based on our review, CBR's intellectual property and technology portfolio is consistent with that of a utility-scale renewable-energy developer, owner, and operator of its size and scale. The Company does not rely on patented core technology, which is typical for companies occupying this position in the renewable-energy value chain. Rather, the Company's core generation and storage technology — including wind turbines, solar photovoltaic panels and inverters, and battery-storage cells — is sourced from third-party equipment manufacturers. The Company does, however, maintain material proprietary software assets (including its internally developed Asset Performance Platform), trade secrets related to project optimization and predictive maintenance, and a well-maintained portfolio of registered trademarks protecting its brand identity.
No material IP disputes — whether involving claims by or against the Company — have been identified through our review. The Company's IP protection program, including employee confidentiality and invention-assignment agreements, contractor nondisclosure agreements, and electronic access controls, is adequate for a company of CBR's size and complexity, though certain housekeeping items and best-practice recommendations are noted herein.
We have also reviewed IP-related provisions in the Company's third-party technology license agreements to assess whether the proposed IPO would trigger any change-of-control provisions. As discussed in detail in Section VIII below, we have concluded that the IPO is unlikely to trigger any change-of-control provision in any material technology license, though we recommend providing precautionary notice to the Company's primary SCADA platform vendor.
Finally, we provide recommendations for the intellectual property and technology disclosure to be included in the Business and Risk Factors sections of the Company's Registration Statement on Form S-1 (the "S-1" or the "Registration Statement").
Key Areas of Focus. The principal areas addressed in this memorandum are as follows:
(a) SCADA systems and operational technology;
(b) proprietary monitoring and analytics software, including the Asset Performance Platform;
(c) trademarks and brand identity;
(d) trade secrets and know-how;
(e) third-party technology licenses;
(f) domain names and internet properties;
(g) IP-related provisions in the Company's material commercial contracts;
(h) cybersecurity considerations related to operational technology;
(i) employee and contractor IP assignment matters; and
(j) adequacy of proposed S-1 disclosure regarding intellectual property and technology.
II. Corporate Structure Context for IP Ownership
An understanding of the Company's corporate structure is necessary to evaluate the ownership and allocation of IP assets across the CBR enterprise. As detailed in the Due Diligence Memorandum — Corporate Structure (Document 3), the Company operates through a multi-tiered holding-company and subsidiary structure that is typical for utility-scale renewable-energy platforms. IP assets are held at multiple levels of this structure, with the allocation generally tracking the functional use of the relevant IP by the applicable entity.
Calloway-Briggs Renewables Inc. CBR is incorporated as a Delaware corporation and serves as the ultimate parent entity of the CBR enterprise. CBR directly holds the Company's portfolio of registered trademarks and service marks, including the "CALLOWAY-BRIGGS" word mark, the "CBR" word mark, the CBR stylized sunburst logo, and the "CALLOWAY-BRIGGS RENEWABLES" word mark. CBR is also the registrant of the Company's primary domain names. In its capacity as the holder of the brand-related IP, CBR licenses these marks on an intercompany basis to its operating subsidiaries, as described below.
CBR Holdings LLC. CBR Holdings LLC is a Delaware limited liability company and a direct, wholly owned subsidiary of CBR. CBR Holdings serves as an intermediate holding company and does not directly hold any IP assets.
Calloway-Briggs Operating Company LLC ("CB Operating"). CB Operating is a Texas limited liability company, a direct, wholly owned subsidiary of CBR Holdings LLC, and the principal operating entity within the CBR enterprise. CB Operating holds the Company's proprietary software assets, including the Asset Performance Platform ("APP"), all proprietary SCADA customizations and integration layers, and the enterprise-level third-party technology licenses (including the primary SCADA platform enterprise license and related software subscriptions). CB Operating employs the approximately 1,240 employees of the CBR enterprise, including the Company's software engineering and data-science team. Accordingly, CB Operating is the beneficiary of all employee confidentiality and invention-assignment agreements, and all employee-created IP vests in CB Operating.
Project Special-Purpose Vehicles ("SPVs"). The Company's individual operating and under-construction projects are held through separate project-level SPVs, each of which is a direct or indirect subsidiary of CB Operating. These SPVs include the following:
• Solaris West Solar LLC (Kern County, California; 500 MW AC)
• Red Mesa Wind Energy LLC (Caddo County, Oklahoma; 400 MW)
• Painted Rock Solar LLC (Maricopa County, Arizona; 350 MW AC)
• Pronghorn Wind LLC (Carson County, Texas; 300 MW)
• Brazos Energy Storage LLC (Fort Bend County, Texas; 200 MW / 800 MWh)
• Mesquite Wind Holdings LLC (Crockett County, Texas; 420 MW; under construction)
• Cimarron Solar Development LLC (Doña Ana County, New Mexico; 350 MW AC; under construction)
Each project SPV holds project-specific technology licenses (to the extent not held at the CB Operating level), site-level SCADA control-system configurations, and project-specific engineering deliverables and design documents received from EPC contractors. The SPVs also hold the project-specific environmental assessments and permitting deliverables prepared by Greenridge Environmental Sciences LLC and other consultants.
CBR Development Co. LLC ("CBR Development"). CBR Development is a Texas limited liability company and a direct, wholly owned subsidiary of CB Operating. CBR Development holds the Company's development-stage IP assets, including the proprietary GIS-based development-pipeline analytics tool and related resource-assessment models and data layers. CBR Development employs the Company's project-development team and is the entity through which the Company evaluates and advances its approximately 6.2 GW development-stage pipeline.
Pinnacle Vista Capital Partners III, LP. Pinnacle Vista is the Company's principal stockholder, having acquired its majority interest in 2016. We confirmed that no IP assets of any kind are held by Pinnacle Vista or any of its affiliated entities. All IP assets reside within the CBR corporate structure.
Intercompany IP License Agreements. CBR, as the owner of the registered trademarks, has entered into an Intercompany Trademark License Agreement (dated January 15, 2017, as amended March 1, 2020) with CB Operating, pursuant to which CBR grants to CB Operating a non-exclusive, royalty-free, perpetual, irrevocable license to use the CALLOWAY-BRIGGS, CBR, and related trademarks and service marks in connection with the operation of the Company's renewable-energy projects and the conduct of its business. This license extends to sublicensing by CB Operating to the project SPVs. The intercompany license is on arm's-length terms and does not present any issues for purposes of the Offering. There are no other intercompany IP license agreements within the CBR structure.
III. Trademarks and Brand Identity
A. Registered Trademarks
The Company maintains a portfolio of four registered trademarks with the USPTO, all of which are owned by Calloway-Briggs Renewables Inc. (the parent entity). The table below summarizes the registered marks:
With respect to the registered trademarks, we note the following:
• Class 40 (Energy Generation): All four marks are registered in International Class 40, which covers treatment of materials, including the generation of electricity from renewable sources. This is the primary classification for the Company's core business activity.
• Class 42 (Engineering Services): The CALLOWAY-BRIGGS word mark and the CBR stylized sunburst design logo are additionally registered in International Class 42, covering scientific and technological services, including engineering design and consulting services related to renewable-energy projects.
• Maintenance Filings: All registrations are current. Sections 8 and 15 affidavits (declarations of continued use and incontestability) have been timely filed for the CALLOWAY-BRIGGS word mark. Maintenance filings for the remaining marks are not yet due based on their registration dates. The Company's General Counsel, Sandra Haverford, has confirmed that the Company utilizes an automated docketing system to track renewal deadlines.
• No Oppositions or Cancellation Proceedings: Our search of the USPTO Trademark Trial and Appeal Board ("TTAB") records revealed no pending opposition proceedings, cancellation proceedings, or other contested matters involving any of the Company's registered marks.
B. Unregistered Marks and Common-Law Rights
In addition to its registered trademark portfolio, the Company uses a number of unregistered marks in connection with its business. Most notably, the Company uses project-specific names as identifiers for its individual renewable-energy projects, both in commercial relationships (e.g., in PPAs and interconnection agreements) and in marketing and public-relations materials. These project names include the following:
"Solaris West," "Red Mesa," "Painted Rock," "Pronghorn," "Brazos Storage," "Mesquite Wind," "Cimarron Solar," "Silverleaf Wind," and "Copper Basin"
These names are used as project identifiers in the ordinary course of business but are not registered as trademarks with the USPTO or any state trademark registry. The Company has acquired common-law trademark rights in these project names through their continuous use in commerce in the states in which the respective projects are located and where the Company's business is conducted, including Texas, Oklahoma, Arizona, New Mexico, and California.
Recommendation: While the lack of registration for project-specific names does not present a material risk to the Offering, we recommend that the Company consider registering certain key project names if the Company intends to use them prominently in public-company marketing, branding, or investor-relations materials following the IPO. Federal registration would provide nationwide constructive notice of the Company's claims to these marks and would strengthen enforcement rights. This is not a gating issue for the S-1 filing or effectiveness.
C. Domain Names
The Company maintains the following primary domain names, all of which are registered to Calloway-Briggs Renewables Inc.:
All domain-name registrations are current through at least 2025. The Company's primary corporate website is hosted at calloway-briggs.com, and the remaining domains redirect to this primary site. We confirmed through a review of WIPO and National Arbitration Forum records that no UDRP proceedings or other domain-name disputes have been filed involving any of the Company's domain names. Similarly, the Company has not initiated any UDRP proceedings against third parties.
D. Trademark-Related Risks
Based on our review, the Company's trademark portfolio is well-maintained and presents no material risk to the Offering. Specifically:
• No Pending Trademark Litigation. The Company is not a party to any pending litigation involving trademark infringement, dilution, unfair competition, or related claims.
• No Cease-and-Desist Letters. The Company has neither received nor sent any cease-and-desist letters related to trademark matters within the past three years. Sandra Haverford confirmed this during our interview on April 8, 2022.
• Clearance Search Results. We conducted a comprehensive clearance search of the USPTO TESS database and commercially available trademark databases for marks that are identical or confusingly similar to the Company's registered marks in the renewable-energy sector. Our search did not identify any marks that present a material risk of confusion or that would support a third-party claim against the Company's registered marks.
S-1 Disclosure Recommendation: The Registration Statement should include a standard risk factor regarding the possibility that third parties may assert intellectual property claims against the Company, including trademark infringement claims. However, based on our review, no company-specific trademark risk warrants individualized disclosure in the risk factors or elsewhere in the S-1.
IV. SCADA Systems and Operational Technology
A. Overview of SCADA Infrastructure
CBR utilizes Supervisory Control and Data Acquisition ("SCADA") systems across its entire portfolio of operating and under-construction renewable-energy projects. SCADA technology is central to the Company's ability to monitor, control, and optimize the performance of its utility-scale solar, wind, and battery-storage assets in real time. As of the date of this memorandum, the Company's operating portfolio comprises 22 projects with an aggregate capacity of approximately 3.8 gigawatts ("GW"), and the Company has two projects under construction — Mesquite Wind (420 MW, Crockett County, Texas) and Cimarron Solar (350 MW AC, Doña Ana County, New Mexico) — for which SCADA systems are being commissioned as part of the construction process.
The Company's SCADA infrastructure is organized around a distributed architecture. Each project site is equipped with local control systems, including programmable logic controllers ("PLCs"), remote terminal units ("RTUs"), and site-level servers that collect and process operational data from individual generation units (e.g., wind turbines, solar inverters, battery racks) and balance-of-plant equipment (e.g., substations, meteorological stations, tracker systems). This site-level data is transmitted via secure telecommunications links to the Company's centralized operations center, located at CBR's corporate headquarters at 4200 Ridgeline Parkway, Suite 1100, Austin, Texas 78746 (the "Operations Center"). The Operations Center is staffed 24 hours a day, 7 days a week, and serves as the command center for real-time monitoring, alarm management, remote dispatch, and coordination with grid operators (principally ERCOT, SPP, CAISO, and WAPA, depending on project location).
The SCADA systems are integral to the Company's operations in several critical respects: they enable real-time performance monitoring and anomaly detection; they support automated and manual curtailment management in response to grid-operator instructions; they collect the operational data that forms the basis for revenue reporting, lender reporting, and tax-equity partner reporting; and they provide the raw data feeds that are processed by the Company's proprietary Asset Performance Platform (discussed in Section V below).
B. Third-Party SCADA Platforms
The Company does not develop its own base-level SCADA platform software. Rather, CBR licenses SCADA platform software from established third-party vendors under multi-year enterprise license agreements. The principal third-party SCADA-related licenses are as follows:
Primary SCADA Platform Enterprise License. CB Operating is a party to an Enterprise Software License Agreement (the "SCADA License") with a leading provider of SCADA and energy-management software for the utility and renewable-energy sectors. The SCADA License covers the core software platform used across the Company's wind and solar generation assets for real-time monitoring, alarm management, data historian functions, and reporting. The material terms of the SCADA License are as follows:
• Term: Seven (7) years from the effective date of the agreement, with automatic renewal for successive one-year periods unless either party provides written notice of non-renewal at least 180 days prior to the expiration of the then-current term. The initial seven-year term commenced on September 1, 2017, and accordingly, the first renewal period commenced on September 1, 2024 (projected); based on the current date, the initial term remains in effect with approximately two years and four months remaining.
• License Grant: Non-exclusive, non-transferable (except as permitted under the change-of-control provisions), enterprise-wide license to install and use the SCADA platform software at all project sites owned or operated by CB Operating and its subsidiaries.
• License Fees: Annual license fees are payable in advance on September 1 of each year. The current annual fee is approximately $1.8 million, subject to annual CPI-based escalation not to exceed 3% per year. License fees include standard maintenance, software updates, patches, and technical support during business hours. Premium 24/7 technical support is available at an additional cost; CBR has elected this option.
• No Sublicense Rights: CB Operating may not sublicense the SCADA platform software to any third party without the prior written consent of the licensor. However, the license expressly permits use by CB Operating's direct and indirect subsidiaries (including project SPVs) without the need for separate sublicenses.
• Data Ownership: The license agreement expressly provides that all operational data generated by the SCADA systems, including generation data, weather data, equipment-performance data, and alarm logs, is and shall remain the sole property of CB Operating. The licensor has no rights to use, access, or exploit such data except as necessary to provide maintenance and support services under the agreement.
• Change-of-Control Provisions: Analyzed separately in Section VIII.A below.
Battery Management System License (Brazos Storage). Brazos Energy Storage LLC, the project SPV for the Company's 200 MW / 800 MWh battery-storage facility in Fort Bend County, Texas, is a party to a separate Software License and Services Agreement (the "BMS License") with the manufacturer and integrator of the battery-storage system. The BMS License covers the proprietary battery management system ("BMS") software that controls the charging, discharging, thermal management, and degradation monitoring of the battery-storage facility. The material terms of the BMS License are as follows:
• Term: Ten (10) years from the commercial operation date ("COD") of the Brazos Storage facility. COD was achieved on August 15, 2021; accordingly, the BMS License extends through August 15, 2031.
• License Grant: Non-exclusive, non-transferable license to use the BMS software solely in connection with the operation of the Brazos Storage facility.
• License Fees: A one-time upfront license fee was paid at COD, with ongoing annual maintenance and support fees of approximately $320,000 per year, subject to annual escalation.
• Firmware Updates: The license includes all firmware updates and security patches during the term, delivered remotely or through on-site service visits.
• Change-of-Control Provisions: Analyzed separately in Section VIII.B below.
Key Observations Regarding Third-Party SCADA Licenses. We have reviewed the complete terms of the SCADA License and BMS License and note the following:
• Both licenses are non-exclusive, meaning that the Company's competitors may (and likely do) license the same or similar SCADA and BMS platforms. The Company does not derive a competitive advantage from its access to these base-level platforms; rather, the Company's competitive differentiation in technology lies in its proprietary customizations, overlays, and analytics capabilities built on top of these platforms (see Sections IV.C and V below).
• The data-ownership provisions in both licenses expressly confirm that CBR and its subsidiaries retain full ownership of all operational data generated by the licensed systems. This is a critical provision, as the operational data is the foundation for the Company's proprietary analytics and reporting capabilities.
• Neither license includes a source-code escrow arrangement. In the event that the primary SCADA vendor or the BMS vendor were to become insolvent or cease operations, the Company would not have access to the source code of the licensed platforms, which could present operational continuity risks. We discuss this further in Section XIV (Open Items and Recommendations) below.
C. Proprietary SCADA Customizations
CBR's internal engineering and software-development team has developed a substantial body of proprietary customizations, overlays, and integration layers that sit on top of the third-party SCADA platforms described above. These proprietary elements are a significant component of the Company's technology portfolio and represent a meaningful area of competitive differentiation relative to other utility-scale renewable-energy developers and operators.
The proprietary SCADA customizations are owned by CB Operating and constitute trade secrets of the Company. The customizations were developed by CB Operating employees under the terms of the Company's standard confidentiality and invention-assignment agreements, and all IP rights therein have been assigned to CB Operating. No portion of the proprietary SCADA customizations has been disclosed to any third party other than on a need-to-know basis under the protection of nondisclosure agreements.
The principal categories of proprietary SCADA customizations include:
(a) Site-Specific Alarm Configurations. The Company has developed customized alarm hierarchies and escalation protocols for each project site, tailored to the specific equipment mix, environmental conditions, and grid-operator requirements applicable to each project. These configurations go beyond the standard alarm functionality provided by the third-party SCADA platform and reflect the Company's accumulated operational experience across its 22-project portfolio.
(b) Predictive-Maintenance Algorithms. The Company's engineering team has developed proprietary algorithms that analyze SCADA data streams to predict equipment failures before they occur. Specific applications include wind-turbine gearbox failure prediction models (based on vibration-analysis data, oil-temperature trends, and historical failure patterns) and solar-panel degradation modeling (based on IV-curve analysis and performance-ratio trends). These algorithms enable the Company to schedule maintenance proactively, reducing unplanned downtime and extending equipment useful life.
(c) Curtailment-Optimization Protocols. When grid operators (e.g., ERCOT, CAISO) issue curtailment instructions, the Company's proprietary optimization protocols determine the most economically efficient allocation of curtailment across generation units within a project, taking into account individual-unit performance characteristics, PPA pricing structures, tax-equity allocation requirements, and real-time weather conditions. This functionality is particularly important for the Company's Texas-based wind projects, which are subject to periodic curtailment by ERCOT due to transmission congestion.
(d) Grid-Interconnection Management Modules. The Company has developed proprietary software modules that manage the interface between the project-level SCADA systems and the grid-operator control systems. These modules handle automated generation of telemetry data required by the grid operator, management of ramp-rate constraints, and coordination of reactive-power support obligations.
Approximately 12 full-time software engineers and data scientists employed by CB Operating are dedicated to the ongoing maintenance, enhancement, and development of these proprietary SCADA customizations. The team is led by the Company's Director of Technology and reports to Dale Renfroe, the Chief Operating Officer.
We note that no patent applications have been filed on any of the proprietary SCADA customizations. The Company's decision not to seek patent protection for these innovations is deliberate and reflects the view that trade-secret protection is more appropriate for software and algorithmic innovations in this context, given the difficulty of detecting patent infringement in proprietary internal systems and the disclosure requirements associated with the patent-prosecution process. We concur with this assessment, as discussed further in Section XII below.
V. Proprietary Monitoring and Analytics Software
A. CBR Asset Performance Platform ("APP")
The Company's most significant proprietary software asset is an internally developed platform referred to as the Asset Performance Platform, or "APP." The APP is a comprehensive, enterprise-wide software system that aggregates, processes, and presents operational and financial data from across the Company's entire portfolio of renewable-energy projects.
Functionality. The APP provides the following principal capabilities:
(a) Real-Time and Historical Data Aggregation. The APP ingests data feeds from all project-level SCADA systems and consolidates them into a unified data warehouse. This enables portfolio-level visibility into the real-time performance of all 22 operating projects and, once commissioned, the projects currently under construction.
(b) Performance Dashboards. The APP provides interactive, web-based dashboards that display key performance indicators ("KPIs") at the portfolio, project, and individual-equipment levels. KPIs include generation output (MW and MWh), capacity factor, availability, performance ratio (for solar projects), curtailment statistics, and weather conditions. Dashboards are configurable by user role and can be accessed by authorized personnel at the Operations Center or remotely via VPN.
(c) Automated Reporting. The APP generates automated periodic reports for multiple stakeholder audiences, including: (i) management reports for CBR's executive team and Board of Directors; (ii) lender reports required under the Company's project-finance credit facilities; and (iii) tax-equity partner reports required under the Company's tax-equity partnership agreements. The automated reporting functionality reduces manual data compilation and transcription errors and ensures consistency across reporting channels.
(d) Revenue Forecasting and Budget Variance Analysis. The APP incorporates proprietary forecasting models that project revenue based on weather forecasts, historical generation patterns, PPA pricing terms, and merchant-price curves. The platform also tracks actual results against budget and provides variance analysis at the project and portfolio levels.
Development History. The APP was developed in-house by CBR's technology team beginning in approximately 2018, shortly after Pinnacle Vista's investment in the Company. The platform has been iteratively enhanced through 2022, with major releases occurring approximately semi-annually. The current version of the APP (v4.2) was deployed in February 2022. The total cumulative investment in APP development, including personnel costs and third-party infrastructure costs, is estimated at approximately $8.5 million, based on information provided by the Company's finance team.
Ownership. The APP is owned by Calloway-Briggs Operating Company LLC. All development work was performed by employees of CB Operating under the terms of the Company's standard confidentiality and invention-assignment agreements. No third-party contractors or consultants contributed to the development of the APP's core functionality; certain infrastructure-related services (e.g., cloud hosting configuration) were provided by third-party consultants under work-for-hire agreements that include IP assignment provisions.
Commercial Licensing. The APP is not commercially licensed to any third party and is used solely for the Company's internal operations. The Company has not evaluated the APP for potential commercialization, and we are not aware of any plans to do so. In her interview, Sandra Haverford confirmed that the APP is treated as a proprietary internal tool and is not available to the Company's offtake counterparties, lenders, or tax-equity partners.
intellectual Property Protection. No patent applications have been filed covering the APP or any of its components. The APP is protected as a trade secret under the Company's comprehensive trade-secret protection program (see Section VI below) and as proprietary software under common-law copyright. No formal copyright registrations have been filed with the U.S. Copyright Office (see Section V.C below).
B. Development Pipeline Analytics Tool
In addition to the APP, the Company maintains a proprietary geographic information system ("GIS")-based analytics tool used by the CBR Development team to evaluate and prioritize prospective project sites within the Company's approximately 6.2 GW development-stage pipeline. The tool is owned by CBR Development Co. LLC.
Functionality. The development-pipeline analytics tool integrates multiple layers of geospatial and resource data into a unified analytical framework. The principal data layers include:
(a) Solar Irradiance Data. The tool incorporates high-resolution solar irradiance data, including global horizontal irradiance ("GHI"), direct normal irradiance ("DNI"), and diffuse horizontal irradiance, sourced from third-party data providers (licensed under the subscription agreements described in Section VII.A below) and supplemented by the Company's proprietary ground-based measurement stations.
(b) Wind-Resource Data. For wind-project development, the tool integrates mesoscale wind-resource data, including wind-speed distributions, wind-direction profiles, and turbulence-intensity estimates, from third-party providers, correlated with the Company's proprietary on-site meteorological tower data.
(c) Land-Availability Databases. The tool maintains a proprietary database of land availability, including ownership records, lease-rate benchmarks, existing land-use restrictions, environmental-sensitivity overlays (e.g., endangered-species habitats, wetlands, cultural-resource areas), and proximity to existing infrastructure.
(d) Transmission-Interconnection Queue Data. The tool tracks the status and position of interconnection-queue entries across the relevant transmission operators (ERCOT, SPP, CAISO, WAPA), enabling the development team to assess interconnection feasibility and timeline for prospective project sites.
(e) Permitting-Risk Scoring Algorithms. The Company has developed proprietary algorithms that assign permitting-risk scores to prospective project sites based on factors including local zoning requirements, historical permitting timelines in the applicable jurisdiction, proximity to military installations and airports (relevant for radar and aviation-safety assessments), and community-opposition risk indicators.
Competitive Assessment. Similar GIS-based site-selection tools are available commercially from third-party providers. However, the Company's tool is differentiated by the proprietary data layers and scoring algorithms developed by the CBR Development team based on the Company's experience in developing and operating projects across multiple markets. Tomás Quintero, SVP of Project Development, characterized the tool as a "moderate but meaningful competitive advantage" in our interview on April 12, 2022, noting that the tool enables the Company to identify and prioritize high-quality development sites more efficiently than competitors who rely solely on off-the-shelf commercial products.
intellectual Property Protection. The development-pipeline analytics tool is protected as a trade secret of CBR Development Co. LLC. No patent applications or copyright registrations have been filed.
C. Software Copyright Registrations
The Company has not filed any formal copyright registrations with the U.S. Copyright Office for the APP, the development-pipeline analytics tool, the proprietary SCADA customizations, or any other software developed by the Company. Under U.S. copyright law, copyright protection attaches automatically upon the creation and fixation of an original work of authorship, including software code. Accordingly, the Company's software assets are protected by common-law copyright even absent formal registration.
Recommendation: While formal copyright registration is not required for copyright protection to exist, registration confers certain significant benefits, including (a) the ability to bring a federal copyright-infringement action (registration is a prerequisite to suit for works of U.S. origin), (b) eligibility for statutory damages and attorney's fees (available only if registration is obtained prior to infringement or within three months of first publication), and (c) establishment of a public record of the copyright claim. We recommend that the Company consider filing copyright registrations for the APP and other key software assets as a defensive measure. This is a best-practice recommendation and is not a gating issue for the IPO.
VI. Trade Secrets and Know-How
A. Categories of Trade Secrets
CBR and its subsidiaries maintain a substantial body of trade secrets and proprietary know-how that has been developed over the course of the Company's more than ten years of operation in the utility-scale renewable-energy sector. The Company's trade secrets span the full range of its business functions, from project development through construction, operation, and financial management. The principal categories of trade secrets identified through our review include the following:
(a) SCADA Customization Code and Configuration Files. As described in Section IV.C above, the Company has developed extensive proprietary customizations to its third-party SCADA platforms, including site-specific alarm configurations, integration layers, and automated control protocols. The source code, configuration files, and related documentation for these customizations constitute trade secrets of CB Operating.
(b) Predictive-Maintenance Algorithms. The Company's proprietary algorithms for predicting equipment failures — including wind-turbine gearbox failure prediction models and solar-panel degradation models — represent significant trade secrets. These algorithms are based on the Company's analysis of multi-year operational data sets collected from its portfolio and incorporate machine-learning techniques and statistical models developed by the Company's data-science team.
(c) Curtailment-Optimization and Dispatch Protocols. The proprietary protocols used by the Company to optimize the allocation of grid-operator-mandated curtailment across its generation fleet, as well as the dispatch algorithms used to optimize the charging and discharging cycles of the Brazos Storage facility, constitute trade secrets.
(d) Project-Development Site-Selection Methodologies. The proprietary methodologies and scoring algorithms used in the Company's GIS-based development-pipeline analytics tool (see Section V.B above), including the permitting-risk scoring algorithms and the Company's proprietary data layers, constitute trade secrets of CBR Development.
(e) Financial Modeling Templates for Tax-Equity Structuring. The Company has developed sophisticated financial models for structuring tax-equity partnerships, including models that implement the hypothetical liquidation at book value ("HLBV") methodology for allocating partnership income and losses. These models were developed in coordination with Kessler McBride & Associates LLP, the Company's independent tax advisors, and reflect the Company's accumulated experience in negotiating and structuring tax-equity transactions. The models are considered proprietary and confidential.
(f) Vendor Pricing Data and Equipment Procurement Strategies. The Company maintains detailed proprietary databases of vendor pricing for key equipment categories, including wind turbines, solar panels, inverters, tracker systems, battery cells, and transformers. These databases, together with the Company's procurement strategies and negotiating playbooks, constitute trade secrets.
(g) Operational Best Practices and Maintenance Protocols. The Company has accumulated a significant body of operational know-how across its 22 operating projects, including best practices for vegetation management at solar sites, cold-weather operations protocols for wind projects, and preventive-maintenance schedules that have been optimized based on the Company's field experience. These protocols and best practices are documented in internal manuals and procedures that constitute trade secrets.
B. Protection Measures
The Company maintains a comprehensive trade-secret protection program that includes contractual, physical, and electronic measures designed to safeguard the confidentiality of its proprietary information. We have reviewed the principal components of this program and assess them as adequate for a company of CBR's size and complexity. The key elements of the program are as follows:
Employee Confidentiality and Invention-Assignment Agreements. All employees of CB Operating are required to sign a standard form of Confidentiality, Non-Disclosure, and Invention Assignment Agreement (the "CIAA") upon hire. The CIAA requires each employee to maintain the confidentiality of all proprietary information of the Company during and after employment, to assign to the Company all inventions, improvements, works of authorship, and other intellectual property created during the employee's employment and related to the Company's business, and to cooperate with the Company in obtaining intellectual-property protections for such inventions. We reviewed the current form of CIAA and confirmed that it is comprehensive and enforceable under applicable law (subject to the state-specific limitations discussed below). We reviewed human-resources records in coordination with Rachel Whitmore, the Company's Chief People Officer, and confirmed that approximately 1,240 employees have executed the CIAA or its predecessor form. (See Section XI below for a discussion of a limited gap identified with respect to certain pre-2016 employees.)
Exit-Interview Protocols and Return-of-Materials Certifications. The Company has established formal procedures for departing employees, including mandatory exit interviews conducted by the Human Resources department and, for employees with access to material trade secrets, by the Legal department. Departing employees are required to return all Company property, including laptops, mobile devices, access badges, and physical documents, and to execute a Return of Materials and Reaffirmation of Obligations certification confirming the return of all materials and the employee's continuing obligations under the CIAA.
Non-Compete and Non-Solicitation Agreements. Key technical employees, including members of the engineering, software development, and project-development teams, are subject to non-competition and non-solicitation agreements with a 12-month post-termination restrictive period. These agreements are generally enforceable in Texas, where the majority of the Company's technical employees are based, provided that the restrictions are reasonable in scope, geography, and duration and are supported by adequate consideration. However, we note that California law generally renders non-competition agreements unenforceable (Cal. Bus. & Prof. Code § 16600), and this limitation affects a subset of the Company's employees, including certain members of the team based at the Solaris West project in Kern County, California. The Company should be mindful of this limitation in assessing the risk of competitive hiring of California-based employees.
Physical and Electronic Access Controls. The Company maintains role-based access controls for its information-technology systems. Access to the SCADA systems, the APP, and the development-pipeline analytics tool is restricted to authorized personnel on a need-to-know basis. Multi-factor authentication is required for all access to the Company's IT systems, and remote access is permitted only through the Company's virtual private network ("VPN"). The Operations Center in Austin is secured with badge-access entry, 24/7 surveillance, and restricted-access zones for server rooms and network infrastructure.
Third-Party NDAs. All third-party consultants, contractors, and service providers are required to execute nondisclosure agreements ("NDAs") before receiving access to any proprietary information of the Company. The Company's standard-form NDA was reviewed and is consistent with market practice. The NDA covers all proprietary and confidential information, survives termination of the engagement, and includes customary remedies (including injunctive relief) for breach.
Board-Level IP and Trade-Secret Protection Policies. The Company's Board of Directors has adopted a formal intellectual Property and Trade Secret Protection Policy (the "IP Policy"), which was most recently updated on November 14, 2021, as part of the Company's IPO-readiness assessment. The IP Policy establishes standards for the identification, classification, and protection of the Company's trade secrets and other proprietary information; designates the General Counsel as the officer responsible for IP protection; and requires annual reviews of the Company's trade-secret protection program.
C. Risk Assessment
Based on our review, the Company's trade-secret protection program is functioning effectively. We note the following findings:
• No Known Misappropriation Incidents. There have been no known incidents of trade-secret misappropriation involving the Company's proprietary information within the past five years. The Company has not initiated any trade-secret misappropriation claims, and no such claims have been asserted against the Company.
• 2021 Employee Departure. In 2021, a senior engineer in the Company's SCADA customization team departed to accept a position with a competing utility-scale renewable-energy developer. Sandra Haverford's team conducted a review of the circumstances surrounding the departure, including an analysis of the departing employee's access to proprietary information, a review of the employee's electronic files and communications in the period preceding departure, and consultations with the employee's former supervisor. Based on this review, the Company determined that there was no evidence of actionable misappropriation of trade secrets. The departing employee executed the standard Return of Materials and Reaffirmation of Obligations certification, and the Company returned all Company-owned devices. The Company continues to monitor publicly available information regarding the competing employer's technology offerings. As of the date of this memorandum, no further action has been taken.
S-1 Disclosure Recommendation: The Registration Statement should include a risk factor addressing the Company's reliance on trade secrets and proprietary information to protect its competitive position, the inherent limitations of trade-secret protection (including the risk that trade secrets may be independently developed by competitors or inadvertently disclosed), the Company's dependence on key technical personnel for institutional know-how, and the enforceability limitations of non-competition agreements in certain jurisdictions (particularly California).
VII. Third-Party Technology Licenses
A. Inventory of Material Technology Licenses
The Company is a party to a number of third-party technology license and subscription agreements that support its operations. In addition to the primary SCADA platform enterprise license and the BMS license discussed in Section IV.B above, the following material technology licenses were identified and reviewed:
Enterprise Resource Planning (ERP) Software License. CB Operating subscribes to a cloud-based ERP platform for financial management, human-capital management, procurement, and supply-chain management. The subscription is on an annual-renewal basis, with the current term running through December 31, 2022. License fees are approximately $780,000 per year. The ERP platform is provided on a software-as-a-service ("SaaS") basis and does not involve on-premises installation.
Geographic Information System (GIS) Base Platform License. CBR Development Co. LLC licenses a commercial GIS platform from a leading provider, which serves as the foundational software layer for the Company's proprietary development-pipeline analytics tool. The license is on a multi-year enterprise basis with a current term expiring on June 30, 2024, and automatic annual renewal thereafter. Annual license fees are approximately $210,000.
Weather and Resource-Data Subscription Agreements. The Company subscribes to multiple third-party data services that provide real-time and historical solar irradiance, wind-speed, and meteorological data. These data feeds are integrated into both the SCADA systems and the APP. The principal data subscriptions include: (a) a solar irradiance data service providing satellite-derived irradiance measurements and forecasts, with an annual subscription fee of approximately $175,000; and (b) a wind-resource data service providing mesoscale wind modeling and on-demand resource assessments, with an annual subscription fee of approximately $140,000. Both subscriptions are on annual-renewal terms.
Cybersecurity Monitoring and Intrusion-Detection Software. The Company licenses an enterprise cybersecurity platform that provides continuous monitoring of the Company's IT and operational-technology ("OT") networks, including intrusion detection, vulnerability scanning, and security-event logging. The license is on an annual subscription basis with a current annual fee of approximately $420,000.
Standard Commercial Software. The Company maintains volume licensing agreements for standard commercial software products, including Ashgrove Software, Crestline Systems cloud services, and related productivity tools. These licenses are on standard commercial terms and do not present any material issues.
B. License Terms Review Summary
We have reviewed the terms of all material technology licenses identified above, as well as the SCADA License and BMS License discussed in Section IV.B. The key findings of our license-terms review are as follows:
• Non-Exclusive Licenses. All material technology licenses held by the Company and its subsidiaries are non-exclusive. No license contains exclusivity provisions that would restrict the Company's competitors from accessing the same or similar technology from the same vendors.
• Assignment and Change-of-Control Provisions. The SCADA License and BMS License contain change-of-control provisions that are analyzed in detail in Section VIII below. The ERP subscription, GIS platform license, weather-data subscriptions, and cybersecurity platform license do not contain change-of-control provisions that would be triggered by the IPO.
• Expiration and Renewal. No material technology license is approaching expiration within the next 12 months without an auto-renewal mechanism in place. The ERP subscription renews annually (current term through December 31, 2022); the GIS license term extends through June 30, 2024; the weather-data subscriptions and cybersecurity subscription are all on auto-renewal. The SCADA License initial term extends through September 1, 2024, and the BMS License term extends through August 15, 2031. Accordingly, there is no near-term risk of license expiration that would create a material operational disruption.
• No Material Disputes. The Company has confirmed that there are no pending disputes, claims, or controversies with any of its technology licensors. All license fees are current, and there are no outstanding defaults or notices of default under any technology license agreement.
• Aggregate Annual Technology License Spend. Based on information provided by the Company's finance team and our review of the license agreements, the Company's aggregate annual spend on technology licenses is approximately $4.2 million for fiscal year 2021. This figure includes the SCADA License, BMS License, ERP subscription, GIS platform, weather-data subscriptions, cybersecurity platform, and standard commercial software licenses.
VIII. IPO-Related Change-of-Control Analysis for IP/Technology Agreements
A critical component of the IP and technology due diligence review in the context of the proposed IPO is the analysis of whether the Offering would trigger any change-of-control or assignment provisions in the Company's material technology license agreements. Such triggers, if applicable, could require the Company to obtain third-party consents, provide notices, or face the risk of license termination in connection with the IPO. We have reviewed all material technology licenses and provide the following analysis.
A. SCADA Platform Enterprise License
The SCADA License contains a change-of-control provision at Section 14.3 of the agreement, which provides as follows (paraphrased):
"In the event of a Change of Control of [CB Operating], [CB Operating] shall provide [Licensor] with written notice of such Change of Control within thirty (30) days following the occurrence thereof. For purposes of this Section, 'Change of Control' means any transaction or series of related transactions resulting in a change in more than fifty percent (50%) of the voting control of [CB Operating]."
Notably, the SCADA License provision requires only notice — not consent — upon a change of control. The licensor does not have a termination right triggered by a change of control, nor does the provision alter the economic terms of the license upon a change of control.
Analysis. The proposed IPO involves the issuance of primary shares of common stock by CBR (the ultimate parent of CB Operating) and the sale of secondary shares by Pinnacle Vista Capital Partners III, LP. CB Operating is a wholly owned indirect subsidiary of CBR, and its direct equity ownership will not change in connection with the IPO. The question is whether the change in the ownership of CBR's common stock at the public-company level constitutes a change in the "voting control" of CB Operating for purposes of the change-of-control definition.
Based on our analysis, the IPO is unlikely to constitute a "Change of Control" of CB Operating as defined in the SCADA License. Following the base Offering (without exercise of the underwriters' overallotment option), Pinnacle Vista is expected to retain approximately 49% of the voting power of CBR's outstanding common stock, and no single third-party investor will acquire more than 50% of the voting power. Even if the overallotment option is exercised in full, Pinnacle Vista is expected to retain approximately 47% of the voting power. At no point during the Offering will a new third party acquire more than 50% of CBR's voting control, and accordingly, the change-of-control threshold is not triggered.
Recommendation. Although we do not believe the IPO triggers the change-of-control provision, we recommend providing precautionary notice to the SCADA licensor in connection with the IPO closing. This serves to maintain a transparent commercial relationship with a critical technology vendor and to eliminate any argument that the Company failed to comply with the notice provision. We recommend that the notice letter be drafted in coordination with Dale Renfroe (COO) and reviewed by this firm prior to delivery. The notice should be delivered no later than the closing date of the Offering.
B. Battery Management System License (Brazos Storage)
The BMS License contains a more restrictive change-of-control provision at Section 11.2 of the agreement, which provides as follows (paraphrased):
"[Brazos Energy Storage LLC] shall not undergo a Change of Control without the prior written consent of [Licensor], which consent shall not be unreasonably withheld, conditioned, or delayed. For purposes of this Section, 'Change of Control' means the acquisition, directly or indirectly, by a third party of more than fifty percent (50%) of the voting securities or equity interests of [Brazos Energy Storage LLC]."
Unlike the SCADA License, the BMS License requires prior written consent of the licensor in the event of a change of control. However, the definition of "Change of Control" is focused on the acquisition by a third party of more than 50% of the voting securities of Brazos Energy Storage LLC specifically (not CBR or CB Operating).
Analysis. The IPO does not constitute a change of control under the BMS License definition. The IPO involves the issuance and sale of shares of CBR (the ultimate parent) at the public-company level. Brazos Energy Storage LLC is an indirect subsidiary of CBR, and the indirect equity ownership of Brazos will not change in connection with the IPO — CBR and its wholly owned subsidiaries will continue to hold 100% of the equity interests in Brazos Energy Storage LLC both before and after the IPO. The change-of-control definition requires acquisition of the equity interests of Brazos itself by a third party, which is not occurring. No consent is required under the BMS License in connection with the IPO.
Recommendation. No action is required at this time with respect to the BMS License. However, we recommend that the Company monitor any subsequent transactions that could affect the ownership of Brazos Energy Storage LLC, including any future secondary offerings by Pinnacle Vista that reduce its holdings below 50% of CBR's voting power, or any potential disposition of the Brazos Storage facility or the SPV that holds it, as such transactions could potentially trigger the change-of-control provision.
C. Other Technology Licenses
We reviewed the ERP subscription, GIS platform license, weather-data subscription agreements, cybersecurity platform license, and standard commercial software volume licenses for change-of-control, assignment, and anti-assignment provisions. None of these agreements contain change-of-control provisions that would be triggered by the IPO. The ERP subscription and weather-data subscriptions are cloud-based SaaS arrangements that do not include change-of-control provisions. The GIS platform license and cybersecurity license include standard anti-assignment clauses that restrict assignment of the license to a third party without consent but do not define an IPO or change in the licensee's parent-company ownership as an "assignment" or a "change of control."
Conclusion. No consent or notice is required under any of the Company's other technology licenses in connection with the IPO.
IX. IP Provisions in Material Commercial Contracts
In addition to the technology licenses reviewed above, we examined the IP-related provisions contained in the Company's other material commercial contracts to identify any potential issues that could affect the Company's IP rights or create obligations to third parties with respect to the Company's proprietary technology.
A. Power Purchase Agreements (PPAs)
We reviewed the PPAs across the Company's operating portfolio, including the long-term fixed-price PPAs, corporate PPAs, and any merchant arrangements. The PPAs reviewed generally do not contain IP-related provisions beyond standard confidentiality obligations that protect both parties' proprietary and commercial informat

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