CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED — WORK PRODUCT

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED — WORK PRODUCT
ORGANIZATIONAL MEETING AGENDA
PROPOSED INITIAL PUBLIC OFFERING OF COMMON STOCK
OF
CALLOWAY-BRIGGS RENEWABLES INC.
Calderwood & Harkness LLP Matter No. 1015-00001
Meeting Dates: March 14–18, 2022
Location: Calloway-Briggs Renewables Inc. Headquarters 4200 Ridgeline Parkway, Suite 1100 Austin, TX 78746
Prepared by: Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022
Circulated by: Brendan Walsh Lead Associate, Capital Markets Calderwood & Harkness LLP
Date of Distribution: March 11, 2022
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I. ATTENDEE LIST
The following individuals have been invited to attend the organizational meeting for the proposed initial public offering (the "Offering") of common stock of Calloway-Briggs Renewables Inc. ("CBR" or the "Company"). Except as otherwise noted, all individuals are expected to attend in person at the Company's headquarters in Austin, Texas. Certain participants identified below as available by phone will participate in specific sessions as indicated in this agenda.
A. Calloway-Briggs Renewables Inc. (the "Issuer")
B. Pinnacle Vista Capital Partners (Pre-IPO Majority Stockholder)
C. Issuer's Counsel — Calderwood & Harkness LLP
599 Lexington Avenue, New York, NY 10022
Note: Leonard Cross (Specialist Partner, Tax) and Theodore Langston (Billing Partner, Capital Markets) will be available by telephone as needed throughout the week and may join specific sessions at the request of the working group.
D. Lead-Left Book-Runner — Hargrove Keating & Co.
383 Madison Place, New York, NY 10017
E. Joint Book-Runners
F. Underwriters' Counsel — Prescott, Danforth & Yee LLP
1271 Avenue of the Americas, New York, NY 10020
G. Selling Stockholder's Counsel — Whitfield Archer & Doss LLP
51 West 52nd Street, New York, NY 10019
H. Independent Auditor — Ashford & Pemberton LLP
30 Rockefeller Plaza, Suite 2800, New York, NY 10112
I. Other Participants (Available by Phone / Invited for Specific Sessions)
The following individuals will participate by telephone or videoconference and have been invited to join specific sessions as indicated throughout this agenda. They should be available during the days and times noted herein and may be called upon for additional questions or follow-up discussion at the discretion of the session moderator.
II. DAY 1 — MONDAY, MARCH 14, 2022
A. Welcome and Introductions (9:00 a.m. – 9:30 a.m.)
Garrett Calloway, Co-Founder, Chairman and Chief Executive Officer of Calloway-Briggs Renewables Inc., will open the organizational meeting with welcome remarks. Mr. Calloway will provide a brief overview of the Company's founding vision, its growth trajectory over the past eight years, and the strategic rationale for pursuing the initial public offering at this time. Mr. Calloway will describe the Company's position as a leading independent renewable energy platform in the United States, with a diversified portfolio spanning utility-scale solar, onshore wind, and battery energy storage systems.
Following Mr. Calloway's remarks, each member of the working group will introduce themselves and describe their respective role in the Offering. All attendees are encouraged to provide their names, titles, firm affiliations, and a brief summary of the areas in which they will be contributing to the transaction.
Jennifer Kwon, Responsible Partner at Calderwood & Harkness LLP, will then provide an overview of the meeting objectives and the schedule for the remainder of the week. Ms. Kwon will describe the purpose of the organizational meeting as the formal launch of the IPO process, during which the working group will establish the key parameters of the Offering, identify critical legal, financial, regulatory, and logistical workstreams, assign responsibilities for each workstream, and set forth a preliminary timeline for completion of all milestones leading to pricing and closing.
Ms. Kwon will designate Calderwood & Harkness LLP as coordinating counsel for the Offering. In that capacity, Calderwood & Harkness will serve as the central point of coordination for all legal workstreams, manage the drafting and filing of the Registration Statement on Form S-1, coordinate due diligence activities, and interface with the Securities and Exchange Commission, the New York Stock Exchange, and the Financial Industry Regulatory Authority on behalf of the working group. Brendan Walsh, Lead Associate at Calderwood & Harkness LLP, is designated as the day-to-day project manager for the Offering and will serve as the primary point of contact for all working group members with respect to scheduling, document circulation, and status updates.
Reference is made to the engagement letter between the Company and Calderwood & Harkness LLP executed on March 10, 2022, which sets forth the terms of Calderwood & Harkness's engagement as issuer's counsel in connection with the Offering (Calderwood & Harkness LLP Matter No. 1015-00001). A copy of the fully executed engagement letter has been provided to the Company's General Counsel, Sandra Haverford, and is on file in the Calderwood & Harkness matter records.
B. Transaction Overview and Offering Parameters (9:30 a.m. – 11:00 a.m.)
This session will provide a comprehensive overview of the proposed Offering, including the structure, size, pricing assumptions, and key financial parameters. Jennifer Kwon and Oliver Marchetti (Hargrove Keating & Co.) will jointly lead the discussion. All working group members should be present for this session, as the terms discussed herein will form the basis for the Registration Statement and underwriting documentation.
1. Proposed Offering
The Company proposes to conduct an initial public offering of shares of its common stock, par value $0.01 per share (the "Common Stock"), pursuant to a Registration Statement on Form S-1 to be filed with the Securities and Exchange Commission (the "SEC").
The principal terms of the proposed Offering are summarized as follows:
Security: Common Stock of Calloway-Briggs Renewables Inc., par value $0.01 per share.
Target Aggregate Offering Size: Approximately $600,000,000 (inclusive of full exercise of the overallotment option).
Base Offering Size: Approximately $521,700,000.
Overallotment Option (15% Greenshoe): Approximately $78,300,000.
Assumed Midpoint IPO Price: $22.00 per share.
Base Shares: Approximately 23,713,636 shares of Common Stock.
Overallotment Shares: Approximately 3,559,091 shares of Common Stock.
Total Shares (Full Exercise): Approximately 27,272,727 shares of Common Stock.
The foregoing share amounts are based on the assumed midpoint IPO price of $22.00 per share and are subject to adjustment based on the actual IPO price determined at the time of pricing. The overallotment option will be granted to the underwriters pursuant to the terms of the underwriting agreement and will be exercisable for a period of 30 days following the date of the final prospectus. The overallotment option is calculated as 15% of the base shares offered in the Offering, which is consistent with market practice for IPOs of this size and type.
2. Primary vs. Secondary Split
The Offering will consist of both primary shares offered by the Company and secondary shares offered by the selling stockholder, Pinnacle Vista Capital Partners III, LP.
Primary Shares (Company): Approximately $371,700,000 / 16,895,455 shares of Common Stock. The net proceeds from the sale of primary shares (after deducting underwriting discounts and commissions and estimated offering expenses) will be received by the Company and applied to the uses described below.
Secondary Shares (Pinnacle Vista Capital Partners III, LP): Approximately $150,000,000 / 6,818,182 shares of Common Stock. The net proceeds from the sale of secondary shares (after deducting underwriting discounts and commissions applicable thereto) will be received by Pinnacle Vista Capital Partners III, LP. The Company will not receive any proceeds from the sale of secondary shares.
3. Pre-IPO and Post-IPO Share Counts
Pre-IPO Shares Outstanding: 100,000,000 shares of Common Stock (on a fully diluted basis, after giving effect to the conversion of all outstanding preferred stock and the reclassification of the Company's capital stock as described in the corporate reorganization section below).
Post-IPO Shares Outstanding (Base, No Overallotment): 123,713,636 shares of Common Stock (consisting of 100,000,000 pre-IPO shares plus 16,895,455 primary shares issued by the Company plus the 6,818,182 secondary shares, which were already outstanding and are not newly issued).
Note: For clarity, only the primary shares represent newly issued shares that increase the total number of shares outstanding. The secondary shares sold by Pinnacle Vista are existing shares and do not increase the total shares outstanding. Therefore, post-IPO shares outstanding on a base (no overallotment) basis equal 100,000,000 plus 16,895,455, which equals 116,895,455 shares. If the overallotment option is exercised in full with additional primary shares, the post-IPO shares outstanding would be approximately 120,454,546 shares. The working group will reconcile these figures during the drafting process based on final allocation between primary and overallotment shares.
Post-IPO Shares Outstanding (Full Exercise): Approximately 127,272,727 shares, assuming the maximum number of primary and overallotment shares are issued.
4. Implied Valuations
Based on the assumed midpoint IPO price of $22.00 per share and the share counts described above, the implied valuations for the Company are as follows:
Pre-Money Equity Valuation: $2,200,000,000 (100,000,000 pre-IPO shares × $22.00 per share).
Post-Money Equity Valuation (Base): $2,721,700,000 (based on post-IPO shares outstanding multiplied by the IPO price, inclusive of primary offering proceeds).
Enterprise Value (FY 2021): Approximately $4,246,700,000 (calculated as post-money equity valuation plus total debt of $1,710,000,000 less estimated cash of $185,000,000, with adjustments for primary proceeds).
EV/EBITDA Multiple (FY 2021): Approximately 19.4x (based on FY 2021 Adjusted EBITDA of $218,600,000).
Oliver Marchetti (Hargrove Keating & Co.) will provide commentary on the valuation context, including comparable company trading multiples, precedent IPO transactions in the renewable energy sector, and current market conditions as they relate to the Offering.
5. Use of Proceeds
The Company intends to use the net proceeds from the sale of primary shares in the Offering as follows:
(a) Approximately $200,000,000 to repay a portion of the outstanding indebtedness under the Company's Term Loan B credit facility with Veltrano National Bank, as agent. The Term Loan B currently has approximately $612,500,000 outstanding as of December 31, 2021, bears interest at a variable rate, and matures in January 2029. As discussed in greater detail in the Debt and Financing Arrangements session (Day 3), the prepayment is expected to be subject to a prepayment premium of 1.00%.
(b) Approximately $100,000,000 to fund the remaining construction costs of the Cimarron Solar project, a 350 MW utility-scale solar photovoltaic facility under development in Doña Ana County, New Mexico, with an expected commercial operation date in the first quarter of 2023.
(c) Approximately $71,700,000 for general corporate purposes, which may include working capital, funding the development of projects in the Company's development pipeline, strategic acquisitions, and other capital expenditures.
The specific allocation of net proceeds among the foregoing uses may be adjusted by the Company based on business conditions and strategic priorities. The prospectus will include appropriate disclosure regarding the Company's discretion to reallocate proceeds and the specific amounts applied to each use.
6. Proposed Listing
The Company intends to apply to list the Common Stock on the New York Stock Exchange (the "NYSE") under the proposed ticker symbol "CBRI." The NYSE listing application is expected to be submitted contemporaneously with the confidential submission of the draft Registration Statement on Form S-1 to the SEC. The NYSE listing requirements and compliance analysis will be discussed in detail during the Day 4 session.
7. Issuer Information
Issuer: Calloway-Briggs Renewables Inc.
State of Incorporation: Delaware
Employer Identification Number (EIN): 83-4027615
Headquarters: 4200 Ridgeline Parkway, Suite 1100, Austin, TX 78746
Registered Agent: Capitol Statutory Services, Inc., 1209 Orange Street, Wilmington, DE 19801
C. Underwriting Syndicate and Economics (11:00 a.m. – 12:00 p.m.)
Oliver Marchetti (Hargrove Keating & Co.) and Margaret Yee (Prescott, Danforth & Yee LLP) will lead the discussion of the underwriting syndicate structure and economics. The syndicate has been formed under the leadership of Hargrove Keating & Co. as Lead-Left Book-Running Manager, with Linden Pratt Securities LLC and Graymont Brothers Inc. as Joint Book-Running Managers and two additional co-managers.
1. Syndicate Structure
The proposed syndicate structure, together with the allocation percentages and corresponding share and dollar amounts (calculated on a base offering basis at the assumed midpoint IPO price of $22.00 per share), is as follows:
The allocation percentages reflect the relative commitments of each underwriter under the base offering and will apply proportionally to any overallotment shares purchased by the underwriters.
2. Gross Spread
The underwriting discount (the "Gross Spread") has been set at 5.50% of the public offering price per share. Based on the assumed midpoint IPO price of $22.00 per share and the total number of shares offered (including full exercise of the overallotment option of approximately 27,272,727 shares), the Gross Spread is expected to be allocated as follows:
Total Gross Spread (Full Exercise): $33,000,000
Management Fee (20% of Gross Spread): $6,600,000
Underwriting Fee (20% of Gross Spread): $6,600,000
Selling Concession (60% of Gross Spread): $19,800,000
The Gross Spread of 5.50% is within the customary range for IPOs of this size in the renewable energy sector. The allocation of the Gross Spread among the management fee, underwriting fee, and selling concession components reflects standard market practice. The management fee and underwriting fee components will be allocated among the underwriters in accordance with the syndicate allocation percentages, while the selling concession will be paid to the underwriter responsible for selling the shares to investors.
3. Underwriter Expense Reimbursement
The Company has agreed to reimburse the underwriters for their reasonable out-of-pocket expenses incurred in connection with the Offering, subject to a cap of $350,000, which relates primarily to FINRA-related expenses. This cap is consistent with customary market terms and will be reflected in the underwriting agreement.
4. Underwriting Agreement Key Terms
The working group will discuss the principal terms to be included in the underwriting agreement for the Offering. The underwriting agreement will be prepared in initial draft by Prescott, Danforth & Yee LLP, as counsel to the underwriters. Calderwood & Harkness LLP will review and comment on the draft on behalf of the Company. Key terms to be addressed include:
(a) Representations and Warranties. The Company will make customary representations and warranties to the underwriters concerning the accuracy and completeness of the Registration Statement and the Prospectus, the Company's corporate organization and authority, financial statements, absence of material adverse changes, compliance with law, and other matters customary for IPOs.
(b) Conditions to Closing. The obligations of the underwriters to purchase shares at closing will be subject to customary conditions, including delivery of legal opinions from issuer's counsel and underwriters' counsel, delivery of comfort letters from the independent auditor, delivery of officers' certificates, bring-down of representations and warranties, and listing of the shares on the NYSE.
(c) Indemnification. The underwriting agreement will include customary indemnification provisions under which the Company and the selling stockholder will agree to indemnify the underwriters against losses arising from material misstatements or omissions in the Registration Statement and the Prospectus (other than information provided by the underwriters for inclusion therein), and the underwriters will agree to indemnify the Company and the selling stockholder against losses arising from information provided by the underwriters for inclusion in the Registration Statement and the Prospectus.
(d) Contribution. In the event that the indemnification provisions are unavailable or insufficient, the underwriting agreement will include contribution provisions allocating liability among the parties based on their relative fault and the benefits received by each party.
(e) Termination Provisions. The underwriting agreement will include customary termination rights in favor of the underwriters in the event of certain adverse conditions, including a material adverse change in the Company's business, financial condition, or prospects, the occurrence of certain force majeure events, or the suspension of trading on the NYSE or other major exchanges.
(f) Material Adverse Effect Definition. The working group will negotiate the definition of "Material Adverse Effect" as used in the underwriting agreement, which is expected to include customary carve-outs for industry-wide conditions, general economic conditions, and changes in applicable law.
(g) Overallotment Option Mechanics. The overallotment option will be exercisable by the underwriters for a period of 30 days following the date of the final prospectus, and may be exercised in whole or in part. The mechanics of the overallotment option, including settlement procedures and allocation among the underwriters, will be set forth in the underwriting agreement.
Margaret Yee (Prescott, Danforth & Yee LLP) will confirm the timeline for circulation of the initial draft of the underwriting agreement, which is targeted for early April 2022.
D. Lunch Break (12:00 p.m. – 1:00 p.m.)
E. Pre-IPO Capitalization and Ownership Structure (1:00 p.m. – 2:30 p.m.)
Sandra Haverford (General Counsel, CBR), Hugh Pemberton (Pinnacle Vista), and Jennifer Kwon (Calderwood & Harkness) will lead a discussion of the Company's pre-IPO capitalization and ownership structure, the post-IPO ownership implications, and the corporate reorganization required in connection with the Offering.
1. Current Ownership
The Company's equity capitalization, on a fully diluted basis after giving effect to the conversion and reclassification described below, is currently held as follows:
Pinnacle Vista Capital Partners III, LP: Approximately 62% of the fully diluted shares of Common Stock. Pinnacle Vista is the Company's largest stockholder and exercises effective control over the Company's operations and governance through its board designation rights under the existing Stockholders' Agreement.
Founders and Management (Garrett Calloway, Elaine Briggs, and others): Approximately 24% of the fully diluted shares of Common Stock. The founders' equity reflects their initial capital contributions, as well as equity grants and awards received in connection with their service to the Company.
Earlier-Stage Investors and Employees: Approximately 14% of the fully diluted shares of Common Stock, held by a combination of earlier-stage venture capital and strategic investors, as well as employees who have received equity awards under the Company's existing equity incentive plan.
2. Pinnacle Vista Investment History
Pinnacle Vista Capital Partners III, LP is a Delaware limited partnership formed as part of the Pinnacle Vista Capital Partners fund family, which is managed by Pinnacle Vista Capital Management LLC, the general partner. The key details of Pinnacle Vista's investment in the Company are as follows:
Fund: Pinnacle Vista Capital Partners Series III Fund (2016 vintage).
Fund Size: $4.8 billion.
Total Assets Under Management (All Funds): Approximately $14.2 billion across four funds.
Initial Investment: $385 million, completed in 2017.
Follow-On Investment: $120 million, completed in 2019.
Total Investment: $505 million.
General Partner: Pinnacle Vista Capital Management LLC.
Managing Partners: Hugh Pemberton and Diane Kovac.
Pinnacle Vista's investment in the Company was made as part of its strategy to invest in high-growth renewable energy platforms in the United States. The IPO represents a significant liquidity event for Pinnacle Vista, which will sell approximately $150,000,000 of its holdings (6,818,182 shares) in the secondary portion of the Offering. Following the IPO, Pinnacle Vista will continue to hold a substantial ownership position in the Company.
3. Post-IPO Ownership Impact
The working group will discuss the impact of the Offering on the Company's ownership structure, including the dilution to existing stockholders resulting from the issuance of primary shares and the reduction in Pinnacle Vista's ownership as a result of the secondary sale. Specifically:
Pinnacle Vista is selling 6,818,182 shares ($150,000,000 at the assumed midpoint IPO price) in the secondary portion of the Offering. The remaining post-IPO ownership of Pinnacle Vista will need to be calculated based on the final pre-IPO share count attributable to Pinnacle Vista and the total post-IPO shares outstanding.
An analysis of whether Pinnacle Vista will continue to hold more than 50% of the voting power of the Company's outstanding Common Stock following the Offering is critical for purposes of determining the Company's eligibility for the "controlled company" exemption under the NYSE Listed Company Manual. Calderwood & Harkness will prepare this analysis as part of the Corporate Governance and Board Composition discussion later today and in the separate Controlled-Company Exemption Memorandum.
4. Corporate Reorganization and Reclassification
In anticipation of the Offering, the Company will undertake a corporate reorganization to simplify its capital structure. The principal elements of the reorganization are as follows:
(a) Conversion of Preferred Stock. All outstanding shares of preferred stock of the Company will be converted into shares of Common Stock immediately prior to the effectiveness of the Registration Statement. The conversion will be effected in accordance with the terms of the Company's existing Certificate of Incorporation, which provides for mandatory conversion of preferred stock upon the occurrence of a Qualified IPO (as defined therein).
(b) Post-Reclassification Shares Outstanding. Following the conversion and reclassification, 100,000,000 shares of Common Stock will be outstanding, which represents the fully diluted share count used throughout this agenda for purposes of calculating the Offering parameters.
(c) Corporate Structure. Based on the preliminary analysis conducted by Leonard Cross (Calderwood & Harkness, Tax) and in consultation with Alan Kessler (Kessler McBride & Associates LLP), the Company intends to proceed with the Offering as a C-corporation. The recommendation to proceed as a C-corp is based on several factors, including the Company's existing corporate form (it is currently a Delaware corporation), Pinnacle Vista's exit timeline (which favors simplicity), and the complexity that an Up-C or Down-C structure would introduce in light of the Company's tax-equity partnerships and the hypothetical tax receivable agreement. A formal Up-C versus Down-C analysis will be completed by March 31, 2022, as described in the Tax Structure and Considerations session on Day 3.
F. Corporate Governance and Board Composition (2:30 p.m. – 4:00 p.m.)
Jennifer Kwon and Brendan Walsh (Calderwood & Harkness) will lead a discussion of the Company's board of directors, committee structure, and corporate governance framework in connection with the transition to a publicly traded company. Sandra Haverford (General Counsel, CBR) and Hugh Pemberton (Pinnacle Vista) will participate actively in this session.
1. Current Board of Directors
The Company's current Board of Directors consists of seven members as follows:
The Board currently has three independent directors (Warren Okoro, Catherine Liang, and Richard Estavez) and four non-independent directors (Garrett Calloway, Elaine Briggs, Hugh Pemberton, and Diane Kovac). A majority of the Board (four of seven) is not independent. The implications of this composition for NYSE listing requirements and the controlled-company exemption are discussed below.
2. Committee Formation
In connection with the Offering, the Board will establish the following standing committees, each of which will operate pursuant to a written charter to be prepared by Calderwood & Harkness:
Audit Committee: The Audit Committee will consist entirely of independent directors as required by the NYSE Listed Company Manual and Rule 10A-3 under the Securities Exchange Act of 1934. Warren Okoro has been designated as the "audit committee financial expert" within the meaning of Item 407(d)(5) of Regulation S-K. The remaining membership of the Audit Committee will be determined, but at a minimum it will include at least three independent members.
Compensation Committee: Catherine Liang (Chair), Richard Estavez, and Warren Okoro. The Compensation Committee will oversee executive compensation, including the approval of equity incentive awards under the 2022 Omnibus Equity Incentive Plan, and will engage Clarendon Rowe Advisory Group LLC as the Board's independent compensation consultant.
Nominating and Corporate Governance Committee: Richard Estavez (Chair), Catherine Liang, and Hugh Pemberton. The inclusion of Hugh Pemberton (a non-independent director) on the Nominating and Corporate Governance Committee will be permissible if the Company avails itself of the controlled-company exemption under Section 303A.00 of the NYSE Listed Company Manual.
3. Governance Documents to be Prepared
Calderwood & Harkness will prepare or substantially revise the following governance documents in connection with the Offering:
(a) Amended and Restated Certificate of Incorporation (IPO Form). The Certificate of Incorporation will be amended and restated to reflect the post-IPO capital structure, including the authorization of shares of Common Stock and preferred stock, the elimination of previously outstanding series of preferred stock, and the inclusion of customary anti-takeover provisions. The working group will discuss the inclusion of the following provisions: (i) a classified board structure with directors divided into three classes serving staggered three-year terms; (ii) provisions eliminating the ability of stockholders to act by written consent; (iii) provisions requiring supermajority approval for certain amendments; (iv) analysis of Delaware General Corporation Law Section 203 and whether the Company will opt in or opt out of Section 203's anti-takeover protections; and (v) an exclusive forum-selection clause designating the Court of Chancery of the State of Delaware as the exclusive forum for certain stockholder litigation.
(b) Amended and Restated Bylaws (IPO Form). The Bylaws will be amended and restated to include advance-notice provisions for stockholder proposals and director nominations, to establish the committee structure described above, and to address other matters customary for a publicly traded company.
(c) Amended and Restated Stockholders' Agreement. The existing Stockholders' Agreement among the Company, Pinnacle Vista, the founders, and certain other stockholders will be amended and restated in connection with the IPO. Key terms will include Pinnacle Vista's board designation rights, with a step-down schedule tied to Pinnacle Vista's ownership percentage (e.g., the right to designate two directors while holding at least 20% of the outstanding Common Stock, one director while holding at least 10%, and no directors below 10%), transfer restrictions, standstill provisions, and information rights. Whitfield Archer & Doss LLP (Christine Navarro) will review and negotiate the Stockholders' Agreement on behalf of Pinnacle Vista.
(d) Registration Rights Agreement. A Registration Rights Agreement will be entered into in connection with the IPO, providing Pinnacle Vista with demand registration rights (including the right to demand up to a specified number of registered offerings), piggyback registration rights on Company-initiated offerings, S-3 shelf registration rights (once the Company becomes eligible), and cut-back provisions in the event of an oversubscribed offering. Calderwood & Harkness will prepare the initial draft, with Whitfield Archer & Doss to review and comment.
(e) Indemnification Agreements. The Company will enter into indemnification agreements with all seven directors and all named executive officers (a total of thirteen agreements). The form of indemnification agreement will provide for indemnification to the fullest extent permitted by Delaware law, advancement of expenses, and related procedural protections. Calderwood & Harkness will prepare the form of agreement and coordinate execution.
4. Controlled-Company Exemption
If Pinnacle Vista holds more than 50% of the total voting power of the Company's outstanding Common Stock following the Offering, the Company will be a "controlled company" within the meaning of Section 303A.00 of the NYSE Listed Company Manual. As a controlled company, the Company would be exempt from certain NYSE corporate governance requirements, including the requirements to have a majority-independent board and fully independent compensation and nominating committees. However, the exemptions do not extend to the audit committee, which must be composed entirely of independent directors in all events.
The working group will assess Pinnacle Vista's post-IPO voting power and, if the controlled-company exemption is available, will discuss the Company's election to rely on the exemption and the phase-in schedule for achieving compliance with the full independence requirements following such time as the Company ceases to qualify as a controlled company. Under NYSE rules, a company that ceases to be a controlled company must comply with the majority-independent-board requirement within one year and with the fully independent committee requirements within the applicable phase-in period.
Calderwood & Harkness will prepare a Controlled-Company Exemption Memorandum analyzing the Company's eligibility for and reliance on the controlled-company exemption.
5. Public-Company Readiness
The working group will discuss the Company's readiness to operate as a publicly traded company. Key items include:
(a) SOX 404 Compliance Timeline. As an emerging growth company, CBR will not be required to provide an auditor attestation report on internal controls over financial reporting under Section 404(b) of the Sarbanes-Oxley Act. However, management will be required to include an assessment of internal controls in its second annual report (first annual report filed after the effectiveness of the Registration Statement). The Company should begin the process of documenting and testing its internal controls now.
(b) Insider Trading Policy. Calderwood & Harkness will prepare a comprehensive insider trading policy for adoption by the Board prior to the IPO. The policy will address trading windows, pre-clearance requirements, Rule 10b5-1 plan procedures, and prohibitions on hedging and pledging.
(c) Code of Conduct and Ethics. The Company will adopt a Code of Business Conduct and Ethics applicable to all directors, officers, and employees, as required by Section 303A.10 of the NYSE Listed Company Manual and Item 406 of Regulation S-K. Calderwood & Harkness will prepare the initial draft.
(d) Disclosure Committee. The Company will establish an internal disclosure committee, chaired by the General Counsel, responsible for reviewing and approving all public disclosures, including SEC filings, press releases, and earnings releases.
(e) IPO Readiness Assessment Memorandum. Calderwood & Harkness will prepare a comprehensive IPO Readiness Assessment Memorandum identifying all governance, compliance, and operational matters that must be addressed prior to the effectiveness of the Registration Statement.
G. Day 1 Wrap-Up and Preview of Day 2 (4:00 p.m. – 4:30 p.m.)
Jennifer Kwon will provide a summary of the key topics discussed during Day 1, identify any open items or follow-up actions arising from the day's sessions, and preview the agenda for Day 2. Any questions or procedural matters should be raised during this session. The working group is reminded that all materials circulated in connection with this organizational meeting are subject to attorney-client privilege and work product protection.
III. DAY 2 — TUESDAY, MARCH 15, 2022
A. Business Overview and Due Diligence Framework (9:00 a.m. – 11:00 a.m.)
Garrett Calloway, Elaine Briggs, and Sandra Haverford will lead a presentation on the Company's business, operations, and development pipeline. This session is intended to provide the working group with a foundational understanding of the Company's business that will inform the drafting of the Registration Statement and the scope and direction of due diligence activities.
1. Company Background
Calloway-Briggs Renewables Inc. was founded in 2014 by Garrett Calloway and Elaine Briggs with a vision to develop, construct, and operate utility-scale renewable energy projects across the United States. The Company's initial focus was on solar photovoltaic generation in Texas, and it has since expanded its platform to include onshore wind generation and battery energy storage systems across multiple states. The Company is headquartered in Austin, Texas, and employs approximately 1,240 people across its corporate offices, regional development offices, and project sites.
The Company operates in the renewable energy sector, with a focus on three primary technology areas:
(a) Utility-Scale Solar Photovoltaic (PV) Generation. The Company develops, constructs, and operates large-scale solar PV projects, typically ranging from 200 MW to 750 MW in capacity.
(b) Onshore Wind Generation. The Company develops, constructs, and operates onshore wind energy projects, primarily located in high-wind-resource areas across Texas and Oklahoma.
(c) Battery Energy Storage Systems (BESS). The Company has entered the energy storage market with its Brazos Storage project and plans to co-locate storage with future solar and wind projects to enhance capacity value and provide grid services.
2. Operating Portfolio
As of the date of this meeting, the Company has approximately 3.8 GW of operating renewable energy capacity across 22 projects located in Texas, New Mexico, Arizona, California, and Oklahoma. In addition, the Company has approximately 1.4 GW of capacity under construction and a robust 6.2 GW development pipeline at various stages of advancement.
3. Key Projects
The following table summarizes the Company's most significant projects across its operating, under-construction, and development portfolios:
The Company's portfolio is geographically diversified across the leading renewable energy markets in the United States and includes projects that benefit from favorable solar irradiance, wind resources, and proximity to major load centers and transmission infrastructure.
4. Subsidiary Structure
The Company's operations are conducted through a multi-tiered subsidiary structure designed to isolate project-level risks and facilitate project finance. The principal subsidiaries are as follows:
CBR Holdings LLC — a Delaware limited liability company, 100% owned by Calloway-Briggs Renewables Inc. CBR Holdings serves as the intermediate holding company for the Company's operating and development subsidiaries.
Calloway-Briggs Operating Company LLC — a Texas limited liability company, 100% owned by CBR Holdings LLC. This entity serves as the primary operating entity for the Company's portfolio.
Project-Level Special Purpose Vehicles (SPVs):
•  Solaris West Solar LLC (Texas)
•  Red Mesa Wind Energy LLC (Oklahoma)
•  Painted Rock Solar LLC (Arizona)
•  Pronghorn Wind LLC (Texas)
•  Brazos Energy Storage LLC (Texas)
•  Mesquite Wind Holdings LLC (Texas)
•  Cimarron Solar Development LLC (New Mexico)
•  CBR Development Co. LLC (Texas)
A complete subsidiary organizational chart will be included in the Registration Statement and will be updated as part of the due diligence process.
5. Due Diligence Plan
Calderwood & Harkness will manage the due diligence process for the Offering. The due diligence plan is summarized as follows:
(a) Due Diligence Request Lists. Calderwood & Harkness (Brendan Walsh and Natasha Forbes) will circulate comprehensive due diligence request lists covering the following categories: corporate and general matters, regulatory and environmental permitting, tax, intellectual property, employment and benefits, insurance, real property and leases, material contracts, litigation, and debt and financing arrangements. The request lists are targeted for distribution no later than March 21, 2022.
(b) Data Room. Sandra Haverford, General Counsel of the Company, will coordinate the establishment and population of a virtual data room to facilitate the collection, organization, and review of due diligence materials. The data room is expected to be operational by March 21, 2022. All working group members with access to the data room will be subject to confidentiality obligations.
(c) Target Due Diligence Completion. The working group is targeting the substantial completion of due diligence by April 29, 2022, in order to support the S-1 drafting timeline and the confidential submission target described below.
(d) Environmental Consultant. Greenridge Environmental Sciences LLC (Dr. Nadine Torres, Principal Scientist; 8400 Shoal Creek Blvd., Suite 200, Austin, TX 78757) has been retained by the Company to prepare Phase I and Phase II environmental site assessments for the Company's project portfolio. Calderwood & Harkness will review the assessments as part of the environmental due diligence workstream. The assessments will address soil and groundwater conditions, regulatory compliance, recognized environmental conditions, and any recommended remediation activities.
B. Financial Overview and Audit Matters (11:00 a.m. – 12:30 p.m.)
Marcus Yoon (CFO), Priya Anand (SVP, Finance & Treasurer), and Gregory Sondheim (Ashford & Pemberton LLP) will lead this session, which will cover the Company's financial performance, capital structure, and the audit and comfort letter process for the Offering.
1. Financial Highlights
The following table presents selected financial data for the Company for the periods indicated:
The Company has demonstrated strong revenue growth, with revenues increasing from $312.8 million in FY 2019 to $487.3 million in FY 2021, representing a compound annual growth rate of approximately 24.8%. Adjusted EBITDA has grown from $138.7 million to $218.6 million over the same period, reflecting the Company's ability to translate revenue growth into operating profitability. The Company achieved profitability on a net income basis in FY 2020 and continued to grow net income in FY 2021.
Estimated cash on hand as of fiscal year-end 2021 was approximately $185,000,000.
2. Auditor Discussion
Gregory Sondheim, Lead Engagement Partner at Ashford & Pemberton LLP, will discuss the following matters:
(a) Independent Auditor. Ashford & Pemberton LLP serves as the Company's independent registered public accounting firm. Ashford & Pemberton has audited the Company's consolidated financial statements for FY 2019, FY 2020, and FY 2021 in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB).
(b) Interim Financials. The Company's Q1 2022 interim financial statements are unaudited and are subject to limited review by Ashford & Pemberton in accordance with applicable standards.
(c) Audit Team. The day-to-day audit manager for the engagement is Irene Valdez, CPA, who will serve as the primary point of contact for audit-related questions during the IPO process.
(d) Comfort Letter Process. In connection with the Offering, the underwriters will request comfort letters from Ashford & Pemberton in accordance with the procedures specified in SAS 72 (AU-C 920). Three circle-ups are planned: (i) an initial comfort letter to be delivered in connection with the filing of the Registration Statement; (ii) a bring-down comfort letter to be delivered at pricing; and (iii) a bring-down comfort letter to be delivered at closing. The comfort letters will cover the audited financial statements for FY 2019, FY 2020, and FY 2021 and the unaudited Q1 2022 interim financial statements, and will include procedures relating to the financial data presented in the prospectus.
(e) HLBV Methodology. The working group will discuss the hypothetical-liquidation-at-book-value (HLBV) methodology used by the Company to account for tax-equity partnerships, including the Solaris West tax-equity partnership with Veltara Basin Financial LLC. This is a complex accounting methodology that is commonly used in the renewable energy industry and will require specific disclosure in the financial statements and MD&A section of the Registration Statement.
(f) Non-GAAP Measures. The Company presents Adjusted EBITDA as a supplemental non-GAAP financial measure. The working group will discuss the calculation methodology, required reconciliations to the most directly comparable GAAP measure (net income), and SEC Staff guidance on the presentation of non-GAAP financial measures in SEC filings.
3. CFO Presentation
Marcus Yoon, Chief Financial Officer, will present to the working group regarding the Company's revenue recognition policies, segment reporting considerations (including whether the Company operates one or more reportable segments under ASC 280), and critical accounting estimates. This presentation will inform the drafting of the MD&A and financial statement footnotes in the Registration Statement.
C. Lunch Break (12:30 p.m. – 1:30 p.m.)
D. Registration Statement Drafting Plan (1:30 p.m. – 3:30 p.m.)
Jennifer Kwon and Brendan Walsh (Calderwood & Harkness) will present the detailed drafting plan for the Registration Statement on Form S-1, including the assignment of drafting responsibilities for each section, the drafting schedule, and the confidential submission process.
1. Form S-1 Structure and Assignment of Drafting Responsibilities
The Registration Statement on Form S-1 will consist of two principal parts: Part I (the Prospectus) and Part II (Information Not Required in the Prospectus). The following table sets forth the assignment of primary drafting responsibility for each section. The designation of a primary drafter does not preclude other members of the working group from reviewing and commenting on any section.
Part I — Prospectus:
Prospectus Cover Page and Summary — Calderwood & Harkness LLP (with CBR management input on business description and investment highlights).
Risk Factors — Calderwood & Harkness LLP. The risk factors section will be comprehensive and will address risks specific to the Company's business, the renewable energy industry, regulatory and environmental risks, financial and capital structure risks, and risks related to the Offering. Renewables-specific risks will be developed in consultation with the CBR management team and the Hargrove Keating Power & Renewables team (Sonia Tran).
Use of Proceeds — Calderwood & Harkness LLP and CBR (Marcus Yoon, Priya Anand).
Dividend Policy — Calderwood & Harkness LLP.
Capitalization Table — Calderwood & Harkness LLP (with CBR finance team; Priya Anand to provide underlying data).
Dilution Analysis — Calderwood & Harkness LLP (with CBR finance team).
Selected Financial Data — CBR finance team (reviewed by Ashford & Pemberton LLP and Calderwood & Harkness LLP).
Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) — CBR finance team to prepare the initial draft (Marcus Yoon, with support from Priya Anand). Calderwood & Harkness LLP will review, supplement, and ensure compliance with SEC disclosure requirements.
Business Section — Calderwood & Harkness LLP (based on CBR management presentations, due diligence materials, and industry data).
Regulatory and Environmental Overview — Calderwood & Harkness LLP.
Management and Board of Directors — Calderwood & Harkness LLP.
Executive Compensation — Calderwood & Harkness LLP (with input from Clarendon Rowe Advisory Group LLC; Patricia Voss, Senior Managing Director, 300 Atlantic Street, Suite 800, Stamford, CT 06901, regarding compensation benchmarking data and peer group analysis).
Principal and Selling Stockholders Table — Calderwood & Harkness LLP and Whitfield Archer & Doss LLP (based on data from the selling stockholder questionnaire).
Certain Relationships and Related-Party Transactions — Calderwood & Harkness LLP.
Description of Capital Stock — Calderwood & Harkness LLP.
Description of Indebtedness — Calderwood & Harkness LLP (with CBR finance team providing underlying credit agreement summaries).
Shares Eligible for Future Sale — Calderwood & Harkness LLP.
Material U.S. Federal Income Tax Consequences — Calderwood & Harkness LLP (Leonard Cross, Specialist Partner, Tax).
Underwriting Section — Prescott, Danforth & Yee LLP (initial draft); Calderwood & Harkness LLP review and comment.
Legal Matters — Calderwood & Harkness LLP.
Experts — Calderwood & Harkness LLP.
Part II — Information Not Required in Prospectus:
Expenses of Issuance and Distribution — Calderwood & Harkness LLP.
Indemnification of Directors and Officers — Calderwood & Harkness LLP.
Recent Sales of Unregistered Securities — Calderwood & Harkness LLP.
Exhibits and Financial Statement Schedules — Calderwood & Harkness LLP.
Undertakings — Calderwood & Harkness LLP.
2. Drafting Schedule
The working group will adhere to the following drafting schedule:
First Full Draft of All S-1 Sections: Target completion by the end of the first week of April 2022.
All-Hands Drafting Sessions: Commencing March 21, 2022 and continuing through April 29, 2022, with regular sessions scheduled as needed based on the progress of drafting.
Internal Review Cycle: All sections will be reviewed by the responsible Calderwood & Harkness partner, Jennifer Kwon, prior to circulation to the broader working group.
Confidential Submission Target: Week of April 11, 2022 (target date for confidential submission of the draft Registration Statement to the SEC on a non-public basis).
3. Emerging Growth Company Status
The Company qualifies as an "emerging growth company" (EGC) as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). The Company's total annual gross revenue for its most recently completed fiscal year (FY 2021) was $487,300,000, which is below the $1.235 billion revenue threshold for EGC eligibility.
As an EGC, the Company is entitled to the following accommodations under the JOBS Act:
(a) Confidential Submission. The Company may submit its draft Registration Statement to the SEC on a confidential basis pursuant to Section 6(e)(1) of the Securities Act of 1933, as amended. The draft Registration Statement will not be publicly available until at least 15 days prior to the commencement of the roadshow.
(b) Reduced Financial Statement Periods. The Company may present two years (rather than three years) of audited financial statements in the Registration Statement. However, the Company has elected to present three years of audited financial statements (FY 2019, FY 2020, and FY 2021), which provides investors with a more complete picture of the Company's financial performance.
(c) Scaled Executive Compensation Disclosure. The Company may provide executive compensation disclosure in accordance with the requirements applicable to "smaller reporting companies" under Regulation S-K, which permits a reduced number of named executive officers and simplified compensation tables.
(d) No Auditor Attestation on Internal Controls. The Company is not required to obtain an auditor attestation report on the effectiveness of internal controls over financial reporting under Section 404(b) of the Sarbanes-Oxley Act.
The confidential DRS submission process will be utilized for this Offering. Calderwood & Harkness will coordinate the preparation and submission of the DRS-1 with Ridgeway Financial Printing Corp.
E. Equity Incentive Plans and Executive Compensation (3:30 p.m. – 4:30 p.m.)
Jennifer Kwon and Brendan Walsh (Calderwood & Harkness) will lead a discussion of the Company's proposed equity incentive plans, IPO equity grants, and executive compensation matters.
1. 2022 Omnibus Equity Incentive Plan
In connection with the Offering, the Company will adopt the 2022 Omnibus Equity Incentive Plan (the "Omnibus Plan"), which will serve as the primary vehicle for equity-based compensation following the IPO. The principal terms of the Omnibus Plan are as follows:
Share Reserve: 12,727,273 shares of Common Stock, representing approximately 10% of the Company's post-IPO shares outstanding on a fully-exercised basis (based on 127,272,727 post-IPO shares outstanding assuming full exercise of the overallotment option).
Award Types: The Omnibus Plan will authorize the grant of stock options (both incentive stock options and non-qualified stock options), restricted stock units (RSUs), performance stock units (PSUs), restricted stock, stock appreciation rights, and other equity-based awards.
Evergreen Provision: The Omnibus Plan will include an "evergreen" provision providing for an automatic annual increase in the share reserve, subject to Board approval. The specific percentage and duration of the evergreen provision will be determined based on market practice and investor expectations.
Board and Stockholder Approval: The Omnibus Plan will require approval by the Board of Directors and by the Company's pre-IPO stockholders prior to the effectiveness of the Registration Statement.
2. 2022 Employee Stock Purchase Plan
The Company will also adopt the 2022 Employee Stock Purchase Plan (the "ESPP") to be effective in connection with the Offering:
Share Reserve: 2,545,455 shares of Common Stock, representing approximately 2% of the Company's post-IPO shares outstanding on a fully-exercised basis.
discount: Eligible employees will be entitled to purchase shares of Common Stock at a 15% discount to the lower of the fair market value of the Common Stock on the first or last day of the applicable offering period.
Offering Periods: Six-month offering periods.
Section 423 Qualification: The ESPP is intended to qualify under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"), which provides favorable tax treatment to participating employees.
3. Proposed IPO Equity Grants
The Company proposes to make the following equity grants to named executive officers in connection with the Offering, subject to approval by the Board of Directors and the Compensation Committee:
Chief Executive Officer (Garrett Calloway): 500,000 RSUs
President, Development (Elaine Briggs): 400,000 RSUs
Chief Financial Officer (Marcus Yoon): 300,000 RSUs
Other Named Executive Officers: 150,000 to 200,000 RSUs each
Vesting Schedule: Four-year ratable vesting (25% per year), subject to continued employment.
4. Section 409A Valuation and Cheap-Stock Analysis
Calderwood & Harkness (Leonard Cross, Tax) will prepare a review memorandum addressing the Company's historical common stock valuations for purposes of Section 409A of the Code and the potential need for a "cheap stock" analysis. The cheap-stock analysis will examine whether any equity awards granted in the twelve-month period prior to the IPO were priced below the fair market value of the Company's Common Stock at the time of grant, which could give rise to additional compensation expense that must be recognized in the Company's financial statements. The common stock valuation history will be reviewed in consultation with the Company's independent valuation advisor.
5. Compensation Consultant
Clarendon Rowe Advisory Group LLC (Patricia Voss, Senior Managing Director) has been retained by the Board of Directors to serve as the independent compensation consultant. Clarendon Rowe will provide benchmarking data, peer group analysis, and recommendations regarding executive compensation levels, incentive plan design, and the appropriateness of the proposed IPO equity grants. The findings of Clarendon Rowe will be disclosed in the executive compensation section of the Registration Statement.
IV. DAY 3 — WEDNESDAY, MARCH 16, 2022
A. Existing Debt and Financing Arrangements (9:00 a.m. – 11:00 a.m.)
Marcus Yoon (CFO), Priya Anand (SVP, Finance & Treasurer), and Jennifer Kwon (Calderwood & Harkness) will lead a detailed review of the Company's existing debt and financing arrangements. This session is critical for the drafting of the "Description of Indebtedness" section and the "Use of Proceeds" section of the Registration Statement, as well as for the identification of consent, waiver, and notice requirements triggered by the Offering.
1. Outstanding Indebtedness
As of December 31, 2021, the Company had total outstanding indebtedness of approximately $1.71 billion. The following table summarizes the Company's principal debt facilities:
The Corporate Revolving Credit Facility provides the Company with a $400,000,000 senior secured revolving credit commitment that is available for general corporate purposes and working capital needs. As of December 31, 2021, there were no borrowings outstanding under the revolver. The Corporate Term Loan B has approximately $612,500,000 outstanding and bears interest at a variable rate based on SOFR plus an applicable margin. Both facilities are provided by a syndicate of lenders led by Veltrano National Bank as administrative agent.
The Mesquite Wind Construction Facility and Cimarron Solar Construction Facility are project-level construction financing facilities provided by Prairie Commercial Bank, N.A. These facilities are intended to convert to term facilities following the achievement of commercial operation of the underlying projects.
The Solaris West Tax-Equity Partnership with Veltara Basin Financial LLC is a partnership-flip structure under which Veltara Basin Financial invested approximately $280,000,000 in the Solaris West project in exchange for a disproportionate allocation of tax benefits (including investment tax credits and depreciation) and a preferred cash distribution. The partnership is expected to "flip" in 2028, at which point the Company will acquire Veltara Basin Financial's remaining interest.
2. IPO Consent and Notice Requirements
The Offering will trigger consent and notice requirements under certain of the Company's existing financing arrangements. Calderwood & Harkness will prepare a comprehensive analysis of these requirements and coordinate the consent and notice process:
(a) Veltrano National Bank — Corporate Credit Agreement. The corporate credit agreement governing the Revolving Credit Facility and Term Loan B includes certain covenants and provisions that are implicated by the Offering. An IPO-related consent from Veltrano National Bank is required. In addition, the Company will seek a waiver of any change-of-control provisions that may be triggered by changes in the Company's stockholder base resulting from the Offering. Calderwood & Harkness will prepare: (i) a consent analysis memorandum identifying the specific provisions requiring consent; (ii) a draft consent request letter addressed to Veltrano National Bank; and (iii) a draft consent form for execution by the administrative agent on behalf of the lending syndicate.
(b) Prairie Commercial Bank — Project Finance Credit Agreements. The project-finance credit agreements governing the Mesquite Wind Construction Facility and Cimarron Solar Construction Facility require notice to Prairie Commercial Bank in connection with an initial public offering of the Company's equity securities. Calderwood & Harkness will prepare notice letters to Prairie Commercial Bank in the form required by the applicable credit agreements.
(c) Veltara Basin Financial — Tax-Equity Partnership Agreement. The partnership agreement governing the Solaris West tax-equity partnership requires a consent or notice analysis to determine whether the IPO constitutes an event requiring consent or triggers any assignment restrictions or recapture risk provisions. It is critical to confirm that the IPO does not constitute a "recapture event" under the partnership agreement that could accelerate the flip or trigger investment tax credit recapture. Calderwood & Harkness will prepare a consent request letter and coordinate with the Company's tax advisors on this analysis.
3. Use of Proceeds — Debt Repayment
As described in the Transaction Overview session, the Company intends to apply approximately $200,000,000 of the net proceeds from the primary offering to repay a portion of the outstanding indebtedness under the Corporate Term Loan B with Veltrano National Bank. The prepayment is expected to be subject to a prepayment premium of 1.00%, resulting in a premium payment of approximately $2,000,000. The Company will need to provide Veltrano National Bank with advance notice of the prepayment in accordance with the terms of the credit agreement.
The wire instructions and notification timeline for the prepayment will be documented and coordinated by the Company's finance team and Calderwood & Harkness in advance of the closing of the Offering.
4. Tax-Equity Considerations
The working group will discuss the tax-equity considerations associated with the Company's portfolio, with a particular focus on the Solaris West partnership-flip structure with Veltara Basin Financial LLC:
(a) Partnership-Flip Structure. The Solaris West tax-equity partnership is structured as a partnership flip, under which Veltara Basin Financial receives a disproportionate share of tax benefits (including investment tax credits under Section 48 of the Code and accelerated depreciation under MACRS) and a preferred cash distribution during the pre-flip period. After the flip (expected in 2028), the Company acquires Veltara Basin Financial's remaining interest.
(b) ITC Recapture Risk Analysis. Calderwood & Harkness and Kessler McBride & Associates LLP will analyze whether the IPO or any related transactions could trigger ITC recapture under Section 50 of the Code. This analysis is critical because ITC recapture could result in a significant tax liability for the partnership and potentially for the Company.
(c) HLBV Methodology. The Company uses the hypothetical-liquidation-at-book-value (HLBV) methodology to account for the tax-equity partnership in its consolidated financial statements. Gregory Sondheim (Ashford & Pemberton LLP) will discuss the HLBV methodology and its implications for the Company's financial reporting.
(d) Coordination with Kessler McBride. Kessler McBride & Associates LLP (Alan Kessler, Managing Partner; Linda McBride, Partner, Tax Structures; 700 Milam Street, Suite 2100, Houston, TX 77002) will coordinate with Leonard Cross (Calderwood & Harkness, Tax) on partnership-flip compliance and the ITC/PTC analysis across the Company's entire portfolio of projects that benefit from federal tax credits.
B. Tax Structure and Considerations (11:00 a.m. – 12:00 p.m.)
Leonard Cross (Calderwood & Harkness, Tax; available by phone) and Alan Kessler (Kessler McBride & Associates LLP; available by phone) will lea