use-of-proceeds.docx

1015-00001 · Graymont Brothers Inc · Registration Statement

use-of-proceeds.docx DOCUMENT Capital Markets

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CONFIDENTIAL TREATMENT REQUESTED BY CALLOWAY-BRIGGS RENEWABLES INC. PURSUANT TO 5 U.S.C. § 552(b)(4) AND SECTION 6(e) OF THE SECURITIES ACT OF 1933

USE OF PROCEEDS

We estimate that we will receive net proceeds from the primary offering of approximately $[●] million (or approximately $[●] million if the underwriters exercise their overallotment option in full), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We are offering 16,895,455 shares of our common stock, par value $0.01 per share, in this initial public offering (the "primary offering") at an assumed initial public offering price of $22.00 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus. The base offering consists of 23,713,636 shares, of which 16,895,455 shares are being offered by us and 6,818,182 shares are being offered by the selling stockholder, Pinnacle Vista Capital Partners III, LP (the "secondary offering"). Based on the assumed initial public offering price of $22.00 per share, the gross proceeds to us from the primary offering would be approximately $371,700,000 (representing 16,895,455 shares multiplied by $22.00 per share). From those gross proceeds, we expect to deduct the estimated underwriting discounts and commissions applicable to the primary shares. The gross underwriting spread for this offering is 5.50% of the public offering price, resulting in estimated underwriting discounts and commissions payable by us with respect to the primary offering of approximately $20,443,500 ($371,700,000 × 5.50%). In addition, we expect to deduct estimated offering expenses payable by us of approximately $[●], consisting of SEC registration fees, FINRA filing fees, stock exchange listing fees, printing and engraving expenses, transfer agent fees, legal fees and expenses, accounting fees and expenses, and miscellaneous other expenses, each as set forth in detail under "Expenses of Issuance and Distribution" in Part II, Item 13 of this registration statement.

We will not receive any proceeds from the sale of shares of our common stock by the selling stockholder, Pinnacle Vista Capital Partners III, LP, in the secondary offering. For additional information regarding the selling stockholder, see "Principal and Selling Stockholders" elsewhere in this prospectus.

If the underwriters exercise their overallotment option in full, we would sell up to an additional [●] shares of our common stock (the allocation of overallotment shares between the Company and the selling stockholder, if any, will be set forth in the pricing agreement at the time of pricing), and we would receive additional net proceeds of approximately $[●] million, after deducting the estimated underwriting discounts and commissions applicable to such additional shares.

A $1.00 increase (or decrease) in the assumed initial public offering price of $22.00 per share would increase (or decrease, as applicable) the net proceeds to us from the primary offering by approximately $[●] million, assuming the number of shares offered by us remains the same and after deducting the estimated underwriting discounts and commissions. Similarly, a one million share increase (or decrease) in the number of shares offered by us in this offering would increase (or decrease, as applicable) the net proceeds to us by approximately $[●] million, assuming the assumed initial public offering price of $22.00 per share remains the same and after deducting the estimated underwriting discounts and commissions.

We intend to use the net proceeds from the primary offering as follows:

Repayment of Approximately $200 Million of Term Loan B

We intend to use approximately $200,000,000 of the net proceeds from the primary offering to repay a portion of the outstanding principal amount under our senior secured term loan B facility (the "Term Loan B"). The Term Loan B is a $650,000,000 senior secured term loan B facility with Veltrano National Bank, as Administrative Agent, the lenders from time to time party thereto, and the other agents named therein. Veltrano National Bank's principal office is located at 1401 McKinney Street, Houston, TX 77010. As of December 31, 2021, the outstanding principal balance under the Term Loan B was approximately $612,500,000. The Term Loan B bears interest at a variable rate per annum equal to, at our election, either (a) the Adjusted Term SOFR Rate (as defined in the credit agreement governing the Term Loan B, which includes a credit spread adjustment of 0.10%) plus an applicable margin or (b) an alternate base rate plus an applicable margin. The Term Loan B matures in January 2029.

The Term Loan B was originally incurred in connection with the refinancing of existing indebtedness of the Company and its subsidiaries and to fund a portion of the acquisition consideration paid in connection with the acquisition of our operating portfolio of wind and solar generation assets from an affiliate of Pinnacle Vista Capital Partners III, LP, as well as for general corporate purposes. The Term Loan B is secured by substantially all of the assets of the Company and its material domestic subsidiaries (other than the assets of project-level subsidiaries that are subject to project-level financing), and is guaranteed by Calloway-Briggs Operating Company LLC and certain of the Company's other material domestic subsidiaries.

The prepayment of $200,000,000 of the outstanding principal balance under the Term Loan B will be subject to a prepayment premium of 1.00% of the principal amount prepaid, resulting in an estimated prepayment premium of approximately $2,000,000 payable by us at the time of such prepayment. After giving effect to the application of approximately $200,000,000 of the net proceeds from this offering to partially repay the Term Loan B, the outstanding principal balance under the Term Loan B would be approximately $412,500,000 ($612,500,000 minus $200,000,000). The reduction in the outstanding principal balance of the Term Loan B is expected to reduce our annual cash interest expense and improve our leverage ratio and other financial covenant metrics under our credit facilities. We believe this partial deleveraging will enhance our financial flexibility and credit profile as we transition to operating as a public company.

For a more complete description of the Term Loan B and our other indebtedness, including the material terms and conditions, covenants, events of default, and prepayment provisions thereof, see "Description of Indebtedness" elsewhere in this prospectus.

Funding of Approximately $100 Million Toward Construction of the Cimarron Solar Project

We intend to use approximately $100,000,000 of the net proceeds from the primary offering to fund a portion of the remaining construction costs of our Cimarron Solar project (the "Cimarron Solar project"). The Cimarron Solar project is a utility-scale solar photovoltaic ("Solar PV") generating facility with an expected nameplate capacity of approximately 350 megawatts ("MW") located in Doña Ana County, New Mexico. The Cimarron Solar project is owned and being developed by Cimarron Solar Development LLC, a New Mexico limited liability company and a wholly owned subsidiary of Calloway-Briggs Operating Company LLC, our principal operating subsidiary. As of the date of this prospectus, the Cimarron Solar project is under construction, with site preparation, civil works, and pile driving substantially complete, and panel installation and electrical infrastructure work ongoing. We expect the Cimarron Solar project to achieve commercial operations (the "COD") during the first quarter of 2023, subject to customary construction risks and permitting conditions.

The total estimated construction cost of the Cimarron Solar project is approximately $[●] million, of which approximately $[●] million had been expended as of December 31, 2021. In addition to the approximately $100,000,000 of net proceeds from this offering that we intend to apply to the Cimarron Solar project, the remaining construction costs are expected to be funded through a combination of (i) draws under the Cimarron Solar construction-to-term financing facility described below and (ii) the Company's internally generated cash flows from its existing operating portfolio. The approximately $100,000,000 of IPO proceeds will be used alongside draws under the Prairie Commercial Bank facility and the Company's internal cash flows to fund the remaining construction costs in a manner consistent with the equity contribution requirements and draw schedules set forth in the applicable financing agreements.

The Cimarron Solar project is supported by a $143,000,000 construction-to-term financing facility (the "Cimarron Construction Facility") provided by Prairie Commercial Bank, N.A., as Administrative Agent and Lender, and certain other financial institutions from time to time party thereto. The Cimarron Construction Facility provides for construction-period loans that, upon satisfaction of certain conditions (including the achievement of COD and compliance with specified completion tests), convert into term loans with a final maturity date in March 2025. The Cimarron Construction Facility is secured by substantially all of the assets of Cimarron Solar Development LLC, and is non-recourse to the Company and its other subsidiaries (other than customary limited completion guarantees provided by Calloway-Briggs Operating Company LLC).

For further details regarding the Cimarron Solar project, including its power purchase agreements, interconnection arrangements, permitting status, and expected financial performance, see "Business — Our Project Portfolio — Cimarron Solar" elsewhere in this prospectus. For a more complete description of the Cimarron Construction Facility, including the material terms, conversion conditions, financial covenants, and other provisions thereof, see "Description of Indebtedness — Project-Level Financing — Cimarron Solar Construction-to-Term Facility" elsewhere in this prospectus.

Approximately $71.7 Million for General Corporate Purposes

We intend to use the remaining net proceeds from the primary offering, estimated to be approximately $71,700,000, for general corporate purposes. As used in this prospectus, "general corporate purposes" includes, without limitation:

• Working capital and operating expenses. We expect to use a portion of the proceeds allocated to general corporate purposes to fund our ongoing working capital requirements and day-to-day operating expenses, including payments to suppliers, vendors, and service providers across our operating portfolio and corporate functions.

• Funding of development-stage projects. We intend to allocate a portion of such proceeds to fund pre-construction development activities for projects in our approximately 6.2 GW development pipeline, including the Silverleaf Wind project (an approximately 400 MW wind energy project located in Irion County, Texas) and the Copper Basin Solar + Storage project (an approximately 250 MW solar plus 100 MW / 400 MWh battery energy storage system located in Riverside County, California). Development-stage expenditures may include land acquisition and lease option payments, permitting and environmental study costs, interconnection deposits and upgrade costs, engineering and design fees, and other customary pre-construction expenditures.

• Potential strategic acquisitions or investments. We may use a portion of such proceeds to pursue selective strategic acquisitions, investments, or joint ventures that we believe would be complementary to our existing business and development pipeline. As of the date of this prospectus, we have no specific acquisitions planned, committed to, or under negotiation, and there can be no assurance that any such transactions will be identified or consummated.

• Capital expenditures for existing assets. We expect to use a portion of such proceeds to fund capital expenditures related to the maintenance, repowering, and optimization of the Company's approximately 3.8 GW portfolio of operating renewable energy generating facilities, including major maintenance events, equipment upgrades, performance enhancement initiatives, and other capital improvement projects.

• General and administrative expenses. We anticipate incurring increased general and administrative expenses in connection with being a public company, including costs associated with compliance with the reporting and disclosure requirements of the Securities Exchange Act of 1934, as amended, the rules and regulations of the New York Stock Exchange (or Nasdaq Global Select Market, as applicable), the Sarbanes-Oxley Act of 2002, and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as increased expenses for directors' and officers' liability insurance, investor relations activities, and additional accounting, legal, and administrative personnel.

We have not yet determined the precise amounts or timing of the application of the net proceeds allocated to general corporate purposes, and the actual allocation among the foregoing uses will depend on a number of factors, including prevailing market conditions, the pace and timing of our development pipeline, the availability and terms of project-level financing, business developments, and other factors that our management may deem relevant. Our management will retain broad discretion in the allocation and application of these proceeds. See "Risk Factors — Risks Related to This Offering — Our management will have broad discretion in the use of the net proceeds from this offering, and you may not agree with how we use these proceeds" elsewhere in this prospectus.

Overallotment Option Proceeds

We have granted the underwriters an option, exercisable for 30 days after the date of this prospectus, to purchase up to 3,559,091 additional shares of common stock (representing 15% of the base offering of 23,713,636 shares) at the initial public offering price, less the underwriting discounts and commissions. If the underwriters exercise their overallotment option in full, the maximum total offering size would be approximately $600,000,000 (representing 27,272,727 shares at the assumed initial public offering price of $22.00 per share). We expect that any additional net proceeds received by us from the exercise of the overallotment option would be used for general corporate purposes, as described above, including any of the uses described under "— Approximately $71.7 Million for General Corporate Purposes." The allocation of overallotment shares between the Company and the selling stockholder will be determined at the time of pricing and set forth in the pricing agreement; accordingly, the Company's actual net proceeds from the exercise of the overallotment option, if any, may vary.

Pending Use of Proceeds

Pending the application of the net proceeds from this offering for the purposes described above, we intend to invest the net proceeds in short-term, interest-bearing, investment-grade instruments, certificates of deposit, or direct or guaranteed obligations of the United States government, or to hold such proceeds as cash deposits with one or more commercial banks. We expect to deploy substantially all of the net proceeds from this offering for their intended purposes within approximately 12 to 18 months following the closing of this offering, although the timing and amount of actual expenditures will depend on the factors described above and may vary significantly from our current expectations.

Selling Stockholder Proceeds

We will not receive any of the proceeds from the sale of shares of our common stock by the selling stockholder, Pinnacle Vista Capital Partners III, LP, in this offering. Pinnacle Vista Capital Partners III, LP will sell 6,818,182 shares of our common stock in this offering, representing aggregate gross proceeds to the selling stockholder of approximately $150,000,000 at the assumed initial public offering price of $22.00 per share (before deducting the underwriting discounts and commissions payable by the selling stockholder with respect to the secondary shares). Pinnacle Vista Capital Partners III, LP is a Delaware limited partnership whose general partner is Pinnacle Vista Capital Management LLC, a Delaware limited liability company. The principal offices of Pinnacle Vista Capital Partners III, LP and Pinnacle Vista Capital Management LLC are located at 900 Park Avenue, 38th Floor, New York, NY 10021.

For additional information regarding Pinnacle Vista Capital Partners III, LP, including a description of its beneficial ownership of our common stock before and after this offering, its material relationships with the Company and its affiliates, and the registration rights and lock-up arrangements applicable to the selling stockholder, see "Principal and Selling Stockholders" and "Certain Relationships and Related Party Transactions" elsewhere in this prospectus.

Affiliations and FINRA Disclosure

Because more than 5% of the net proceeds of this offering (not including underwriting compensation) may be received by Veltrano National Bank, which serves as the Administrative Agent under the Term Loan B, a portion of which is being repaid with the net proceeds of this offering, and because Veltrano National Bank may be deemed to be an affiliate of [●], one of the underwriters of this offering, this offering is being conducted in compliance with FINRA Rule 5121 (Public Offerings of Securities with Conflicts of Interest). Under FINRA Rule 5121, [●] will not confirm sales to any account over which it exercises discretionary authority without the prior specific written approval of the customer. The appointment of a qualified independent underwriter is not required in connection with this offering because a bona fide public market, as defined in FINRA Rule 5121, does not exist for our common stock prior to this offering. See "Underwriting — Conflicts of Interest and FINRA Matters" elsewhere in this prospectus for additional information regarding the participation of [●] in this offering and the FINRA compliance measures applicable hereto. The FINRA filing related to this offering has been made under FINRA Filing No. 20221129-01.

Summary of Estimated Use of Proceeds

The following table summarizes the estimated allocation of net proceeds to the Company from the primary offering, assuming an initial public offering price of $22.00 per share (the midpoint of the estimated price range set forth on the cover page of this prospectus) and before deducting the estimated underwriting discounts and commissions and estimated offering expenses:

The foregoing table and the allocation amounts presented therein are estimates based on our current plans and assumptions. The actual amounts and timing of our use of proceeds will vary depending on numerous factors, including the actual net proceeds received after deduction of the estimated underwriting discounts and commissions (estimated at approximately $20,443,500 for the primary offering) and estimated offering expenses payable by us (estimated at approximately $[●]), as well as the factors described elsewhere in this section. The amounts shown in the table above are presented on a gross basis before the deduction of underwriting discounts and commissions and offering expenses, and accordingly the actual net proceeds available for each use will be less than the amounts shown. We retain broad discretion in allocating and reallocating the net proceeds among the uses described above, and the actual allocation may differ materially from our current expectations. Investors will be relying on the judgment of our management with regard to the application of the net proceeds of this offering. See "Risk Factors — Risks Related to This Offering" elsewhere in this prospectus.

For additional information relating to the matters discussed in this section, see the following sections of this prospectus:

• "Capitalization" — for information regarding the effects of this offering and the application of the net proceeds therefrom on our capitalization;

• "Dilution" — for information regarding the immediate dilution in net tangible book value per share to new investors in this offering;

• "Description of Indebtedness" — for a more complete description of the Term Loan B, the Cimarron Solar construction-to-term facility, and our other indebtedness;

• "Business" — for additional information regarding the Cimarron Solar project, the Silverleaf Wind project, the Copper Basin Solar + Storage project, and our broader project portfolio and development pipeline;

• "Principal and Selling Stockholders" — for information regarding the selling stockholder, Pinnacle Vista Capital Partners III, LP, and beneficial ownership of our common stock; and

• "Underwriting" — for information regarding the underwriters, underwriting arrangements, the overallotment option, conflicts of interest, and FINRA-related disclosures.

A detailed breakdown of the estimated expenses of issuance and distribution is set forth in Part II, Item 13 of this registration statement.

Use of Proceeds	Approximate Amount
Repayment of a portion of Term Loan B (Veltrano National Bank, as Administrative Agent)	$200,000,000
Construction funding — Cimarron Solar project (Doña Ana County, New Mexico)	$100,000,000
General corporate purposes (including working capital, development pipeline funding, and other purposes described above)	$71,700,000
Total estimated net proceeds (primary offering)	$371,700,000

CONFIDENTIAL TREATMENT REQUESTED BY CALLOWAY-BRIGGS RENEWABLES INC. PURSUANT TO 5 U.S.C. § 552(b)(4) AND SECTION 6(e) OF THE SECURITIES ACT OF 1933
USE OF PROCEEDS
We estimate that we will receive net proceeds from the primary offering of approximately $[●] million (or approximately $[●] million if the underwriters exercise their overallotment option in full), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We are offering 16,895,455 shares of our common stock, par value $0.01 per share, in this initial public offering (the "primary offering") at an assumed initial public offering price of $22.00 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus. The base offering consists of 23,713,636 shares, of which 16,895,455 shares are being offered by us and 6,818,182 shares are being offered by the selling stockholder, Pinnacle Vista Capital Partners III, LP (the "secondary offering"). Based on the assumed initial public offering price of $22.00 per share, the gross proceeds to us from the primary offering would be approximately $371,700,000 (representing 16,895,455 shares multiplied by $22.00 per share). From those gross proceeds, we expect to deduct the estimated underwriting discounts and commissions applicable to the primary shares. The gross underwriting spread for this offering is 5.50% of the public offering price, resulting in estimated underwriting discounts and commissions payable by us with respect to the primary offering of approximately $20,443,500 ($371,700,000 × 5.50%). In addition, we expect to deduct estimated offering expenses payable by us of approximately $[●], consisting of SEC registration fees, FINRA filing fees, stock exchange listing fees, printing and engraving expenses, transfer agent fees, legal fees and expenses, accounting fees and expenses, and miscellaneous other expenses, each as set forth in detail under "Expenses of Issuance and Distribution" in Part II, Item 13 of this registration statement.
We will not receive any proceeds from the sale of shares of our common stock by the selling stockholder, Pinnacle Vista Capital Partners III, LP, in the secondary offering. For additional information regarding the selling stockholder, see "Principal and Selling Stockholders" elsewhere in this prospectus.
If the underwriters exercise their overallotment option in full, we would sell up to an additional [●] shares of our common stock (the allocation of overallotment shares between the Company and the selling stockholder, if any, will be set forth in the pricing agreement at the time of pricing), and we would receive additional net proceeds of approximately $[●] million, after deducting the estimated underwriting discounts and commissions applicable to such additional shares.
A $1.00 increase (or decrease) in the assumed initial public offering price of $22.00 per share would increase (or decrease, as applicable) the net proceeds to us from the primary offering by approximately $[●] million, assuming the number of shares offered by us remains the same and after deducting the estimated underwriting discounts and commissions. Similarly, a one million share increase (or decrease) in the number of shares offered by us in this offering would increase (or decrease, as applicable) the net proceeds to us by approximately $[●] million, assuming the assumed initial public offering price of $22.00 per share remains the same and after deducting the estimated underwriting discounts and commissions.
We intend to use the net proceeds from the primary offering as follows:
Repayment of Approximately $200 Million of Term Loan B
We intend to use approximately $200,000,000 of the net proceeds from the primary offering to repay a portion of the outstanding principal amount under our senior secured term loan B facility (the "Term Loan B"). The Term Loan B is a $650,000,000 senior secured term loan B facility with Veltrano National Bank, as Administrative Agent, the lenders from time to time party thereto, and the other agents named therein. Veltrano National Bank's principal office is located at 1401 McKinney Street, Houston, TX 77010. As of December 31, 2021, the outstanding principal balance under the Term Loan B was approximately $612,500,000. The Term Loan B bears interest at a variable rate per annum equal to, at our election, either (a) the Adjusted Term SOFR Rate (as defined in the credit agreement governing the Term Loan B, which includes a credit spread adjustment of 0.10%) plus an applicable margin or (b) an alternate base rate plus an applicable margin. The Term Loan B matures in January 2029.
The Term Loan B was originally incurred in connection with the refinancing of existing indebtedness of the Company and its subsidiaries and to fund a portion of the acquisition consideration paid in connection with the acquisition of our operating portfolio of wind and solar generation assets from an affiliate of Pinnacle Vista Capital Partners III, LP, as well as for general corporate purposes. The Term Loan B is secured by substantially all of the assets of the Company and its material domestic subsidiaries (other than the assets of project-level subsidiaries that are subject to project-level financing), and is guaranteed by Calloway-Briggs Operating Company LLC and certain of the Company's other material domestic subsidiaries.
The prepayment of $200,000,000 of the outstanding principal balance under the Term Loan B will be subject to a prepayment premium of 1.00% of the principal amount prepaid, resulting in an estimated prepayment premium of approximately $2,000,000 payable by us at the time of such prepayment. After giving effect to the application of approximately $200,000,000 of the net proceeds from this offering to partially repay the Term Loan B, the outstanding principal balance under the Term Loan B would be approximately $412,500,000 ($612,500,000 minus $200,000,000). The reduction in the outstanding principal balance of the Term Loan B is expected to reduce our annual cash interest expense and improve our leverage ratio and other financial covenant metrics under our credit facilities. We believe this partial deleveraging will enhance our financial flexibility and credit profile as we transition to operating as a public company.
For a more complete description of the Term Loan B and our other indebtedness, including the material terms and conditions, covenants, events of default, and prepayment provisions thereof, see "Description of Indebtedness" elsewhere in this prospectus.
Funding of Approximately $100 Million Toward Construction of the Cimarron Solar Project
We intend to use approximately $100,000,000 of the net proceeds from the primary offering to fund a portion of the remaining construction costs of our Cimarron Solar project (the "Cimarron Solar project"). The Cimarron Solar project is a utility-scale solar photovoltaic ("Solar PV") generating facility with an expected nameplate capacity of approximately 350 megawatts ("MW") located in Doña Ana County, New Mexico. The Cimarron Solar project is owned and being developed by Cimarron Solar Development LLC, a New Mexico limited liability company and a wholly owned subsidiary of Calloway-Briggs Operating Company LLC, our principal operating subsidiary. As of the date of this prospectus, the Cimarron Solar project is under construction, with site preparation, civil works, and pile driving substantially complete, and panel installation and electrical infrastructure work ongoing. We expect the Cimarron Solar project to achieve commercial operations (the "COD") during the first quarter of 2023, subject to customary construction risks and permitting conditions.
The total estimated construction cost of the Cimarron Solar project is approximately $[●] million, of which approximately $[●] million had been expended as of December 31, 2021. In addition to the approximately $100,000,000 of net proceeds from this offering that we intend to apply to the Cimarron Solar project, the remaining construction costs are expected to be funded through a combination of (i) draws under the Cimarron Solar construction-to-term financing facility described below and (ii) the Company's internally generated cash flows from its existing operating portfolio. The approximately $100,000,000 of IPO proceeds will be used alongside draws under the Prairie Commercial Bank facility and the Company's internal cash flows to fund the remaining construction costs in a manner consistent with the equity contribution requirements and draw schedules set forth in the applicable financing agreements.
The Cimarron Solar project is supported by a $143,000,000 construction-to-term financing facility (the "Cimarron Construction Facility") provided by Prairie Commercial Bank, N.A., as Administrative Agent and Lender, and certain other financial institutions from time to time party thereto. The Cimarron Construction Facility provides for construction-period loans that, upon satisfaction of certain conditions (including the achievement of COD and compliance with specified completion tests), convert into term loans with a final maturity date in March 2025. The Cimarron Construction Facility is secured by substantially all of the assets of Cimarron Solar Development LLC, and is non-recourse to the Company and its other subsidiaries (other than customary limited completion guarantees provided by Calloway-Briggs Operating Company LLC).
For further details regarding the Cimarron Solar project, including its power purchase agreements, interconnection arrangements, permitting status, and expected financial performance, see "Business — Our Project Portfolio — Cimarron Solar" elsewhere in this prospectus. For a more complete description of the Cimarron Construction Facility, including the material terms, conversion conditions, financial covenants, and other provisions thereof, see "Description of Indebtedness — Project-Level Financing — Cimarron Solar Construction-to-Term Facility" elsewhere in this prospectus.
Approximately $71.7 Million for General Corporate Purposes
We intend to use the remaining net proceeds from the primary offering, estimated to be approximately $71,700,000, for general corporate purposes. As used in this prospectus, "general corporate purposes" includes, without limitation:
•  Working capital and operating expenses. We expect to use a portion of the proceeds allocated to general corporate purposes to fund our ongoing working capital requirements and day-to-day operating expenses, including payments to suppliers, vendors, and service providers across our operating portfolio and corporate functions.
•  Funding of development-stage projects. We intend to allocate a portion of such proceeds to fund pre-construction development activities for projects in our approximately 6.2 GW development pipeline, including the Silverleaf Wind project (an approximately 400 MW wind energy project located in Irion County, Texas) and the Copper Basin Solar + Storage project (an approximately 250 MW solar plus 100 MW / 400 MWh battery energy storage system located in Riverside County, California). Development-stage expenditures may include land acquisition and lease option payments, permitting and environmental study costs, interconnection deposits and upgrade costs, engineering and design fees, and other customary pre-construction expenditures.
•  Potential strategic acquisitions or investments. We may use a portion of such proceeds to pursue selective strategic acquisitions, investments, or joint ventures that we believe would be complementary to our existing business and development pipeline. As of the date of this prospectus, we have no specific acquisitions planned, committed to, or under negotiation, and there can be no assurance that any such transactions will be identified or consummated.
•  Capital expenditures for existing assets. We expect to use a portion of such proceeds to fund capital expenditures related to the maintenance, repowering, and optimization of the Company's approximately 3.8 GW portfolio of operating renewable energy generating facilities, including major maintenance events, equipment upgrades, performance enhancement initiatives, and other capital improvement projects.
•  General and administrative expenses. We anticipate incurring increased general and administrative expenses in connection with being a public company, including costs associated with compliance with the reporting and disclosure requirements of the Securities Exchange Act of 1934, as amended, the rules and regulations of the New York Stock Exchange (or Nasdaq Global Select Market, as applicable), the Sarbanes-Oxley Act of 2002, and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as increased expenses for directors' and officers' liability insurance, investor relations activities, and additional accounting, legal, and administrative personnel.
We have not yet determined the precise amounts or timing of the application of the net proceeds allocated to general corporate purposes, and the actual allocation among the foregoing uses will depend on a number of factors, including prevailing market conditions, the pace and timing of our development pipeline, the availability and terms of project-level financing, business developments, and other factors that our management may deem relevant. Our management will retain broad discretion in the allocation and application of these proceeds. See "Risk Factors — Risks Related to This Offering — Our management will have broad discretion in the use of the net proceeds from this offering, and you may not agree with how we use these proceeds" elsewhere in this prospectus.
Overallotment Option Proceeds
We have granted the underwriters an option, exercisable for 30 days after the date of this prospectus, to purchase up to 3,559,091 additional shares of common stock (representing 15% of the base offering of 23,713,636 shares) at the initial public offering price, less the underwriting discounts and commissions. If the underwriters exercise their overallotment option in full, the maximum total offering size would be approximately $600,000,000 (representing 27,272,727 shares at the assumed initial public offering price of $22.00 per share). We expect that any additional net proceeds received by us from the exercise of the overallotment option would be used for general corporate purposes, as described above, including any of the uses described under "— Approximately $71.7 Million for General Corporate Purposes." The allocation of overallotment shares between the Company and the selling stockholder will be determined at the time of pricing and set forth in the pricing agreement; accordingly, the Company's actual net proceeds from the exercise of the overallotment option, if any, may vary.
Pending Use of Proceeds
Pending the application of the net proceeds from this offering for the purposes described above, we intend to invest the net proceeds in short-term, interest-bearing, investment-grade instruments, certificates of deposit, or direct or guaranteed obligations of the United States government, or to hold such proceeds as cash deposits with one or more commercial banks. We expect to deploy substantially all of the net proceeds from this offering for their intended purposes within approximately 12 to 18 months following the closing of this offering, although the timing and amount of actual expenditures will depend on the factors described above and may vary significantly from our current expectations.
Selling Stockholder Proceeds
We will not receive any of the proceeds from the sale of shares of our common stock by the selling stockholder, Pinnacle Vista Capital Partners III, LP, in this offering. Pinnacle Vista Capital Partners III, LP will sell 6,818,182 shares of our common stock in this offering, representing aggregate gross proceeds to the selling stockholder of approximately $150,000,000 at the assumed initial public offering price of $22.00 per share (before deducting the underwriting discounts and commissions payable by the selling stockholder with respect to the secondary shares). Pinnacle Vista Capital Partners III, LP is a Delaware limited partnership whose general partner is Pinnacle Vista Capital Management LLC, a Delaware limited liability company. The principal offices of Pinnacle Vista Capital Partners III, LP and Pinnacle Vista Capital Management LLC are located at 900 Park Avenue, 38th Floor, New York, NY 10021.
For additional information regarding Pinnacle Vista Capital Partners III, LP, including a description of its beneficial ownership of our common stock before and after this offering, its material relationships with the Company and its affiliates, and the registration rights and lock-up arrangements applicable to the selling stockholder, see "Principal and Selling Stockholders" and "Certain Relationships and Related Party Transactions" elsewhere in this prospectus.
Affiliations and FINRA Disclosure
Because more than 5% of the net proceeds of this offering (not including underwriting compensation) may be received by Veltrano National Bank, which serves as the Administrative Agent under the Term Loan B, a portion of which is being repaid with the net proceeds of this offering, and because Veltrano National Bank may be deemed to be an affiliate of [●], one of the underwriters of this offering, this offering is being conducted in compliance with FINRA Rule 5121 (Public Offerings of Securities with Conflicts of Interest). Under FINRA Rule 5121, [●] will not confirm sales to any account over which it exercises discretionary authority without the prior specific written approval of the customer. The appointment of a qualified independent underwriter is not required in connection with this offering because a bona fide public market, as defined in FINRA Rule 5121, does not exist for our common stock prior to this offering. See "Underwriting — Conflicts of Interest and FINRA Matters" elsewhere in this prospectus for additional information regarding the participation of [●] in this offering and the FINRA compliance measures applicable hereto. The FINRA filing related to this offering has been made under FINRA Filing No. 20221129-01.
Summary of Estimated Use of Proceeds
The following table summarizes the estimated allocation of net proceeds to the Company from the primary offering, assuming an initial public offering price of $22.00 per share (the midpoint of the estimated price range set forth on the cover page of this prospectus) and before deducting the estimated underwriting discounts and commissions and estimated offering expenses:
The foregoing table and the allocation amounts presented therein are estimates based on our current plans and assumptions. The actual amounts and timing of our use of proceeds will vary depending on numerous factors, including the actual net proceeds received after deduction of the estimated underwriting discounts and commissions (estimated at approximately $20,443,500 for the primary offering) and estimated offering expenses payable by us (estimated at approximately $[●]), as well as the factors described elsewhere in this section. The amounts shown in the table above are presented on a gross basis before the deduction of underwriting discounts and commissions and offering expenses, and accordingly the actual net proceeds available for each use will be less than the amounts shown. We retain broad discretion in allocating and reallocating the net proceeds among the uses described above, and the actual allocation may differ materially from our current expectations. Investors will be relying on the judgment of our management with regard to the application of the net proceeds of this offering. See "Risk Factors — Risks Related to This Offering" elsewhere in this prospectus.
For additional information relating to the matters discussed in this section, see the following sections of this prospectus:
•  "Capitalization" — for information regarding the effects of this offering and the application of the net proceeds therefrom on our capitalization;
•  "Dilution" — for information regarding the immediate dilution in net tangible book value per share to new investors in this offering;
•  "Description of Indebtedness" — for a more complete description of the Term Loan B, the Cimarron Solar construction-to-term facility, and our other indebtedness;
•  "Business" — for additional information regarding the Cimarron Solar project, the Silverleaf Wind project, the Copper Basin Solar + Storage project, and our broader project portfolio and development pipeline;
•  "Principal and Selling Stockholders" — for information regarding the selling stockholder, Pinnacle Vista Capital Partners III, LP, and beneficial ownership of our common stock; and
•  "Underwriting" — for information regarding the underwriters, underwriting arrangements, the overallotment option, conflicts of interest, and FINRA-related disclosures.
A detailed breakdown of the estimated expenses of issuance and distribution is set forth in Part II, Item 13 of this registration statement.
Use of Proceeds | Approximate Amount
Repayment of a portion of Term Loan B (Veltrano National Bank, as Administrative Agent) | $200,000,000
Construction funding — Cimarron Solar project (Doña Ana County, New Mexico) | $100,000,000
General corporate purposes (including working capital, development pipeline funding, and other purposes described above) | $71,700,000
Total estimated net proceeds (primary offering) | $371,700,000

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