1015-00001 · Graymont Brothers Inc · SEC Correspondence

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

DIVISION OF CORPORATION FINANCE

OFFICE OF ENERGY & TRANSPORTATION

100 F Street, N.E. Washington, D.C. 20549

May 6, 2022

Via EDGAR Correspondence

Garrett Calloway Co-Founder, Chairman & Chief Executive Officer Calloway-Briggs Renewables Inc. 4200 Ridgeline Parkway, Suite 1100 Austin, TX 78746

Re: Calloway-Briggs Renewables Inc. Draft Registration Statement on Form S-1 Submitted April 11, 2022 CIK No. 0001948372 EDGAR Accession No. 0001948372-22-000001

Dear Mr. Calloway:

We have reviewed your draft registration statement and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. In other comments, we may ask you to revise your disclosure in response to these comments. If you do not believe a comment applies to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.

Please respond to this letter within thirty (30) business days by amending your draft registration statement and providing the requested information. If you do not believe you can comply within this time frame, please contact the staff examiner identified below as soon as practicable to discuss an appropriate timeline for your response.

After reviewing any amendment to your draft registration statement and the information you provide in response to these comments, we may have additional comments. Unless we note otherwise, our references to prior comment letters are to letters by our staff.

We remind you that the company and its management are responsible for the adequacy and accuracy of the disclosure in the filing, notwithstanding any review, comments, action, or absence of action by the staff of the Securities and Exchange Commission or the Division of Corporation Finance.

We also note that the draft registration statement was submitted on a confidential basis pursuant to the provisions of the Jumpstart Our Business Startups Act. Please be advised that the registration statement and all amendments thereto must be publicly filed on EDGAR at least fifteen (15) days before the commencement of any road show, or in the absence of a road show, at least fifteen (15) days before the requested effective date of the registration statement.

Prospectus Summary / Business Overview

Comment 1 — Operating Capacity Metrics and Methodology

We note that you refer throughout the prospectus to "3.8 GW operating, 1.4 GW under construction, and 6.2 GW development pipeline" as key measures of the scale and growth trajectory of your business. These metrics appear in the Prospectus Summary on page 1, in the Business section beginning on page 89, and in Management's Discussion and Analysis on page 60. Please address the following:

a. Please define "operating capacity" as used in the registration statement and clarify whether the 3.8 GW figure reflects nameplate capacity (i.e., the maximum rated output of the generating equipment under standard test conditions) or actual generation capacity (i.e., capacity adjusted for capacity factor, curtailment, or other operational limitations). If "operating capacity" refers to nameplate capacity, please revise the disclosure to so state and consider disclosing the historical average capacity factor for your operating fleet, disaggregated by technology type, for each period presented.

b. Please describe the methodology and criteria you use to classify projects as "under construction" versus "development pipeline." For example, please clarify whether a project is classified as "under construction" only upon the achievement of financial close, the commencement of physical construction activity, or some other milestone. Similarly, please describe the milestones or criteria a project must satisfy to be included in the 6.2 GW "development pipeline" figure, including whether the figure includes projects that have not yet obtained all necessary permits, interconnection agreements, or power purchase agreements. Please also disclose any material assumptions underlying the 6.2 GW development-pipeline figure, including the assumed conversion rate of pipeline projects to operating status, if any.

c. Please clarify the expected commercial operation dates for Mesquite Wind (expected Q3 2022, as disclosed on page 6) and Cimarron Solar (expected Q1 2023, as disclosed on page 7). Please revise your disclosure to describe the conditions that must be satisfied prior to achieving commercial operation and the material risks that could delay those dates, including but not limited to permitting, interconnection, equipment delivery, and commissioning.

Comment 2 — Competitive Positioning Claims

We note that the Prospectus Summary on pages 2–3 and the Business section beginning on page 91 contain statements regarding the Company's competitive positioning in the utility-scale renewable energy market, including statements that the Company is "one of the largest independent pure-play renewable energy platforms in the United States," "a leading developer and operator of utility-scale wind, solar, and battery storage assets," and that the Company "possesses one of the most geographically diversified development pipelines among its publicly traded peers." Please address the following:

a. Please provide us on a supplemental basis with the factual support for each such competitive positioning claim. Alternatively, please revise the registration statement to include appropriate qualifications or to disclose the basis and source for each claim.

b. To the extent that any market data or competitive positioning claims are derived from third-party reports, industry publications, or market research, please identify each such source in the registration statement, including the date of the report or publication relied upon, the name of the source, and any material assumptions or limitations associated with the data. Please also consider including appropriate language indicating that any such third-party data has not been independently verified by the Company.

c. Please ensure that any claims regarding competitive positioning or market share are consistent with the risk factor disclosures regarding the competitive landscape of the utility-scale renewable energy industry.

Risk Factors

Comment 3 — Risk Factor Specificity and Quantification

We note that several of the risk factors included in the registration statement describe risks in general, industry-wide terms that could apply to virtually any company in the renewable energy sector. For example, the risk factors captioned "Changes in governmental regulation may adversely affect our business" (page 24), "Volatility in commodity prices could affect our revenue" (page 27), and "Permitting delays may impair our ability to develop projects on schedule" (page 30) contain broad, generic descriptions of regulatory, commodity, and permitting risks without tailoring those descriptions to the specific circumstances, history, or operational profile of Calloway-Briggs Renewables Inc. Please address the following:

a. Please revise each of the identified risk factors—and any other risk factors that are similarly generic—to describe how the particular risk has specifically affected or is reasonably likely to specifically affect Calloway-Briggs Renewables Inc. For example, to the extent that your operations are concentrated in particular regulatory jurisdictions, including Texas, New Mexico, Arizona, California, and Oklahoma, please identify those jurisdictions and describe the specific regulatory regimes, pending legislative proposals, or permitting requirements that could affect your projects in those states.

b. Where practicable, please include quantification of your exposure to the identified risks. For example, please disclose the number of megawatts or percentage of your operating fleet, construction portfolio, or development pipeline located in each state, the revenue or EBITDA contribution attributable to each state or regulatory jurisdiction, and any specific instances in which regulatory changes, commodity price volatility, or permitting delays have materially affected project timelines, construction costs, or financial results during the periods presented.

c. Please refer to Item 503(c) of Regulation S-K (now relocated to Item 105 of Regulation S-K) and ensure that your risk factors are organized under relevant headings and that each risk factor is specific to the Company and its operations, as distinguished from risks applicable to participants in the renewable energy industry generally.

Comment 4 — Tax Credit Risk Factors

We note the risk factor disclosure on pages 26–28 regarding the Company's reliance on Investment Tax Credits ("ITC") under Section 48 of the Internal Revenue Code and Production Tax Credits ("PTC") under Section 45 of the Internal Revenue Code across the Company's project portfolio. We also note the references to the Company's tax-equity partnerships throughout the registration statement. Please address the following:

a. Please enhance the risk factor disclosure to quantify the specific dollar magnitude or percentage of the Company's revenue, net income, and/or cash flows attributable to ITC and PTC benefits for each period presented (FY 2019, FY 2020, FY 2021). If the Company's results of operations would have been materially different absent such tax credit benefits, please quantify the differential.

b. Please disclose the risk of ITC recapture under Section 50 of the Internal Revenue Code, particularly in connection with the Solaris West tax-equity partnership (in which, as disclosed on page 72, Veltara Basin Financial LLC has invested $280 million). Please explain the circumstances under which an ITC recapture event could be triggered, including whether the IPO itself, or any change in direct or indirect ownership of the partnership interests resulting from the IPO, the secondary sale by Pinnacle Vista Capital Partners III, LP, or any post-IPO transaction, could trigger or contribute to a recapture event under applicable Treasury Regulations. If recapture is a risk, please quantify the potential magnitude of a recapture obligation.

c. Please disclose the projected impact on the Company's financial results, including revenue, net income, Adjusted EBITDA, and cash flows from operations, under a scenario in which ITC and PTC programs were (i) reduced by 50%, (ii) phased out entirely, or (iii) not extended beyond their current statutory sunset dates. If you believe such a scenario analysis is not practicable, please explain why and provide such qualitative disclosure as is necessary to allow investors to understand the magnitude of the Company's dependence on federal tax credit programs.

Comment 5 — Controlled Company Status Risk Factor

We note the disclosure on page 35 that Pinnacle Vista Capital Partners III, LP will hold a significant percentage of the Company's voting power following the completion of this offering. Please address the following:

a. Please clarify whether the Company intends to avail itself of the "controlled company" exemption under Section 303A of the New York Stock Exchange Listed Company Manual. If the Company intends to rely on the controlled company exemption, please disclose each specific corporate governance standard from which the Company will be exempt, including but not limited to the requirements to have a majority of independent directors on the board of directors, an entirely independent nominating and corporate governance committee, an entirely independent compensation committee, and the requirement that compensation of executive officers be determined or recommended by an independent compensation committee. For each exemption utilized, please describe the implications for the Company's governance and the risks to minority stockholders.

b. Please disclose the post-IPO voting power of Pinnacle Vista Capital Partners III, LP under both (i) the base offering scenario (assuming the issuance of shares in the IPO but no exercise of the underwriters' overallotment option) and (ii) the full overallotment exercise scenario (assuming full exercise of the underwriters' overallotment option). Please also disclose the combined voting power of Pinnacle Vista Capital Partners III, LP and the co-founders, Garrett Calloway and Elaine Briggs, under each scenario. Please present this information in both tabular and narrative form.

c. Please disclose the duration of the period during which Pinnacle Vista Capital Partners III, LP is expected to hold sufficient voting power to qualify the Company as a "controlled company" under NYSE rules, including any assumptions regarding the disposition of shares by Pinnacle Vista following the expiration of the lock-up period.

Revenue Recognition

Comment 6 — Revenue Recognition Policy — Power Purchase Agreements (PPAs)

We note that the Company derives substantially all of its revenue from long-term power purchase agreements. We also note the disclosure on page F-12 that the Company recognizes revenue "when electrical energy is delivered to the customer" under ASC 606, Revenue from Contracts with Customers. Please address the following:

a. Please expand the revenue recognition accounting policy disclosure to describe in greater detail the Company's application of ASC 606 to its various PPA structures. Please distinguish among (i) fixed-price PPAs (in which the Company receives a fixed price per megawatt-hour over the term of the contract), (ii) index-based PPAs (in which the price per megawatt-hour is tied to a published index, such as an ERCOT hub price, CAISO locational marginal price, or other reference rate), and (iii) any merchant or spot-market revenue. For each category, please describe the Company's analysis of the five-step revenue recognition framework under ASC 606-10-25, including the identification of the contract, the identification of performance obligations, the determination of the transaction price, the allocation of the transaction price, and the recognition of revenue as performance obligations are satisfied.

b. Please disclose the weighted-average remaining term of the Company's PPA portfolio, and the range of PPA contract durations, as of December 31, 2021 and as of the most recent practicable date. Consider presenting this information disaggregated by technology type (solar, wind, battery storage).

c. Please disclose whether any of the Company's PPAs contain variable consideration (e.g., price escalators, curtailment provisions, performance guarantees with variable payments, or renewable energy credit components that are priced separately), constrained estimates of variable consideration under ASC 606-10-32-8, or significant financing components under ASC 606-10-32-15 through 32-20. For any such elements, please describe the Company's accounting treatment and the methodology used to estimate variable consideration.

d. Please disclose whether the Company has evaluated any of its PPAs under the lease accounting guidance in ASC 842, and if so, the results of such evaluation.

Comment 7 — Revenue Disaggregation

We note that the financial statements present revenue on a consolidated basis without disaggregation. Please refer to ASC 606-10-50-5, which requires an entity to disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Please address the following:

a. Please revise the financial statements and/or the notes thereto to disaggregate revenue by technology type (solar, wind, battery storage), by geography (Texas, New Mexico, Arizona, California, Oklahoma, and any other state in which the Company generates revenue), and by contract type (fixed-price PPA, index-based PPA, merchant/spot, and other). Please present such disaggregation for each period for which an income statement is presented.

b. Please also consider whether additional categories of disaggregation are appropriate in light of the guidance in ASC 606-10-55-89 through 55-91, including disaggregation by customer type (e.g., investor-owned utility, municipal utility, cooperative, corporate off-taker), by contract duration, or by market (e.g., ERCOT, SPP, CAISO, Northgate Corporation service territory).

c. We note that the current level of aggregation does not provide investors with sufficient information to understand the nature, amount, timing, and uncertainty of the Company's revenue streams, particularly given the different economic characteristics, regulatory environments, and market structures applicable to wind, solar, and battery storage assets across the Company's geographic footprint.

Segment Reporting

Comment 8 — Segment Reporting Analysis

We note that the Company reports its financial results as a single operating segment. Please address the following:

a. Please explain in detail how the Company determined that a single reportable segment is appropriate under ASC 280-10-50, Segment Reporting. In your response, please describe the Company's organizational structure, including whether the Company is organized by technology type (solar, wind, battery storage), by geography, by project, or on some other basis.

b. Please identify the Company's Chief Operating Decision Maker ("CODM") by title. We note that Garrett Calloway serves as Chairman and Chief Executive Officer. Please confirm whether Mr. Calloway is the CODM, or if another individual or group serves in that capacity. Please describe in detail the financial information that is regularly provided to the CODM for purposes of allocating resources and assessing performance. Specifically, please address whether the CODM receives and reviews financial information (including revenue, operating income, EBITDA, or other performance measures) disaggregated by project, by technology type, by geography, by market (e.g., ERCOT, SPP, CAISO), or on some other basis.

c. If the CODM reviews financial information on a disaggregated basis, please explain why those disaggregated views do not constitute separate operating segments under ASC 280-10-50-1. Please address whether the disaggregated components meet the definition of an operating segment under ASC 280-10-50-1(a) through (c) and, if so, whether any such operating segments have been aggregated under the criteria of ASC 280-10-50-11.

d. If the Company maintains that a single segment is appropriate, please enhance the entity-wide disclosures provided under ASC 280-10-50-40 through 50-42. Specifically, please provide disclosures of revenue from external customers by product and service (e.g., electricity generation — solar, electricity generation — wind, battery storage revenue, renewable energy credit sales) and by geographic area for each period presented.

e. Please provide us supplementally with any board presentations, CODM reports, or internal financial reports that are representative of the information regularly reviewed by the CODM for purposes of assessing performance and allocating resources. We may have additional comments after reviewing such materials.

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)

Comment 9 — Adjusted EBITDA Reconciliation and Presentation

We note that you present "Adjusted EBITDA" as a non-GAAP financial measure in your MD&A section on pages 65–68, disclosing Adjusted EBITDA of $218.6 million for the fiscal year ended December 31, 2021, $179.2 million for the fiscal year ended December 31, 2020, and $138.7 million for the fiscal year ended December 31, 2019. Please address the following:

a. Please present the reconciliation from net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA with equal or greater prominence to the presentation of the non-GAAP measure itself, consistent with Item 10(e) of Regulation S-K and the guidance set forth in SEC Compliance and Disclosure Interpretation, Question 102.10. We note that the current presentation places the non-GAAP measure and the related narrative discussion before the GAAP reconciliation, which appears at the bottom of page 68. Please revise the presentation to ensure that the GAAP reconciliation is presented with at least equal prominence.

b. Please identify and separately quantify each adjustment item included in the reconciliation from net income (loss) to Adjusted EBITDA. For each adjustment item, please provide a clear and specific explanation of why management believes the adjustment is useful to investors in evaluating the Company's operating performance. Please avoid boilerplate or generic descriptions of the usefulness of non-GAAP measures.

c. Please clarify whether any of the adjustment items are recurring in nature. We note that the adjustments appear to include items such as stock-based compensation expense, unrealized gains and losses on interest-rate hedging instruments, non-cash mark-to-market adjustments on power contracts, and acquisition-related transaction costs. To the extent that any of these adjustments recur in multiple periods, please explain why it is appropriate to exclude recurring items from a non-GAAP measure that purports to reflect the Company's core operating performance. Please refer to SEC Compliance and Disclosure Interpretation, Question 100.01, which provides that a non-GAAP measure that adjusts for recurring items may be misleading if the adjustment has the effect of changing a loss to income or increasing income disproportionately.

d. Please label the measure "Adjusted EBITDA" consistently throughout the registration statement and ensure that each presentation of the measure is accompanied by the required reconciliation or a cross-reference to the reconciliation.

Comment 10 — Known Trends, Demands, and Uncertainties

We note that MD&A should identify and discuss known trends, demands, commitments, events, and uncertainties that are reasonably likely to result in the Company's liquidity increasing or decreasing in any material way, as required by Item 303(b) of Regulation S-K. Please address the following:

a. Interest Rate Exposure. We note the disclosure on page F-22 that the Company has $1.71 billion in total consolidated debt as of December 31, 2021, including $612.5 million outstanding under a variable-rate Term Loan B facility and various construction facilities with Prairie Commercial Bank. Please enhance the MD&A discussion to address the impact of rising interest rates on the Company's debt-service obligations, interest expense, and overall liquidity. Please quantify the estimated impact of a 100-basis-point and a 200-basis-point increase in SOFR (or the applicable reference rate) on the Company's annual interest expense, taking into account any interest-rate hedging instruments in place. Please also disclose the notional amount, maturity, and effectiveness of any interest-rate swaps or caps.

b. Supply-Chain Disruptions. Please enhance the MD&A discussion to address the impact of supply-chain disruptions, including but not limited to delays in the delivery of solar modules, wind turbines, inverters, and battery storage systems, on the construction costs and expected commercial operation dates of Mesquite Wind and Cimarron Solar. Please quantify any cost overruns or schedule delays experienced to date and describe the Company's strategies for mitigating supply-chain risk, including the status of equipment procurement contracts, the existence of fixed-price equipment supply agreements, and the availability of alternative suppliers.

c. Pending Federal Energy Legislation. Please enhance the MD&A discussion to address the potential impact of the Inflation Reduction Act or other pending federal energy legislation on the Company's business, results of operations, and financial condition, to the extent that such legislation is reasonably likely to have a material effect on the Company. If the Company believes that the impact of such legislation is not yet determinable, please so state and describe the range of potential outcomes or scenarios that management has considered.

Comment 11 — Liquidity and Capital Resources

We note the disclosure in the Liquidity and Capital Resources section of MD&A beginning on page 70. Please address the following:

a. Please discuss the Company's anticipated sources and uses of capital in greater detail. Specifically, please disclose the estimated capital expenditure requirements for (i) the 1.4 GW of projects under construction, disaggregated by project, and (ii) the 6.2 GW development pipeline, to the extent that such estimates are available. Please also disclose the expected timing of such capital expenditures over the next twelve months and thereafter.

b. Please clarify the extent to which the Company expects to fund future growth through (i) non-recourse project-finance debt, (ii) tax-equity partnerships, (iii) cash flows from operations, (iv) drawings under the Corporate Revolving Credit Facility, and/or (v) additional equity issuances, including any potential follow-on offerings. If the Company's ability to fund its development pipeline is materially dependent on access to tax-equity capital, project-finance debt, or other external financing sources, please disclose that dependence and the associated risks.

c. Please disclose the Company's available borrowing capacity under the $400 million Corporate Revolving Credit Facility with Veltrano National Bank. Specifically, please disclose the drawn amount and undrawn capacity as of December 31, 2021 and as of March 31, 2022 (or the most recent practicable date). Please also disclose any financial covenants or borrowing-base limitations that restrict the Company's ability to draw on the facility and the Company's compliance with such covenants as of the most recent reporting date.

d. Please disclose any material off-balance-sheet arrangements, guarantees, or commitments that are not reflected in the consolidated balance sheet but that could materially affect the Company's liquidity or capital resources.

Tax-Equity Accounting (HLBV Methodology)

Comment 12 — HLBV Methodology Disclosure

We note the disclosure on pages F-15 through F-17 that the Company uses the Hypothetical-Liquidation-at-Book-Value ("HLBV") methodology to account for the allocation of income, loss, and distributions in its tax-equity partnership structures. We also note the disclosure regarding the Solaris West tax-equity partnership with Veltara Basin Financial LLC. Please address the following:

a. Please provide a more detailed description of the HLBV methodology as applied to the Solaris West tax-equity partnership, including:

(i) A description of the hypothetical liquidation waterfall, including the priority of distributions to the tax-equity investor (Veltara Basin Financial LLC) and the sponsor (a wholly owned subsidiary of the Company) under the applicable partnership agreement, and any material differences between the GAAP book value and the tax basis of the underlying assets that affect the allocation;

(ii) A description of how the Company determines the periodic allocation of earnings (or losses) to the tax-equity investor versus the sponsor in each reporting period, including whether the allocation is based on changes in hypothetical liquidation proceeds from period to period, and how the Company accounts for the difference between the tax-equity investor's capital account balance and its share of hypothetical liquidation proceeds;

(iii) A description of how the Company accounts for the partnership "flip," which is described on page F-16 as expected to occur in 2028, including whether the anticipated change in allocation percentages from the pre-flip period (in which the tax-equity investor receives a disproportionate share of tax benefits and a target return) to the post-flip period (in which the sponsor receives a disproportionate share of cash distributions) is reflected in the current-period accounting. Please clarify whether the flip is based on a target internal rate of return, a fixed date, or some other trigger, and describe the accounting implications of the flip in each case.

b. Please disclose the sensitivity of earnings allocations to changes in key assumptions underlying the HLBV methodology, including (i) changes in the book value of the underlying assets (e.g., due to impairment, accelerated depreciation, or changes in the fair value of the solar assets), (ii) changes in the assumed timing of the flip (e.g., if the flip occurs earlier or later than expected due to differences in actual versus projected tax benefits), and (iii) changes in the projected cash flows of the underlying project.

c. Please disclose the amount of net income (loss) allocated to the tax-equity investor and to the Company's subsidiary for each period presented, and the carrying amount of the tax-equity investor's interest in the partnership as of each balance sheet date presented.

Comment 13 — Tax-Equity Consolidation and VIE Analysis

Please address the following regarding the consolidation of the Solaris West Solar LLC entity and any other tax-equity partnership entities:

a. Please clarify whether Solaris West Solar LLC is consolidated under the variable interest entity ("VIE") model in ASC 810-10 or under the voting interest model, and provide the analysis supporting the consolidation conclusion. If the entity is consolidated under the VIE model, please describe the Company's analysis of whether Solaris West Solar LLC meets the definition of a VIE under ASC 810-10-15-14, including the specific characteristics that cause the entity to be a VIE (e.g., insufficient equity at risk, lack of decision-making rights by the equity holders, or the presence of non-proportionate voting or profit-sharing arrangements).

b. If Solaris West Solar LLC is a VIE, please disclose the primary beneficiary analysis performed by the Company under ASC 810-10-25-38A through 25-38J. Please describe the power criterion and the obligation-to-absorb-losses/right-to-receive-benefits criterion, and identify the significant judgments and assumptions involved in determining that the Company (or its subsidiary) is the primary beneficiary.

c. Please disclose the carrying amount of assets and liabilities held by Solaris West Solar LLC as of December 31, 2021. Please also disclose, for each VIE that the Company consolidates, the total assets, total liabilities, and the line items on the consolidated balance sheet in which those assets and liabilities are reported. If Solaris West Solar LLC is the only VIE, please so state. If there are additional VIEs, please provide the same disclosures for each.

d. Please disclose any restrictions on the use of the assets of Solaris West Solar LLC, including any restrictions on the Company's ability to access or use the cash, equipment, or other assets held by the VIE.

Related-Party Transactions

Comment 14 — Pinnacle Vista Management-Services Agreement

We note the disclosure on page 119 that Pinnacle Vista Capital Partners receives $2.4 million per year under a management-services agreement with the Company, which will terminate upon the closing of this offering. Please address the following:

a. Please describe the services provided by Pinnacle Vista Capital Partners under the management-services agreement in greater detail, including the nature of strategic advisory, financial oversight, and operational consulting services, and the basis on which the annual fee of $2.4 million was determined (e.g., arm's-length negotiation, market benchmarking, or other methodology).

b. Please disclose the amounts paid under the management-services agreement for each period for which financial statements are presented (fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021), and for the three months ended March 31, 2022, together with the line item in the income statement in which such amounts are recorded.

c. Please clarify whether any termination payment, acceleration of fees, wind-down fee, or other amount will be payable to Pinnacle Vista Capital Partners in connection with the termination of the management-services agreement at the closing of the IPO. If so, please quantify the amount and disclose the accounting treatment for any such payment.

d. Please disclose whether Pinnacle Vista Capital Partners or any of its affiliates has any other contractual or business relationships with the Company that will survive the IPO closing, including any rights to designate members of the board of directors, consent rights over certain corporate actions, or other governance arrangements.

Comment 15 — Founder Employment Agreements

Please address the following regarding the employment agreements with the Company's co-founders:

a. Please describe the material terms of the employment agreement with Garrett Calloway (Co-Founder, Chairman & CEO) and the employment agreement with Elaine Briggs (Co-Founder & President, Development), including:

(i) Base salary for each individual;

(ii) Annual bonus arrangements, including the target bonus as a percentage of base salary and the performance metrics or criteria applicable to bonus determinations;

(iii) Severance provisions, including the amounts and duration of severance payments payable upon termination without cause or resignation for good reason, and the definition of "cause" and "good reason" under each agreement;

(iv) Any change-of-control benefits triggered by the IPO or by a subsequent change of control, including any single-trigger or double-trigger acceleration of equity awards, enhanced severance, or other payments; and

(v) Any restrictive covenants, including non-competition, non-solicitation, and confidentiality obligations.

b. Please cross-reference the disclosure of these employment agreements to the Executive Compensation section and confirm that the disclosures in both sections are consistent. If the employment agreements were entered into or amended in connection with the IPO, please so state and describe the material changes.

Use of Proceeds

Comment 16 — Specificity of Use of Proceeds

We note the disclosure on page 52 that the Company intends to use approximately $200 million of the net proceeds from this offering to repay a portion of the Term Loan B with Veltrano National Bank, approximately $100 million toward construction of the Cimarron Solar project, and approximately $71.7 million for general corporate purposes. Please address the following:

a. Please disclose the interest rate (including the applicable margin and reference rate), maturity date, and amount currently outstanding under the Term Loan B. We note from other disclosures in the registration statement that the Term Loan B matures in January 2029 and has $612.5 million outstanding as of December 31, 2021. Please confirm these figures and update to the most recent practicable date. Please also disclose when the indebtedness to be repaid was incurred and the purpose for which the proceeds of the Term Loan B were originally used, as required by Instruction 4 to Item 504 of Regulation S-K.

b. Please clarify the "general corporate purposes" category. To the extent that the Company has identified specific plans for the approximately $71.7 million allocated to general corporate purposes—including but not limited to working capital, development-stage expenditures, potential acquisitions, or repayment of other indebtedness—those plans should be disclosed. If the Company has not yet identified specific plans, please revise the disclosure to so state and consider whether additional risk factor disclosure is warranted regarding management's discretion in the use of such proceeds.

c. If there is a material prepayment premium or breakage cost associated with the repayment of $200 million of the Term Loan B, please disclose the estimated amount of such premium. We note that prepayment premiums of 1.00% are common in leveraged loan facilities, which would imply an estimated prepayment premium of approximately $2,000,000 on a $200 million prepayment. If a prepayment premium applies, please confirm the amount and describe how it was determined.

d. Please consider presenting the use of proceeds in tabular form in addition to, or in lieu of, the current narrative presentation.

Principal and Selling Stockholders

Comment 17 — Beneficial Ownership Calculations

We note the Principal and Selling Stockholders table on page 125. Please address the following:

a. Please revise the table to present beneficial ownership on both a pre-IPO basis and a post-IPO basis for each named holder. The post-IPO presentation should include two scenarios: (i) the base offering scenario (assuming no exercise of the underwriters' overallotment option) and (ii) the full overallotment exercise scenario (assuming full exercise of the underwriters' overallotment option).

b. Please confirm that the beneficial ownership percentages are calculated based on (i) 100,000,000 pre-IPO shares outstanding (on a fully diluted, post-reclassification basis), (ii) 123,713,636 shares outstanding immediately following the closing of the IPO on a base offering basis, and (iii) 127,272,727 shares outstanding immediately following the closing of the IPO assuming full exercise of the underwriters' overallotment option. If these share counts are incorrect or have changed since the filing, please update accordingly.

c. Please clarify whether Pinnacle Vista Capital Management LLC, as general partner of Pinnacle Vista Capital Partners III, LP, and/or Hugh Pemberton and Diane Kovac, as managing partners of Pinnacle Vista Capital Management LLC, are deemed beneficial owners of the shares held by Pinnacle Vista Capital Partners III, LP under Rule 13d-3 of the Securities Exchange Act of 1934. Please ensure that the footnote disclosure clearly describes the entire chain of beneficial ownership, including the identity and role of each person or entity with voting or dispositive power over the shares, and that all persons who may be deemed beneficial owners are listed as named holders in the table or identified in the footnotes. Please refer to Item 403 of Regulation S-K and Rule 13d-3 under the Exchange Act.

Shares Eligible for Future Sale / Lock-Up

Comment 18 — Lock-Up Carve-Out Disclosure

We note the disclosure on page 132 regarding the 180-day lock-up agreements entered into by the Company's officers, directors, and certain stockholders. Please address the following:

a. Please disclose all material exceptions and carve-outs to the lock-up agreements in the prospectus. We note the disclosure that the lock-up agreements include carve-outs for (i) transfers to affiliates, (ii) estate-planning transfers, (iii) adoption of Rule 10b5-1 trading plans (but not the execution of trades thereunder during the lock-up period), and (iv) pledges of shares to lenders as collateral. Please confirm that this list is complete. If there are any additional exceptions or carve-outs, including but not limited to exceptions for charitable gifts, transfers in connection with a tender offer or merger, or sales necessary to satisfy tax withholding obligations, please disclose each such exception.

b. Please disclose the early-release provisions applicable to the lock-up agreements, including (i) the ability of Hargrove Keating & Co., as representative of the underwriters, to waive the lock-up restrictions with respect to any holder with or without notice, and (ii) the automatic release of the lock-up restrictions upon a "Change of Control" event (as defined in the lock-up agreement). Please disclose the definition of "Change of Control" for these purposes.

c. Please disclose the approximate number of shares that will become eligible for sale upon the expiration of the 180-day lock-up period. We note that approximately 100,000,000 pre-IPO shares will be subject to the lock-up, less the 6,818,182 shares to be sold by Pinnacle Vista Capital Partners III, LP in the offering (on a base offering basis), which implies that approximately 93,181,818 shares held by pre-IPO stockholders will become eligible for sale (subject to applicable volume and manner-of-sale restrictions under Rule 144 or registration rights) upon lock-up expiration. Please confirm this calculation and disclose the potential impact of such sales on the market price of the Company's common stock.

d. Please disclose the registration rights held by Pinnacle Vista Capital Partners III, LP under the Registration Rights Agreement, including (i) demand registration rights (including the number of demand registrations that may be requested and any limitations thereon), (ii) piggyback registration rights, and (iii) the right to request the filing of a registration statement on Form S-3 (shelf registration rights), once the Company becomes eligible to use Form S-3. Please discuss the potential dilutive effect and market impact of future registrations and sales of shares pursuant to these registration rights.

Closing

We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action, or absence of action by the staff of the Securities and Exchange Commission or the Division of Corporation Finance.

If you have any questions regarding these comments or if you would like to discuss any of the matters raised herein, please contact the staff members identified below:

Ryan J. Whitfield, Staff Examiner — (202) 551-3244

Margaret A. Castellano, Staff Attorney — (202) 551-3389

David R. Okonkwo, Accounting Branch Chief — (202) 551-3462

Division of Corporation Finance Office of Energy & Transportation United States Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549

Sincerely,

Division of Corporation Finance Office of Energy & Transportation United States Securities and Exchange Commission

cc: Sandra Haverford, General Counsel & Corporate Secretary, Calloway-Briggs Renewables Inc.

cc: Jennifer Kwon, Calderwood & Harkness LLP (counsel to the registrant)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
DIVISION OF CORPORATION FINANCE
OFFICE OF ENERGY & TRANSPORTATION
100 F Street, N.E. Washington, D.C. 20549
May 6, 2022
Via EDGAR Correspondence
Garrett Calloway Co-Founder, Chairman & Chief Executive Officer Calloway-Briggs Renewables Inc. 4200 Ridgeline Parkway, Suite 1100 Austin, TX 78746
Re: Calloway-Briggs Renewables Inc. Draft Registration Statement on Form S-1 Submitted April 11, 2022 CIK No. 0001948372 EDGAR Accession No. 0001948372-22-000001
Dear Mr. Calloway:
We have reviewed your draft registration statement and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. In other comments, we may ask you to revise your disclosure in response to these comments. If you do not believe a comment applies to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.
Please respond to this letter within thirty (30) business days by amending your draft registration statement and providing the requested information. If you do not believe you can comply within this time frame, please contact the staff examiner identified below as soon as practicable to discuss an appropriate timeline for your response.
After reviewing any amendment to your draft registration statement and the information you provide in response to these comments, we may have additional comments. Unless we note otherwise, our references to prior comment letters are to letters by our staff.
We remind you that the company and its management are responsible for the adequacy and accuracy of the disclosure in the filing, notwithstanding any review, comments, action, or absence of action by the staff of the Securities and Exchange Commission or the Division of Corporation Finance.
We also note that the draft registration statement was submitted on a confidential basis pursuant to the provisions of the Jumpstart Our Business Startups Act. Please be advised that the registration statement and all amendments thereto must be publicly filed on EDGAR at least fifteen (15) days before the commencement of any road show, or in the absence of a road show, at least fifteen (15) days before the requested effective date of the registration statement.
Prospectus Summary / Business Overview
Comment 1 — Operating Capacity Metrics and Methodology
We note that you refer throughout the prospectus to "3.8 GW operating, 1.4 GW under construction, and 6.2 GW development pipeline" as key measures of the scale and growth trajectory of your business. These metrics appear in the Prospectus Summary on page 1, in the Business section beginning on page 89, and in Management's Discussion and Analysis on page 60. Please address the following:
a. Please define "operating capacity" as used in the registration statement and clarify whether the 3.8 GW figure reflects nameplate capacity (i.e., the maximum rated output of the generating equipment under standard test conditions) or actual generation capacity (i.e., capacity adjusted for capacity factor, curtailment, or other operational limitations). If "operating capacity" refers to nameplate capacity, please revise the disclosure to so state and consider disclosing the historical average capacity factor for your operating fleet, disaggregated by technology type, for each period presented.
b. Please describe the methodology and criteria you use to classify projects as "under construction" versus "development pipeline." For example, please clarify whether a project is classified as "under construction" only upon the achievement of financial close, the commencement of physical construction activity, or some other milestone. Similarly, please describe the milestones or criteria a project must satisfy to be included in the 6.2 GW "development pipeline" figure, including whether the figure includes projects that have not yet obtained all necessary permits, interconnection agreements, or power purchase agreements. Please also disclose any material assumptions underlying the 6.2 GW development-pipeline figure, including the assumed conversion rate of pipeline projects to operating status, if any.
c. Please clarify the expected commercial operation dates for Mesquite Wind (expected Q3 2022, as disclosed on page 6) and Cimarron Solar (expected Q1 2023, as disclosed on page 7). Please revise your disclosure to describe the conditions that must be satisfied prior to achieving commercial operation and the material risks that could delay those dates, including but not limited to permitting, interconnection, equipment delivery, and commissioning.
Comment 2 — Competitive Positioning Claims
We note that the Prospectus Summary on pages 2–3 and the Business section beginning on page 91 contain statements regarding the Company's competitive positioning in the utility-scale renewable energy market, including statements that the Company is "one of the largest independent pure-play renewable energy platforms in the United States," "a leading developer and operator of utility-scale wind, solar, and battery storage assets," and that the Company "possesses one of the most geographically diversified development pipelines among its publicly traded peers." Please address the following:
a. Please provide us on a supplemental basis with the factual support for each such competitive positioning claim. Alternatively, please revise the registration statement to include appropriate qualifications or to disclose the basis and source for each claim.
b. To the extent that any market data or competitive positioning claims are derived from third-party reports, industry publications, or market research, please identify each such source in the registration statement, including the date of the report or publication relied upon, the name of the source, and any material assumptions or limitations associated with the data. Please also consider including appropriate language indicating that any such third-party data has not been independently verified by the Company.
c. Please ensure that any claims regarding competitive positioning or market share are consistent with the risk factor disclosures regarding the competitive landscape of the utility-scale renewable energy industry.
Risk Factors
Comment 3 — Risk Factor Specificity and Quantification
We note that several of the risk factors included in the registration statement describe risks in general, industry-wide terms that could apply to virtually any company in the renewable energy sector. For example, the risk factors captioned "Changes in governmental regulation may adversely affect our business" (page 24), "Volatility in commodity prices could affect our revenue" (page 27), and "Permitting delays may impair our ability to develop projects on schedule" (page 30) contain broad, generic descriptions of regulatory, commodity, and permitting risks without tailoring those descriptions to the specific circumstances, history, or operational profile of Calloway-Briggs Renewables Inc. Please address the following:
a. Please revise each of the identified risk factors—and any other risk factors that are similarly generic—to describe how the particular risk has specifically affected or is reasonably likely to specifically affect Calloway-Briggs Renewables Inc. For example, to the extent that your operations are concentrated in particular regulatory jurisdictions, including Texas, New Mexico, Arizona, California, and Oklahoma, please identify those jurisdictions and describe the specific regulatory regimes, pending legislative proposals, or permitting requirements that could affect your projects in those states.
b. Where practicable, please include quantification of your exposure to the identified risks. For example, please disclose the number of megawatts or percentage of your operating fleet, construction portfolio, or development pipeline located in each state, the revenue or EBITDA contribution attributable to each state or regulatory jurisdiction, and any specific instances in which regulatory changes, commodity price volatility, or permitting delays have materially affected project timelines, construction costs, or financial results during the periods presented.
c. Please refer to Item 503(c) of Regulation S-K (now relocated to Item 105 of Regulation S-K) and ensure that your risk factors are organized under relevant headings and that each risk factor is specific to the Company and its operations, as distinguished from risks applicable to participants in the renewable energy industry generally.
Comment 4 — Tax Credit Risk Factors
We note the risk factor disclosure on pages 26–28 regarding the Company's reliance on Investment Tax Credits ("ITC") under Section 48 of the Internal Revenue Code and Production Tax Credits ("PTC") under Section 45 of the Internal Revenue Code across the Company's project portfolio. We also note the references to the Company's tax-equity partnerships throughout the registration statement. Please address the following:
a. Please enhance the risk factor disclosure to quantify the specific dollar magnitude or percentage of the Company's revenue, net income, and/or cash flows attributable to ITC and PTC benefits for each period presented (FY 2019, FY 2020, FY 2021). If the Company's results of operations would have been materially different absent such tax credit benefits, please quantify the differential.
b. Please disclose the risk of ITC recapture under Section 50 of the Internal Revenue Code, particularly in connection with the Solaris West tax-equity partnership (in which, as disclosed on page 72, Veltara Basin Financial LLC has invested $280 million). Please explain the circumstances under which an ITC recapture event could be triggered, including whether the IPO itself, or any change in direct or indirect ownership of the partnership interests resulting from the IPO, the secondary sale by Pinnacle Vista Capital Partners III, LP, or any post-IPO transaction, could trigger or contribute to a recapture event under applicable Treasury Regulations. If recapture is a risk, please quantify the potential magnitude of a recapture obligation.
c. Please disclose the projected impact on the Company's financial results, including revenue, net income, Adjusted EBITDA, and cash flows from operations, under a scenario in which ITC and PTC programs were (i) reduced by 50%, (ii) phased out entirely, or (iii) not extended beyond their current statutory sunset dates. If you believe such a scenario analysis is not practicable, please explain why and provide such qualitative disclosure as is necessary to allow investors to understand the magnitude of the Company's dependence on federal tax credit programs.
Comment 5 — Controlled Company Status Risk Factor
We note the disclosure on page 35 that Pinnacle Vista Capital Partners III, LP will hold a significant percentage of the Company's voting power following the completion of this offering. Please address the following:
a. Please clarify whether the Company intends to avail itself of the "controlled company" exemption under Section 303A of the New York Stock Exchange Listed Company Manual. If the Company intends to rely on the controlled company exemption, please disclose each specific corporate governance standard from which the Company will be exempt, including but not limited to the requirements to have a majority of independent directors on the board of directors, an entirely independent nominating and corporate governance committee, an entirely independent compensation committee, and the requirement that compensation of executive officers be determined or recommended by an independent compensation committee. For each exemption utilized, please describe the implications for the Company's governance and the risks to minority stockholders.
b. Please disclose the post-IPO voting power of Pinnacle Vista Capital Partners III, LP under both (i) the base offering scenario (assuming the issuance of shares in the IPO but no exercise of the underwriters' overallotment option) and (ii) the full overallotment exercise scenario (assuming full exercise of the underwriters' overallotment option). Please also disclose the combined voting power of Pinnacle Vista Capital Partners III, LP and the co-founders, Garrett Calloway and Elaine Briggs, under each scenario. Please present this information in both tabular and narrative form.
c. Please disclose the duration of the period during which Pinnacle Vista Capital Partners III, LP is expected to hold sufficient voting power to qualify the Company as a "controlled company" under NYSE rules, including any assumptions regarding the disposition of shares by Pinnacle Vista following the expiration of the lock-up period.
Revenue Recognition
Comment 6 — Revenue Recognition Policy — Power Purchase Agreements (PPAs)
We note that the Company derives substantially all of its revenue from long-term power purchase agreements. We also note the disclosure on page F-12 that the Company recognizes revenue "when electrical energy is delivered to the customer" under ASC 606, Revenue from Contracts with Customers. Please address the following:
a. Please expand the revenue recognition accounting policy disclosure to describe in greater detail the Company's application of ASC 606 to its various PPA structures. Please distinguish among (i) fixed-price PPAs (in which the Company receives a fixed price per megawatt-hour over the term of the contract), (ii) index-based PPAs (in which the price per megawatt-hour is tied to a published index, such as an ERCOT hub price, CAISO locational marginal price, or other reference rate), and (iii) any merchant or spot-market revenue. For each category, please describe the Company's analysis of the five-step revenue recognition framework under ASC 606-10-25, including the identification of the contract, the identification of performance obligations, the determination of the transaction price, the allocation of the transaction price, and the recognition of revenue as performance obligations are satisfied.
b. Please disclose the weighted-average remaining term of the Company's PPA portfolio, and the range of PPA contract durations, as of December 31, 2021 and as of the most recent practicable date. Consider presenting this information disaggregated by technology type (solar, wind, battery storage).
c. Please disclose whether any of the Company's PPAs contain variable consideration (e.g., price escalators, curtailment provisions, performance guarantees with variable payments, or renewable energy credit components that are priced separately), constrained estimates of variable consideration under ASC 606-10-32-8, or significant financing components under ASC 606-10-32-15 through 32-20. For any such elements, please describe the Company's accounting treatment and the methodology used to estimate variable consideration.
d. Please disclose whether the Company has evaluated any of its PPAs under the lease accounting guidance in ASC 842, and if so, the results of such evaluation.
Comment 7 — Revenue Disaggregation
We note that the financial statements present revenue on a consolidated basis without disaggregation. Please refer to ASC 606-10-50-5, which requires an entity to disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Please address the following:
a. Please revise the financial statements and/or the notes thereto to disaggregate revenue by technology type (solar, wind, battery storage), by geography (Texas, New Mexico, Arizona, California, Oklahoma, and any other state in which the Company generates revenue), and by contract type (fixed-price PPA, index-based PPA, merchant/spot, and other). Please present such disaggregation for each period for which an income statement is presented.
b. Please also consider whether additional categories of disaggregation are appropriate in light of the guidance in ASC 606-10-55-89 through 55-91, including disaggregation by customer type (e.g., investor-owned utility, municipal utility, cooperative, corporate off-taker), by contract duration, or by market (e.g., ERCOT, SPP, CAISO, Northgate Corporation service territory).
c. We note that the current level of aggregation does not provide investors with sufficient information to understand the nature, amount, timing, and uncertainty of the Company's revenue streams, particularly given the different economic characteristics, regulatory environments, and market structures applicable to wind, solar, and battery storage assets across the Company's geographic footprint.
Segment Reporting
Comment 8 — Segment Reporting Analysis
We note that the Company reports its financial results as a single operating segment. Please address the following:
a. Please explain in detail how the Company determined that a single reportable segment is appropriate under ASC 280-10-50, Segment Reporting. In your response, please describe the Company's organizational structure, including whether the Company is organized by technology type (solar, wind, battery storage), by geography, by project, or on some other basis.
b. Please identify the Company's Chief Operating Decision Maker ("CODM") by title. We note that Garrett Calloway serves as Chairman and Chief Executive Officer. Please confirm whether Mr. Calloway is the CODM, or if another individual or group serves in that capacity. Please describe in detail the financial information that is regularly provided to the CODM for purposes of allocating resources and assessing performance. Specifically, please address whether the CODM receives and reviews financial information (including revenue, operating income, EBITDA, or other performance measures) disaggregated by project, by technology type, by geography, by market (e.g., ERCOT, SPP, CAISO), or on some other basis.
c. If the CODM reviews financial information on a disaggregated basis, please explain why those disaggregated views do not constitute separate operating segments under ASC 280-10-50-1. Please address whether the disaggregated components meet the definition of an operating segment under ASC 280-10-50-1(a) through (c) and, if so, whether any such operating segments have been aggregated under the criteria of ASC 280-10-50-11.
d. If the Company maintains that a single segment is appropriate, please enhance the entity-wide disclosures provided under ASC 280-10-50-40 through 50-42. Specifically, please provide disclosures of revenue from external customers by product and service (e.g., electricity generation — solar, electricity generation — wind, battery storage revenue, renewable energy credit sales) and by geographic area for each period presented.
e. Please provide us supplementally with any board presentations, CODM reports, or internal financial reports that are representative of the information regularly reviewed by the CODM for purposes of assessing performance and allocating resources. We may have additional comments after reviewing such materials.
Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)
Comment 9 — Adjusted EBITDA Reconciliation and Presentation
We note that you present "Adjusted EBITDA" as a non-GAAP financial measure in your MD&A section on pages 65–68, disclosing Adjusted EBITDA of $218.6 million for the fiscal year ended December 31, 2021, $179.2 million for the fiscal year ended December 31, 2020, and $138.7 million for the fiscal year ended December 31, 2019. Please address the following:
a. Please present the reconciliation from net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA with equal or greater prominence to the presentation of the non-GAAP measure itself, consistent with Item 10(e) of Regulation S-K and the guidance set forth in SEC Compliance and Disclosure Interpretation, Question 102.10. We note that the current presentation places the non-GAAP measure and the related narrative discussion before the GAAP reconciliation, which appears at the bottom of page 68. Please revise the presentation to ensure that the GAAP reconciliation is presented with at least equal prominence.
b. Please identify and separately quantify each adjustment item included in the reconciliation from net income (loss) to Adjusted EBITDA. For each adjustment item, please provide a clear and specific explanation of why management believes the adjustment is useful to investors in evaluating the Company's operating performance. Please avoid boilerplate or generic descriptions of the usefulness of non-GAAP measures.
c. Please clarify whether any of the adjustment items are recurring in nature. We note that the adjustments appear to include items such as stock-based compensation expense, unrealized gains and losses on interest-rate hedging instruments, non-cash mark-to-market adjustments on power contracts, and acquisition-related transaction costs. To the extent that any of these adjustments recur in multiple periods, please explain why it is appropriate to exclude recurring items from a non-GAAP measure that purports to reflect the Company's core operating performance. Please refer to SEC Compliance and Disclosure Interpretation, Question 100.01, which provides that a non-GAAP measure that adjusts for recurring items may be misleading if the adjustment has the effect of changing a loss to income or increasing income disproportionately.
d. Please label the measure "Adjusted EBITDA" consistently throughout the registration statement and ensure that each presentation of the measure is accompanied by the required reconciliation or a cross-reference to the reconciliation.
Comment 10 — Known Trends, Demands, and Uncertainties
We note that MD&A should identify and discuss known trends, demands, commitments, events, and uncertainties that are reasonably likely to result in the Company's liquidity increasing or decreasing in any material way, as required by Item 303(b) of Regulation S-K. Please address the following:
a. Interest Rate Exposure. We note the disclosure on page F-22 that the Company has $1.71 billion in total consolidated debt as of December 31, 2021, including $612.5 million outstanding under a variable-rate Term Loan B facility and various construction facilities with Prairie Commercial Bank. Please enhance the MD&A discussion to address the impact of rising interest rates on the Company's debt-service obligations, interest expense, and overall liquidity. Please quantify the estimated impact of a 100-basis-point and a 200-basis-point increase in SOFR (or the applicable reference rate) on the Company's annual interest expense, taking into account any interest-rate hedging instruments in place. Please also disclose the notional amount, maturity, and effectiveness of any interest-rate swaps or caps.
b. Supply-Chain Disruptions. Please enhance the MD&A discussion to address the impact of supply-chain disruptions, including but not limited to delays in the delivery of solar modules, wind turbines, inverters, and battery storage systems, on the construction costs and expected commercial operation dates of Mesquite Wind and Cimarron Solar. Please quantify any cost overruns or schedule delays experienced to date and describe the Company's strategies for mitigating supply-chain risk, including the status of equipment procurement contracts, the existence of fixed-price equipment supply agreements, and the availability of alternative suppliers.
c. Pending Federal Energy Legislation. Please enhance the MD&A discussion to address the potential impact of the Inflation Reduction Act or other pending federal energy legislation on the Company's business, results of operations, and financial condition, to the extent that such legislation is reasonably likely to have a material effect on the Company. If the Company believes that the impact of such legislation is not yet determinable, please so state and describe the range of potential outcomes or scenarios that management has considered.
Comment 11 — Liquidity and Capital Resources
We note the disclosure in the Liquidity and Capital Resources section of MD&A beginning on page 70. Please address the following:
a. Please discuss the Company's anticipated sources and uses of capital in greater detail. Specifically, please disclose the estimated capital expenditure requirements for (i) the 1.4 GW of projects under construction, disaggregated by project, and (ii) the 6.2 GW development pipeline, to the extent that such estimates are available. Please also disclose the expected timing of such capital expenditures over the next twelve months and thereafter.
b. Please clarify the extent to which the Company expects to fund future growth through (i) non-recourse project-finance debt, (ii) tax-equity partnerships, (iii) cash flows from operations, (iv) drawings under the Corporate Revolving Credit Facility, and/or (v) additional equity issuances, including any potential follow-on offerings. If the Company's ability to fund its development pipeline is materially dependent on access to tax-equity capital, project-finance debt, or other external financing sources, please disclose that dependence and the associated risks.
c. Please disclose the Company's available borrowing capacity under the $400 million Corporate Revolving Credit Facility with Veltrano National Bank. Specifically, please disclose the drawn amount and undrawn capacity as of December 31, 2021 and as of March 31, 2022 (or the most recent practicable date). Please also disclose any financial covenants or borrowing-base limitations that restrict the Company's ability to draw on the facility and the Company's compliance with such covenants as of the most recent reporting date.
d. Please disclose any material off-balance-sheet arrangements, guarantees, or commitments that are not reflected in the consolidated balance sheet but that could materially affect the Company's liquidity or capital resources.
Tax-Equity Accounting (HLBV Methodology)
Comment 12 — HLBV Methodology Disclosure
We note the disclosure on pages F-15 through F-17 that the Company uses the Hypothetical-Liquidation-at-Book-Value ("HLBV") methodology to account for the allocation of income, loss, and distributions in its tax-equity partnership structures. We also note the disclosure regarding the Solaris West tax-equity partnership with Veltara Basin Financial LLC. Please address the following:
a. Please provide a more detailed description of the HLBV methodology as applied to the Solaris West tax-equity partnership, including:
(i) A description of the hypothetical liquidation waterfall, including the priority of distributions to the tax-equity investor (Veltara Basin Financial LLC) and the sponsor (a wholly owned subsidiary of the Company) under the applicable partnership agreement, and any material differences between the GAAP book value and the tax basis of the underlying assets that affect the allocation;
(ii) A description of how the Company determines the periodic allocation of earnings (or losses) to the tax-equity investor versus the sponsor in each reporting period, including whether the allocation is based on changes in hypothetical liquidation proceeds from period to period, and how the Company accounts for the difference between the tax-equity investor's capital account balance and its share of hypothetical liquidation proceeds;
(iii) A description of how the Company accounts for the partnership "flip," which is described on page F-16 as expected to occur in 2028, including whether the anticipated change in allocation percentages from the pre-flip period (in which the tax-equity investor receives a disproportionate share of tax benefits and a target return) to the post-flip period (in which the sponsor receives a disproportionate share of cash distributions) is reflected in the current-period accounting. Please clarify whether the flip is based on a target internal rate of return, a fixed date, or some other trigger, and describe the accounting implications of the flip in each case.
b. Please disclose the sensitivity of earnings allocations to changes in key assumptions underlying the HLBV methodology, including (i) changes in the book value of the underlying assets (e.g., due to impairment, accelerated depreciation, or changes in the fair value of the solar assets), (ii) changes in the assumed timing of the flip (e.g., if the flip occurs earlier or later than expected due to differences in actual versus projected tax benefits), and (iii) changes in the projected cash flows of the underlying project.
c. Please disclose the amount of net income (loss) allocated to the tax-equity investor and to the Company's subsidiary for each period presented, and the carrying amount of the tax-equity investor's interest in the partnership as of each balance sheet date presented.
Comment 13 — Tax-Equity Consolidation and VIE Analysis
Please address the following regarding the consolidation of the Solaris West Solar LLC entity and any other tax-equity partnership entities:
a. Please clarify whether Solaris West Solar LLC is consolidated under the variable interest entity ("VIE") model in ASC 810-10 or under the voting interest model, and provide the analysis supporting the consolidation conclusion. If the entity is consolidated under the VIE model, please describe the Company's analysis of whether Solaris West Solar LLC meets the definition of a VIE under ASC 810-10-15-14, including the specific characteristics that cause the entity to be a VIE (e.g., insufficient equity at risk, lack of decision-making rights by the equity holders, or the presence of non-proportionate voting or profit-sharing arrangements).
b. If Solaris West Solar LLC is a VIE, please disclose the primary beneficiary analysis performed by the Company under ASC 810-10-25-38A through 25-38J. Please describe the power criterion and the obligation-to-absorb-losses/right-to-receive-benefits criterion, and identify the significant judgments and assumptions involved in determining that the Company (or its subsidiary) is the primary beneficiary.
c. Please disclose the carrying amount of assets and liabilities held by Solaris West Solar LLC as of December 31, 2021. Please also disclose, for each VIE that the Company consolidates, the total assets, total liabilities, and the line items on the consolidated balance sheet in which those assets and liabilities are reported. If Solaris West Solar LLC is the only VIE, please so state. If there are additional VIEs, please provide the same disclosures for each.
d. Please disclose any restrictions on the use of the assets of Solaris West Solar LLC, including any restrictions on the Company's ability to access or use the cash, equipment, or other assets held by the VIE.
Related-Party Transactions
Comment 14 — Pinnacle Vista Management-Services Agreement
We note the disclosure on page 119 that Pinnacle Vista Capital Partners receives $2.4 million per year under a management-services agreement with the Company, which will terminate upon the closing of this offering. Please address the following:
a. Please describe the services provided by Pinnacle Vista Capital Partners under the management-services agreement in greater detail, including the nature of strategic advisory, financial oversight, and operational consulting services, and the basis on which the annual fee of $2.4 million was determined (e.g., arm's-length negotiation, market benchmarking, or other methodology).
b. Please disclose the amounts paid under the management-services agreement for each period for which financial statements are presented (fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021), and for the three months ended March 31, 2022, together with the line item in the income statement in which such amounts are recorded.
c. Please clarify whether any termination payment, acceleration of fees, wind-down fee, or other amount will be payable to Pinnacle Vista Capital Partners in connection with the termination of the management-services agreement at the closing of the IPO. If so, please quantify the amount and disclose the accounting treatment for any such payment.
d. Please disclose whether Pinnacle Vista Capital Partners or any of its affiliates has any other contractual or business relationships with the Company that will survive the IPO closing, including any rights to designate members of the board of directors, consent rights over certain corporate actions, or other governance arrangements.
Comment 15 — Founder Employment Agreements
Please address the following regarding the employment agreements with the Company's co-founders:
a. Please describe the material terms of the employment agreement with Garrett Calloway (Co-Founder, Chairman & CEO) and the employment agreement with Elaine Briggs (Co-Founder & President, Development), including:
(i) Base salary for each individual;
(ii) Annual bonus arrangements, including the target bonus as a percentage of base salary and the performance metrics or criteria applicable to bonus determinations;
(iii) Severance provisions, including the amounts and duration of severance payments payable upon termination without cause or resignation for good reason, and the definition of "cause" and "good reason" under each agreement;
(iv) Any change-of-control benefits triggered by the IPO or by a subsequent change of control, including any single-trigger or double-trigger acceleration of equity awards, enhanced severance, or other payments; and
(v) Any restrictive covenants, including non-competition, non-solicitation, and confidentiality obligations.
b. Please cross-reference the disclosure of these employment agreements to the Executive Compensation section and confirm that the disclosures in both sections are consistent. If the employment agreements were entered into or amended in connection with the IPO, please so state and describe the material changes.
Use of Proceeds
Comment 16 — Specificity of Use of Proceeds
We note the disclosure on page 52 that the Company intends to use approximately $200 million of the net proceeds from this offering to repay a portion of the Term Loan B with Veltrano National Bank, approximately $100 million toward construction of the Cimarron Solar project, and approximately $71.7 million for general corporate purposes. Please address the following:
a. Please disclose the interest rate (including the applicable margin and reference rate), maturity date, and amount currently outstanding under the Term Loan B. We note from other disclosures in the registration statement that the Term Loan B matures in January 2029 and has $612.5 million outstanding as of December 31, 2021. Please confirm these figures and update to the most recent practicable date. Please also disclose when the indebtedness to be repaid was incurred and the purpose for which the proceeds of the Term Loan B were originally used, as required by Instruction 4 to Item 504 of Regulation S-K.
b. Please clarify the "general corporate purposes" category. To the extent that the Company has identified specific plans for the approximately $71.7 million allocated to general corporate purposes—including but not limited to working capital, development-stage expenditures, potential acquisitions, or repayment of other indebtedness—those plans should be disclosed. If the Company has not yet identified specific plans, please revise the disclosure to so state and consider whether additional risk factor disclosure is warranted regarding management's discretion in the use of such proceeds.
c. If there is a material prepayment premium or breakage cost associated with the repayment of $200 million of the Term Loan B, please disclose the estimated amount of such premium. We note that prepayment premiums of 1.00% are common in leveraged loan facilities, which would imply an estimated prepayment premium of approximately $2,000,000 on a $200 million prepayment. If a prepayment premium applies, please confirm the amount and describe how it was determined.
d. Please consider presenting the use of proceeds in tabular form in addition to, or in lieu of, the current narrative presentation.
Principal and Selling Stockholders
Comment 17 — Beneficial Ownership Calculations
We note the Principal and Selling Stockholders table on page 125. Please address the following:
a. Please revise the table to present beneficial ownership on both a pre-IPO basis and a post-IPO basis for each named holder. The post-IPO presentation should include two scenarios: (i) the base offering scenario (assuming no exercise of the underwriters' overallotment option) and (ii) the full overallotment exercise scenario (assuming full exercise of the underwriters' overallotment option).
b. Please confirm that the beneficial ownership percentages are calculated based on (i) 100,000,000 pre-IPO shares outstanding (on a fully diluted, post-reclassification basis), (ii) 123,713,636 shares outstanding immediately following the closing of the IPO on a base offering basis, and (iii) 127,272,727 shares outstanding immediately following the closing of the IPO assuming full exercise of the underwriters' overallotment option. If these share counts are incorrect or have changed since the filing, please update accordingly.
c. Please clarify whether Pinnacle Vista Capital Management LLC, as general partner of Pinnacle Vista Capital Partners III, LP, and/or Hugh Pemberton and Diane Kovac, as managing partners of Pinnacle Vista Capital Management LLC, are deemed beneficial owners of the shares held by Pinnacle Vista Capital Partners III, LP under Rule 13d-3 of the Securities Exchange Act of 1934. Please ensure that the footnote disclosure clearly describes the entire chain of beneficial ownership, including the identity and role of each person or entity with voting or dispositive power over the shares, and that all persons who may be deemed beneficial owners are listed as named holders in the table or identified in the footnotes. Please refer to Item 403 of Regulation S-K and Rule 13d-3 under the Exchange Act.
Shares Eligible for Future Sale / Lock-Up
Comment 18 — Lock-Up Carve-Out Disclosure
We note the disclosure on page 132 regarding the 180-day lock-up agreements entered into by the Company's officers, directors, and certain stockholders. Please address the following:
a. Please disclose all material exceptions and carve-outs to the lock-up agreements in the prospectus. We note the disclosure that the lock-up agreements include carve-outs for (i) transfers to affiliates, (ii) estate-planning transfers, (iii) adoption of Rule 10b5-1 trading plans (but not the execution of trades thereunder during the lock-up period), and (iv) pledges of shares to lenders as collateral. Please confirm that this list is complete. If there are any additional exceptions or carve-outs, including but not limited to exceptions for charitable gifts, transfers in connection with a tender offer or merger, or sales necessary to satisfy tax withholding obligations, please disclose each such exception.
b. Please disclose the early-release provisions applicable to the lock-up agreements, including (i) the ability of Hargrove Keating & Co., as representative of the underwriters, to waive the lock-up restrictions with respect to any holder with or without notice, and (ii) the automatic release of the lock-up restrictions upon a "Change of Control" event (as defined in the lock-up agreement). Please disclose the definition of "Change of Control" for these purposes.
c. Please disclose the approximate number of shares that will become eligible for sale upon the expiration of the 180-day lock-up period. We note that approximately 100,000,000 pre-IPO shares will be subject to the lock-up, less the 6,818,182 shares to be sold by Pinnacle Vista Capital Partners III, LP in the offering (on a base offering basis), which implies that approximately 93,181,818 shares held by pre-IPO stockholders will become eligible for sale (subject to applicable volume and manner-of-sale restrictions under Rule 144 or registration rights) upon lock-up expiration. Please confirm this calculation and disclose the potential impact of such sales on the market price of the Company's common stock.
d. Please disclose the registration rights held by Pinnacle Vista Capital Partners III, LP under the Registration Rights Agreement, including (i) demand registration rights (including the number of demand registrations that may be requested and any limitations thereon), (ii) piggyback registration rights, and (iii) the right to request the filing of a registration statement on Form S-3 (shelf registration rights), once the Company becomes eligible to use Form S-3. Please discuss the potential dilutive effect and market impact of future registrations and sales of shares pursuant to these registration rights.
Closing
We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action, or absence of action by the staff of the Securities and Exchange Commission or the Division of Corporation Finance.
If you have any questions regarding these comments or if you would like to discuss any of the matters raised herein, please contact the staff members identified below:
Ryan J. Whitfield, Staff Examiner — (202) 551-3244
Margaret A. Castellano, Staff Attorney — (202) 551-3389
David R. Okonkwo, Accounting Branch Chief — (202) 551-3462
Division of Corporation Finance Office of Energy & Transportation United States Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549
Sincerely,
Division of Corporation Finance Office of Energy & Transportation United States Securities and Exchange Commission
cc: Sandra Haverford, General Counsel & Corporate Secretary, Calloway-Briggs Renewables Inc.
cc: Jennifer Kwon, Calderwood & Harkness LLP (counsel to the registrant)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

DIVISION OF CORPORATION FINANCE

OFFICE OF ENERGY & TRANSPORTATION

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