1015-00001 · Graymont Brothers Inc · SEC Correspondence

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CONFIDENTIAL TREATMENT REQUESTED BY CALLOWAY-BRIGGS RENEWABLES INC.

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

Telephone: (212) 558-4000 Facsimile: (212) 558-3588

June 10, 2022

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

Attention: Staff reviewing the confidential draft registration statement of Calloway-Briggs Renewables Inc.

Re: Calloway-Briggs Renewables Inc. Confidential Draft Registration Statement on Form S-1 Originally Submitted April 11, 2022 CIK No. 0001948372 EDGAR Accession No. (Amendment No. 2): 0001948372-22-000003

Ladies and Gentlemen:

This letter is submitted by Calderwood & Harkness LLP, as outside counsel to Calloway-Briggs Renewables Inc. ("CBR" or the "Company"), a Delaware corporation headquartered at 4200 Ridgeline Parkway, Suite 1100, Austin, Texas 78746, in response to the comment letter of the Staff (the "Staff") of the Division of Corporation Finance of the United States Securities and Exchange Commission (the "Commission") dated June 3, 2022 (the "Second Comment Letter"). The Second Comment Letter contains seven comments relating to Amendment No. 1 to the Company's confidential draft registration statement on Form S-1, which was filed on May 20, 2022 (EDGAR Accession No. 0001948372-22-000002) (the "First Amended DRS").

Concurrently with the submission of this letter, the Company is filing Amendment No. 2 to the confidential draft registration statement on Form S-1 (the "Amended DRS" or "Amendment No. 2"), which reflects the Company's responses to the Staff's comments contained in the Second Comment Letter, as well as certain other updates to the registration statement. The Company is an "emerging growth company" as defined in Section 2(a)(19) of the Securities Act of 1933, as amended (the "Securities Act"), as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and is confidentially submitting the registration statement pursuant to Section 6(e) of the Securities Act.

For the convenience of the Staff, each comment from the Second Comment Letter is reproduced below in bold typeface, followed by the Company's response. Unless otherwise indicated, all references to page numbers are to pages in Amendment No. 2. Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in Amendment No. 2.

The key contacts for correspondence relating to this matter are as follows:

• Jennifer Kwon, Responsible Partner, Capital Markets, Calderwood & Harkness LLP — (212) 558-4127

• Brendan Walsh, Lead Associate, Capital Markets, Calderwood & Harkness LLP — (212) 558-4293

• Natasha Forbes, Working Associate, Capital Markets, Calderwood & Harkness LLP — (212) 558-4315

• Sandra Haverford, General Counsel & Corporate Secretary, Calloway-Briggs Renewables Inc. — (512) 477-3100

• Marcus Yoon, Chief Financial Officer, Calloway-Briggs Renewables Inc. — (512) 477-3102

• Gregory Sondheim, Lead Engagement Partner, Ashford & Pemberton LLP (independent auditor) — (214) 969-7800

The Company's responses to each of the Staff's seven comments are set forth below.

Comment 1: HLBV Methodology — Enhanced Disclosure

The Staff notes the Company's prior response regarding the Hypothetical-Liquidation-at-Book-Value ("HLBV") methodology used to allocate income and losses in the Company's tax-equity partnership structures. The Staff requests enhanced disclosure explaining the HLBV methodology in greater detail, including (a) how the hypothetical liquidation proceeds are allocated among the tax-equity investor and the Company at each reporting date, (b) the key inputs and assumptions underlying the HLBV calculation, and (c) the sensitivity of reported results to changes in those inputs and assumptions. The Staff references, in particular, the Solaris West tax-equity partnership with Veltara Basin Financial LLC, in which $280,000,000 was invested and in which a partnership flip is expected to occur in 2028.

Response:. The Company acknowledges the Staff's comment and appreciates the opportunity to provide enhanced disclosure regarding its application of the HLBV methodology. In response to this comment, the Company has revised the disclosure in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of Amendment No. 2, specifically under the subheading "Critical Accounting Policies — Tax-Equity Partnerships — HLBV Methodology," to provide significantly more detailed and granular information regarding the Company's use of the HLBV methodology.

As described in the revised disclosure, the HLBV methodology is an accepted method of allocating income and losses in structures where the contractual allocation of cash distributions and tax benefits differs from the partners' relative ownership percentages, as is common in the renewable energy industry. Under the HLBV methodology, at each reporting date, the Company calculates the amount that each partner — the Company, through its wholly owned subsidiary Solaris West Solar LLC ("Solaris West"), and the tax-equity investor, Veltara Basin Financial LLC ("Veltara Basin") — would receive if the partnership were hypothetically liquidated at the carrying amounts of its net assets as of such date. The change in each partner's claim on the net assets of the partnership from period to period is used to determine the allocation of earnings or losses for that period.

The revised disclosure in Amendment No. 2 identifies and explains the following key inputs and assumptions underlying the Company's HLBV calculation:

(i) Carrying Values of Partnership Assets. The carrying values of the partnership's assets, including the Solaris West solar photovoltaic facility, which has a nameplate capacity of 450 MW and is located in Pecos County, Texas. The Solaris West facility reached commercial operations in the third quarter of 2020. The carrying values of the facility and related assets are based on historical cost, net of accumulated depreciation and any impairment charges.

(ii) Allocation of Investment Tax Credits. The allocation of federal Investment Tax Credits ("ITCs") to Veltara Basin as the tax-equity investor, in accordance with the terms of the partnership agreement. The ITCs were allocated to Veltara Basin upon the Solaris West facility achieving commercial operations and are subject to potential recapture during the applicable five-year recapture period under Section 50 of the Internal Revenue Code of 1986, as amended.

(iii) Projected Taxable Income and Loss Allocations. The projected allocations of taxable income and loss between the Company (through Solaris West) and Veltara Basin for each period during the term of the partnership, as set forth in the partnership agreement. These allocations are based on the partnership agreement's provisions governing pre-flip and post-flip allocations of taxable income, taxable loss, and tax credits.

(iv) Capital Account Balances. The capital account balances of each partner, as maintained in accordance with the partnership agreement and Treasury Regulation Section 1.704-1(b)(2)(iv). These capital account balances reflect each partner's initial capital contribution, allocated income and losses, and distributions received.

(v) Expected Timing of the Partnership Flip. The expected timing of the partnership flip, which is currently projected to occur in 2028. Under the terms of the partnership agreement, upon the occurrence of certain conditions — including the achievement by Veltara Basin of a specified after-tax internal rate of return on its $280,000,000 investment — the allocation ratios between the Company and Veltara Basin will change, and the Company will have the right to acquire Veltara Basin's remaining interest in the partnership at fair market value. The projected flip date is based on management's best estimate of when the specified return thresholds will be achieved and is subject to change based on the actual performance of the Solaris West facility and other factors.

The revised disclosure further explains that the change in each partner's claim on the net assets of the partnership from period to period — as determined by the hypothetical liquidation waterfall described above — drives the allocation of earnings or losses for each period. This methodology ensures that the cumulative income or loss recognized by each partner at any given balance sheet date is equal to the amount that the partner would receive (or be required to contribute) if the partnership were liquidated at that date at book value.

In addition, the Company has included enhanced sensitivity disclosure in the revised Amendment No. 2. Specifically, the Company has noted that changes in the following inputs could materially affect the allocation of income between the Company and the tax-equity investor:

• Estimated useful life of the underlying solar assets. A decrease in the estimated useful life of the Solaris West facility could accelerate depreciation expense, thereby reducing the carrying value of partnership assets and altering the hypothetical liquidation waterfall.

• Adjustments to ITC amounts, including potential recapture. If the ITCs allocated to Veltara Basin were subject to recapture (for example, due to a change in the qualifying use of the facility during the recapture period), the resulting adjustment could significantly alter the capital account balances and, consequently, the HLBV allocation of income.

• Changes in the projected flip date. If the partnership flip were to occur earlier or later than the currently projected date of 2028 — for example, due to changes in energy production, power prices, or operating expenses — the allocation of income between the Company and Veltara Basin could change materially, as the pre-flip and post-flip allocation ratios differ significantly.

The Company advises the Staff that the tax-equity structure discussion reflected in the revised disclosure was prepared in coordination with Kessler McBride & Associates LLP, the Company's external tax advisor, and was reviewed by Ashford & Pemberton LLP, the Company's independent registered public accounting firm (Gregory Sondheim, Lead Engagement Partner; Irene Valdez, Audit Manager), to ensure consistency with the Company's audited financial statements and the applicable accounting guidance.

The Company respectfully directs the Staff to the revised disclosure on pages 72 through 78 of Amendment No. 2.

Comment 2: HLBV Methodology — Reconciliation Table

The Staff requests that the Company provide a tabular reconciliation showing the impact of the HLBV methodology on reported revenue and net income for each period presented (FY 2019, FY 2020, FY 2021, and Q1 2022 (unaudited)).

Response:. The Company acknowledges the Staff's comment. In response, the Company has added a tabular reconciliation in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of Amendment No. 2 that presents, for each period presented, the impact of the HLBV methodology on the Company's reported revenue and net income. The table is designed to provide investors with a clear and concise understanding of how the HLBV methodology affects the Company's consolidated financial results.

The table presents, for each period, the following line items: (a) total revenue as reported in the Company's consolidated statements of operations, (b) the amount of revenue attributable to the tax-equity arrangement with Veltara Basin, and (c) the HLBV-related allocation of income (loss) to the tax-equity investor for each respective period. The following summary data is reflected in the reconciliation table:

The Company notes that the Solaris West tax-equity partnership with Veltara Basin, in which Veltara Basin invested $280,000,000, achieved commercial operations in the third quarter of fiscal year 2020. Accordingly, the impact of the HLBV methodology on the Company's consolidated financial results is reflected beginning in that period. For fiscal year 2019, the Solaris West facility was still under construction and the tax-equity partnership had not yet commenced operations, and therefore no HLBV-related income allocation is reflected for that period.

The reconciliation table quantifies the HLBV impact on total consolidated revenue and net income for each period and demonstrates that the Company has applied the HLBV methodology consistently across all periods presented. The Company has also added a footnote to the reconciliation table explaining that the financial statements for fiscal years 2019, 2020, and 2021 were audited by Ashford & Pemberton LLP, the Company's independent registered public accounting firm, in accordance with the standards of the Public Company Accounting Oversight Board (United States), and that the financial data for the three months ended March 31, 2022 (Q1 2022) is unaudited but has been prepared on the same basis as the Company's audited annual financial statements and, in the opinion of management, includes all adjustments necessary for a fair presentation of the Company's financial position and results of operations for such interim period.

The Company respectfully directs the Staff to the new reconciliation table on pages 79 through 81 of Amendment No. 2.

Comment 3: PPA Revenue Detail — Disaggregation

The Staff requests additional disaggregation of revenue by type of power purchase agreement ("PPA"), including (a) fixed-price PPAs, (b) indexed or escalating-price PPAs, and (c) merchant or spot-market revenue, for each period presented. The Staff notes that the Company's operating portfolio of 3.8 GW across 22 projects in Texas, New Mexico, Arizona, California, and Oklahoma may have materially different revenue characteristics depending on the PPA structure.

Response:. The Company acknowledges the Staff's comment and agrees that disaggregation of revenue by PPA type provides investors with meaningful information regarding the composition and characteristics of the Company's revenue streams. In response, the Company has revised both the "Business" section and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of Amendment No. 2 to provide enhanced disaggregation of revenue by PPA type.

The revised disclosure includes a new table presenting revenue for each of the three categories identified by the Staff — (a) fixed-price PPAs, (b) indexed or escalating-price PPAs, and (c) merchant or spot-market revenue — for each of fiscal years 2019, 2020, and 2021, and the three months ended March 31, 2022 (Q1 2022, unaudited). The table is accompanied by narrative disclosure providing additional context regarding the nature and significance of each revenue category.

The Company notes that the substantial majority of its revenue is derived from long-term, fixed-price PPAs with investment-grade or creditworthy counterparties, including municipal utilities, electric cooperatives, and corporate offtakers. The Company believes that its heavy weighting toward contracted, fixed-price revenue provides visibility and predictability of cash flows, reduces exposure to commodity price volatility, and supports the Company's ability to service its outstanding indebtedness and fund its growth plans.

The revised disclosure identifies the key operating projects contributing to each revenue category, including the following:

• Solaris West — 450 MW solar photovoltaic facility, Pecos County, Texas; COD Q3 2020; revenue recognized under a long-term, fixed-price PPA.

• Red Mesa Wind — 380 MW onshore wind facility, Custer County, Oklahoma; COD Q1 2019; revenue recognized under a long-term, indexed/escalating-price PPA with annual escalators tied to a published price index.

• Painted Rock Solar — 320 MW solar photovoltaic facility, Maricopa County, Arizona; COD Q4 2020; revenue recognized under a long-term, fixed-price PPA.

• Pronghorn Wind — 510 MW onshore wind facility, Nolan County, Texas; COD Q2 2021; revenue recognized under a combination of long-term, fixed-price PPAs covering approximately 80% of expected annual energy production, with the remaining approximately 20% sold into the ERCOT wholesale market at prevailing spot prices.

• Brazos Storage — 200 MW / 800 MWh battery energy storage system, Fort Bend County, Texas; COD Q4 2021; revenue includes both (x) capacity payments received under a fixed-price tolling agreement with a large Texas-based retail electricity provider and (y) energy arbitrage revenue earned by buying and selling electricity on the ERCOT wholesale market, which constitutes merchant or spot-market revenue.

The Company has separately disclosed the capacity payments (fixed) and energy arbitrage revenue (merchant/spot) attributable to the Brazos Storage facility in the disaggregation table, as the revenue characteristics of these two streams are materially different.

For context, the Company's total revenue for fiscal year 2021 was $487.3 million, and its Adjusted EBITDA for the same period was $218.6 million. The PPA disaggregation table allows investors to understand the composition of these figures by reference to the underlying contractual structures driving revenue recognition.

The Company respectfully directs the Staff to the revised disclosure on pages 50 through 54 (Business section) and pages 82 through 85 (MD&A section) of Amendment No. 2.

Comment 4: PPA Revenue Detail — Weighted Average Remaining Contract Life

The Staff requests disclosure of the weighted average remaining contract life of the Company's PPAs and the percentage of revenue under contract for the next five years, to enable investors to assess the sustainability and predictability of the Company's revenue streams.

Response:. The Company acknowledges the Staff's comment and agrees that disclosure of the weighted average remaining contract life and the percentage of projected revenue under contract is useful information for investors. In response, the Company has added new disclosure in both the "Business" section and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of Amendment No. 2 providing this information.

The revised disclosure states the weighted average remaining contract life of the Company's PPA portfolio as of March 31, 2022, weighted by expected contracted revenue over the remaining term of each PPA. In addition, the Company has added a table showing the approximate percentage of projected revenue that is under contract for each of the next five fiscal years (fiscal year 2022 through fiscal year 2026). This table is intended to provide investors with a clear picture of the degree to which the Company's near-term and medium-term revenue streams are supported by existing, binding contractual commitments.

The revised disclosure also discusses the expected addition of contracted revenue from the Company's two projects currently under construction, which are expected to contribute incremental long-term contracted revenue upon reaching commercial operations:

• Mesquite Wind — 420 MW onshore wind facility, Oldham County, Texas; expected COD Q3 2022. The Company has entered into a 15-year, fixed-price PPA for the full expected output of the facility with a creditworthy counterparty.

• Cimarron Solar — 350 MW solar photovoltaic facility, Doña Ana County, New Mexico; expected COD Q1 2023. The Company has entered into a 20-year, fixed-price PPA for the full expected output of the facility with an investment-grade municipal utility.

Upon reaching commercial operations, these two projects are expected to increase the Company's operating portfolio from 3.8 GW to approximately 4.6 GW and to further enhance the Company's revenue visibility and contracted revenue backlog.

The Company supplementally advises the Staff that detailed PPA summaries — including counterparty name, contract term (commencement and expiration dates), pricing structure, and volume commitments — were provided in the Company's due diligence materials prepared in connection with the offering and shared with the underwriting syndicate and their counsel. In preparing the public disclosure in Amendment No. 2, the Company has endeavored to balance the provision of investor-useful information regarding the depth and duration of its contracted revenue base with the protection of commercially sensitive information, including specific counterparty names, exact pricing terms, and other proprietary details that could competitively disadvantage the Company if publicly disclosed. The Company believes that the disclosure as revised in Amendment No. 2 strikes an appropriate balance and provides investors with the information necessary to assess the sustainability and predictability of the Company's revenue streams.

The Company respectfully directs the Staff to the revised disclosure on pages 55 through 58 (Business section) and pages 86 through 88 (MD&A section) of Amendment No. 2.

Comment 5: Non-GAAP Reconciliation — Adjusted EBITDA

The Staff notes that the Company presents Adjusted EBITDA as a non-GAAP financial measure and requests: (a) clarification of the nature and amount of each adjustment, (b) a more detailed reconciliation from GAAP net income to Adjusted EBITDA for each period presented, and (c) an explanation of why management believes each adjustment is appropriate and useful to investors. The Staff references SEC guidance on non-GAAP financial measures under Regulation G and Item 10(e) of Regulation S-K.

Response:. The Company acknowledges the Staff's comment. In response, the Company has substantially revised the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of Amendment No. 2 to provide an enhanced Adjusted EBITDA reconciliation that addresses each element of the Staff's comment.

The revised reconciliation now presents a detailed line-by-line bridge from GAAP net income (loss) — the most directly comparable GAAP financial measure — to Adjusted EBITDA for each period presented, as summarized below:

Each adjustment in the reconciliation is individually identified, quantified, and accompanied by a brief explanation of its nature and the reasons why management believes the adjustment is appropriate and useful to investors. The adjustments included in the reconciliation are as follows:

(i) Interest expense. Represents cash and non-cash interest expense on the Company's outstanding indebtedness, including the $400 million Corporate Revolving Credit Facility and the $650 million Term Loan B (of which $612.5 million was outstanding as of March 31, 2022), both with Veltrano National Bank, as well as non-recourse project-level debt. Management excludes interest expense because it is not considered indicative of the Company's core operating performance and because the Company's capital structure may differ significantly from that of other companies in its industry.

(ii) Income tax expense (benefit). Represents the Company's provision for federal and state income taxes, including the impact of ITCs and accelerated tax depreciation. Management excludes income tax expense because it is significantly influenced by the Company's tax-equity structures and the availability of ITCs and other tax attributes, which may not be reflective of the Company's underlying operating results.

(iii) Depreciation and amortization. Represents depreciation of the Company's property, plant, and equipment (primarily utility-scale renewable energy facilities) and amortization of intangible assets. Management excludes depreciation and amortization because it is a non-cash charge that can vary significantly based on the Company's capital investment decisions, useful life assumptions, and acquisition activity.

(iv) Stock-based compensation expense. Represents non-cash charges associated with equity awards granted to the Company's directors, officers, and employees. Management excludes stock-based compensation because it is a non-cash expense and because the amount can vary from period to period based on factors that are not directly related to the Company's operating performance, such as the timing and size of equity grants and the assumptions used to determine the fair value of such awards.

(v) Unrealized gains and losses on derivatives. Represents the non-cash mark-to-market gains or losses on the Company's interest rate swaps, commodity hedges, and other derivative instruments that do not qualify for hedge accounting or for which the Company has not elected hedge accounting. Management excludes unrealized derivative gains and losses because they represent non-cash fluctuations in fair value that are driven by changes in market conditions and do not reflect the Company's realized cash flows from its hedging activities.

(vi) Acquisition and development costs. Represents legal, advisory, diligence, and other third-party costs incurred in connection with the Company's evaluation and pursuit of potential acquisitions, as well as early-stage development expenditures for projects that have not yet reached a stage of development at which they are probable of construction. Management excludes these costs because they are lumpy, episodic, and not reflective of the Company's ongoing, recurring operating performance.

(vii) Non-cash HLBV income allocations. Represents the non-cash component of income allocations to the tax-equity investor under the HLBV methodology described in the Company's response to Comment 1 above. Management excludes non-cash HLBV income allocations because they do not reflect cash received or paid by the Company and can vary significantly from period to period based on changes in the inputs and assumptions underlying the HLBV calculation.

(viii) Other non-recurring items. Represents certain discrete, one-time costs that are not expected to recur in the ordinary course of business, including costs associated with the Company's organizational restructuring completed in the second quarter of fiscal year 2020 and certain litigation settlement costs. Management excludes these items because they are not indicative of the Company's ongoing operating performance.

For each adjustment identified above, the Company has included narrative disclosure in Amendment No. 2 explaining why management considers the adjustment appropriate and how it enhances investors' understanding of the Company's core operating performance. The Company has also noted that Adjusted EBITDA is used by management and the Company's Board of Directors for the purposes of evaluating the Company's operating performance, making operating and capital allocation decisions, and establishing performance targets for executive compensation purposes. In addition, Adjusted EBITDA is a key financial metric referenced in the financial maintenance covenants under the Company's credit agreements with Veltrano National Bank, including the $400 million Corporate Revolving Credit Facility (maturing January 2027) and the $650 million Term Loan B (with $612.5 million outstanding, maturing January 2029).

The Company confirms that the presentation of Adjusted EBITDA in Amendment No. 2 complies with the requirements of Regulation G and Item 10(e) of Regulation S-K, including the requirement that the most directly comparable GAAP financial measure (GAAP net income (loss)) be presented with equal or greater prominence than the non-GAAP measure. The GAAP net income (loss) figures are presented immediately preceding the Adjusted EBITDA reconciliation table and are referenced throughout the narrative discussion.

The Company respectfully directs the Staff to the revised disclosure on pages 89 through 95 of Amendment No. 2.

Comment 6: Non-GAAP Reconciliation — Characterization of Adjustments

The Staff requests that the Company remove the characterization of certain adjustments as "non-recurring" or "unusual" unless the Company can demonstrate that the adjustments are, in fact, non-recurring within the meaning of SEC guidance. Specifically, the Staff questions whether development-stage project costs, which appear in multiple periods, should be characterized as non-recurring.

Response:. The Company acknowledges the Staff's comment and appreciates the Staff's attention to the characterization of adjustments in the Adjusted EBITDA reconciliation. In response, the Company has revised the Adjusted EBITDA reconciliation and accompanying narrative disclosure in Amendment No. 2 to address the Staff's concerns.

Specifically, the Company has revised the Adjusted EBITDA reconciliation to remove the characterization of development-stage project costs as "non-recurring." As the Staff has correctly observed, development-stage project costs have appeared in multiple reporting periods and are an inherent part of the Company's business as a developer and operator of utility-scale renewable energy projects. The revised disclosure instead characterizes such costs as "costs associated with early-stage project development activities" and includes a note explaining that, while these costs may vary in amount from period to period depending on the number, size, and stage of development projects being actively pursued, they are a regular and expected component of the Company's business operations.

The Company has reviewed all other adjustments in the Adjusted EBITDA reconciliation and has removed the characterization "non-recurring" or "unusual" from any adjustment where the underlying item has appeared in more than one of the reporting periods presented. Only those items that are demonstrably non-recurring — meaning that they are reasonably unlikely to recur within two years, consistent with SEC guidance — retain the "non-recurring" characterization. For example, certain one-time transaction costs associated with the Company's 2020 organizational restructuring, which involved the legal entity reorganization in connection with the conversion of CBR from a limited liability company to a Delaware corporation, are appropriately characterized as non-recurring because they were directly attributable to a discrete, one-time event and are not expected to recur.

The Company has also updated the narrative explanation accompanying the Adjusted EBITDA reconciliation to more clearly distinguish between (a) adjustments that management expects to continue as part of the Company's ordinary course of business (such as development-stage project costs, stock-based compensation, and non-cash HLBV income allocations) and (b) adjustments that are truly one-time in nature (such as the organizational restructuring costs referenced above). This distinction is now clearly articulated in the introductory paragraph preceding the reconciliation table.

The Company notes, for additional context, that its development pipeline as of March 31, 2022 comprised approximately 6.2 GW of projects in various stages of development across Texas, New Mexico, Arizona, California, Oklahoma, and other states. The Company's strategy of maintaining a large and diversified development pipeline is a core element of its growth plan, and the costs associated with the early-stage development of these projects — including site control, interconnection studies, permitting, environmental assessments, and preliminary engineering — are an ongoing and expected part of the Company's business activities. The Company therefore agrees with the Staff that characterizing such costs as "non-recurring" would be inappropriate and potentially misleading to investors.

The Company respectfully directs the Staff to the revised disclosure on pages 89 through 95 of Amendment No. 2.

Comment 7: Lock-Up Carve-Out Disclosure

The Staff requests enhanced disclosure regarding the carve-outs to the 180-day lock-up agreements, including (a) a description of each carve-out, (b) the identity of the parties subject to the lock-up, and (c) clarification regarding whether the adoption of a Rule 10b5-1 trading plan during the lock-up period could result in sales of shares during the lock-up period. The Staff notes that the "Shares Eligible for Future Sale" section and the "Underwriting" section should be consistent in their description of lock-up provisions.

Response:. The Company acknowledges the Staff's comment and has revised both the "Shares Eligible for Future Sale" section and the "Underwriting" section of Amendment No. 2 to provide enhanced and fully consistent disclosure of the lock-up provisions applicable to the Company's directors, executive officers, and significant stockholders.

Parties Subject to the Lock-Up. The revised disclosure identifies all parties that have entered into (or, upon pricing, will enter into) lock-up agreements with Hargrove Keating & Co., as lead-left book-running manager and representative of the several underwriters. These parties include:

Directors:

• Garrett Calloway (Co-Founder and Chairman of the Board)

• Elaine Briggs (Co-Founder and Director)

• Hugh Pemberton (Independent Director)

• Diane Kovac (Independent Director)

• Warren Okoro (Independent Director)

• Catherine Liang (Independent Director)

• Richard Estavez (Independent Director)

Executive Officers:

• Marcus Yoon (Chief Financial Officer)

• Sandra Haverford (General Counsel & Corporate Secretary)

• Dale Renfroe (Chief Operating Officer)

• Priya Anand (Senior Vice President, Finance & Treasurer)

• Tomás Quintero (Senior Vice President, Development)

• Rachel Whitmore (Senior Vice President, Asset Management)

Significant Stockholders:

• Pinnacle Vista Capital Partners III, LP (the pre-IPO majority stockholder, holding approximately 62% of the Company's pre-IPO fully diluted common stock)

• All other holders of 1% or more of the Company's pre-IPO common stock

In total, approximately 18 persons and entities are subject to the lock-up agreements.

Lock-Up Period. The lock-up period runs for 180 days following the date of the final prospectus relating to the offering.

Carve-Outs. The revised disclosure describes in detail each carve-out to the lock-up agreements, as follows:

(i) Transfers to affiliates. A lock-up party may transfer shares to an affiliate of such party (including, in the case of an individual, a trust or other estate-planning vehicle controlled by or for the benefit of such individual, and, in the case of a fund, to limited partners, members, or other equity holders of such fund), provided that the transferee agrees in writing to be bound by the terms of the lock-up agreement for the remainder of the lock-up period.

(ii) Estate-planning transfers. A lock-up party may transfer shares as a bona fide gift, as a transfer to a trust for the benefit of family members of the lock-up party, or as a transfer by will or intestacy upon the death of the lock-up party, in each case provided that the transferee agrees in writing to be bound by the terms of the lock-up agreement for the remainder of the lock-up period and that no public filing or announcement of such transfer is required or voluntarily made during the lock-up period (other than a filing on Form 4 or Form 5 required under Section 16 of the Securities Exchange Act of 1934, as amended, in which case the filing shall include a footnote disclosing that the transfer was made for estate-planning purposes and that the transferee is bound by the lock-up agreement).

(iii) Adoption of Rule 10b5-1 trading plans. A lock-up party may adopt a trading plan intended to comply with the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, during the lock-up period; provided, however, that no sales of shares may be made under any such trading plan until the expiration of the lock-up period. The Company has clarified this point in both the "Shares Eligible for Future Sale" and "Underwriting" sections of Amendment No. 2 in order to address the Staff's specific inquiry regarding whether the adoption of a 10b5-1 trading plan during the lock-up period could result in sales during the lock-up period. The answer is no — while adoption of a plan is permitted, no sales or other dispositions may occur under such plan until after the lock-up period has ended.

(iv) Pledges to lenders. A lock-up party may pledge shares to a lending institution as collateral for a bona fide loan; provided, however, that the pledge does not result in any sale, transfer, or other disposition of such shares during the lock-up period. In the event that the lender forecloses on the pledged shares during the lock-up period, the resulting disposition would constitute a breach of the lock-up agreement.

Lock-Up Release Mechanisms. The revised disclosure describes the two mechanisms by which the lock-up may be released prior to the expiration of the 180-day lock-up period:

(a) Written consent of the representative of the underwriters. Hargrove Keating & Co., as lead-left book-running manager and representative of the several underwriters, may, in its sole discretion, release any lock-up party from the terms of the lock-up agreement at any time prior to the expiration of the lock-up period, in whole or in part, with or without conditions.

(b) Change of Control. The lock-up restrictions shall automatically terminate upon the occurrence of a "Change of Control" (as defined in the lock-up agreement), which generally means (x) the acquisition by any person or group of persons of beneficial ownership of more than 50% of the Company's then-outstanding voting securities (other than by Pinnacle Vista Capital Partners III, LP or its affiliates), (y) the consummation of a merger, consolidation, or similar business combination in which the Company's stockholders immediately prior to such transaction own less than 50% of the voting securities of the surviving or resulting entity, or (z) the sale, lease, or other disposition of all or substantially all of the Company's assets.

Issuer Lock-Up. The revised disclosure also describes the issuer lock-up to which CBR is subject. The Company has agreed not to issue, sell, offer, contract to sell, pledge, grant any option to purchase, or otherwise dispose of (or enter into any transaction that is designed to, or might reasonably be expected to, result in the disposition of) any shares of common stock or securities convertible into or exercisable or exchangeable for common stock for 180 days following the date of the final prospectus, subject to the following customary exceptions:

• Shares of common stock sold to the underwriters pursuant to the underwriting agreement;

• Shares of common stock or options to purchase shares of common stock granted or issued pursuant to the Company's 2022 Omnibus Equity Incentive Plan (which provides for a share reserve of 12,727,273 shares) and the Company's 2022 Employee Stock Purchase Plan (which provides for a share reserve of 2,545,455 shares), in each case as described in the registration statement;

• Shares of common stock issued as consideration for acquisitions or strategic transactions, provided that the aggregate number of shares so issued does not exceed a specified percentage of the Company's then-outstanding common stock and that the recipients of such shares agree to be bound by the lock-up restrictions for the remainder of the lock-up period; and

• Shares of common stock issued upon the exercise or conversion of options, warrants, or convertible securities outstanding as of the date of the final prospectus, as described in the registration statement.

The Company has confirmed that the descriptions of the lock-up provisions — including all carve-outs, release mechanisms, and the issuer lock-up — are now fully consistent between the "Shares Eligible for Future Sale" section and the "Underwriting" section of Amendment No. 2. The Company has cross-referenced each section to the other in order to facilitate the Staff's review.

The Company respectfully directs the Staff to pages 145 through 149 (Shares Eligible for Future Sale) and pages 158 through 163 (Underwriting) of Amendment No. 2.

Closing

The Company believes that the revisions reflected in Amendment No. 2, as described in this letter, are fully responsive to each of the seven comments contained in the Staff's Second Comment Letter dated June 3, 2022. The Company has endeavored to address each comment thoroughly and to ensure that the revised disclosure provides investors with the information necessary to make an informed investment decision.

In connection with this response, the Company acknowledges the following:

(i) The Company is responsible for the adequacy and accuracy of the disclosure in the filing;

(ii) Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and

(iii) The Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

If the Staff has any additional questions or comments regarding this letter or Amendment No. 2, please do not hesitate to contact the undersigned at (212) 558-4293 or Jennifer Kwon at (212) 558-4127.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Brendan Walsh Lead Associate, Capital Markets

With: ________ Jennifer Kwon Responsible Partner, Capital Markets

cc:

Sandra Haverford, General Counsel & Corporate Secretary, Calloway-Briggs Renewables Inc. Marcus Yoon, Chief Financial Officer, Calloway-Briggs Renewables Inc. Priya Anand, Senior Vice President, Finance & Treasurer, Calloway-Briggs Renewables Inc. Jennifer Kwon, Calderwood & Harkness LLP Theodore Langston, Calderwood & Harkness LLP Natasha Forbes, Calderwood & Harkness LLP Leonard Cross, Calderwood & Harkness LLP (Tax) Margaret Yee, Prescott, Danforth & Yee LLP (Underwriters' Counsel) Scott Halverson, Prescott, Danforth & Yee LLP Gregory Sondheim, Ashford & Pemberton LLP (Independent Auditor) Oliver Marchetti, Hargrove Keating & Co. (Lead-Left Book-Runner) Christine Navarro, Whitfield Archer & Doss LLP (Counsel to Pinnacle Vista Capital Partners III, LP)

FY 2019	FY 2020	FY 2021	Q1 2022 (Unaudited)
Total Revenue (as reported)	$312.8M	$401.5M	$487.3M	$131.4M
Net Income (Loss) (as reported)	($22.4M)	$14.1M	$41.7M	$8.3M
FY 2019	FY 2020	FY 2021	Q1 2022 (Unaudited)
GAAP Net Income (Loss)	($22.4M)	$14.1M	$41.7M	$8.3M
Adjusted EBITDA	$138.7M	$179.2M	$218.6M	$59.8M

CONFIDENTIAL TREATMENT REQUESTED BY CALLOWAY-BRIGGS RENEWABLES INC.
CALDERWOOD & HARKNESS LLP 599 Lexington Avenue New York, NY 10022
Telephone: (212) 558-4000 Facsimile: (212) 558-3588
June 10, 2022
United States Securities and Exchange Commission Division of Corporation Finance 100 F Street, N.E. Washington, D.C. 20549
Attention: Staff reviewing the confidential draft registration statement of Calloway-Briggs Renewables Inc.
Re: Calloway-Briggs Renewables Inc. Confidential Draft Registration Statement on Form S-1 Originally Submitted April 11, 2022 CIK No. 0001948372 EDGAR Accession No. (Amendment No. 2): 0001948372-22-000003
Ladies and Gentlemen:
This letter is submitted by Calderwood & Harkness LLP, as outside counsel to Calloway-Briggs Renewables Inc. ("CBR" or the "Company"), a Delaware corporation headquartered at 4200 Ridgeline Parkway, Suite 1100, Austin, Texas 78746, in response to the comment letter of the Staff (the "Staff") of the Division of Corporation Finance of the United States Securities and Exchange Commission (the "Commission") dated June 3, 2022 (the "Second Comment Letter"). The Second Comment Letter contains seven comments relating to Amendment No. 1 to the Company's confidential draft registration statement on Form S-1, which was filed on May 20, 2022 (EDGAR Accession No. 0001948372-22-000002) (the "First Amended DRS").
Concurrently with the submission of this letter, the Company is filing Amendment No. 2 to the confidential draft registration statement on Form S-1 (the "Amended DRS" or "Amendment No. 2"), which reflects the Company's responses to the Staff's comments contained in the Second Comment Letter, as well as certain other updates to the registration statement. The Company is an "emerging growth company" as defined in Section 2(a)(19) of the Securities Act of 1933, as amended (the "Securities Act"), as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and is confidentially submitting the registration statement pursuant to Section 6(e) of the Securities Act.
For the convenience of the Staff, each comment from the Second Comment Letter is reproduced below in bold typeface, followed by the Company's response. Unless otherwise indicated, all references to page numbers are to pages in Amendment No. 2. Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in Amendment No. 2.
The key contacts for correspondence relating to this matter are as follows:
• Jennifer Kwon, Responsible Partner, Capital Markets, Calderwood & Harkness LLP — (212) 558-4127
• Brendan Walsh, Lead Associate, Capital Markets, Calderwood & Harkness LLP — (212) 558-4293
• Natasha Forbes, Working Associate, Capital Markets, Calderwood & Harkness LLP — (212) 558-4315
• Sandra Haverford, General Counsel & Corporate Secretary, Calloway-Briggs Renewables Inc. — (512) 477-3100
• Marcus Yoon, Chief Financial Officer, Calloway-Briggs Renewables Inc. — (512) 477-3102
• Gregory Sondheim, Lead Engagement Partner, Ashford & Pemberton LLP (independent auditor) — (214) 969-7800
The Company's responses to each of the Staff's seven comments are set forth below.
Comment 1: HLBV Methodology — Enhanced Disclosure
The Staff notes the Company's prior response regarding the Hypothetical-Liquidation-at-Book-Value ("HLBV") methodology used to allocate income and losses in the Company's tax-equity partnership structures. The Staff requests enhanced disclosure explaining the HLBV methodology in greater detail, including (a) how the hypothetical liquidation proceeds are allocated among the tax-equity investor and the Company at each reporting date, (b) the key inputs and assumptions underlying the HLBV calculation, and (c) the sensitivity of reported results to changes in those inputs and assumptions. The Staff references, in particular, the Solaris West tax-equity partnership with Veltara Basin Financial LLC, in which $280,000,000 was invested and in which a partnership flip is expected to occur in 2028.
Response:. The Company acknowledges the Staff's comment and appreciates the opportunity to provide enhanced disclosure regarding its application of the HLBV methodology. In response to this comment, the Company has revised the disclosure in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of Amendment No. 2, specifically under the subheading "Critical Accounting Policies — Tax-Equity Partnerships — HLBV Methodology," to provide significantly more detailed and granular information regarding the Company's use of the HLBV methodology.
As described in the revised disclosure, the HLBV methodology is an accepted method of allocating income and losses in structures where the contractual allocation of cash distributions and tax benefits differs from the partners' relative ownership percentages, as is common in the renewable energy industry. Under the HLBV methodology, at each reporting date, the Company calculates the amount that each partner — the Company, through its wholly owned subsidiary Solaris West Solar LLC ("Solaris West"), and the tax-equity investor, Veltara Basin Financial LLC ("Veltara Basin") — would receive if the partnership were hypothetically liquidated at the carrying amounts of its net assets as of such date. The change in each partner's claim on the net assets of the partnership from period to period is used to determine the allocation of earnings or losses for that period.
The revised disclosure in Amendment No. 2 identifies and explains the following key inputs and assumptions underlying the Company's HLBV calculation:
(i) Carrying Values of Partnership Assets. The carrying values of the partnership's assets, including the Solaris West solar photovoltaic facility, which has a nameplate capacity of 450 MW and is located in Pecos County, Texas. The Solaris West facility reached commercial operations in the third quarter of 2020. The carrying values of the facility and related assets are based on historical cost, net of accumulated depreciation and any impairment charges.
(ii) Allocation of Investment Tax Credits. The allocation of federal Investment Tax Credits ("ITCs") to Veltara Basin as the tax-equity investor, in accordance with the terms of the partnership agreement. The ITCs were allocated to Veltara Basin upon the Solaris West facility achieving commercial operations and are subject to potential recapture during the applicable five-year recapture period under Section 50 of the Internal Revenue Code of 1986, as amended.
(iii) Projected Taxable Income and Loss Allocations. The projected allocations of taxable income and loss between the Company (through Solaris West) and Veltara Basin for each period during the term of the partnership, as set forth in the partnership agreement. These allocations are based on the partnership agreement's provisions governing pre-flip and post-flip allocations of taxable income, taxable loss, and tax credits.
(iv) Capital Account Balances. The capital account balances of each partner, as maintained in accordance with the partnership agreement and Treasury Regulation Section 1.704-1(b)(2)(iv). These capital account balances reflect each partner's initial capital contribution, allocated income and losses, and distributions received.
(v) Expected Timing of the Partnership Flip. The expected timing of the partnership flip, which is currently projected to occur in 2028. Under the terms of the partnership agreement, upon the occurrence of certain conditions — including the achievement by Veltara Basin of a specified after-tax internal rate of return on its $280,000,000 investment — the allocation ratios between the Company and Veltara Basin will change, and the Company will have the right to acquire Veltara Basin's remaining interest in the partnership at fair market value. The projected flip date is based on management's best estimate of when the specified return thresholds will be achieved and is subject to change based on the actual performance of the Solaris West facility and other factors.
The revised disclosure further explains that the change in each partner's claim on the net assets of the partnership from period to period — as determined by the hypothetical liquidation waterfall described above — drives the allocation of earnings or losses for each period. This methodology ensures that the cumulative income or loss recognized by each partner at any given balance sheet date is equal to the amount that the partner would receive (or be required to contribute) if the partnership were liquidated at that date at book value.
In addition, the Company has included enhanced sensitivity disclosure in the revised Amendment No. 2. Specifically, the Company has noted that changes in the following inputs could materially affect the allocation of income between the Company and the tax-equity investor:
• Estimated useful life of the underlying solar assets. A decrease in the estimated useful life of the Solaris West facility could accelerate depreciation expense, thereby reducing the carrying value of partnership assets and altering the hypothetical liquidation waterfall.
• Adjustments to ITC amounts, including potential recapture. If the ITCs allocated to Veltara Basin were subject to recapture (for example, due to a change in the qualifying use of the facility during the recapture period), the resulting adjustment could significantly alter the capital account balances and, consequently, the HLBV allocation of income.
• Changes in the projected flip date. If the partnership flip were to occur earlier or later than the currently projected date of 2028 — for example, due to changes in energy production, power prices, or operating expenses — the allocation of income between the Company and Veltara Basin could change materially, as the pre-flip and post-flip allocation ratios differ significantly.
The Company advises the Staff that the tax-equity structure discussion reflected in the revised disclosure was prepared in coordination with Kessler McBride & Associates LLP, the Company's external tax advisor, and was reviewed by Ashford & Pemberton LLP, the Company's independent registered public accounting firm (Gregory Sondheim, Lead Engagement Partner; Irene Valdez, Audit Manager), to ensure consistency with the Company's audited financial statements and the applicable accounting guidance.
The Company respectfully directs the Staff to the revised disclosure on pages 72 through 78 of Amendment No. 2.
Comment 2: HLBV Methodology — Reconciliation Table
The Staff requests that the Company provide a tabular reconciliation showing the impact of the HLBV methodology on reported revenue and net income for each period presented (FY 2019, FY 2020, FY 2021, and Q1 2022 (unaudited)).
Response:. The Company acknowledges the Staff's comment. In response, the Company has added a tabular reconciliation in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of Amendment No. 2 that presents, for each period presented, the impact of the HLBV methodology on the Company's reported revenue and net income. The table is designed to provide investors with a clear and concise understanding of how the HLBV methodology affects the Company's consolidated financial results.
The table presents, for each period, the following line items: (a) total revenue as reported in the Company's consolidated statements of operations, (b) the amount of revenue attributable to the tax-equity arrangement with Veltara Basin, and (c) the HLBV-related allocation of income (loss) to the tax-equity investor for each respective period. The following summary data is reflected in the reconciliation table:
The Company notes that the Solaris West tax-equity partnership with Veltara Basin, in which Veltara Basin invested $280,000,000, achieved commercial operations in the third quarter of fiscal year 2020. Accordingly, the impact of the HLBV methodology on the Company's consolidated financial results is reflected beginning in that period. For fiscal year 2019, the Solaris West facility was still under construction and the tax-equity partnership had not yet commenced operations, and therefore no HLBV-related income allocation is reflected for that period.
The reconciliation table quantifies the HLBV impact on total consolidated revenue and net income for each period and demonstrates that the Company has applied the HLBV methodology consistently across all periods presented. The Company has also added a footnote to the reconciliation table explaining that the financial statements for fiscal years 2019, 2020, and 2021 were audited by Ashford & Pemberton LLP, the Company's independent registered public accounting firm, in accordance with the standards of the Public Company Accounting Oversight Board (United States), and that the financial data for the three months ended March 31, 2022 (Q1 2022) is unaudited but has been prepared on the same basis as the Company's audited annual financial statements and, in the opinion of management, includes all adjustments necessary for a fair presentation of the Company's financial position and results of operations for such interim period.
The Company respectfully directs the Staff to the new reconciliation table on pages 79 through 81 of Amendment No. 2.
Comment 3: PPA Revenue Detail — Disaggregation
The Staff requests additional disaggregation of revenue by type of power purchase agreement ("PPA"), including (a) fixed-price PPAs, (b) indexed or escalating-price PPAs, and (c) merchant or spot-market revenue, for each period presented. The Staff notes that the Company's operating portfolio of 3.8 GW across 22 projects in Texas, New Mexico, Arizona, California, and Oklahoma may have materially different revenue characteristics depending on the PPA structure.
Response:. The Company acknowledges the Staff's comment and agrees that disaggregation of revenue by PPA type provides investors with meaningful information regarding the composition and characteristics of the Company's revenue streams. In response, the Company has revised both the "Business" section and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of Amendment No. 2 to provide enhanced disaggregation of revenue by PPA type.
The revised disclosure includes a new table presenting revenue for each of the three categories identified by the Staff — (a) fixed-price PPAs, (b) indexed or escalating-price PPAs, and (c) merchant or spot-market revenue — for each of fiscal years 2019, 2020, and 2021, and the three months ended March 31, 2022 (Q1 2022, unaudited). The table is accompanied by narrative disclosure providing additional context regarding the nature and significance of each revenue category.
The Company notes that the substantial majority of its revenue is derived from long-term, fixed-price PPAs with investment-grade or creditworthy counterparties, including municipal utilities, electric cooperatives, and corporate offtakers. The Company believes that its heavy weighting toward contracted, fixed-price revenue provides visibility and predictability of cash flows, reduces exposure to commodity price volatility, and supports the Company's ability to service its outstanding indebtedness and fund its growth plans.
The revised disclosure identifies the key operating projects contributing to each revenue category, including the following:
• Solaris West — 450 MW solar photovoltaic facility, Pecos County, Texas; COD Q3 2020; revenue recognized under a long-term, fixed-price PPA.
• Red Mesa Wind — 380 MW onshore wind facility, Custer County, Oklahoma; COD Q1 2019; revenue recognized under a long-term, indexed/escalating-price PPA with annual escalators tied to a published price index.
• Painted Rock Solar — 320 MW solar photovoltaic facility, Maricopa County, Arizona; COD Q4 2020; revenue recognized under a long-term, fixed-price PPA.
• Pronghorn Wind — 510 MW onshore wind facility, Nolan County, Texas; COD Q2 2021; revenue recognized under a combination of long-term, fixed-price PPAs covering approximately 80% of expected annual energy production, with the remaining approximately 20% sold into the ERCOT wholesale market at prevailing spot prices.
• Brazos Storage — 200 MW / 800 MWh battery energy storage system, Fort Bend County, Texas; COD Q4 2021; revenue includes both (x) capacity payments received under a fixed-price tolling agreement with a large Texas-based retail electricity provider and (y) energy arbitrage revenue earned by buying and selling electricity on the ERCOT wholesale market, which constitutes merchant or spot-market revenue.
The Company has separately disclosed the capacity payments (fixed) and energy arbitrage revenue (merchant/spot) attributable to the Brazos Storage facility in the disaggregation table, as the revenue characteristics of these two streams are materially different.
For context, the Company's total revenue for fiscal year 2021 was $487.3 million, and its Adjusted EBITDA for the same period was $218.6 million. The PPA disaggregation table allows investors to understand the composition of these figures by reference to the underlying contractual structures driving revenue recognition.
The Company respectfully directs the Staff to the revised disclosure on pages 50 through 54 (Business section) and pages 82 through 85 (MD&A section) of Amendment No. 2.
Comment 4: PPA Revenue Detail — Weighted Average Remaining Contract Life
The Staff requests disclosure of the weighted average remaining contract life of the Company's PPAs and the percentage of revenue under contract for the next five years, to enable investors to assess the sustainability and predictability of the Company's revenue streams.
Response:. The Company acknowledges the Staff's comment and agrees that disclosure of the weighted average remaining contract life and the percentage of projected revenue under contract is useful information for investors. In response, the Company has added new disclosure in both the "Business" section and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of Amendment No. 2 providing this information.
The revised disclosure states the weighted average remaining contract life of the Company's PPA portfolio as of March 31, 2022, weighted by expected contracted revenue over the remaining term of each PPA. In addition, the Company has added a table showing the approximate percentage of projected revenue that is under contract for each of the next five fiscal years (fiscal year 2022 through fiscal year 2026). This table is intended to provide investors with a clear picture of the degree to which the Company's near-term and medium-term revenue streams are supported by existing, binding contractual commitments.
The revised disclosure also discusses the expected addition of contracted revenue from the Company's two projects currently under construction, which are expected to contribute incremental long-term contracted revenue upon reaching commercial operations:
• Mesquite Wind — 420 MW onshore wind facility, Oldham County, Texas; expected COD Q3 2022. The Company has entered into a 15-year, fixed-price PPA for the full expected output of the facility with a creditworthy counterparty.
• Cimarron Solar — 350 MW solar photovoltaic facility, Doña Ana County, New Mexico; expected COD Q1 2023. The Company has entered into a 20-year, fixed-price PPA for the full expected output of the facility with an investment-grade municipal utility.
Upon reaching commercial operations, these two projects are expected to increase the Company's operating portfolio from 3.8 GW to approximately 4.6 GW and to further enhance the Company's revenue visibility and contracted revenue backlog.
The Company supplementally advises the Staff that detailed PPA summaries — including counterparty name, contract term (commencement and expiration dates), pricing structure, and volume commitments — were provided in the Company's due diligence materials prepared in connection with the offering and shared with the underwriting syndicate and their counsel. In preparing the public disclosure in Amendment No. 2, the Company has endeavored to balance the provision of investor-useful information regarding the depth and duration of its contracted revenue base with the protection of commercially sensitive information, including specific counterparty names, exact pricing terms, and other proprietary details that could competitively disadvantage the Company if publicly disclosed. The Company believes that the disclosure as revised in Amendment No. 2 strikes an appropriate balance and provides investors with the information necessary to assess the sustainability and predictability of the Company's revenue streams.
The Company respectfully directs the Staff to the revised disclosure on pages 55 through 58 (Business section) and pages 86 through 88 (MD&A section) of Amendment No. 2.
Comment 5: Non-GAAP Reconciliation — Adjusted EBITDA
The Staff notes that the Company presents Adjusted EBITDA as a non-GAAP financial measure and requests: (a) clarification of the nature and amount of each adjustment, (b) a more detailed reconciliation from GAAP net income to Adjusted EBITDA for each period presented, and (c) an explanation of why management believes each adjustment is appropriate and useful to investors. The Staff references SEC guidance on non-GAAP financial measures under Regulation G and Item 10(e) of Regulation S-K.
Response:. The Company acknowledges the Staff's comment. In response, the Company has substantially revised the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of Amendment No. 2 to provide an enhanced Adjusted EBITDA reconciliation that addresses each element of the Staff's comment.
The revised reconciliation now presents a detailed line-by-line bridge from GAAP net income (loss) — the most directly comparable GAAP financial measure — to Adjusted EBITDA for each period presented, as summarized below:
Each adjustment in the reconciliation is individually identified, quantified, and accompanied by a brief explanation of its nature and the reasons why management believes the adjustment is appropriate and useful to investors. The adjustments included in the reconciliation are as follows:
(i) Interest expense. Represents cash and non-cash interest expense on the Company's outstanding indebtedness, including the $400 million Corporate Revolving Credit Facility and the $650 million Term Loan B (of which $612.5 million was outstanding as of March 31, 2022), both with Veltrano National Bank, as well as non-recourse project-level debt. Management excludes interest expense because it is not considered indicative of the Company's core operating performance and because the Company's capital structure may differ significantly from that of other companies in its industry.
(ii) Income tax expense (benefit). Represents the Company's provision for federal and state income taxes, including the impact of ITCs and accelerated tax depreciation. Management excludes income tax expense because it is significantly influenced by the Company's tax-equity structures and the availability of ITCs and other tax attributes, which may not be reflective of the Company's underlying operating results.
(iii) Depreciation and amortization. Represents depreciation of the Company's property, plant, and equipment (primarily utility-scale renewable energy facilities) and amortization of intangible assets. Management excludes depreciation and amortization because it is a non-cash charge that can vary significantly based on the Company's capital investment decisions, useful life assumptions, and acquisition activity.
(iv) Stock-based compensation expense. Represents non-cash charges associated with equity awards granted to the Company's directors, officers, and employees. Management excludes stock-based compensation because it is a non-cash expense and because the amount can vary from period to period based on factors that are not directly related to the Company's operating performance, such as the timing and size of equity grants and the assumptions used to determine the fair value of such awards.
(v) Unrealized gains and losses on derivatives. Represents the non-cash mark-to-market gains or losses on the Company's interest rate swaps, commodity hedges, and other derivative instruments that do not qualify for hedge accounting or for which the Company has not elected hedge accounting. Management excludes unrealized derivative gains and losses because they represent non-cash fluctuations in fair value that are driven by changes in market conditions and do not reflect the Company's realized cash flows from its hedging activities.
(vi) Acquisition and development costs. Represents legal, advisory, diligence, and other third-party costs incurred in connection with the Company's evaluation and pursuit of potential acquisitions, as well as early-stage development expenditures for projects that have not yet reached a stage of development at which they are probable of construction. Management excludes these costs because they are lumpy, episodic, and not reflective of the Company's ongoing, recurring operating performance.
(vii) Non-cash HLBV income allocations. Represents the non-cash component of income allocations to the tax-equity investor under the HLBV methodology described in the Company's response to Comment 1 above. Management excludes non-cash HLBV income allocations because they do not reflect cash received or paid by the Company and can vary significantly from period to period based on changes in the inputs and assumptions underlying the HLBV calculation.
(viii) Other non-recurring items. Represents certain discrete, one-time costs that are not expected to recur in the ordinary course of business, including costs associated with the Company's organizational restructuring completed in the second quarter of fiscal year 2020 and certain litigation settlement costs. Management excludes these items because they are not indicative of the Company's ongoing operating performance.
For each adjustment identified above, the Company has included narrative disclosure in Amendment No. 2 explaining why management considers the adjustment appropriate and how it enhances investors' understanding of the Company's core operating performance. The Company has also noted that Adjusted EBITDA is used by management and the Company's Board of Directors for the purposes of evaluating the Company's operating performance, making operating and capital allocation decisions, and establishing performance targets for executive compensation purposes. In addition, Adjusted EBITDA is a key financial metric referenced in the financial maintenance covenants under the Company's credit agreements with Veltrano National Bank, including the $400 million Corporate Revolving Credit Facility (maturing January 2027) and the $650 million Term Loan B (with $612.5 million outstanding, maturing January 2029).
The Company confirms that the presentation of Adjusted EBITDA in Amendment No. 2 complies with the requirements of Regulation G and Item 10(e) of Regulation S-K, including the requirement that the most directly comparable GAAP financial measure (GAAP net income (loss)) be presented with equal or greater prominence than the non-GAAP measure. The GAAP net income (loss) figures are presented immediately preceding the Adjusted EBITDA reconciliation table and are referenced throughout the narrative discussion.
The Company respectfully directs the Staff to the revised disclosure on pages 89 through 95 of Amendment No. 2.
Comment 6: Non-GAAP Reconciliation — Characterization of Adjustments
The Staff requests that the Company remove the characterization of certain adjustments as "non-recurring" or "unusual" unless the Company can demonstrate that the adjustments are, in fact, non-recurring within the meaning of SEC guidance. Specifically, the Staff questions whether development-stage project costs, which appear in multiple periods, should be characterized as non-recurring.
Response:. The Company acknowledges the Staff's comment and appreciates the Staff's attention to the characterization of adjustments in the Adjusted EBITDA reconciliation. In response, the Company has revised the Adjusted EBITDA reconciliation and accompanying narrative disclosure in Amendment No. 2 to address the Staff's concerns.
Specifically, the Company has revised the Adjusted EBITDA reconciliation to remove the characterization of development-stage project costs as "non-recurring." As the Staff has correctly observed, development-stage project costs have appeared in multiple reporting periods and are an inherent part of the Company's business as a developer and operator of utility-scale renewable energy projects. The revised disclosure instead characterizes such costs as "costs associated with early-stage project development activities" and includes a note explaining that, while these costs may vary in amount from period to period depending on the number, size, and stage of development projects being actively pursued, they are a regular and expected component of the Company's business operations.
The Company has reviewed all other adjustments in the Adjusted EBITDA reconciliation and has removed the characterization "non-recurring" or "unusual" from any adjustment where the underlying item has appeared in more than one of the reporting periods presented. Only those items that are demonstrably non-recurring — meaning that they are reasonably unlikely to recur within two years, consistent with SEC guidance — retain the "non-recurring" characterization. For example, certain one-time transaction costs associated with the Company's 2020 organizational restructuring, which involved the legal entity reorganization in connection with the conversion of CBR from a limited liability company to a Delaware corporation, are appropriately characterized as non-recurring because they were directly attributable to a discrete, one-time event and are not expected to recur.
The Company has also updated the narrative explanation accompanying the Adjusted EBITDA reconciliation to more clearly distinguish between (a) adjustments that management expects to continue as part of the Company's ordinary course of business (such as development-stage project costs, stock-based compensation, and non-cash HLBV income allocations) and (b) adjustments that are truly one-time in nature (such as the organizational restructuring costs referenced above). This distinction is now clearly articulated in the introductory paragraph preceding the reconciliation table.
The Company notes, for additional context, that its development pipeline as of March 31, 2022 comprised approximately 6.2 GW of projects in various stages of development across Texas, New Mexico, Arizona, California, Oklahoma, and other states. The Company's strategy of maintaining a large and diversified development pipeline is a core element of its growth plan, and the costs associated with the early-stage development of these projects — including site control, interconnection studies, permitting, environmental assessments, and preliminary engineering — are an ongoing and expected part of the Company's business activities. The Company therefore agrees with the Staff that characterizing such costs as "non-recurring" would be inappropriate and potentially misleading to investors.
The Company respectfully directs the Staff to the revised disclosure on pages 89 through 95 of Amendment No. 2.
Comment 7: Lock-Up Carve-Out Disclosure
The Staff requests enhanced disclosure regarding the carve-outs to the 180-day lock-up agreements, including (a) a description of each carve-out, (b) the identity of the parties subject to the lock-up, and (c) clarification regarding whether the adoption of a Rule 10b5-1 trading plan during the lock-up period could result in sales of shares during the lock-up period. The Staff notes that the "Shares Eligible for Future Sale" section and the "Underwriting" section should be consistent in their description of lock-up provisions.
Response:. The Company acknowledges the Staff's comment and has revised both the "Shares Eligible for Future Sale" section and the "Underwriting" section of Amendment No. 2 to provide enhanced and fully consistent disclosure of the lock-up provisions applicable to the Company's directors, executive officers, and significant stockholders.
Parties Subject to the Lock-Up. The revised disclosure identifies all parties that have entered into (or, upon pricing, will enter into) lock-up agreements with Hargrove Keating & Co., as lead-left book-running manager and representative of the several underwriters. These parties include:
Directors:
• Garrett Calloway (Co-Founder and Chairman of the Board)
• Elaine Briggs (Co-Founder and Director)
• Hugh Pemberton (Independent Director)
• Diane Kovac (Independent Director)
• Warren Okoro (Independent Director)
• Catherine Liang (Independent Director)
• Richard Estavez (Independent Director)
Executive Officers:
• Marcus Yoon (Chief Financial Officer)
• Sandra Haverford (General Counsel & Corporate Secretary)
• Dale Renfroe (Chief Operating Officer)
• Priya Anand (Senior Vice President, Finance & Treasurer)
• Tomás Quintero (Senior Vice President, Development)
• Rachel Whitmore (Senior Vice President, Asset Management)
Significant Stockholders:
• Pinnacle Vista Capital Partners III, LP (the pre-IPO majority stockholder, holding approximately 62% of the Company's pre-IPO fully diluted common stock)
• All other holders of 1% or more of the Company's pre-IPO common stock
In total, approximately 18 persons and entities are subject to the lock-up agreements.
Lock-Up Period. The lock-up period runs for 180 days following the date of the final prospectus relating to the offering.
Carve-Outs. The revised disclosure describes in detail each carve-out to the lock-up agreements, as follows:
(i) Transfers to affiliates. A lock-up party may transfer shares to an affiliate of such party (including, in the case of an individual, a trust or other estate-planning vehicle controlled by or for the benefit of such individual, and, in the case of a fund, to limited partners, members, or other equity holders of such fund), provided that the transferee agrees in writing to be bound by the terms of the lock-up agreement for the remainder of the lock-up period.
(ii) Estate-planning transfers. A lock-up party may transfer shares as a bona fide gift, as a transfer to a trust for the benefit of family members of the lock-up party, or as a transfer by will or intestacy upon the death of the lock-up party, in each case provided that the transferee agrees in writing to be bound by the terms of the lock-up agreement for the remainder of the lock-up period and that no public filing or announcement of such transfer is required or voluntarily made during the lock-up period (other than a filing on Form 4 or Form 5 required under Section 16 of the Securities Exchange Act of 1934, as amended, in which case the filing shall include a footnote disclosing that the transfer was made for estate-planning purposes and that the transferee is bound by the lock-up agreement).
(iii) Adoption of Rule 10b5-1 trading plans. A lock-up party may adopt a trading plan intended to comply with the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, during the lock-up period; provided, however, that no sales of shares may be made under any such trading plan until the expiration of the lock-up period. The Company has clarified this point in both the "Shares Eligible for Future Sale" and "Underwriting" sections of Amendment No. 2 in order to address the Staff's specific inquiry regarding whether the adoption of a 10b5-1 trading plan during the lock-up period could result in sales during the lock-up period. The answer is no — while adoption of a plan is permitted, no sales or other dispositions may occur under such plan until after the lock-up period has ended.
(iv) Pledges to lenders. A lock-up party may pledge shares to a lending institution as collateral for a bona fide loan; provided, however, that the pledge does not result in any sale, transfer, or other disposition of such shares during the lock-up period. In the event that the lender forecloses on the pledged shares during the lock-up period, the resulting disposition would constitute a breach of the lock-up agreement.
Lock-Up Release Mechanisms. The revised disclosure describes the two mechanisms by which the lock-up may be released prior to the expiration of the 180-day lock-up period:
(a) Written consent of the representative of the underwriters. Hargrove Keating & Co., as lead-left book-running manager and representative of the several underwriters, may, in its sole discretion, release any lock-up party from the terms of the lock-up agreement at any time prior to the expiration of the lock-up period, in whole or in part, with or without conditions.
(b) Change of Control. The lock-up restrictions shall automatically terminate upon the occurrence of a "Change of Control" (as defined in the lock-up agreement), which generally means (x) the acquisition by any person or group of persons of beneficial ownership of more than 50% of the Company's then-outstanding voting securities (other than by Pinnacle Vista Capital Partners III, LP or its affiliates), (y) the consummation of a merger, consolidation, or similar business combination in which the Company's stockholders immediately prior to such transaction own less than 50% of the voting securities of the surviving or resulting entity, or (z) the sale, lease, or other disposition of all or substantially all of the Company's assets.
Issuer Lock-Up. The revised disclosure also describes the issuer lock-up to which CBR is subject. The Company has agreed not to issue, sell, offer, contract to sell, pledge, grant any option to purchase, or otherwise dispose of (or enter into any transaction that is designed to, or might reasonably be expected to, result in the disposition of) any shares of common stock or securities convertible into or exercisable or exchangeable for common stock for 180 days following the date of the final prospectus, subject to the following customary exceptions:
• Shares of common stock sold to the underwriters pursuant to the underwriting agreement;
• Shares of common stock or options to purchase shares of common stock granted or issued pursuant to the Company's 2022 Omnibus Equity Incentive Plan (which provides for a share reserve of 12,727,273 shares) and the Company's 2022 Employee Stock Purchase Plan (which provides for a share reserve of 2,545,455 shares), in each case as described in the registration statement;
• Shares of common stock issued as consideration for acquisitions or strategic transactions, provided that the aggregate number of shares so issued does not exceed a specified percentage of the Company's then-outstanding common stock and that the recipients of such shares agree to be bound by the lock-up restrictions for the remainder of the lock-up period; and
• Shares of common stock issued upon the exercise or conversion of options, warrants, or convertible securities outstanding as of the date of the final prospectus, as described in the registration statement.
The Company has confirmed that the descriptions of the lock-up provisions — including all carve-outs, release mechanisms, and the issuer lock-up — are now fully consistent between the "Shares Eligible for Future Sale" section and the "Underwriting" section of Amendment No. 2. The Company has cross-referenced each section to the other in order to facilitate the Staff's review.
The Company respectfully directs the Staff to pages 145 through 149 (Shares Eligible for Future Sale) and pages 158 through 163 (Underwriting) of Amendment No. 2.
Closing
The Company believes that the revisions reflected in Amendment No. 2, as described in this letter, are fully responsive to each of the seven comments contained in the Staff's Second Comment Letter dated June 3, 2022. The Company has endeavored to address each comment thoroughly and to ensure that the revised disclosure provides investors with the information necessary to make an informed investment decision.
In connection with this response, the Company acknowledges the following:
(i) The Company is responsible for the adequacy and accuracy of the disclosure in the filing;
(ii) Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and
(iii) The Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
If the Staff has any additional questions or comments regarding this letter or Amendment No. 2, please do not hesitate to contact the undersigned at (212) 558-4293 or Jennifer Kwon at (212) 558-4127.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Brendan Walsh Lead Associate, Capital Markets
With: ________ Jennifer Kwon Responsible Partner, Capital Markets
cc:
Sandra Haverford, General Counsel & Corporate Secretary, Calloway-Briggs Renewables Inc. Marcus Yoon, Chief Financial Officer, Calloway-Briggs Renewables Inc. Priya Anand, Senior Vice President, Finance & Treasurer, Calloway-Briggs Renewables Inc. Jennifer Kwon, Calderwood & Harkness LLP Theodore Langston, Calderwood & Harkness LLP Natasha Forbes, Calderwood & Harkness LLP Leonard Cross, Calderwood & Harkness LLP (Tax) Margaret Yee, Prescott, Danforth & Yee LLP (Underwriters' Counsel) Scott Halverson, Prescott, Danforth & Yee LLP Gregory Sondheim, Ashford & Pemberton LLP (Independent Auditor) Oliver Marchetti, Hargrove Keating & Co. (Lead-Left Book-Runner) Christine Navarro, Whitfield Archer & Doss LLP (Counsel to Pinnacle Vista Capital Partners III, LP)
FY 2019 | FY 2020 | FY 2021 | Q1 2022 (Unaudited)
Total Revenue (as reported) | $312.8M | $401.5M | $487.3M | $131.4M
Net Income (Loss) (as reported) | ($22.4M) | $14.1M | $41.7M | $8.3M
FY 2019 | FY 2020 | FY 2021 | Q1 2022 (Unaudited)
GAAP Net Income (Loss) | ($22.4M) | $14.1M | $41.7M | $8.3M
Adjusted EBITDA | $138.7M | $179.2M | $218.6M | $59.8M

CONFIDENTIAL TREATMENT REQUESTED BY CALLOWAY-BRIGGS RENEWABLES INC.

CALDERWOOD & HARKNESS LLP

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