1015-00001 · Graymont Brothers Inc · Transaction Documents/Underwriting

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DRAFT — Prepared for Review by Calderwood & Harkness LLP

HARGROVE KEATING & CO. 383 Madison Place New York, NY 10017

[●], 2022

Ashford & Pemberton LLP 30 Rockefeller Plaza, Suite 2800 New York, NY 10112

Attention: Gregory Sondheim, Lead Engagement Partner, CPA

Irene Valdez, Audit Manager, CPA

Re: Proposed Initial Public Offering of Common Stock of Calloway-Briggs Renewables Inc. — Request for Comfort Letter Pursuant to AU-C Section 920 (formerly SAS 72)

Dear Mr. Sondheim and Ms. Valdez:

I. Introduction and Background

Hargrove Keating & Co. ("HK&Co."), acting as representative of the several underwriters (including Linden Pratt Securities LLC, Graymont Brothers Inc., Barfield Stuart & Co., and Crane Whitley Capital LLC, collectively with HK&Co., the "Underwriters"), writes in connection with the proposed initial public offering (the "Offering") of shares of common stock, par value $0.01 per share (the "Common Stock"), of Calloway-Briggs Renewables Inc., a corporation organized and existing under the laws of the State of Delaware ("CBR" or the "Company"). The Offering is expected to have a proposed aggregate offering size of approximately $600,000,000 (including shares issuable upon the exercise of the overallotment option granted to the Underwriters), and the Common Stock is expected to be listed for trading on the New York Stock Exchange under the ticker symbol "CBRI."

In connection with the Offering, CBR has prepared and caused to be filed with the Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-1 (SEC CIK No. 0001948372) that was initially confidentially submitted to the SEC on April 11, 2022. The Registration Statement was subsequently amended by Amendment No. 1, filed with the SEC on May 20, 2022 (EDGAR Accession No. 0001948372-22-000002), and by Amendment No. 2, filed with the SEC on June 10, 2022 (EDGAR Accession No. 0001948372-22-000003) (the Registration Statement, as so amended, and together with all exhibits thereto and all information deemed to be part thereof, is referred to herein as the "Registration Statement"). The prospectus forming a part of the Registration Statement, including any preliminary prospectus and any amendments or supplements thereto, is referred to herein as the "Prospectus."

We further refer to the draft Underwriting Agreement (the "Underwriting Agreement") among CBR, Pinnacle Vista Capital Partners III, LP, a Delaware limited partnership ("Pinnacle Vista"), as selling stockholder, and the several underwriters named therein, with HK&Co. acting as representative of the several Underwriters. Under the terms and conditions of the Underwriting Agreement, the delivery of one or more comfort letters from Ashford & Pemberton LLP ("A&P") is a condition precedent to the obligations of the Underwriters to consummate the purchase of Common Stock at the closing of the Offering.

We understand and acknowledge that A&P serves as the independent registered public accounting firm for CBR and that A&P has audited the consolidated financial statements of CBR and its consolidated subsidiaries for each of the three fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021, respectively, and has issued reports of independent registered public accounting firm thereon, which reports are included in the Registration Statement.

This letter constitutes the Underwriters' formal request that A&P deliver comfort letters (as more fully described below) to the Underwriters in connection with the Offering. This request is made pursuant to AU-C Section 920 (Letters for Underwriters and Certain Other Requesting Parties), formerly Statement on Auditing Standards No. 72 ("SAS 72"), and the related professional standards and interpretive guidance promulgated by the American Institute of Certified Public Accountants ("AICPA") and the Public Company Accounting Oversight Board (the "PCAOB").

II. Purpose of the Request

The Underwriters request that A&P deliver comfort letters to the Underwriters in connection with the Offering, as contemplated by the conditions to closing set forth in the Underwriting Agreement. The comfort letters are intended to assist the Underwriters in conducting a reasonable investigation of the financial information included in the Registration Statement and the Prospectus for purposes of establishing a due diligence defense under Section 11 of the Securities Act of 1933, as amended (the "Securities Act"). The comfort letters are not intended as a substitute for the Underwriters' own independent investigation or for the exercise of the Underwriters' own professional judgment, but rather are designed to provide the Underwriters with the benefit of A&P's professional expertise with respect to the financial and accounting information included in the Registration Statement.

In accordance with customary market practice for initial public offerings of this nature and as contemplated by the Underwriting Agreement, three separate comfort letter deliveries (commonly referred to as "circle-ups") are planned:

1. Initial Comfort Letter. The initial comfort letter is to be delivered on or about the date of the effectiveness of the Registration Statement (or, in the case of a transaction proceeding by means of a confidential submission, at such date prior to the launch of the Offering as may be agreed upon among the parties). The initial comfort letter will address all of the procedures and financial information described in this request letter as of its respective cut-off date.

2. Bring-Down Comfort Letter. The bring-down comfort letter is to be delivered on the pricing date of the Offering (i.e., the date on which the public offering price, the underwriting discount, and the number of shares to be sold are determined). The bring-down comfort letter will update the procedures and change-period coverage through a cut-off date applicable to such bring-down letter and will confirm, repeat, or update the statements, negative assurance, and other information contained in the initial comfort letter.

3. Pricing/Closing Comfort Letter. The pricing/closing comfort letter is to be delivered on the closing date of the Offering (i.e., the date on which the shares of Common Stock are delivered to the Underwriters against payment of the purchase price). The pricing/closing comfort letter will update the procedures and change-period coverage through a cut-off date applicable to such closing letter and will confirm, repeat, or update the statements, negative assurance, and other information contained in the prior comfort letters.

Each bring-down and closing letter should update the change-period coverage through the applicable cut-off date and repeat or update the negative assurance statements provided in connection with the prior circle-up. The three iterations described above (initial, bring-down, and pricing/closing) are planned per the working-group understanding established at the organizational meeting held on May 3, 2022. In the event that the Underwriters exercise the overallotment option and a separate closing date is established for the delivery of the additional shares, the Underwriters reserve the right to request an additional bring-down or closing comfort letter in connection with such overallotment closing, on terms consistent with this request.

III. Identification of Financial Statements and Financial Information

The following sets forth the financial statements, financial information, and other financial data included (or to be included) in the Registration Statement and the Prospectus with respect to which the Underwriters request that A&P provide comfort.

A. Audited Consolidated Financial Statements

The Registration Statement includes the following audited consolidated financial statements of CBR and its consolidated subsidiaries, together with A&P's reports of independent registered public accounting firm thereon (each such report expressing an unqualified opinion):

• Audited consolidated balance sheets of CBR as of December 31, 2019, December 31, 2020, and December 31, 2021.

• Audited consolidated statements of operations for each of the three fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021.

• Audited consolidated statements of comprehensive income (loss) for each of the three fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021.

• Audited consolidated statements of changes in stockholders' equity for each of the three fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021.

• Audited consolidated statements of cash flows for each of the three fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021.

• Notes to the audited consolidated financial statements.

For reference and to facilitate A&P's preparation of the comfort letter, the Underwriters note the following key audited financial data points as reported in the Registration Statement:

Fiscal Year Ended December 31, 2021:

Fiscal Year Ended December 31, 2020:

Fiscal Year Ended December 31, 2019:

B. Unaudited Interim Financial Information

The Registration Statement includes (or is expected to include at the time of effectiveness) the following unaudited condensed consolidated interim financial information:

• Unaudited condensed consolidated balance sheet of CBR as of March 31, 2022.

• Unaudited condensed consolidated statements of operations for the three months ended March 31, 2022 and March 31, 2021 (comparative).

• Unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2022 and March 31, 2021 (comparative).

For reference, the Underwriters note the following key figures for the three months ended March 31, 2022 (Q1 2022):

The Underwriters request that A&P confirm the extent to which it has performed a review of the unaudited condensed consolidated financial statements for Q1 2022 in accordance with AU-C Section 930 (Interim Financial Information), formerly Statement on Auditing Standards No. 100 ("SAS 100"), and, to the extent such review has been completed or limited procedures have been performed, that A&P provide the statements and negative assurance described in Section VI of this letter.

C. Financial Information Appearing Outside of the Financial Statements

In addition to the audited and unaudited financial statements described above, the Registration Statement and the Prospectus contain substantial financial information, numerical data, financial metrics, and related disclosures appearing in various sections of the Prospectus that are derived from, or based upon, the Company's accounting records, audited financial statements, or unaudited interim financial information. The Underwriters request that A&P's comfort procedures extend to such financial information, including but not limited to the following:

(i) Selected Financial Data Table. The Selected Financial Data table included in the Prospectus presents selected consolidated financial data for fiscal years 2019 through 2021 and for the interim period ended March 31, 2022.

(ii) Capitalization Table. The Capitalization table included in the Prospectus presents the capitalization of CBR on a historical basis and on a pro forma as adjusted basis giving effect to the Offering, reflecting, among other things: (a) pre-IPO shares outstanding of 100,000,000; (b) pro forma post-IPO shares outstanding (base offering, excluding overallotment) of 123,713,636; and (c) pro forma post-IPO shares outstanding (full exercise of overallotment) of 127,272,727, in each case based on an assumed initial public offering price of $22.00 per share (the midpoint of the estimated price range set forth on the cover page of the Prospectus).

(iii) Dilution Analysis. The Dilution section of the Prospectus presents the dilution in net tangible book value per share to new investors resulting from the Offering.

(iv) Non-GAAP Financial Measures. The Prospectus includes certain non-GAAP financial measures, including Adjusted EBITDA, together with a reconciliation of Adjusted EBITDA to GAAP net income (loss), as presented in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of the Prospectus.

(v) Prospectus Summary Financial Information. Financial information and financial data presented in the "Prospectus Summary" section of the Prospectus.

(vi) Business Section — Operating Capacity Data. Financial and operational information presented in the "Business" section of the Prospectus, including references to the Company's operating capacity of 3.8 GW of operating renewable energy generation capacity, 1.4 GW of capacity under construction, and 6.2 GW of development pipeline capacity.

(vii) Description of Indebtedness. Financial information and terms set forth in the "Description of Indebtedness" section of the Prospectus, including the following instruments:

• Corporate Revolving Credit Facility: $400 million aggregate commitment; maturity date January 2027.

• Term Loan B: $650 million original principal amount; $612.5 million outstanding; maturity date January 2029.

• Mesquite Wind Construction Facility: $165 million; conversion date December 2024.

• Cimarron Solar Construction Facility: $143 million; conversion date March 2025.

• Solaris West Tax-Equity Financing: $280 million; tax-equity flip date 2028.

(viii) Use of Proceeds. Financial information presented in the "Use of Proceeds" section of the Prospectus, including the planned allocation of net proceeds as follows: approximately $200 million for repayment of the Term Loan B; approximately $100 million for Cimarron Solar construction costs; and approximately $71.7 million for general corporate purposes.

(ix) Principal and Selling Stockholders Table. The "Principal and Selling Stockholders" table in the Prospectus, reflecting, among other things: Pinnacle Vista's ownership of approximately 62% of outstanding Common Stock prior to the Offering; founders' and management ownership of approximately 24%; other holders' ownership of approximately 14%; and Pinnacle Vista's sale of 6,818,182 shares in the Offering (representing approximately $150,000,000 at the assumed midpoint offering price of $22.00 per share).

(x) Equity Plan Information. Information regarding the Company's equity incentive plans, including the 2022 Omnibus Equity Incentive Plan (with a share reserve of 12,727,273 shares, representing 10% of 127,272,727 shares on a fully diluted pro forma basis) and the 2022 Employee Stock Purchase Plan (the "2022 ESPP") (with a share reserve of 2,545,455 shares, representing 2% of 127,272,727 shares on a fully diluted pro forma basis).

IV. Requested Procedures — Independence

The Underwriters request that the comfort letter include a statement by A&P confirming that A&P is an independent registered public accounting firm with respect to CBR within the meaning of the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the applicable rules and regulations adopted by the SEC and the PCAOB, including but not limited to Rule 2-01 of Regulation S-X and the independence standards of the PCAOB. Such confirmation should be made as of the date of each comfort letter delivered by A&P in connection with the Offering, and A&P should confirm that nothing has come to its attention that would cause A&P to believe that it was not independent with respect to CBR under the applicable standards during the audit periods covered by A&P's reports of independent registered public accounting firm or during the period from the end of the most recent audited fiscal year through the date of the comfort letter.

V. Requested Procedures — Audited Financial Statements

The Underwriters request that the comfort letter include the following with respect to the audited consolidated financial statements of CBR described in Section III.A above:

(a) A statement that the audited consolidated financial statements and the related reports of independent registered public accounting firm included in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the published rules and regulations of the SEC thereunder, including, without limitation, the requirements of Regulation S-X promulgated by the SEC.

(b) A statement that A&P's audits of the consolidated financial statements of CBR for the three fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021 were conducted in accordance with the standards of the PCAOB.

(c) A statement that A&P's reports of independent registered public accounting firm included in the Registration Statement express unqualified opinions on the consolidated financial statements for each of the three fiscal years in the audit period and that A&P has not withdrawn, modified, or qualified any such opinion subsequent to the date of such report.

The Underwriters note that the three-year audit period covering fiscal years 2019, 2020, and 2021 encompasses the full period required by the SEC's rules for Form S-1 registration statements.

VI. Requested Procedures — Unaudited Interim Financial Information

The Underwriters request that the comfort letter include the following with respect to the unaudited condensed consolidated interim financial information of CBR described in Section III.B above:

(a) A statement confirming that A&P has performed a review of the unaudited condensed consolidated financial statements for the three months ended March 31, 2022 (and the comparative period ended March 31, 2021) in accordance with AU-C Section 930 (Interim Financial Information), or, if such review has not been completed as of the date of the comfort letter, a description of the limited procedures that A&P has performed with respect to such interim financial information.

(b) Negative assurance to the effect that, based on such review or limited procedures (as applicable), nothing came to A&P's attention that caused A&P to believe that any material modifications should be made to the unaudited condensed consolidated interim financial information included in the Registration Statement for it to be in conformity with generally accepted accounting principles in the United States ("GAAP") applied on a basis substantially consistent with that of the audited consolidated financial statements for the fiscal year ended December 31, 2021.

(c) A statement confirming that the unaudited condensed consolidated interim financial information included in the Registration Statement complies as to form in all material respects with the applicable accounting requirements of Regulation S-X, specifically Article 10 thereof, as they relate to interim financial information.

The Underwriters understand that a review of interim financial information conducted in accordance with AU-C Section 930 is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole, and accordingly, no such opinion is expressed.

VII. Requested Procedures — Change Period

The Underwriters request that A&P perform the following procedures with respect to the period subsequent to the most recent financial statements included in the Registration Statement (the "change period"):

A. Change-Period Definition. For purposes of the initial comfort letter, the "change period" is defined as the period beginning on the later of (i) the most recent audited balance sheet date (December 31, 2021) or (ii) the end of the most recent interim period for which unaudited financial information is included in the Registration Statement (March 31, 2022), and extending through a "cut-off date" that is no more than five (5) business days prior to the date of the initial comfort letter. For purposes of the bring-down comfort letter and the pricing/closing comfort letter, the change period shall be extended through updated cut-off dates that are no more than five (5) business days prior to the respective delivery dates of such letters.

B. Specific Procedures. The Underwriters request that A&P perform the following procedures with respect to the change period:

(i) Reading of Unaudited Financial Statements. Reading of the unaudited consolidated financial statements of CBR (including any unaudited month-end balance sheets, income statements, and cash flow statements prepared by the Company's management in the ordinary course) for the period from April 1, 2022 through the applicable cut-off date.

(ii) Inquiries of Company Officials. Making inquiries of certain officials of CBR who are responsible for financial and accounting matters — specifically, Marcus Yoon, Chief Financial Officer, and Priya Anand, Senior Vice President, Finance & Treasurer — regarding, among other things, whether:

(a) There has been any change in the capital stock (including any issuance or authorization of additional shares, any stock split, stock dividend, or recapitalization) or any increase in long-term debt or decrease in stockholders' equity of CBR and its consolidated subsidiaries, taken as a whole, as compared to the amounts shown on the most recent balance sheet included in the Registration Statement (the condensed consolidated balance sheet as of March 31, 2022);

(b) There have been any decreases, as compared to the corresponding period of the prior year (the three months ended March 31, 2021 or other applicable comparable period), in any of the following: (1) consolidated revenue, (2) Adjusted EBITDA, or (3) consolidated net income;

(c) Any event or development has occurred, or any condition has arisen, that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the business, assets, financial condition, or results of operations of CBR and its consolidated subsidiaries, taken as a whole; and

(d) There have been any changes in accounting principles or practices, any reclassifications, or any changes in the application of accounting principles that would have a material effect on the consolidated financial statements of CBR.

(iii) Reading of Minutes. Reading of the minutes (or, if minutes have not yet been prepared, drafts of minutes or summaries of actions) of meetings of the Board of Directors of CBR and its standing committees (including the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee) and of the stockholders of CBR held subsequent to December 31, 2021 through the applicable cut-off date.

C. Negative Assurance. Based on the foregoing procedures (which do not constitute an audit conducted in accordance with the standards of the PCAOB), the Underwriters request that A&P provide negative assurance to the effect that nothing came to A&P's attention that caused A&P to believe that, during the change period and through the applicable cut-off date, there was any change in the capital stock, increase in long-term debt, or decrease in stockholders' equity of CBR and its consolidated subsidiaries, or any decrease in revenue, Adjusted EBITDA, or net income, in each case as compared to the comparable prior-year period or the most recent balance sheet included in the Registration Statement, as applicable, except in each case as described in the comfort letter or the Registration Statement.

VIII. Requested Procedures — Specific Financial Data (Tick-and-Tie)

The Underwriters request that A&P compare specific amounts, percentages, financial data, and other numerical information appearing in the Registration Statement (including the Prospectus and any amendments or supplements thereto) to the audited consolidated financial statements, the unaudited condensed consolidated interim financial information, and the underlying accounting records of CBR, and to confirm agreement therewith or the accuracy of the recalculation thereof. Without limiting the foregoing, the Underwriters specifically request that such comparison and confirmation procedures extend to the following items:

(a) Revenue, Adjusted EBITDA, and Net Income (Loss). Revenue, Adjusted EBITDA, and net income (loss) figures for each of the fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021, and for the three months ended March 31, 2022, wherever such amounts appear in the Prospectus, including in the Prospectus Summary, Selected Financial Data table, and Management's Discussion and Analysis of Financial Condition and Results of Operations.

(b) Total Assets and Total Debt. Total assets and total debt figures for each of the fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021, and as of March 31, 2022.

(c) Operating Capacity Figures. Operating capacity figures as disclosed in the Prospectus, including: 3.8 GW of operating capacity as of December 31, 2021; 2.9 GW of operating capacity as of December 31, 2020; and 2.1 GW of operating capacity as of December 31, 2019, to the extent that such figures are derived from or agreed to the Company's accounting records or other financial data within the scope of the comfort letter.

(d) Share Data. Pre-IPO shares of Common Stock outstanding (100,000,000 shares); pro forma post-IPO shares of Common Stock outstanding on a base offering basis (123,713,636 shares); and pro forma post-IPO shares of Common Stock outstanding assuming full exercise of the overallotment option (127,272,727 shares).

(e) Share and Per-Share Data. All share and per-share data appearing throughout the Prospectus, including earnings per share (basic and diluted), net tangible book value per share, and dilution per share to new investors, as presented in the Dilution section and elsewhere in the Prospectus.

(f) Capitalization Table Amounts. All line items and totals appearing in the Capitalization table in the Prospectus, on both a historical and pro forma as adjusted basis.

(g) Use of Proceeds Allocation. The allocation of estimated net proceeds set forth in the Use of Proceeds section, including: approximately $200 million designated for repayment of a portion of the outstanding Term Loan B; approximately $100 million designated for construction costs associated with the Cimarron Solar project; and approximately $71.7 million designated for general corporate purposes.

(h) Debt Balances and Terms. Debt balances, commitment amounts, outstanding principal balances, interest rates, maturity dates, and other terms as described in the Description of Indebtedness section of the Prospectus, including the instruments described in Section III.C(vii) above.

(i) Non-GAAP Reconciliation. The reconciliation of Adjusted EBITDA to GAAP net income (loss) as presented in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Prospectus, including the individual reconciling items and the totals thereof.

(j) Underwriting Economics. The underwriting discount and commission structure as presented in the "Underwriting" section of the Prospectus, including: the gross spread of 5.50% of the public offering price; the allocation of the gross spread (20% management fee, 20% underwriting fee, and 60% selling concession); and the total underwriting discount of $33,000,000 (based on the full exercise of the overallotment option at the assumed midpoint offering price of $22.00 per share).

(k) Implied Valuation Metrics. Implied valuation metrics to the extent appearing in the Prospectus, including: the implied pre-money equity valuation of approximately $2.2 billion; the implied post-money equity valuation of approximately $2.72 billion; and the implied enterprise value to Adjusted EBITDA multiple (EV/EBITDA) of approximately 19.4x.

(l) Employee Count. The employee count of approximately 1,240 employees as disclosed in the Prospectus, to the extent derived from or agreed to the Company's records.

(m) D&O Insurance. The directors' and officers' liability insurance tower aggregate of $50 million and annual premium of approximately $1.87 million, to the extent such information appears in the Registration Statement and is derived from or agreed to the Company's accounting records or underlying contracts.

(n) Equity Plan Share Reserves. The share reserve of 12,727,273 shares under the 2022 Omnibus Equity Incentive Plan and the share reserve of 2,545,455 shares under the 2022 Employee Stock Purchase Plan, as described in the Prospectus.

(o) Selling Stockholder Share Amounts. The number of shares of Common Stock to be sold by Pinnacle Vista in the Offering (6,818,182 shares), the aggregate dollar amount of such sale based on the assumed midpoint offering price ($150,000,000 at $22.00 per share), and the ownership percentages attributed to Pinnacle Vista and other stockholders in the Principal and Selling Stockholders table.

The Underwriters acknowledge that certain of the foregoing items (such as operating capacity figures and employee counts) may not be directly derived from the audited financial statements and that A&P's procedures with respect to such items may be limited to comparison with the Company's records and management representations, as appropriate under AU-C Section 920.

IX. Requested Procedures — Tables and Schedules

In addition to the tick-and-tie procedures described in Section VIII above, the Underwriters specifically request that A&P verify the numerical accuracy and internal consistency of the following tables and schedules included in the Prospectus:

(a) Selected Financial Data Table. Verification that all amounts presented in the Selected Financial Data table are accurately extracted from, or accurately computed based upon, the audited consolidated financial statements and unaudited condensed consolidated interim financial information, and that all percentages and period-over-period changes are accurately calculated.

(b) Capitalization Table. Verification that all historical amounts are accurately extracted from the Company's financial statements and accounting records, that all pro forma adjustments are accurately calculated, and that the table foots and cross-foots correctly.

(c) Dilution Table. Verification that the net tangible book value per share (on a historical and pro forma as adjusted basis), the increase in net tangible book value per share attributable to new investors, and the dilution per share to new investors are accurately calculated based on the underlying data.

(d) Principal and Selling Stockholders Table. Verification that the ownership percentages and share counts attributed to each listed stockholder are accurately calculated, both before and after giving effect to the Offering (on both a base offering and full exercise basis), and that such percentages and share counts are internally consistent within the table and consistent with the other disclosure in the Prospectus.

(e) Summary Financial Data. Verification that all financial data presented in the "Summary — Summary Financial Data" subsection of the Prospectus Summary are accurately extracted from or agreed to the audited consolidated financial statements, unaudited interim financial information, or the Company's accounting records.

(f) Underwriting Allocation Table. Verification of the underwriting allocation table (reflecting the allocation of shares among the Underwriters), including:

Verification that the allocation percentages, the corresponding share amounts, and the corresponding dollar amounts are accurately calculated and internally consistent, based on the number of shares offered and the assumed midpoint offering price.

X. Requested Procedures — Subsequent Events

The Underwriters request that A&P carry out procedures relating to events subsequent to the date of the latest balance sheet included in the Registration Statement (i.e., March 31, 2022) that may require disclosure in, or adjustment to, the consolidated financial statements in accordance with GAAP and the applicable requirements of the SEC's rules and regulations.

Specifically, the Underwriters request that A&P make inquiries of the management of CBR (including Marcus Yoon, CFO, and Priya Anand, SVP Finance & Treasurer) regarding the existence of any subsequent events, contingencies, or commitments that have arisen after March 31, 2022, including, without limitation:

(i) Any significant acquisitions, dispositions, or commitments involving the acquisition or disposition of material assets;

(ii) Any material litigation, claims, or assessments arising after the balance sheet date;

(iii) Any defaults or events of default under any of the Company's debt instruments or financing arrangements;

(iv) Any material changes in the Company's tax positions or any pending or threatened tax assessments;

(v) Any material impairment charges or write-downs of assets; and

(vi) Any other events or developments that, in accordance with GAAP, may require disclosure as subsequent events in the financial statements included in the Registration Statement.

The Underwriters acknowledge that the foregoing procedures do not constitute an audit and are limited to inquiries and the reading of minutes and other records as described herein and in Section VII above.

XI. Requested Procedures — HLBV Methodology and Tax-Equity Accounting

Given the focus of the SEC Staff's comment letters on the Company's accounting for its tax-equity financing arrangements, the Underwriters specifically request that A&P address the following matters in the comfort letter:

(a) Description of HLBV Methodology. Confirmation that the description of the Hypothetical-Liquidation-at-Book-Value ("HLBV") methodology used by the Company for accounting for the Solaris West tax-equity partnership with Veltara Basin Financial LLC, as presented in the critical accounting policies section of the Management's Discussion and Analysis and in the notes to the consolidated financial statements included in the Registration Statement, is consistent with A&P's understanding of the accounting methodology that the Company has applied in preparing its consolidated financial statements.

(b) Propriety and Consistency of the HLBV Approach. Confirmation that, based on A&P's audit of the Company's consolidated financial statements for the fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021, the Company's application of the HLBV methodology for the allocation of earnings and losses in the Solaris West tax-equity partnership is in conformity with GAAP, including the applicable provisions of ASC 810 (Consolidation) and ASC 323 (Investments — Equity Method and Joint Ventures), and that such methodology has been consistently applied during the periods covered by the audited financial statements.

(c) Tax-Equity Structure Disclosures. To the extent that the Prospectus contains descriptions of the economic terms and accounting treatment of the Solaris West tax-equity financing (including the $280 million commitment, the anticipated tax-equity flip date in 2028, and the allocation of investment tax credits and production tax credits), confirmation that such descriptions are consistent with A&P's understanding of the terms of the arrangement and the accounting treatment applied.

The Underwriters acknowledge that A&P's comfort on these matters is limited to matters within A&P's professional competence as independent auditors and that A&P is not being asked to opine on the legal characterization of the tax-equity structure or the availability of tax credits.

XII. Comfort Letter Delivery Schedule

The following table sets forth the three planned circle-ups, together with the applicable delivery occasions, approximate timing, and cut-off dates:

The specific dates for each delivery are to be determined based on the offering timeline and will be communicated to A&P as promptly as practicable once such dates are established. The exact dates have been left blank in this request letter due to the current dormant status of the offering process. Each bring-down letter should update the change-period coverage through the applicable updated cut-off date and should repeat or update the negative assurance and other statements contained in the prior comfort letter(s).

As noted in Section II above, three iterations (initial, bring-down, and pricing/closing) are planned per the working-group understanding established at the organizational meeting held on May 3, 2022. The Underwriters reserve the right to request additional circle-ups in the event of (i) any material amendment to the Registration Statement or Prospectus after the initial comfort letter is delivered, (ii) the exercise of the overallotment option with a separate closing date, or (iii) any other circumstance that, in the Underwriters' judgment, requires an updated comfort letter.

XIII. Scope and Addressees

A. Addressees. Each comfort letter delivered by A&P pursuant to this request should be addressed to the following parties:

• Hargrove Keating & Co., as Representative of the Several Underwriters

383 Madison Place New York, NY 10017

• Linden Pratt Securities LLC

• Graymont Brothers Inc.

• Barfield Stuart & Co.

• Crane Whitley Capital LLC

B. Copies. Copies of each comfort letter, and of each draft thereof, should be furnished to the following:

• Calderwood & Harkness LLP

599 Lexington Avenue New York, NY 10022

Attention: Jennifer Kwon, Brendan Walsh, Natasha Forbes

(Counsel to CBR)

• Prescott, Danforth & Yee LLP

1271 Avenue of the Americas New York, NY 10020

Attention: Margaret Yee, Scott Halverson

(Counsel to the Underwriters)

The Underwriters understand that the comfort letter is issued for the sole benefit of the addressees and that A&P assumes no responsibility to any third party that may obtain or review a copy of the comfort letter.

XIV. Form and Scope Limitations

The Underwriters acknowledge and agree that the following limitations and qualifications apply to the comfort letter and to the procedures described in this request:

(a) The comfort letter procedures are limited to those described in AU-C Section 920 (Letters for Underwriters and Certain Other Requesting Parties) and the related professional standards and interpretive guidance. The procedures do not constitute an audit or a review of any financial statements or financial information beyond what has been specifically identified in this request letter, and they do not encompass all procedures that might be necessary to identify every error or irregularity in the financial information included in the Registration Statement.

(b) The procedures described herein do not provide assurance that the Registration Statement or the Prospectus as a whole is complete or accurate, or that there are no misstatements in the Registration Statement or the Prospectus. Such assurance is beyond the scope of a comfort letter and is not within the professional competence of the independent auditor in the context of AU-C Section 920 procedures.

(c) The comfort letter should include customary language regarding the inherent limitations of the agreed-upon procedures and the negative assurance format, including a statement that the procedures would not necessarily reveal all matters of significance to the Underwriters and that the negative assurance provided is based solely on the limited procedures described in the comfort letter and does not extend to any financial information or any period not specifically covered by such procedures.

(d) The comfort letter is being requested solely for the benefit of the Underwriters in connection with their due diligence investigation under Section 11 of the Securities Act, and is not intended for any other purpose or to be relied upon by any other party. The comfort letter should not be filed as an exhibit to the Registration Statement or otherwise made publicly available, and the Underwriters agree not to distribute the comfort letter to any person other than the addressees and the parties designated to receive copies as set forth in Section XIII above without A&P's prior written consent.

The Underwriters acknowledge that A&P's willingness to deliver the comfort letter is subject to A&P's satisfaction that (i) the scope and form of the procedures described herein are consistent with the requirements and limitations of AU-C Section 920 and applicable professional standards, (ii) the engagement letter between A&P and CBR (and any additional engagement letter between A&P and the Underwriters) has been duly executed, and (iii) the Company has provided A&P with all management representations and access to records necessary for A&P to perform the requested procedures.

XV. Contact Information and Logistics

The following individuals should serve as the primary points of contact for all matters relating to the comfort letter process:

Underwriter Contacts:

Oliver Marchetti Managing Director, Equity Capital Markets Hargrove Keating & Co. 383 Madison Place New York, NY 10017

Daniel Furman Vice President, ECM Syndicate Hargrove Keating & Co. 383 Madison Place New York, NY 10017

Company Contacts:

Marcus Yoon, Chief Financial Officer Priya Anand, Senior Vice President, Finance & Treasurer Calloway-Briggs Renewables Inc. 4200 Ridgeline Parkway, Suite 1100 Austin, TX 78746

A&P Contacts:

Gregory Sondheim, Lead Engagement Partner, CPA Irene Valdez, Audit Manager, CPA Ashford & Pemberton LLP 30 Rockefeller Plaza, Suite 2800 New York, NY 10112

The Underwriters request that A&P coordinate directly with CBR management (specifically, Marcus Yoon and Priya Anand at the Company's principal offices in Austin, Texas) for access to the Company's financial records, accounting workpapers, internal financial statements, and management representations as may be necessary for A&P to perform the procedures described in this letter.

The Underwriters further request that drafts of each comfort letter (and any subsequent revisions thereof) be circulated to the following legal counsel for review and comment prior to finalization:

• Calderwood & Harkness LLP: Brendan Walsh and Natasha Forbes (counsel to CBR)

• Prescott, Danforth & Yee LLP: Scott Halverson and Anita Desmond (counsel to the Underwriters)

It is the expectation of the working group that a draft of the comfort letter will be prepared well in advance of the anticipated delivery date for the initial comfort letter, so as to allow sufficient time for review, comment, and resolution of any open issues.

XVI. Closing

We respectfully request A&P's prompt acknowledgment of receipt of this letter and confirmation of A&P's willingness to deliver the comfort letters on the terms and in accordance with the procedures described herein. In the event that A&P has any concerns, questions, or proposed modifications regarding the scope, form, or timing of the requested comfort letter, we ask that A&P communicate such matters promptly to the undersigned and to the legal counsel identified in Section XV above, so that any issues may be resolved in an efficient and timely manner prior to the delivery of the initial comfort letter.

We thank you in advance for your cooperation and attention to this matter.

Very truly yours,

HARGROVE KEATING & CO. As Representative of the Several Underwriters

By: ________

Name: Oliver Marchetti

Title: Managing Director, Equity Capital Markets

By: ________

Name: Daniel Furman

Title: Vice President, ECM Syndicate

DISTRIBUTION / REVIEW NOTATION

DRAFT — Reviewed and commented on by Calderwood & Harkness LLP (B. Walsh / N. Forbes) — C&H Matter No. 1015-00001

This draft was circulated for review by counsel in connection with the proposed initial public offering of common stock of Calloway-Briggs Renewables Inc. This draft was prepared prior to the offering being placed in dormant status on June 17, 2022. This document should be retained in the transaction files and updated in connection with any reactivation of the offering process.

Metric	Amount
Revenue	$487.3 million
Adjusted EBITDA	$218.6 million
Net Income	$41.7 million
Total Assets	$3.94 billion
Total Debt	$1.71 billion
Cash and Cash Equivalents (estimated)	$185.0 million
Metric	Amount
Revenue	$401.5 million
Adjusted EBITDA	$179.2 million
Net Income	$14.1 million
Total Assets	$3.18 billion
Total Debt	$1.52 billion
Metric	Amount
Revenue	$312.8 million
Adjusted EBITDA	$138.7 million
Net Loss	($22.4 million)
Total Assets	$2.61 billion
Total Debt	$1.28 billion
Metric	Amount
Revenue	$131.4 million
Adjusted EBITDA	$59.8 million
Net Income	$8.3 million
Total Assets	$4.07 billion
Total Debt	$1.74 billion

Underwriter	Allocation (%)	Shares (Base)	Shares (Full Exercise)
Hargrove Keating & Co.	40%	—	—
Linden Pratt Securities LLC	25%	—	—
Graymont Brothers Inc.	20%	—	—
Barfield Stuart & Co.	10%	—	—
Crane Whitley Capital LLC	5%	—	—
Circle-Up	Delivery Occasion	Approximate Timing	Cut-Off Date
1. Initial Comfort Letter	Effectiveness of Registration Statement / launch of the Offering	[●]	Five (5) business days prior to delivery
2. Bring-Down Comfort Letter	Pricing date of the Offering	[●]	Five (5) business days prior to delivery
3. Pricing/Closing Comfort Letter	Closing date of the Offering	[●]	Five (5) business days prior to delivery

DRAFT — Prepared for Review by Calderwood & Harkness LLP
HARGROVE KEATING & CO. 383 Madison Place New York, NY 10017
[●], 2022
Ashford & Pemberton LLP 30 Rockefeller Plaza, Suite 2800 New York, NY 10112
Attention: Gregory Sondheim, Lead Engagement Partner, CPA
Irene Valdez, Audit Manager, CPA
Re: Proposed Initial Public Offering of Common Stock of Calloway-Briggs Renewables Inc. — Request for Comfort Letter Pursuant to AU-C Section 920 (formerly SAS 72)
Dear Mr. Sondheim and Ms. Valdez:
I. Introduction and Background
Hargrove Keating & Co. ("HK&Co."), acting as representative of the several underwriters (including Linden Pratt Securities LLC, Graymont Brothers Inc., Barfield Stuart & Co., and Crane Whitley Capital LLC, collectively with HK&Co., the "Underwriters"), writes in connection with the proposed initial public offering (the "Offering") of shares of common stock, par value $0.01 per share (the "Common Stock"), of Calloway-Briggs Renewables Inc., a corporation organized and existing under the laws of the State of Delaware ("CBR" or the "Company"). The Offering is expected to have a proposed aggregate offering size of approximately $600,000,000 (including shares issuable upon the exercise of the overallotment option granted to the Underwriters), and the Common Stock is expected to be listed for trading on the New York Stock Exchange under the ticker symbol "CBRI."
In connection with the Offering, CBR has prepared and caused to be filed with the Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-1 (SEC CIK No. 0001948372) that was initially confidentially submitted to the SEC on April 11, 2022. The Registration Statement was subsequently amended by Amendment No. 1, filed with the SEC on May 20, 2022 (EDGAR Accession No. 0001948372-22-000002), and by Amendment No. 2, filed with the SEC on June 10, 2022 (EDGAR Accession No. 0001948372-22-000003) (the Registration Statement, as so amended, and together with all exhibits thereto and all information deemed to be part thereof, is referred to herein as the "Registration Statement"). The prospectus forming a part of the Registration Statement, including any preliminary prospectus and any amendments or supplements thereto, is referred to herein as the "Prospectus."
We further refer to the draft Underwriting Agreement (the "Underwriting Agreement") among CBR, Pinnacle Vista Capital Partners III, LP, a Delaware limited partnership ("Pinnacle Vista"), as selling stockholder, and the several underwriters named therein, with HK&Co. acting as representative of the several Underwriters. Under the terms and conditions of the Underwriting Agreement, the delivery of one or more comfort letters from Ashford & Pemberton LLP ("A&P") is a condition precedent to the obligations of the Underwriters to consummate the purchase of Common Stock at the closing of the Offering.
We understand and acknowledge that A&P serves as the independent registered public accounting firm for CBR and that A&P has audited the consolidated financial statements of CBR and its consolidated subsidiaries for each of the three fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021, respectively, and has issued reports of independent registered public accounting firm thereon, which reports are included in the Registration Statement.
This letter constitutes the Underwriters' formal request that A&P deliver comfort letters (as more fully described below) to the Underwriters in connection with the Offering. This request is made pursuant to AU-C Section 920 (Letters for Underwriters and Certain Other Requesting Parties), formerly Statement on Auditing Standards No. 72 ("SAS 72"), and the related professional standards and interpretive guidance promulgated by the American Institute of Certified Public Accountants ("AICPA") and the Public Company Accounting Oversight Board (the "PCAOB").
II. Purpose of the Request
The Underwriters request that A&P deliver comfort letters to the Underwriters in connection with the Offering, as contemplated by the conditions to closing set forth in the Underwriting Agreement. The comfort letters are intended to assist the Underwriters in conducting a reasonable investigation of the financial information included in the Registration Statement and the Prospectus for purposes of establishing a due diligence defense under Section 11 of the Securities Act of 1933, as amended (the "Securities Act"). The comfort letters are not intended as a substitute for the Underwriters' own independent investigation or for the exercise of the Underwriters' own professional judgment, but rather are designed to provide the Underwriters with the benefit of A&P's professional expertise with respect to the financial and accounting information included in the Registration Statement.
In accordance with customary market practice for initial public offerings of this nature and as contemplated by the Underwriting Agreement, three separate comfort letter deliveries (commonly referred to as "circle-ups") are planned:
1.  Initial Comfort Letter. The initial comfort letter is to be delivered on or about the date of the effectiveness of the Registration Statement (or, in the case of a transaction proceeding by means of a confidential submission, at such date prior to the launch of the Offering as may be agreed upon among the parties). The initial comfort letter will address all of the procedures and financial information described in this request letter as of its respective cut-off date.
2.  Bring-Down Comfort Letter. The bring-down comfort letter is to be delivered on the pricing date of the Offering (i.e., the date on which the public offering price, the underwriting discount, and the number of shares to be sold are determined). The bring-down comfort letter will update the procedures and change-period coverage through a cut-off date applicable to such bring-down letter and will confirm, repeat, or update the statements, negative assurance, and other information contained in the initial comfort letter.
3.  Pricing/Closing Comfort Letter. The pricing/closing comfort letter is to be delivered on the closing date of the Offering (i.e., the date on which the shares of Common Stock are delivered to the Underwriters against payment of the purchase price). The pricing/closing comfort letter will update the procedures and change-period coverage through a cut-off date applicable to such closing letter and will confirm, repeat, or update the statements, negative assurance, and other information contained in the prior comfort letters.
Each bring-down and closing letter should update the change-period coverage through the applicable cut-off date and repeat or update the negative assurance statements provided in connection with the prior circle-up. The three iterations described above (initial, bring-down, and pricing/closing) are planned per the working-group understanding established at the organizational meeting held on May 3, 2022. In the event that the Underwriters exercise the overallotment option and a separate closing date is established for the delivery of the additional shares, the Underwriters reserve the right to request an additional bring-down or closing comfort letter in connection with such overallotment closing, on terms consistent with this request.
III. Identification of Financial Statements and Financial Information
The following sets forth the financial statements, financial information, and other financial data included (or to be included) in the Registration Statement and the Prospectus with respect to which the Underwriters request that A&P provide comfort.
A. Audited Consolidated Financial Statements
The Registration Statement includes the following audited consolidated financial statements of CBR and its consolidated subsidiaries, together with A&P's reports of independent registered public accounting firm thereon (each such report expressing an unqualified opinion):
•  Audited consolidated balance sheets of CBR as of December 31, 2019, December 31, 2020, and December 31, 2021.
•  Audited consolidated statements of operations for each of the three fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021.
•  Audited consolidated statements of comprehensive income (loss) for each of the three fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021.
•  Audited consolidated statements of changes in stockholders' equity for each of the three fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021.
•  Audited consolidated statements of cash flows for each of the three fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021.
•  Notes to the audited consolidated financial statements.
For reference and to facilitate A&P's preparation of the comfort letter, the Underwriters note the following key audited financial data points as reported in the Registration Statement:
Fiscal Year Ended December 31, 2021:
Fiscal Year Ended December 31, 2020:
Fiscal Year Ended December 31, 2019:
B. Unaudited Interim Financial Information
The Registration Statement includes (or is expected to include at the time of effectiveness) the following unaudited condensed consolidated interim financial information:
•  Unaudited condensed consolidated balance sheet of CBR as of March 31, 2022.
•  Unaudited condensed consolidated statements of operations for the three months ended March 31, 2022 and March 31, 2021 (comparative).
•  Unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2022 and March 31, 2021 (comparative).
For reference, the Underwriters note the following key figures for the three months ended March 31, 2022 (Q1 2022):
The Underwriters request that A&P confirm the extent to which it has performed a review of the unaudited condensed consolidated financial statements for Q1 2022 in accordance with AU-C Section 930 (Interim Financial Information), formerly Statement on Auditing Standards No. 100 ("SAS 100"), and, to the extent such review has been completed or limited procedures have been performed, that A&P provide the statements and negative assurance described in Section VI of this letter.
C. Financial Information Appearing Outside of the Financial Statements
In addition to the audited and unaudited financial statements described above, the Registration Statement and the Prospectus contain substantial financial information, numerical data, financial metrics, and related disclosures appearing in various sections of the Prospectus that are derived from, or based upon, the Company's accounting records, audited financial statements, or unaudited interim financial information. The Underwriters request that A&P's comfort procedures extend to such financial information, including but not limited to the following:
(i) Selected Financial Data Table. The Selected Financial Data table included in the Prospectus presents selected consolidated financial data for fiscal years 2019 through 2021 and for the interim period ended March 31, 2022.
(ii) Capitalization Table. The Capitalization table included in the Prospectus presents the capitalization of CBR on a historical basis and on a pro forma as adjusted basis giving effect to the Offering, reflecting, among other things: (a) pre-IPO shares outstanding of 100,000,000; (b) pro forma post-IPO shares outstanding (base offering, excluding overallotment) of 123,713,636; and (c) pro forma post-IPO shares outstanding (full exercise of overallotment) of 127,272,727, in each case based on an assumed initial public offering price of $22.00 per share (the midpoint of the estimated price range set forth on the cover page of the Prospectus).
(iii) Dilution Analysis. The Dilution section of the Prospectus presents the dilution in net tangible book value per share to new investors resulting from the Offering.
(iv) Non-GAAP Financial Measures. The Prospectus includes certain non-GAAP financial measures, including Adjusted EBITDA, together with a reconciliation of Adjusted EBITDA to GAAP net income (loss), as presented in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of the Prospectus.
(v) Prospectus Summary Financial Information. Financial information and financial data presented in the "Prospectus Summary" section of the Prospectus.
(vi) Business Section — Operating Capacity Data. Financial and operational information presented in the "Business" section of the Prospectus, including references to the Company's operating capacity of 3.8 GW of operating renewable energy generation capacity, 1.4 GW of capacity under construction, and 6.2 GW of development pipeline capacity.
(vii) Description of Indebtedness. Financial information and terms set forth in the "Description of Indebtedness" section of the Prospectus, including the following instruments:
•  Corporate Revolving Credit Facility: $400 million aggregate commitment; maturity date January 2027.
•  Term Loan B: $650 million original principal amount; $612.5 million outstanding; maturity date January 2029.
•  Mesquite Wind Construction Facility: $165 million; conversion date December 2024.
•  Cimarron Solar Construction Facility: $143 million; conversion date March 2025.
•  Solaris West Tax-Equity Financing: $280 million; tax-equity flip date 2028.
(viii) Use of Proceeds. Financial information presented in the "Use of Proceeds" section of the Prospectus, including the planned allocation of net proceeds as follows: approximately $200 million for repayment of the Term Loan B; approximately $100 million for Cimarron Solar construction costs; and approximately $71.7 million for general corporate purposes.
(ix) Principal and Selling Stockholders Table. The "Principal and Selling Stockholders" table in the Prospectus, reflecting, among other things: Pinnacle Vista's ownership of approximately 62% of outstanding Common Stock prior to the Offering; founders' and management ownership of approximately 24%; other holders' ownership of approximately 14%; and Pinnacle Vista's sale of 6,818,182 shares in the Offering (representing approximately $150,000,000 at the assumed midpoint offering price of $22.00 per share).
(x) Equity Plan Information. Information regarding the Company's equity incentive plans, including the 2022 Omnibus Equity Incentive Plan (with a share reserve of 12,727,273 shares, representing 10% of 127,272,727 shares on a fully diluted pro forma basis) and the 2022 Employee Stock Purchase Plan (the "2022 ESPP") (with a share reserve of 2,545,455 shares, representing 2% of 127,272,727 shares on a fully diluted pro forma basis).
IV. Requested Procedures — Independence
The Underwriters request that the comfort letter include a statement by A&P confirming that A&P is an independent registered public accounting firm with respect to CBR within the meaning of the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the applicable rules and regulations adopted by the SEC and the PCAOB, including but not limited to Rule 2-01 of Regulation S-X and the independence standards of the PCAOB. Such confirmation should be made as of the date of each comfort letter delivered by A&P in connection with the Offering, and A&P should confirm that nothing has come to its attention that would cause A&P to believe that it was not independent with respect to CBR under the applicable standards during the audit periods covered by A&P's reports of independent registered public accounting firm or during the period from the end of the most recent audited fiscal year through the date of the comfort letter.
V. Requested Procedures — Audited Financial Statements
The Underwriters request that the comfort letter include the following with respect to the audited consolidated financial statements of CBR described in Section III.A above:
(a) A statement that the audited consolidated financial statements and the related reports of independent registered public accounting firm included in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the published rules and regulations of the SEC thereunder, including, without limitation, the requirements of Regulation S-X promulgated by the SEC.
(b) A statement that A&P's audits of the consolidated financial statements of CBR for the three fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021 were conducted in accordance with the standards of the PCAOB.
(c) A statement that A&P's reports of independent registered public accounting firm included in the Registration Statement express unqualified opinions on the consolidated financial statements for each of the three fiscal years in the audit period and that A&P has not withdrawn, modified, or qualified any such opinion subsequent to the date of such report.
The Underwriters note that the three-year audit period covering fiscal years 2019, 2020, and 2021 encompasses the full period required by the SEC's rules for Form S-1 registration statements.
VI. Requested Procedures — Unaudited Interim Financial Information
The Underwriters request that the comfort letter include the following with respect to the unaudited condensed consolidated interim financial information of CBR described in Section III.B above:
(a) A statement confirming that A&P has performed a review of the unaudited condensed consolidated financial statements for the three months ended March 31, 2022 (and the comparative period ended March 31, 2021) in accordance with AU-C Section 930 (Interim Financial Information), or, if such review has not been completed as of the date of the comfort letter, a description of the limited procedures that A&P has performed with respect to such interim financial information.
(b) Negative assurance to the effect that, based on such review or limited procedures (as applicable), nothing came to A&P's attention that caused A&P to believe that any material modifications should be made to the unaudited condensed consolidated interim financial information included in the Registration Statement for it to be in conformity with generally accepted accounting principles in the United States ("GAAP") applied on a basis substantially consistent with that of the audited consolidated financial statements for the fiscal year ended December 31, 2021.
(c) A statement confirming that the unaudited condensed consolidated interim financial information included in the Registration Statement complies as to form in all material respects with the applicable accounting requirements of Regulation S-X, specifically Article 10 thereof, as they relate to interim financial information.
The Underwriters understand that a review of interim financial information conducted in accordance with AU-C Section 930 is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole, and accordingly, no such opinion is expressed.
VII. Requested Procedures — Change Period
The Underwriters request that A&P perform the following procedures with respect to the period subsequent to the most recent financial statements included in the Registration Statement (the "change period"):
A. Change-Period Definition. For purposes of the initial comfort letter, the "change period" is defined as the period beginning on the later of (i) the most recent audited balance sheet date (December 31, 2021) or (ii) the end of the most recent interim period for which unaudited financial information is included in the Registration Statement (March 31, 2022), and extending through a "cut-off date" that is no more than five (5) business days prior to the date of the initial comfort letter. For purposes of the bring-down comfort letter and the pricing/closing comfort letter, the change period shall be extended through updated cut-off dates that are no more than five (5) business days prior to the respective delivery dates of such letters.
B. Specific Procedures. The Underwriters request that A&P perform the following procedures with respect to the change period:
(i) Reading of Unaudited Financial Statements. Reading of the unaudited consolidated financial statements of CBR (including any unaudited month-end balance sheets, income statements, and cash flow statements prepared by the Company's management in the ordinary course) for the period from April 1, 2022 through the applicable cut-off date.
(ii) Inquiries of Company Officials. Making inquiries of certain officials of CBR who are responsible for financial and accounting matters — specifically, Marcus Yoon, Chief Financial Officer, and Priya Anand, Senior Vice President, Finance & Treasurer — regarding, among other things, whether:
(a) There has been any change in the capital stock (including any issuance or authorization of additional shares, any stock split, stock dividend, or recapitalization) or any increase in long-term debt or decrease in stockholders' equity of CBR and its consolidated subsidiaries, taken as a whole, as compared to the amounts shown on the most recent balance sheet included in the Registration Statement (the condensed consolidated balance sheet as of March 31, 2022);
(b) There have been any decreases, as compared to the corresponding period of the prior year (the three months ended March 31, 2021 or other applicable comparable period), in any of the following: (1) consolidated revenue, (2) Adjusted EBITDA, or (3) consolidated net income;
(c) Any event or development has occurred, or any condition has arisen, that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the business, assets, financial condition, or results of operations of CBR and its consolidated subsidiaries, taken as a whole; and
(d) There have been any changes in accounting principles or practices, any reclassifications, or any changes in the application of accounting principles that would have a material effect on the consolidated financial statements of CBR.
(iii) Reading of Minutes. Reading of the minutes (or, if minutes have not yet been prepared, drafts of minutes or summaries of actions) of meetings of the Board of Directors of CBR and its standing committees (including the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee) and of the stockholders of CBR held subsequent to December 31, 2021 through the applicable cut-off date.
C. Negative Assurance. Based on the foregoing procedures (which do not constitute an audit conducted in accordance with the standards of the PCAOB), the Underwriters request that A&P provide negative assurance to the effect that nothing came to A&P's attention that caused A&P to believe that, during the change period and through the applicable cut-off date, there was any change in the capital stock, increase in long-term debt, or decrease in stockholders' equity of CBR and its consolidated subsidiaries, or any decrease in revenue, Adjusted EBITDA, or net income, in each case as compared to the comparable prior-year period or the most recent balance sheet included in the Registration Statement, as applicable, except in each case as described in the comfort letter or the Registration Statement.
VIII. Requested Procedures — Specific Financial Data (Tick-and-Tie)
The Underwriters request that A&P compare specific amounts, percentages, financial data, and other numerical information appearing in the Registration Statement (including the Prospectus and any amendments or supplements thereto) to the audited consolidated financial statements, the unaudited condensed consolidated interim financial information, and the underlying accounting records of CBR, and to confirm agreement therewith or the accuracy of the recalculation thereof. Without limiting the foregoing, the Underwriters specifically request that such comparison and confirmation procedures extend to the following items:
(a) Revenue, Adjusted EBITDA, and Net Income (Loss). Revenue, Adjusted EBITDA, and net income (loss) figures for each of the fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021, and for the three months ended March 31, 2022, wherever such amounts appear in the Prospectus, including in the Prospectus Summary, Selected Financial Data table, and Management's Discussion and Analysis of Financial Condition and Results of Operations.
(b) Total Assets and Total Debt. Total assets and total debt figures for each of the fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021, and as of March 31, 2022.
(c) Operating Capacity Figures. Operating capacity figures as disclosed in the Prospectus, including: 3.8 GW of operating capacity as of December 31, 2021; 2.9 GW of operating capacity as of December 31, 2020; and 2.1 GW of operating capacity as of December 31, 2019, to the extent that such figures are derived from or agreed to the Company's accounting records or other financial data within the scope of the comfort letter.
(d) Share Data. Pre-IPO shares of Common Stock outstanding (100,000,000 shares); pro forma post-IPO shares of Common Stock outstanding on a base offering basis (123,713,636 shares); and pro forma post-IPO shares of Common Stock outstanding assuming full exercise of the overallotment option (127,272,727 shares).
(e) Share and Per-Share Data. All share and per-share data appearing throughout the Prospectus, including earnings per share (basic and diluted), net tangible book value per share, and dilution per share to new investors, as presented in the Dilution section and elsewhere in the Prospectus.
(f) Capitalization Table Amounts. All line items and totals appearing in the Capitalization table in the Prospectus, on both a historical and pro forma as adjusted basis.
(g) Use of Proceeds Allocation. The allocation of estimated net proceeds set forth in the Use of Proceeds section, including: approximately $200 million designated for repayment of a portion of the outstanding Term Loan B; approximately $100 million designated for construction costs associated with the Cimarron Solar project; and approximately $71.7 million designated for general corporate purposes.
(h) Debt Balances and Terms. Debt balances, commitment amounts, outstanding principal balances, interest rates, maturity dates, and other terms as described in the Description of Indebtedness section of the Prospectus, including the instruments described in Section III.C(vii) above.
(i) Non-GAAP Reconciliation. The reconciliation of Adjusted EBITDA to GAAP net income (loss) as presented in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Prospectus, including the individual reconciling items and the totals thereof.
(j) Underwriting Economics. The underwriting discount and commission structure as presented in the "Underwriting" section of the Prospectus, including: the gross spread of 5.50% of the public offering price; the allocation of the gross spread (20% management fee, 20% underwriting fee, and 60% selling concession); and the total underwriting discount of $33,000,000 (based on the full exercise of the overallotment option at the assumed midpoint offering price of $22.00 per share).
(k) Implied Valuation Metrics. Implied valuation metrics to the extent appearing in the Prospectus, including: the implied pre-money equity valuation of approximately $2.2 billion; the implied post-money equity valuation of approximately $2.72 billion; and the implied enterprise value to Adjusted EBITDA multiple (EV/EBITDA) of approximately 19.4x.
(l) Employee Count. The employee count of approximately 1,240 employees as disclosed in the Prospectus, to the extent derived from or agreed to the Company's records.
(m) D&O Insurance. The directors' and officers' liability insurance tower aggregate of $50 million and annual premium of approximately $1.87 million, to the extent such information appears in the Registration Statement and is derived from or agreed to the Company's accounting records or underlying contracts.
(n) Equity Plan Share Reserves. The share reserve of 12,727,273 shares under the 2022 Omnibus Equity Incentive Plan and the share reserve of 2,545,455 shares under the 2022 Employee Stock Purchase Plan, as described in the Prospectus.
(o) Selling Stockholder Share Amounts. The number of shares of Common Stock to be sold by Pinnacle Vista in the Offering (6,818,182 shares), the aggregate dollar amount of such sale based on the assumed midpoint offering price ($150,000,000 at $22.00 per share), and the ownership percentages attributed to Pinnacle Vista and other stockholders in the Principal and Selling Stockholders table.
The Underwriters acknowledge that certain of the foregoing items (such as operating capacity figures and employee counts) may not be directly derived from the audited financial statements and that A&P's procedures with respect to such items may be limited to comparison with the Company's records and management representations, as appropriate under AU-C Section 920.
IX. Requested Procedures — Tables and Schedules
In addition to the tick-and-tie procedures described in Section VIII above, the Underwriters specifically request that A&P verify the numerical accuracy and internal consistency of the following tables and schedules included in the Prospectus:
(a) Selected Financial Data Table. Verification that all amounts presented in the Selected Financial Data table are accurately extracted from, or accurately computed based upon, the audited consolidated financial statements and unaudited condensed consolidated interim financial information, and that all percentages and period-over-period changes are accurately calculated.
(b) Capitalization Table. Verification that all historical amounts are accurately extracted from the Company's financial statements and accounting records, that all pro forma adjustments are accurately calculated, and that the table foots and cross-foots correctly.
(c) Dilution Table. Verification that the net tangible book value per share (on a historical and pro forma as adjusted basis), the increase in net tangible book value per share attributable to new investors, and the dilution per share to new investors are accurately calculated based on the underlying data.
(d) Principal and Selling Stockholders Table. Verification that the ownership percentages and share counts attributed to each listed stockholder are accurately calculated, both before and after giving effect to the Offering (on both a base offering and full exercise basis), and that such percentages and share counts are internally consistent within the table and consistent with the other disclosure in the Prospectus.
(e) Summary Financial Data. Verification that all financial data presented in the "Summary — Summary Financial Data" subsection of the Prospectus Summary are accurately extracted from or agreed to the audited consolidated financial statements, unaudited interim financial information, or the Company's accounting records.
(f) Underwriting Allocation Table. Verification of the underwriting allocation table (reflecting the allocation of shares among the Underwriters), including:
Verification that the allocation percentages, the corresponding share amounts, and the corresponding dollar amounts are accurately calculated and internally consistent, based on the number of shares offered and the assumed midpoint offering price.
X. Requested Procedures — Subsequent Events
The Underwriters request that A&P carry out procedures relating to events subsequent to the date of the latest balance sheet included in the Registration Statement (i.e., March 31, 2022) that may require disclosure in, or adjustment to, the consolidated financial statements in accordance with GAAP and the applicable requirements of the SEC's rules and regulations.
Specifically, the Underwriters request that A&P make inquiries of the management of CBR (including Marcus Yoon, CFO, and Priya Anand, SVP Finance & Treasurer) regarding the existence of any subsequent events, contingencies, or commitments that have arisen after March 31, 2022, including, without limitation:
(i) Any significant acquisitions, dispositions, or commitments involving the acquisition or disposition of material assets;
(ii) Any material litigation, claims, or assessments arising after the balance sheet date;
(iii) Any defaults or events of default under any of the Company's debt instruments or financing arrangements;
(iv) Any material changes in the Company's tax positions or any pending or threatened tax assessments;
(v) Any material impairment charges or write-downs of assets; and
(vi) Any other events or developments that, in accordance with GAAP, may require disclosure as subsequent events in the financial statements included in the Registration Statement.
The Underwriters acknowledge that the foregoing procedures do not constitute an audit and are limited to inquiries and the reading of minutes and other records as described herein and in Section VII above.
XI. Requested Procedures — HLBV Methodology and Tax-Equity Accounting
Given the focus of the SEC Staff's comment letters on the Company's accounting for its tax-equity financing arrangements, the Underwriters specifically request that A&P address the following matters in the comfort letter:
(a) Description of HLBV Methodology. Confirmation that the description of the Hypothetical-Liquidation-at-Book-Value ("HLBV") methodology used by the Company for accounting for the Solaris West tax-equity partnership with Veltara Basin Financial LLC, as presented in the critical accounting policies section of the Management's Discussion and Analysis and in the notes to the consolidated financial statements included in the Registration Statement, is consistent with A&P's understanding of the accounting methodology that the Company has applied in preparing its consolidated financial statements.
(b) Propriety and Consistency of the HLBV Approach. Confirmation that, based on A&P's audit of the Company's consolidated financial statements for the fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021, the Company's application of the HLBV methodology for the allocation of earnings and losses in the Solaris West tax-equity partnership is in conformity with GAAP, including the applicable provisions of ASC 810 (Consolidation) and ASC 323 (Investments — Equity Method and Joint Ventures), and that such methodology has been consistently applied during the periods covered by the audited financial statements.
(c) Tax-Equity Structure Disclosures. To the extent that the Prospectus contains descriptions of the economic terms and accounting treatment of the Solaris West tax-equity financing (including the $280 million commitment, the anticipated tax-equity flip date in 2028, and the allocation of investment tax credits and production tax credits), confirmation that such descriptions are consistent with A&P's understanding of the terms of the arrangement and the accounting treatment applied.
The Underwriters acknowledge that A&P's comfort on these matters is limited to matters within A&P's professional competence as independent auditors and that A&P is not being asked to opine on the legal characterization of the tax-equity structure or the availability of tax credits.
XII. Comfort Letter Delivery Schedule
The following table sets forth the three planned circle-ups, together with the applicable delivery occasions, approximate timing, and cut-off dates:
The specific dates for each delivery are to be determined based on the offering timeline and will be communicated to A&P as promptly as practicable once such dates are established. The exact dates have been left blank in this request letter due to the current dormant status of the offering process. Each bring-down letter should update the change-period coverage through the applicable updated cut-off date and should repeat or update the negative assurance and other statements contained in the prior comfort letter(s).
As noted in Section II above, three iterations (initial, bring-down, and pricing/closing) are planned per the working-group understanding established at the organizational meeting held on May 3, 2022. The Underwriters reserve the right to request additional circle-ups in the event of (i) any material amendment to the Registration Statement or Prospectus after the initial comfort letter is delivered, (ii) the exercise of the overallotment option with a separate closing date, or (iii) any other circumstance that, in the Underwriters' judgment, requires an updated comfort letter.
XIII. Scope and Addressees
A. Addressees. Each comfort letter delivered by A&P pursuant to this request should be addressed to the following parties:
•  Hargrove Keating & Co., as Representative of the Several Underwriters
383 Madison Place New York, NY 10017
•  Linden Pratt Securities LLC
•  Graymont Brothers Inc.
•  Barfield Stuart & Co.
•  Crane Whitley Capital LLC
B. Copies. Copies of each comfort letter, and of each draft thereof, should be furnished to the following:
•  Calderwood & Harkness LLP
599 Lexington Avenue New York, NY 10022
Attention: Jennifer Kwon, Brendan Walsh, Natasha Forbes
(Counsel to CBR)
•  Prescott, Danforth & Yee LLP
1271 Avenue of the Americas New York, NY 10020
Attention: Margaret Yee, Scott Halverson
(Counsel to the Underwriters)
The Underwriters understand that the comfort letter is issued for the sole benefit of the addressees and that A&P assumes no responsibility to any third party that may obtain or review a copy of the comfort letter.
XIV. Form and Scope Limitations
The Underwriters acknowledge and agree that the following limitations and qualifications apply to the comfort letter and to the procedures described in this request:
(a) The comfort letter procedures are limited to those described in AU-C Section 920 (Letters for Underwriters and Certain Other Requesting Parties) and the related professional standards and interpretive guidance. The procedures do not constitute an audit or a review of any financial statements or financial information beyond what has been specifically identified in this request letter, and they do not encompass all procedures that might be necessary to identify every error or irregularity in the financial information included in the Registration Statement.
(b) The procedures described herein do not provide assurance that the Registration Statement or the Prospectus as a whole is complete or accurate, or that there are no misstatements in the Registration Statement or the Prospectus. Such assurance is beyond the scope of a comfort letter and is not within the professional competence of the independent auditor in the context of AU-C Section 920 procedures.
(c) The comfort letter should include customary language regarding the inherent limitations of the agreed-upon procedures and the negative assurance format, including a statement that the procedures would not necessarily reveal all matters of significance to the Underwriters and that the negative assurance provided is based solely on the limited procedures described in the comfort letter and does not extend to any financial information or any period not specifically covered by such procedures.
(d) The comfort letter is being requested solely for the benefit of the Underwriters in connection with their due diligence investigation under Section 11 of the Securities Act, and is not intended for any other purpose or to be relied upon by any other party. The comfort letter should not be filed as an exhibit to the Registration Statement or otherwise made publicly available, and the Underwriters agree not to distribute the comfort letter to any person other than the addressees and the parties designated to receive copies as set forth in Section XIII above without A&P's prior written consent.
The Underwriters acknowledge that A&P's willingness to deliver the comfort letter is subject to A&P's satisfaction that (i) the scope and form of the procedures described herein are consistent with the requirements and limitations of AU-C Section 920 and applicable professional standards, (ii) the engagement letter between A&P and CBR (and any additional engagement letter between A&P and the Underwriters) has been duly executed, and (iii) the Company has provided A&P with all management representations and access to records necessary for A&P to perform the requested procedures.
XV. Contact Information and Logistics
The following individuals should serve as the primary points of contact for all matters relating to the comfort letter process:
Underwriter Contacts:
Oliver Marchetti Managing Director, Equity Capital Markets Hargrove Keating & Co. 383 Madison Place New York, NY 10017
Daniel Furman Vice President, ECM Syndicate Hargrove Keating & Co. 383 Madison Place New York, NY 10017
Company Contacts:
Marcus Yoon, Chief Financial Officer Priya Anand, Senior Vice President, Finance & Treasurer Calloway-Briggs Renewables Inc. 4200 Ridgeline Parkway, Suite 1100 Austin, TX 78746
A&P Contacts:
Gregory Sondheim, Lead Engagement Partner, CPA Irene Valdez, Audit Manager, CPA Ashford & Pemberton LLP 30 Rockefeller Plaza, Suite 2800 New York, NY 10112
The Underwriters request that A&P coordinate directly with CBR management (specifically, Marcus Yoon and Priya Anand at the Company's principal offices in Austin, Texas) for access to the Company's financial records, accounting workpapers, internal financial statements, and management representations as may be necessary for A&P to perform the procedures described in this letter.
The Underwriters further request that drafts of each comfort letter (and any subsequent revisions thereof) be circulated to the following legal counsel for review and comment prior to finalization:
•  Calderwood & Harkness LLP: Brendan Walsh and Natasha Forbes (counsel to CBR)
•  Prescott, Danforth & Yee LLP: Scott Halverson and Anita Desmond (counsel to the Underwriters)
It is the expectation of the working group that a draft of the comfort letter will be prepared well in advance of the anticipated delivery date for the initial comfort letter, so as to allow sufficient time for review, comment, and resolution of any open issues.
XVI. Closing
We respectfully request A&P's prompt acknowledgment of receipt of this letter and confirmation of A&P's willingness to deliver the comfort letters on the terms and in accordance with the procedures described herein. In the event that A&P has any concerns, questions, or proposed modifications regarding the scope, form, or timing of the requested comfort letter, we ask that A&P communicate such matters promptly to the undersigned and to the legal counsel identified in Section XV above, so that any issues may be resolved in an efficient and timely manner prior to the delivery of the initial comfort letter.
We thank you in advance for your cooperation and attention to this matter.
Very truly yours,
HARGROVE KEATING & CO. As Representative of the Several Underwriters
By: ________
Name: Oliver Marchetti
Title: Managing Director, Equity Capital Markets
By: ________
Name: Daniel Furman
Title: Vice President, ECM Syndicate
DISTRIBUTION / REVIEW NOTATION
DRAFT — Reviewed and commented on by Calderwood & Harkness LLP (B. Walsh / N. Forbes) — C&H Matter No. 1015-00001
This draft was circulated for review by counsel in connection with the proposed initial public offering of common stock of Calloway-Briggs Renewables Inc. This draft was prepared prior to the offering being placed in dormant status on June 17, 2022. This document should be retained in the transaction files and updated in connection with any reactivation of the offering process.
Metric | Amount
Revenue | $487.3 million
Adjusted EBITDA | $218.6 million
Net Income | $41.7 million
Total Assets | $3.94 billion
Total Debt | $1.71 billion
Cash and Cash Equivalents (estimated) | $185.0 million
Metric | Amount
Revenue | $401.5 million
Adjusted EBITDA | $179.2 million
Net Income | $14.1 million
Total Assets | $3.18 billion
Total Debt | $1.52 billion
Metric | Amount
Revenue | $312.8 million
Adjusted EBITDA | $138.7 million
Net Loss | ($22.4 million)
Total Assets | $2.61 billion
Total Debt | $1.28 billion
Metric | Amount
Revenue | $131.4 million
Adjusted EBITDA | $59.8 million
Net Income | $8.3 million
Total Assets | $4.07 billion
Total Debt | $1.74 billion
Underwriter | Allocation (%) | Shares (Base) | Shares (Full Exercise)
Hargrove Keating & Co. | 40% | — | —
Linden Pratt Securities LLC | 25% | — | —
Graymont Brothers Inc. | 20% | — | —
Barfield Stuart & Co. | 10% | — | —
Crane Whitley Capital LLC | 5% | — | —
Circle-Up | Delivery Occasion | Approximate Timing | Cut-Off Date
1. Initial Comfort Letter | Effectiveness of Registration Statement / launch of the Offering | [●] | Five (5) business days prior to delivery
2. Bring-Down Comfort Letter | Pricing date of the Offering | [●] | Five (5) business days prior to delivery
3. Pricing/Closing Comfort Letter | Closing date of the Offering | [●] | Five (5) business days prior to delivery

DRAFT — Prepared for Review by Calderwood & Harkness LLP

DISTRIBUTION / REVIEW NOTATION

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