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

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DRAFT — FOR DISCUSSION PURPOSES ONLY

June 8, 2022

ASHFORD & PEMBERTON LLP Certified Public Accountants 30 Rockefeller Plaza, Suite 2800 New York, NY 10112

The Representatives of the Several Underwriters named in the Underwriting Agreement (as defined below) c/o Hargrove Keating & Co. (as Lead-Left Book-Running Manager and Representative) 383 Madison Place New York, NY 10017

Attention: Oliver Marchetti, Managing Director, Equity Capital Markets

Re: Proposed Initial Public Offering of Common Stock of Calloway-Briggs Renewables Inc. — Initial Comfort Letter

Ladies and Gentlemen:

I. INTRODUCTORY PARAGRAPH

A. Identification of the Registration Statement

We have been requested to furnish this letter (the "Initial Comfort Letter") 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 Delaware corporation (the "Company"), with an aggregate offering size of approximately $600,000,000. The Common Stock is proposed to be listed on the New York Stock Exchange under the proposed ticker symbol "CBRI."

We refer to the Draft Registration Statement on Form S-1 (File No. 333-[__]) (the "Registration Statement") of the Company, initially confidentially submitted to the Securities and Exchange Commission (the "SEC" or the "Commission") on April 11, 2022 (EDGAR Accession No. 0001948372-22-000001) (the "DRS-1"), as amended by Amendment No. 1 to the Registration Statement filed with the Commission on May 20, 2022 (EDGAR Accession No. 0001948372-22-000002) ("Amendment No. 1"), and Amendment No. 2 to the Registration Statement filed with the Commission on June 10, 2022 (EDGAR Accession No. 0001948372-22-000003) ("Amendment No. 2," and together with the DRS-1 and Amendment No. 1, the "Registration Statement"). The Company's SEC Central Index Key (CIK) number is 0001948372. The Registration Statement includes a Prospectus (the "Prospectus") forming Part I thereof. Unless otherwise indicated, all references in this letter to the Registration Statement and the Prospectus are to the Registration Statement and Prospectus as amended through and including Amendment No. 2.

B. Identification of the Underwriting Agreement

We also refer to the Underwriting Agreement, in near-final draft form dated as of June 6, 2022 (the "Underwriting Agreement"), among the Company, Pinnacle Vista Capital Partners III, LP, a Delaware limited partnership (as selling stockholder) (the "Selling Stockholder"), and the several underwriters named therein (collectively, the "Underwriters"), for whom Hargrove Keating & Co. is acting as lead-left book-running manager and representative of the Underwriters (the "Representative"). The joint book-running managers for the Offering are Hargrove Keating & Co., Linden Pratt Securities LLC, and Graymont Brothers Inc. Barfield Stuart & Co. and Crane Whitley Capital LLC are acting as co-managers for the Offering.

C. Purpose and Professional Standards

This letter is furnished pursuant to Section [__] of the Underwriting Agreement and in accordance with the guidance set forth in AU-C Section 920, Letters for Underwriters and Certain Other Requesting Parties (which codified and superseded Statement on Auditing Standards ("SAS") No. 72, Letters for Underwriters and Certain Other Requesting Parties, as subsequently amended by SAS No. 76, Amendment to Statement on Auditing Standards No. 72, Letters for Underwriters and Certain Other Requesting Parties, and SAS No. 86, Amendment to Statement on Auditing Standards No. 72, Letters for Underwriters and Certain Other Requesting Parties) (collectively, "AU-C 920").

This letter is solely for the use of the addressees — namely, the several underwriters named in the Underwriting Agreement — in connection with the proposed Offering and in conducting and documenting their investigation of the affairs of the Company in connection therewith. This letter is not to be used, circulated, quoted, or otherwise referred to for any other purpose, nor is it to be filed with the SEC or any other regulatory body, except as expressly provided in Section X hereof.

This letter constitutes the initial comfort letter (circle-up 1 of 3 planned iterations). We expect to furnish two additional comfort letters in connection with the Offering: (i) a bring-down comfort letter at or near the pricing date and (ii) a second bring-down comfort letter at or near the closing date, in each case updating the cut-off date, repeating the procedures described herein through a more recent date, and addressing any changes in the Registration Statement since the date of this letter, all as more fully described in Section X below.

DRAFT — FOR DISCUSSION PURPOSES ONLY

II. INDEPENDENCE

A. Independence Statement

We are an independent registered public accounting firm with respect to the Company within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and the applicable rules and regulations thereunder adopted by the Commission, and within the meaning of Rule 3520, Auditor Independence, and related independence rules and standards of the Public Company Accounting Oversight Board (the "PCAOB"). We confirm that we have been the Company's independent auditor for each of the fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021 (collectively, "FY 2019," "FY 2020," and "FY 2021," respectively), and we continue to be independent with respect to the Company as of the date of this letter. In making this determination, we have considered all professional relationships between our firm and the Company and its affiliates, including Pinnacle Vista Capital Partners III, LP and its portfolio companies, and have concluded that no such relationships impair our independence under the applicable standards.

DRAFT — FOR DISCUSSION PURPOSES ONLY

III. AUDITED FINANCIAL STATEMENTS

A. Identification of Financial Statements Audited

We have audited the consolidated financial statements of Calloway-Briggs Renewables Inc. and its subsidiaries (collectively, the "Consolidated Entities"), consisting of:

(i) the consolidated balance sheets as of December 31, 2019, December 31, 2020, and December 31, 2021;

(ii) the consolidated statements of operations for each of the three fiscal years in the period ended December 31, 2021;

(iii) the consolidated statements of comprehensive income (loss) for each of the three fiscal years in the period ended December 31, 2021;

(iv) the consolidated statements of changes in stockholders' equity for each of the three fiscal years in the period ended December 31, 2021;

(v) the consolidated statements of cash flows for each of the three fiscal years in the period ended December 31, 2021; and

(vi) the related notes to the consolidated financial statements,

all of which are included in the Registration Statement (collectively, the "Audited Financial Statements"). Our report on the Audited Financial Statements, dated March 18, 2022 (the "Audit Report"), was included in the Registration Statement and expressed an unqualified opinion on the Audited Financial Statements.

B. Audit Report Reference

The Audit Report was prepared in accordance with the standards of the PCAOB and includes the standard form of report of an independent registered public accounting firm as prescribed by PCAOB Auditing Standard No. 3101, The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion. Our audit of the Audited Financial Statements was conducted in accordance with the standards of the PCAOB, including the applicable auditing standards relating to planning and performing the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

C. Consent

We refer to our consent (which is expected to be filed as Exhibit 23.1 to the Registration Statement) to the inclusion of the Audit Report in the Registration Statement and to the references to Ashford & Pemberton LLP under the caption "Experts" in the Prospectus. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder. Our consent will be dated as of the effective date of the Registration Statement.

DRAFT — FOR DISCUSSION PURPOSES ONLY

IV. FINANCIAL STATEMENTS AND FINANCIAL DATA COVERED

A. Audited Periods

The Audited Financial Statements included in the Registration Statement cover the following periods and reflect the following selected data:

The selected data presented above are derived from, and should be read in conjunction with, the Audited Financial Statements. Adjusted EBITDA is a non-GAAP financial measure, and the treatment thereof is described further in Section V.E below.

B. Unaudited Interim Period

The Registration Statement also includes unaudited condensed consolidated financial data for the three-month period ended March 31, 2022 ("Q1 2022"), reflecting the following selected data:

These interim financial data have been reviewed by Ashford & Pemberton LLP in accordance with PCAOB Auditing Standard No. 4105, Reviews of Interim Financial Information ("AS 4105"). Our review of the Q1 2022 interim financial data consisted principally of applying analytical procedures to the financial data and making inquiries of persons responsible for financial and accounting matters at the Company. A review of interim financial information 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. Accordingly, we do not express such an opinion on the Q1 2022 interim financial data.

C. Selected Financial Data

The "Selected Financial Data" section of the Prospectus presents consolidated financial data for each of FY 2019, FY 2020, and FY 2021, as well as for Q1 2022 and Q1 2021 (three months ended March 31, 2021). We have read the amounts and other financial data set forth in the "Selected Financial Data" section and have compared such amounts and data to (i) the corresponding amounts appearing in the Audited Financial Statements for FY 2019, FY 2020, and FY 2021 and (ii) the corresponding amounts appearing in the unaudited condensed consolidated financial data for Q1 2022 and Q1 2021. We found such amounts and data to be in agreement with, or to have been correctly derived from, such financial statements and financial data, as applicable, subject to rounding adjustments as described in footnotes to the "Selected Financial Data" table.

DRAFT — FOR DISCUSSION PURPOSES ONLY

V. PROCEDURES PERFORMED (AGREED-UPON AND SPECIFIED)

In addition to the audit referred to in Section III above and the review of interim financial information referred to in Section IV.B above, we have performed the following procedures, which were agreed upon by the addressees, with respect to the Registration Statement. These procedures were performed solely to assist the Underwriters in conducting and documenting their investigation of the affairs of the Company in connection with the proposed Offering. It should be understood that these procedures do not constitute an audit or review made in accordance with PCAOB standards.

A. Reading of Minutes and Records

We have read the minutes of meetings of the Board of Directors of the Company and of committees thereof (including, without limitation, the Audit Committee of the Board of Directors) and of the stockholders of the Company, as set forth in the minute books and records made available to us by the Company, through the date of this letter. We have also inquired of certain officials of the Company as to matters discussed at meetings of the Board of Directors, committees thereof, and stockholders for which minutes were not yet available or had not yet been approved. It should be understood that we have not performed any procedures to corroborate the completeness or accuracy of the minutes or other records made available to us.

B. Reading of the Registration Statement

We have read the entire Registration Statement, including the Prospectus, as most recently amended through Amendment No. 2 (dated June 10, 2022), insofar as it relates to financial and accounting data and information. We call attention to the fact that our professional competence relates to accounting and auditing matters; accordingly, we make no representation regarding, and our procedures do not extend to, the adequacy, accuracy, or completeness of legal, regulatory, commercial, engineering, environmental, or other non-financial matters discussed in the Registration Statement, including without limitation the descriptions of the Company's operations, the regulatory framework applicable to the Company's business, legal proceedings, risk factors, or the tax consequences of the Offering. We have also read the SEC staff comment letters issued with respect to the DRS-1 and Amendment No. 1 (first round: 18 comments; second round: 7 comments) and the Company's responses thereto, insofar as they relate to financial and accounting matters.

C. Comparison and Tick-and-Tie Procedures

We have compared specific financial data appearing in the Registration Statement to, and found such data to be in agreement with, or correctly derived from, one or more of the following sources:

1. The Audited Financial Statements (consolidated financial statements and related notes) for FY 2019, FY 2020, and FY 2021;

2. The unaudited condensed consolidated financial data for Q1 2022, as reviewed by us in accordance with AS 4105;

3. The Company's accounting records and internal schedules, as provided to us by the Company's finance and accounting department.

The categories of financial data that we compared and ticked-and-tied are set forth in detail in Appendix B to this letter. The following is a summary of the principal categories of data covered by our comparison and tick-and-tie procedures:

Prospectus Summary — Financial Highlights. We compared the financial highlights data appearing in the Prospectus Summary section of the Prospectus (including revenue, Adjusted EBITDA, net income (loss), total assets, total debt, and operating capacity for each of FY 2019, FY 2020, FY 2021, and Q1 2022) to the corresponding amounts in the Audited Financial Statements, the reviewed Q1 2022 interim financial data, and the Company's accounting records, and found them to be in agreement therewith or correctly derived therefrom.

Selected Financial Data Tables. We compared the amounts set forth in the "Selected Financial Data" tables of the Prospectus for revenue, Adjusted EBITDA, net income (loss), total assets, and total debt for FY 2019, FY 2020, FY 2021, and Q1 2022 to the corresponding amounts in the Audited Financial Statements, the reviewed Q1 2022 interim financial data, and the Company's accounting records, and found them to be in agreement therewith or correctly derived therefrom.

Capitalization Table. We compared the historical amounts in the "Capitalization" table of the Prospectus (both pre-IPO and pro forma post-IPO) to the Audited Financial Statements and the reviewed Q1 2022 interim financial data, and found the historical amounts to be in agreement therewith. The pro forma adjustments are addressed in Section VIII below.

Use of Proceeds. We compared the financial data set forth in the "Use of Proceeds" section of the Prospectus to the Company's accounting records and internal schedules, including the following specified applications of estimated net proceeds:

• Approximately $200 million for the repayment of a portion of the Term Loan B with Veltrano National Bank, N.A.;

• Approximately $100 million toward the construction of the Cimarron Solar project (350 MW, Doña Ana County, New Mexico);

• Approximately $71.7 million for general corporate purposes;

and found the data to be in agreement with, or correctly derived from, the Company's accounting records and the terms of the relevant credit agreements as described in the Registration Statement.

Dilution Analysis. We compared the per-share data set forth in the "Dilution" section of the Prospectus to the corresponding amounts in the Audited Financial Statements, the reviewed Q1 2022 interim financial data, the Company's accounting records, and the terms of the Offering as described in the Registration Statement, and found them to be in agreement therewith or correctly derived therefrom.

Description of Indebtedness. We compared the principal amounts and other financial data set forth in the "Description of Indebtedness" section of the Prospectus to the Audited Financial Statements, the reviewed Q1 2022 interim financial data, and the Company's accounting records, and found them to be in agreement therewith or correctly derived therefrom. The indebtedness described in the Prospectus includes the following:

• Corporate Revolving Credit Facility: $400 million commitment;

• Term Loan B with Veltrano National Bank, N.A.: $650 million original principal amount; $612.5 million outstanding as of the most recent reported date;

• Mesquite Wind construction facility with Prairie Commercial Bank, N.A.: $165 million commitment;

• Cimarron Solar construction facility with Prairie Commercial Bank, N.A.: $143 million commitment;

• Solaris West tax-equity financing with Veltara Basin Financial LLC: $280 million invested.

MD&A — Key Financial Data and Adjusted EBITDA Reconciliation. We compared the financial data and figures set forth in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of the Prospectus, including the tabular reconciliation of Adjusted EBITDA to GAAP net income, to the Audited Financial Statements, the reviewed Q1 2022 interim financial data, and the Company's accounting records, and found them to be in agreement therewith or correctly derived therefrom. The arithmetic accuracy of the Adjusted EBITDA reconciliation is addressed separately in Section V.E below.

Operating Capacity Data. We compared the operating capacity data set forth in the Registration Statement (3.8 GW operating; 1.4 GW under construction; 6.2 GW development pipeline) to the Company's internal records and project schedules, and found the data to be in agreement therewith. We note that operating capacity data are operational metrics and are not derived from the Audited Financial Statements or the reviewed interim financial data; we have verified only that the data as stated in the Prospectus are consistent with the Company's internal records provided to us, and we do not express any opinion or other form of assurance on such operational data.

Implied Valuation Data. We compared the implied valuation data set forth in the Registration Statement, including:

• Pre-money equity valuation of $2.2 billion based on 100,000,000 pre-IPO shares at $22.00 per share (the midpoint of the estimated price range);

• Post-money equity valuation of approximately $2.72 billion based on 123,713,636 post-IPO shares (base offering, no overallotment exercise) at $22.00 per share;

• Enterprise value of approximately $4.25 billion;

• EV/EBITDA multiple of approximately 19.4x;

to the terms of the Offering, the Company's accounting records, and the financial data in the Audited Financial Statements and reviewed Q1 2022 interim financial data, and recalculated the arithmetic of such computations, finding them to be arithmetically correct.

Underwriting Economics Data. We compared the underwriting economics data set forth in the "Underwriting" section of the Prospectus to the terms of the Underwriting Agreement (in near-final draft form) and recalculated the arithmetic thereof, finding the following to be arithmetically correct:

• Gross spread: 5.50% of the public offering price;

• Total underwriting discount on full exercise of the overallotment option: $33,000,000;

• Management fee: $6,600,000;

• Underwriting fee: $6,600,000;

• Selling concession: $19,800,000.

Share and Per-Share Data. We compared the share and per-share data set forth in the Registration Statement to the Company's accounting records, the terms of the Offering, and the Company's certificate of incorporation (as proposed to be amended and restated prior to the completion of the Offering), and found them to be in agreement therewith or correctly derived therefrom. The share data include:

• Base shares offered: 23,713,636 (of which 16,895,455 are primary shares to be issued by the Company and 6,818,182 are secondary shares to be sold by the Selling Stockholder);

• Overallotment shares: 3,559,091 (primary shares only);

• Total shares on full exercise of the overallotment option: 27,272,727;

• Pinnacle Vista secondary shares: 6,818,182 shares at an aggregate offering price of $150,000,000;

• Primary shares (base offering): 16,895,455 shares at an aggregate offering price of $371,700,000.

Equity Plan Reserve Data. We compared the equity plan reserve data set forth in the Registration Statement to the Company's internal records, the terms of the proposed equity plans, and the Company's accounting records, and found them to be in agreement therewith. The equity plan reserve data include:

• 2022 Omnibus Equity Incentive Plan: 12,727,273 shares reserved, representing 10% of 127,272,727 post-IPO shares on a fully-exercised basis (inclusive of the overallotment option);

• 2022 Employee Stock Purchase Plan: 2,545,455 shares reserved, representing 2% of post-IPO shares on a fully-exercised basis.

A complete schedule of the specific financial data compared, organized by Prospectus section and cross-referenced to the applicable source, is set forth in Appendix B to this letter.

D. Inquiries of Company Officials

We have made inquiries of certain officials of the Company who have responsibility for financial and accounting matters, specifically Marcus Yoon, Chief Financial Officer, and Priya Anand, Senior Vice President, Finance & Treasurer, regarding:

1. Whether there were, at a date not more than five business days prior to the date of this letter (such date being June 3, 2022, the "Cut-Off Date"), any changes in the Company's capital stock (other than issuances of shares of Common Stock upon the exercise of stock options under the Company's pre-IPO equity plans in the ordinary course), any increase in total debt, or any decrease in total stockholders' equity or net current assets of the Company and its consolidated subsidiaries, as compared with the amounts shown on the consolidated balance sheet as of December 31, 2021 (the most recent audited balance sheet date), other than as set forth in or contemplated by the Registration Statement; and

2. Whether there were, for the period from January 1, 2022 through the Cut-Off Date, any decreases in revenue, net income, or Adjusted EBITDA of the Company and its consolidated subsidiaries, as compared with the corresponding period of the preceding year (i.e., January 1, 2021 through approximately June 3, 2021), other than as set forth in or contemplated by the Registration Statement.

The responses of such officials are reflected in the negative assurance provided in Section VI below and the tabular data set forth in Section VII below.

E. Non-GAAP Measures

The Prospectus includes, in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section and elsewhere, a reconciliation of Adjusted EBITDA (a non-GAAP financial measure) to net income, the most directly comparable GAAP financial measure, for each of FY 2019, FY 2020, FY 2021, and Q1 2022.

We have recalculated the arithmetic accuracy of the reconciliation of Adjusted EBITDA to GAAP net income for each period presented and found the reconciliations to be arithmetically correct. The Adjusted EBITDA amounts for each period, as reconciled from GAAP net income, are as follows:

We note that Adjusted EBITDA is a non-GAAP financial measure as defined in Regulation G and Item 10(e) of Regulation S-K. We have not performed an audit or review of the Adjusted EBITDA reconciliation itself, and we do not express any opinion or other form of assurance thereon. Our procedures were limited to verifying (i) the arithmetic accuracy of the reconciliation and (ii) that the underlying GAAP amounts used in the reconciliation (including net income, interest expense, income tax expense (benefit), depreciation and amortization, and the other reconciling items) were correctly extracted from the Audited Financial Statements and the reviewed Q1 2022 interim financial data.

F. Tax-Equity and HLBV Methodology

The Registration Statement includes disclosures regarding the Company's use of the Hypothetical-Liquidation-at-Book-Value ("HLBV") methodology for accounting for its tax-equity partnerships. In particular, the Company's Solaris West tax-equity partnership with Veltara Basin Financial LLC involves $280 million of invested capital, with a tax-equity flip expected to occur in 2028. The HLBV methodology is used to allocate earnings and losses and to determine the carrying amounts of the tax-equity investors' interests in accordance with Accounting Standards Codification Topic 810 and related guidance.

We have read the HLBV disclosures set forth in the Registration Statement, including in Note 2 (Summary of Significant Accounting Policies) and Note 12 (Variable Interest Entities and Tax-Equity Financing Arrangements) to the Audited Financial Statements, and have compared those disclosures to the accounting methodology applied in the Audited Financial Statements. We found the disclosures to be consistent with the accounting methodology applied.

We note that the SEC staff comment letters with respect to the DRS-1 and Amendment No. 1 included questions regarding the HLBV methodology and the Company's power purchase agreement ("PPA") revenue recognition disclosures. Specifically, in the first round of comments (18 comments total), the SEC staff raised questions concerning (i) the appropriateness of the Company's application of the HLBV methodology for the Solaris West partnership and (ii) the level of detail provided regarding the terms and pricing of the Company's PPAs. In the second round of comments (7 comments total), the SEC staff requested additional quantification of the impact of PPA escalators on projected revenue. The Company, with our assistance, provided responsive disclosures in Amendment No. 1 and further supplemented those disclosures in Amendment No. 2.

DRAFT — FOR DISCUSSION PURPOSES ONLY

VI. NEGATIVE ASSURANCE (CHANGE PERIOD)

A. Scope of Negative Assurance

Based upon the procedures described in Section V above (which procedures do not constitute an audit conducted in accordance with PCAOB standards), and subject to the limitations set forth in Section VI.B below, nothing came to our attention that caused us to believe that:

1. The Audited Financial Statements and schedules included in the Registration Statement do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the related published rules and regulations adopted by the Commission;

2. Any material modifications should be made to the unaudited condensed consolidated financial data for Q1 2022 included in the Registration Statement for them to be in conformity with generally accepted accounting principles in the United States of America ("U.S. GAAP");

3. At the Cut-Off Date (June 3, 2022), there was any change in the capital stock of the Company (other than issuances of shares of Common Stock upon the exercise of stock options under the Company's pre-IPO equity plans in the ordinary course), any increase in total debt, or any decrease in total stockholders' equity or net current assets of the Company and its consolidated subsidiaries, as compared with amounts shown on the most recent audited consolidated balance sheet included in the Registration Statement (i.e., the consolidated balance sheet as of December 31, 2021), except as disclosed in the Registration Statement or as set forth in the table in Section VII below; or

4. For the period from January 1, 2022 through the Cut-Off Date, there were any decreases in revenue, net income, or Adjusted EBITDA of the Company and its consolidated subsidiaries, as compared with the corresponding period of the preceding year (i.e., January 1, 2021 through approximately June 3, 2021), except in each case for changes, increases, or decreases that the Registration Statement discloses have occurred or may occur.

B. Limitations

The foregoing negative assurance is subject to the following limitations, which are inherent in the nature of the procedures we performed:

(a) The procedures described in Section V above do not constitute an audit conducted in accordance with the standards of the PCAOB. Accordingly, we do not express an opinion or any other form of assurance on any financial data as of any date or for any period subsequent to December 31, 2021, except for our review of the Q1 2022 interim financial data conducted in accordance with AS 4105.

(b) Had we performed additional procedures, or had we conducted an audit or review of the Company's financial data as of any date or for any period from April 1, 2022 through the Cut-Off Date, other matters might have come to our attention that would have been reported to you.

(c) The procedures we performed with respect to the period from April 1, 2022 through the Cut-Off Date were limited to (i) reading the Company's unaudited internal financial reports for April 2022 and May 2022 (to the extent available), (ii) making inquiries of certain officials of the Company with responsibility for financial and accounting matters, and (iii) reading the minutes of meetings as described in Section V.A above. These procedures are substantially less in scope than an audit or review conducted in accordance with PCAOB standards.

(d) The negative assurance in clause (4) of Section VI.A above relating to Adjusted EBITDA is given solely on the basis described in Section V.E above; we have not performed an audit or review of Adjusted EBITDA as a non-GAAP measure, and our procedures were limited to verifying the arithmetic and the extraction of underlying GAAP amounts.

DRAFT — FOR DISCUSSION PURPOSES ONLY

VII. CHANGE-PERIOD TABULAR DATA

A. Table Comparing Balance Sheet Items

The following table sets forth a comparison of selected consolidated balance sheet items of the Company and its consolidated subsidiaries as of the Cut-Off Date (approximately June 3, 2022) with the corresponding amounts as of December 31, 2021 (the most recent audited balance sheet date):

Note: The increases in total debt and total assets reflected in the table above are primarily attributable to ongoing construction spending on the Company's two projects currently under construction: (i) the Mesquite Wind project (420 MW, Oldham County, Texas, expected commercial operations date ("COD") in Q3 2022), financed through a $165 million construction facility with Prairie Commercial Bank, N.A., and (ii) the Cimarron Solar project (350 MW, Doña Ana County, New Mexico, expected COD in Q1 2023), financed through a $143 million construction facility with Prairie Commercial Bank, N.A. These increases are consistent with the disclosures in the Registration Statement regarding the Company's construction program and the anticipated sources and uses of capital in connection therewith.

Note: Bracketed amounts in the table above are preliminary and subject to confirmation by the Company's accounting department and verification by Ashford & Pemberton LLP prior to the issuance of the final comfort letter at pricing. To the extent that any confirmed amounts would alter the negative assurance provided in Section VI above, we will report such matters in the bring-down comfort letter to be furnished at pricing.

B. Table Comparing Income Statement Items

The following table sets forth a comparison of selected consolidated income statement items of the Company and its consolidated subsidiaries for the period from January 1 through the Cut-Off Date (approximately June 3) for each of 2021 and 2022:

Note: Bracketed amounts in the table above are preliminary and subject to finalization by the Company's accounting department and confirmation by Ashford & Pemberton LLP prior to the issuance of the final comfort letter at pricing. The Company has indicated that the data necessary to complete this table will be derived from the Company's unaudited internal financial reports for April 2022 and May 2022, as supplemented by management estimates through the Cut-Off Date. These data have not been audited or reviewed by us, and the procedures we have performed with respect thereto are limited to those described in Section V above.

DRAFT — FOR DISCUSSION PURPOSES ONLY

VIII. CAPITALIZATION AND PRO FORMA DATA

A. Capitalization Table

We have read the "Capitalization" table included in the Prospectus and have compared the historical amounts therein to the Audited Financial Statements and the reviewed Q1 2022 interim financial data. The historical amounts were found to be in agreement with, or correctly derived from, such financial statements and financial data, as applicable.

The capitalization data reflected in the Registration Statement include the following:

• Pre-IPO shares of Common Stock outstanding: 100,000,000 (on a fully diluted basis, after giving effect to the reclassification of all outstanding shares of preferred stock into shares of Common Stock, which reclassification is expected to occur immediately prior to the completion of the Offering);

• Post-IPO shares of Common Stock outstanding (base offering, assuming no exercise of the underwriters' overallotment option): 123,713,636;

• Post-IPO shares of Common Stock outstanding (assuming full exercise of the underwriters' overallotment option): 127,272,727;

• Par value per share of Common Stock: $0.01.

B. Pro Forma Adjustments

We have read the pro forma adjustments described in the "Capitalization" and "Use of Proceeds" sections of the Prospectus, and have recalculated the arithmetic of the pro forma capitalization adjustments, finding them to be arithmetically correct. The pro forma adjustments described in the Registration Statement include the following:

(i) The issuance of 23,713,636 base shares of Common Stock at 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), or 27,272,727 shares on full exercise of the underwriters' overallotment option;

(ii) The receipt of net primary proceeds of approximately $371,700,000 from the issuance of 16,895,455 primary shares at $22.00 per share (before deducting the underwriting discount and estimated offering expenses payable by the Company);

(iii) The application of approximately $200 million of net proceeds to repay a portion of the Term Loan B with Veltrano National Bank, N.A. (including a prepayment premium of 1.00%, or $2,000,000, as required under the terms of the Term Loan B credit agreement);

(iv) The application of approximately $100 million of net proceeds toward the construction of the Cimarron Solar project (350 MW, Doña Ana County, New Mexico);

(v) The application of approximately $71.7 million of net proceeds for general corporate purposes, including working capital.

We have recalculated the arithmetic of these pro forma adjustments as presented in the "Capitalization" and "Use of Proceeds" sections and found them to be arithmetically correct. We note that the pro forma adjustments are based on assumptions regarding the initial public offering price, the number of shares to be issued, the underwriting discount, and the estimated offering expenses, each of which is subject to change. Accordingly, the pro forma data will be updated in the final Prospectus to reflect the actual offering terms.

DRAFT — FOR DISCUSSION PURPOSES ONLY

IX. OTHER MATTERS

A. Subsequent Events

We have read, to the extent available as of the date of this letter, the Company's unaudited internal financial reports for the months of April 2022 and May 2022 and have made inquiries of management (specifically, Marcus Yoon, Chief Financial Officer, and Priya Anand, Senior Vice President, Finance & Treasurer) as to whether any events or transactions have occurred subsequent to March 31, 2022 that, in the judgment of management, should be disclosed in the Registration Statement in order to keep the financial statements and financial data included therein from being misleading. The officials of the Company stated that, to their knowledge, no such events or transactions had occurred that are not already disclosed in the Registration Statement, other than those reflected in the change-period tabular data set forth in Section VII above.

We note that our procedures with respect to the period subsequent to March 31, 2022 were limited in scope and do not provide the same level of assurance as would be obtained from an audit or review of financial statements conducted in accordance with PCAOB standards. We express no opinion or other form of assurance regarding the Company's financial position, results of operations, or cash flows for any period subsequent to March 31, 2022, other than the negative assurance provided in Section VI above.

B. Emerging Growth Company Status

The Company qualifies as an "emerging growth company" as defined in Section 2(a)(19) of the Securities Act, as amended by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As of the last completed fiscal year (FY 2021), the Company's annual revenue was $487.3 million, which is below the $1.235 billion revenue threshold for emerging growth company status. Accordingly, the Company has elected to take advantage of certain reduced reporting and disclosure requirements available to emerging growth companies under the Securities Act and the Securities Exchange Act of 1934, as amended, including (i) providing only two years of audited financial statements in addition to any required interim financial data (although the Company has voluntarily included three years of audited financial statements), (ii) reduced executive compensation disclosure, and (iii) the ability to delay adoption of new or revised accounting standards until such standards apply to private companies.

Our comfort letter procedures have been conducted taking into account the applicable scaled disclosure requirements available to emerging growth companies. To the extent that the Company has elected to avail itself of such reduced reporting requirements, our procedures have been designed to address the disclosures as actually presented in the Registration Statement.

DRAFT — FOR DISCUSSION PURPOSES ONLY

X. CONCLUDING PARAGRAPH

A. Addressee Restriction

This letter is solely for the information of, and assistance to, the addressees — that is, the several underwriters named in the Underwriting Agreement — in conducting and documenting their investigation of the affairs of the Company in connection with the proposed Offering of the Company's Common Stock. This letter is not to be used, circulated, quoted, or otherwise referred to for any other purpose, including but not limited to the registration, purchase, or sale of securities, nor is it to be filed with or referred to in whole or in part in the Registration Statement or any other document, except that reference may be made to this letter in the Underwriting Agreement or in any list of closing documents pertaining to the proposed Offering. Without limiting the foregoing, this letter is not intended for, and should not be relied upon by, any person or entity other than the addressees, and no other person or entity is entitled to rely on this letter for any purpose.

B. Bring-Down Letters

As noted in Section I.C above, this letter constitutes the initial comfort letter (circle-up 1 of 3 planned). We expect to furnish:

(i) A bring-down comfort letter at or near the pricing date (the "Pricing Bring-Down Letter"), which will update the Cut-Off Date to a date not more than five business days prior to the pricing date, repeat the procedures described herein through such updated Cut-Off Date, and address any changes in the Registration Statement since the date of this letter; and

(ii) A second bring-down comfort letter at or near the closing date (the "Closing Bring-Down Letter"), which will update the Cut-Off Date to a date not more than five business days prior to the closing date, repeat the procedures described herein through such updated Cut-Off Date, and address any changes since the date of the Pricing Bring-Down Letter.

The Pricing Bring-Down Letter and the Closing Bring-Down Letter will be substantially in the form of this letter, with updated dates, tabular data, and such other changes as may be appropriate to reflect the then-current facts and circumstances. To the extent that the final form of the Registration Statement and Prospectus, as declared effective by the Commission, differs from the form reviewed by us in connection with the preparation of this letter, such changes will be addressed in the Pricing Bring-Down Letter.

C. Draft Status

This letter is furnished in draft form for discussion purposes only and may not be relied upon by the addressees or any other person for any purpose. This draft is subject to revision, update, and completion, and is maintained in the file of Calderwood & Harkness LLP (C&H Matter No. 1015-00001) for review purposes. The final letter will be dated as of the pricing date (or such other date as the parties may agree) and will reflect the final form of the Registration Statement and Prospectus as declared effective by the Commission. Until such time as the final letter is delivered, this draft letter should not be considered to constitute a comfort letter within the meaning of AU-C 920.

We acknowledge that Calderwood & Harkness LLP, as counsel to the Company, has been provided a copy of this draft letter for its review and that Whitfield Donaghue LLP, as counsel to the Underwriters, may also be provided a copy of this draft letter. The provision of this draft letter to such counsel does not expand the scope of the addressees or the purposes for which this letter may be used.

DRAFT — FOR DISCUSSION PURPOSES ONLY

D. Signature block

Very truly yours,

ASHFORD & PEMBERTON LLP

By: [DRAFT — to be signed]

________________________________________

Gregory Sondheim, CPA Lead Engagement Partner

30 Rockefeller Plaza, Suite 2800 New York, NY 10112

Engagement Manager: Irene Valdez, CPA

DRAFT — FOR DISCUSSION PURPOSES ONLY

APPENDIX A

FINANCIAL STATEMENT PERIODS AND DESCRIPTIONS

The following table sets forth each set of financial statements and financial data covered by this letter, together with the applicable periods, the level of assurance provided, and the applicable professional standards:

The Audit Report covering FY 2019, FY 2020, and FY 2021 was dated March 18, 2022, and was included in the Registration Statement. Our review report covering Q1 2022 is included in the Registration Statement in accordance with the applicable requirements.

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APPENDIX B

SPECIFIED FINANCIAL DATA COMPARED (TICK-AND-TIE SCHEDULE)

The following is a detailed listing of the specific financial figures and data appearing in the Prospectus that were compared by Ashford & Pemberton LLP to the applicable source documents. Each item is organized by Prospectus section and cross-referenced to its source. For purposes of this Appendix, the following abbreviations are used:

• AFS = Audited Financial Statements (FY 2019, FY 2020, FY 2021)

• RIF = Reviewed Interim Financial Data (Q1 2022)

• CAR = Company Accounting Records and Internal Schedules

• UA = Underwriting Agreement (near-final draft form)

1. Prospectus Summary

2. Selected Financial Data

3. Capitalization.

4. Dilution.

5. Use of Proceeds

6. MD&A.

DRAFT — FOR DISCUSSION PURPOSES ONLY
June 8, 2022
ASHFORD & PEMBERTON LLP Certified Public Accountants 30 Rockefeller Plaza, Suite 2800 New York, NY 10112
DRAFT — FOR DISCUSSION PURPOSES ONLY
The Representatives of the Several Underwriters named in the Underwriting Agreement (as defined below) c/o Hargrove Keating & Co. (as Lead-Left Book-Running Manager and Representative) 383 Madison Place New York, NY 10017
Attention: Oliver Marchetti, Managing Director, Equity Capital Markets
Re: Proposed Initial Public Offering of Common Stock of Calloway-Briggs Renewables Inc. — Initial Comfort Letter
Ladies and Gentlemen:
I. INTRODUCTORY PARAGRAPH
A. Identification of the Registration Statement
We have been requested to furnish this letter (the "Initial Comfort Letter") 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 Delaware corporation (the "Company"), with an aggregate offering size of approximately $600,000,000. The Common Stock is proposed to be listed on the New York Stock Exchange under the proposed ticker symbol "CBRI."
We refer to the Draft Registration Statement on Form S-1 (File No. 333-[__]) (the "Registration Statement") of the Company, initially confidentially submitted to the Securities and Exchange Commission (the "SEC" or the "Commission") on April 11, 2022 (EDGAR Accession No. 0001948372-22-000001) (the "DRS-1"), as amended by Amendment No. 1 to the Registration Statement filed with the Commission on May 20, 2022 (EDGAR Accession No. 0001948372-22-000002) ("Amendment No. 1"), and Amendment No. 2 to the Registration Statement filed with the Commission on June 10, 2022 (EDGAR Accession No. 0001948372-22-000003) ("Amendment No. 2," and together with the DRS-1 and Amendment No. 1, the "Registration Statement"). The Company's SEC Central Index Key (CIK) number is 0001948372. The Registration Statement includes a Prospectus (the "Prospectus") forming Part I thereof. Unless otherwise indicated, all references in this letter to the Registration Statement and the Prospectus are to the Registration Statement and Prospectus as amended through and including Amendment No. 2.
B. Identification of the Underwriting Agreement
We also refer to the Underwriting Agreement, in near-final draft form dated as of June 6, 2022 (the "Underwriting Agreement"), among the Company, Pinnacle Vista Capital Partners III, LP, a Delaware limited partnership (as selling stockholder) (the "Selling Stockholder"), and the several underwriters named therein (collectively, the "Underwriters"), for whom Hargrove Keating & Co. is acting as lead-left book-running manager and representative of the Underwriters (the "Representative"). The joint book-running managers for the Offering are Hargrove Keating & Co., Linden Pratt Securities LLC, and Graymont Brothers Inc. Barfield Stuart & Co. and Crane Whitley Capital LLC are acting as co-managers for the Offering.
C. Purpose and Professional Standards
This letter is furnished pursuant to Section [__] of the Underwriting Agreement and in accordance with the guidance set forth in AU-C Section 920, Letters for Underwriters and Certain Other Requesting Parties (which codified and superseded Statement on Auditing Standards ("SAS") No. 72, Letters for Underwriters and Certain Other Requesting Parties, as subsequently amended by SAS No. 76, Amendment to Statement on Auditing Standards No. 72, Letters for Underwriters and Certain Other Requesting Parties, and SAS No. 86, Amendment to Statement on Auditing Standards No. 72, Letters for Underwriters and Certain Other Requesting Parties) (collectively, "AU-C 920").
This letter is solely for the use of the addressees — namely, the several underwriters named in the Underwriting Agreement — in connection with the proposed Offering and in conducting and documenting their investigation of the affairs of the Company in connection therewith. This letter is not to be used, circulated, quoted, or otherwise referred to for any other purpose, nor is it to be filed with the SEC or any other regulatory body, except as expressly provided in Section X hereof.
This letter constitutes the initial comfort letter (circle-up 1 of 3 planned iterations). We expect to furnish two additional comfort letters in connection with the Offering: (i) a bring-down comfort letter at or near the pricing date and (ii) a second bring-down comfort letter at or near the closing date, in each case updating the cut-off date, repeating the procedures described herein through a more recent date, and addressing any changes in the Registration Statement since the date of this letter, all as more fully described in Section X below.
DRAFT — FOR DISCUSSION PURPOSES ONLY
II. INDEPENDENCE
A. Independence Statement
We are an independent registered public accounting firm with respect to the Company within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and the applicable rules and regulations thereunder adopted by the Commission, and within the meaning of Rule 3520, Auditor Independence, and related independence rules and standards of the Public Company Accounting Oversight Board (the "PCAOB"). We confirm that we have been the Company's independent auditor for each of the fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021 (collectively, "FY 2019," "FY 2020," and "FY 2021," respectively), and we continue to be independent with respect to the Company as of the date of this letter. In making this determination, we have considered all professional relationships between our firm and the Company and its affiliates, including Pinnacle Vista Capital Partners III, LP and its portfolio companies, and have concluded that no such relationships impair our independence under the applicable standards.
DRAFT — FOR DISCUSSION PURPOSES ONLY
III. AUDITED FINANCIAL STATEMENTS
A. Identification of Financial Statements Audited
We have audited the consolidated financial statements of Calloway-Briggs Renewables Inc. and its subsidiaries (collectively, the "Consolidated Entities"), consisting of:
(i) the consolidated balance sheets as of December 31, 2019, December 31, 2020, and December 31, 2021;
(ii) the consolidated statements of operations for each of the three fiscal years in the period ended December 31, 2021;
(iii) the consolidated statements of comprehensive income (loss) for each of the three fiscal years in the period ended December 31, 2021;
(iv) the consolidated statements of changes in stockholders' equity for each of the three fiscal years in the period ended December 31, 2021;
(v) the consolidated statements of cash flows for each of the three fiscal years in the period ended December 31, 2021; and
(vi) the related notes to the consolidated financial statements,
all of which are included in the Registration Statement (collectively, the "Audited Financial Statements"). Our report on the Audited Financial Statements, dated March 18, 2022 (the "Audit Report"), was included in the Registration Statement and expressed an unqualified opinion on the Audited Financial Statements.
B. Audit Report Reference
The Audit Report was prepared in accordance with the standards of the PCAOB and includes the standard form of report of an independent registered public accounting firm as prescribed by PCAOB Auditing Standard No. 3101, The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion. Our audit of the Audited Financial Statements was conducted in accordance with the standards of the PCAOB, including the applicable auditing standards relating to planning and performing the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
C. Consent
We refer to our consent (which is expected to be filed as Exhibit 23.1 to the Registration Statement) to the inclusion of the Audit Report in the Registration Statement and to the references to Ashford & Pemberton LLP under the caption "Experts" in the Prospectus. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder. Our consent will be dated as of the effective date of the Registration Statement.
DRAFT — FOR DISCUSSION PURPOSES ONLY
IV. FINANCIAL STATEMENTS AND FINANCIAL DATA COVERED
A. Audited Periods
The Audited Financial Statements included in the Registration Statement cover the following periods and reflect the following selected data:
The selected data presented above are derived from, and should be read in conjunction with, the Audited Financial Statements. Adjusted EBITDA is a non-GAAP financial measure, and the treatment thereof is described further in Section V.E below.
B. Unaudited Interim Period
The Registration Statement also includes unaudited condensed consolidated financial data for the three-month period ended March 31, 2022 ("Q1 2022"), reflecting the following selected data:
These interim financial data have been reviewed by Ashford & Pemberton LLP in accordance with PCAOB Auditing Standard No. 4105, Reviews of Interim Financial Information ("AS 4105"). Our review of the Q1 2022 interim financial data consisted principally of applying analytical procedures to the financial data and making inquiries of persons responsible for financial and accounting matters at the Company. A review of interim financial information 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. Accordingly, we do not express such an opinion on the Q1 2022 interim financial data.
C. Selected Financial Data
The "Selected Financial Data" section of the Prospectus presents consolidated financial data for each of FY 2019, FY 2020, and FY 2021, as well as for Q1 2022 and Q1 2021 (three months ended March 31, 2021). We have read the amounts and other financial data set forth in the "Selected Financial Data" section and have compared such amounts and data to (i) the corresponding amounts appearing in the Audited Financial Statements for FY 2019, FY 2020, and FY 2021 and (ii) the corresponding amounts appearing in the unaudited condensed consolidated financial data for Q1 2022 and Q1 2021. We found such amounts and data to be in agreement with, or to have been correctly derived from, such financial statements and financial data, as applicable, subject to rounding adjustments as described in footnotes to the "Selected Financial Data" table.
DRAFT — FOR DISCUSSION PURPOSES ONLY
V. PROCEDURES PERFORMED (AGREED-UPON AND SPECIFIED)
In addition to the audit referred to in Section III above and the review of interim financial information referred to in Section IV.B above, we have performed the following procedures, which were agreed upon by the addressees, with respect to the Registration Statement. These procedures were performed solely to assist the Underwriters in conducting and documenting their investigation of the affairs of the Company in connection with the proposed Offering. It should be understood that these procedures do not constitute an audit or review made in accordance with PCAOB standards.
A. Reading of Minutes and Records
We have read the minutes of meetings of the Board of Directors of the Company and of committees thereof (including, without limitation, the Audit Committee of the Board of Directors) and of the stockholders of the Company, as set forth in the minute books and records made available to us by the Company, through the date of this letter. We have also inquired of certain officials of the Company as to matters discussed at meetings of the Board of Directors, committees thereof, and stockholders for which minutes were not yet available or had not yet been approved. It should be understood that we have not performed any procedures to corroborate the completeness or accuracy of the minutes or other records made available to us.
B. Reading of the Registration Statement
We have read the entire Registration Statement, including the Prospectus, as most recently amended through Amendment No. 2 (dated June 10, 2022), insofar as it relates to financial and accounting data and information. We call attention to the fact that our professional competence relates to accounting and auditing matters; accordingly, we make no representation regarding, and our procedures do not extend to, the adequacy, accuracy, or completeness of legal, regulatory, commercial, engineering, environmental, or other non-financial matters discussed in the Registration Statement, including without limitation the descriptions of the Company's operations, the regulatory framework applicable to the Company's business, legal proceedings, risk factors, or the tax consequences of the Offering. We have also read the SEC staff comment letters issued with respect to the DRS-1 and Amendment No. 1 (first round: 18 comments; second round: 7 comments) and the Company's responses thereto, insofar as they relate to financial and accounting matters.
C. Comparison and Tick-and-Tie Procedures
We have compared specific financial data appearing in the Registration Statement to, and found such data to be in agreement with, or correctly derived from, one or more of the following sources:
1.  The Audited Financial Statements (consolidated financial statements and related notes) for FY 2019, FY 2020, and FY 2021;
2.  The unaudited condensed consolidated financial data for Q1 2022, as reviewed by us in accordance with AS 4105;
3.  The Company's accounting records and internal schedules, as provided to us by the Company's finance and accounting department.
The categories of financial data that we compared and ticked-and-tied are set forth in detail in Appendix B to this letter. The following is a summary of the principal categories of data covered by our comparison and tick-and-tie procedures:
Prospectus Summary — Financial Highlights. We compared the financial highlights data appearing in the Prospectus Summary section of the Prospectus (including revenue, Adjusted EBITDA, net income (loss), total assets, total debt, and operating capacity for each of FY 2019, FY 2020, FY 2021, and Q1 2022) to the corresponding amounts in the Audited Financial Statements, the reviewed Q1 2022 interim financial data, and the Company's accounting records, and found them to be in agreement therewith or correctly derived therefrom.
Selected Financial Data Tables. We compared the amounts set forth in the "Selected Financial Data" tables of the Prospectus for revenue, Adjusted EBITDA, net income (loss), total assets, and total debt for FY 2019, FY 2020, FY 2021, and Q1 2022 to the corresponding amounts in the Audited Financial Statements, the reviewed Q1 2022 interim financial data, and the Company's accounting records, and found them to be in agreement therewith or correctly derived therefrom.
Capitalization Table. We compared the historical amounts in the "Capitalization" table of the Prospectus (both pre-IPO and pro forma post-IPO) to the Audited Financial Statements and the reviewed Q1 2022 interim financial data, and found the historical amounts to be in agreement therewith. The pro forma adjustments are addressed in Section VIII below.
Use of Proceeds. We compared the financial data set forth in the "Use of Proceeds" section of the Prospectus to the Company's accounting records and internal schedules, including the following specified applications of estimated net proceeds:
•  Approximately $200 million for the repayment of a portion of the Term Loan B with Veltrano National Bank, N.A.;
•  Approximately $100 million toward the construction of the Cimarron Solar project (350 MW, Doña Ana County, New Mexico);
•  Approximately $71.7 million for general corporate purposes;
and found the data to be in agreement with, or correctly derived from, the Company's accounting records and the terms of the relevant credit agreements as described in the Registration Statement.
Dilution Analysis. We compared the per-share data set forth in the "Dilution" section of the Prospectus to the corresponding amounts in the Audited Financial Statements, the reviewed Q1 2022 interim financial data, the Company's accounting records, and the terms of the Offering as described in the Registration Statement, and found them to be in agreement therewith or correctly derived therefrom.
Description of Indebtedness. We compared the principal amounts and other financial data set forth in the "Description of Indebtedness" section of the Prospectus to the Audited Financial Statements, the reviewed Q1 2022 interim financial data, and the Company's accounting records, and found them to be in agreement therewith or correctly derived therefrom. The indebtedness described in the Prospectus includes the following:
•  Corporate Revolving Credit Facility: $400 million commitment;
•  Term Loan B with Veltrano National Bank, N.A.: $650 million original principal amount; $612.5 million outstanding as of the most recent reported date;
•  Mesquite Wind construction facility with Prairie Commercial Bank, N.A.: $165 million commitment;
•  Cimarron Solar construction facility with Prairie Commercial Bank, N.A.: $143 million commitment;
•  Solaris West tax-equity financing with Veltara Basin Financial LLC: $280 million invested.
MD&A — Key Financial Data and Adjusted EBITDA Reconciliation. We compared the financial data and figures set forth in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of the Prospectus, including the tabular reconciliation of Adjusted EBITDA to GAAP net income, to the Audited Financial Statements, the reviewed Q1 2022 interim financial data, and the Company's accounting records, and found them to be in agreement therewith or correctly derived therefrom. The arithmetic accuracy of the Adjusted EBITDA reconciliation is addressed separately in Section V.E below.
Operating Capacity Data. We compared the operating capacity data set forth in the Registration Statement (3.8 GW operating; 1.4 GW under construction; 6.2 GW development pipeline) to the Company's internal records and project schedules, and found the data to be in agreement therewith. We note that operating capacity data are operational metrics and are not derived from the Audited Financial Statements or the reviewed interim financial data; we have verified only that the data as stated in the Prospectus are consistent with the Company's internal records provided to us, and we do not express any opinion or other form of assurance on such operational data.
Implied Valuation Data. We compared the implied valuation data set forth in the Registration Statement, including:
•  Pre-money equity valuation of $2.2 billion based on 100,000,000 pre-IPO shares at $22.00 per share (the midpoint of the estimated price range);
•  Post-money equity valuation of approximately $2.72 billion based on 123,713,636 post-IPO shares (base offering, no overallotment exercise) at $22.00 per share;
•  Enterprise value of approximately $4.25 billion;
•  EV/EBITDA multiple of approximately 19.4x;
to the terms of the Offering, the Company's accounting records, and the financial data in the Audited Financial Statements and reviewed Q1 2022 interim financial data, and recalculated the arithmetic of such computations, finding them to be arithmetically correct.
Underwriting Economics Data. We compared the underwriting economics data set forth in the "Underwriting" section of the Prospectus to the terms of the Underwriting Agreement (in near-final draft form) and recalculated the arithmetic thereof, finding the following to be arithmetically correct:
•  Gross spread: 5.50% of the public offering price;
•  Total underwriting discount on full exercise of the overallotment option: $33,000,000;
•  Management fee: $6,600,000;
•  Underwriting fee: $6,600,000;
•  Selling concession: $19,800,000.
Share and Per-Share Data. We compared the share and per-share data set forth in the Registration Statement to the Company's accounting records, the terms of the Offering, and the Company's certificate of incorporation (as proposed to be amended and restated prior to the completion of the Offering), and found them to be in agreement therewith or correctly derived therefrom. The share data include:
•  Base shares offered: 23,713,636 (of which 16,895,455 are primary shares to be issued by the Company and 6,818,182 are secondary shares to be sold by the Selling Stockholder);
•  Overallotment shares: 3,559,091 (primary shares only);
•  Total shares on full exercise of the overallotment option: 27,272,727;
•  Pinnacle Vista secondary shares: 6,818,182 shares at an aggregate offering price of $150,000,000;
•  Primary shares (base offering): 16,895,455 shares at an aggregate offering price of $371,700,000.
Equity Plan Reserve Data. We compared the equity plan reserve data set forth in the Registration Statement to the Company's internal records, the terms of the proposed equity plans, and the Company's accounting records, and found them to be in agreement therewith. The equity plan reserve data include:
•  2022 Omnibus Equity Incentive Plan: 12,727,273 shares reserved, representing 10% of 127,272,727 post-IPO shares on a fully-exercised basis (inclusive of the overallotment option);
•  2022 Employee Stock Purchase Plan: 2,545,455 shares reserved, representing 2% of post-IPO shares on a fully-exercised basis.
A complete schedule of the specific financial data compared, organized by Prospectus section and cross-referenced to the applicable source, is set forth in Appendix B to this letter.
D. Inquiries of Company Officials
We have made inquiries of certain officials of the Company who have responsibility for financial and accounting matters, specifically Marcus Yoon, Chief Financial Officer, and Priya Anand, Senior Vice President, Finance & Treasurer, regarding:
1.  Whether there were, at a date not more than five business days prior to the date of this letter (such date being June 3, 2022, the "Cut-Off Date"), any changes in the Company's capital stock (other than issuances of shares of Common Stock upon the exercise of stock options under the Company's pre-IPO equity plans in the ordinary course), any increase in total debt, or any decrease in total stockholders' equity or net current assets of the Company and its consolidated subsidiaries, as compared with the amounts shown on the consolidated balance sheet as of December 31, 2021 (the most recent audited balance sheet date), other than as set forth in or contemplated by the Registration Statement; and
2.  Whether there were, for the period from January 1, 2022 through the Cut-Off Date, any decreases in revenue, net income, or Adjusted EBITDA of the Company and its consolidated subsidiaries, as compared with the corresponding period of the preceding year (i.e., January 1, 2021 through approximately June 3, 2021), other than as set forth in or contemplated by the Registration Statement.
The responses of such officials are reflected in the negative assurance provided in Section VI below and the tabular data set forth in Section VII below.
E. Non-GAAP Measures
The Prospectus includes, in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section and elsewhere, a reconciliation of Adjusted EBITDA (a non-GAAP financial measure) to net income, the most directly comparable GAAP financial measure, for each of FY 2019, FY 2020, FY 2021, and Q1 2022.
We have recalculated the arithmetic accuracy of the reconciliation of Adjusted EBITDA to GAAP net income for each period presented and found the reconciliations to be arithmetically correct. The Adjusted EBITDA amounts for each period, as reconciled from GAAP net income, are as follows:
We note that Adjusted EBITDA is a non-GAAP financial measure as defined in Regulation G and Item 10(e) of Regulation S-K. We have not performed an audit or review of the Adjusted EBITDA reconciliation itself, and we do not express any opinion or other form of assurance thereon. Our procedures were limited to verifying (i) the arithmetic accuracy of the reconciliation and (ii) that the underlying GAAP amounts used in the reconciliation (including net income, interest expense, income tax expense (benefit), depreciation and amortization, and the other reconciling items) were correctly extracted from the Audited Financial Statements and the reviewed Q1 2022 interim financial data.
F. Tax-Equity and HLBV Methodology
The Registration Statement includes disclosures regarding the Company's use of the Hypothetical-Liquidation-at-Book-Value ("HLBV") methodology for accounting for its tax-equity partnerships. In particular, the Company's Solaris West tax-equity partnership with Veltara Basin Financial LLC involves $280 million of invested capital, with a tax-equity flip expected to occur in 2028. The HLBV methodology is used to allocate earnings and losses and to determine the carrying amounts of the tax-equity investors' interests in accordance with Accounting Standards Codification Topic 810 and related guidance.
We have read the HLBV disclosures set forth in the Registration Statement, including in Note 2 (Summary of Significant Accounting Policies) and Note 12 (Variable Interest Entities and Tax-Equity Financing Arrangements) to the Audited Financial Statements, and have compared those disclosures to the accounting methodology applied in the Audited Financial Statements. We found the disclosures to be consistent with the accounting methodology applied.
We note that the SEC staff comment letters with respect to the DRS-1 and Amendment No. 1 included questions regarding the HLBV methodology and the Company's power purchase agreement ("PPA") revenue recognition disclosures. Specifically, in the first round of comments (18 comments total), the SEC staff raised questions concerning (i) the appropriateness of the Company's application of the HLBV methodology for the Solaris West partnership and (ii) the level of detail provided regarding the terms and pricing of the Company's PPAs. In the second round of comments (7 comments total), the SEC staff requested additional quantification of the impact of PPA escalators on projected revenue. The Company, with our assistance, provided responsive disclosures in Amendment No. 1 and further supplemented those disclosures in Amendment No. 2.
DRAFT — FOR DISCUSSION PURPOSES ONLY
VI. NEGATIVE ASSURANCE (CHANGE PERIOD)
A. Scope of Negative Assurance
Based upon the procedures described in Section V above (which procedures do not constitute an audit conducted in accordance with PCAOB standards), and subject to the limitations set forth in Section VI.B below, nothing came to our attention that caused us to believe that:
1.  The Audited Financial Statements and schedules included in the Registration Statement do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the related published rules and regulations adopted by the Commission;
2.  Any material modifications should be made to the unaudited condensed consolidated financial data for Q1 2022 included in the Registration Statement for them to be in conformity with generally accepted accounting principles in the United States of America ("U.S. GAAP");
3.  At the Cut-Off Date (June 3, 2022), there was any change in the capital stock of the Company (other than issuances of shares of Common Stock upon the exercise of stock options under the Company's pre-IPO equity plans in the ordinary course), any increase in total debt, or any decrease in total stockholders' equity or net current assets of the Company and its consolidated subsidiaries, as compared with amounts shown on the most recent audited consolidated balance sheet included in the Registration Statement (i.e., the consolidated balance sheet as of December 31, 2021), except as disclosed in the Registration Statement or as set forth in the table in Section VII below; or
4.  For the period from January 1, 2022 through the Cut-Off Date, there were any decreases in revenue, net income, or Adjusted EBITDA of the Company and its consolidated subsidiaries, as compared with the corresponding period of the preceding year (i.e., January 1, 2021 through approximately June 3, 2021), except in each case for changes, increases, or decreases that the Registration Statement discloses have occurred or may occur.
B. Limitations
The foregoing negative assurance is subject to the following limitations, which are inherent in the nature of the procedures we performed:
(a) The procedures described in Section V above do not constitute an audit conducted in accordance with the standards of the PCAOB. Accordingly, we do not express an opinion or any other form of assurance on any financial data as of any date or for any period subsequent to December 31, 2021, except for our review of the Q1 2022 interim financial data conducted in accordance with AS 4105.
(b) Had we performed additional procedures, or had we conducted an audit or review of the Company's financial data as of any date or for any period from April 1, 2022 through the Cut-Off Date, other matters might have come to our attention that would have been reported to you.
(c) The procedures we performed with respect to the period from April 1, 2022 through the Cut-Off Date were limited to (i) reading the Company's unaudited internal financial reports for April 2022 and May 2022 (to the extent available), (ii) making inquiries of certain officials of the Company with responsibility for financial and accounting matters, and (iii) reading the minutes of meetings as described in Section V.A above. These procedures are substantially less in scope than an audit or review conducted in accordance with PCAOB standards.
(d) The negative assurance in clause (4) of Section VI.A above relating to Adjusted EBITDA is given solely on the basis described in Section V.E above; we have not performed an audit or review of Adjusted EBITDA as a non-GAAP measure, and our procedures were limited to verifying the arithmetic and the extraction of underlying GAAP amounts.
DRAFT — FOR DISCUSSION PURPOSES ONLY
VII. CHANGE-PERIOD TABULAR DATA
A. Table Comparing Balance Sheet Items
The following table sets forth a comparison of selected consolidated balance sheet items of the Company and its consolidated subsidiaries as of the Cut-Off Date (approximately June 3, 2022) with the corresponding amounts as of December 31, 2021 (the most recent audited balance sheet date):
Note: The increases in total debt and total assets reflected in the table above are primarily attributable to ongoing construction spending on the Company's two projects currently under construction: (i) the Mesquite Wind project (420 MW, Oldham County, Texas, expected commercial operations date ("COD") in Q3 2022), financed through a $165 million construction facility with Prairie Commercial Bank, N.A., and (ii) the Cimarron Solar project (350 MW, Doña Ana County, New Mexico, expected COD in Q1 2023), financed through a $143 million construction facility with Prairie Commercial Bank, N.A. These increases are consistent with the disclosures in the Registration Statement regarding the Company's construction program and the anticipated sources and uses of capital in connection therewith.
Note: Bracketed amounts in the table above are preliminary and subject to confirmation by the Company's accounting department and verification by Ashford & Pemberton LLP prior to the issuance of the final comfort letter at pricing. To the extent that any confirmed amounts would alter the negative assurance provided in Section VI above, we will report such matters in the bring-down comfort letter to be furnished at pricing.
B. Table Comparing Income Statement Items
The following table sets forth a comparison of selected consolidated income statement items of the Company and its consolidated subsidiaries for the period from January 1 through the Cut-Off Date (approximately June 3) for each of 2021 and 2022:
Note: Bracketed amounts in the table above are preliminary and subject to finalization by the Company's accounting department and confirmation by Ashford & Pemberton LLP prior to the issuance of the final comfort letter at pricing. The Company has indicated that the data necessary to complete this table will be derived from the Company's unaudited internal financial reports for April 2022 and May 2022, as supplemented by management estimates through the Cut-Off Date. These data have not been audited or reviewed by us, and the procedures we have performed with respect thereto are limited to those described in Section V above.
DRAFT — FOR DISCUSSION PURPOSES ONLY
VIII. CAPITALIZATION AND PRO FORMA DATA
A. Capitalization Table
We have read the "Capitalization" table included in the Prospectus and have compared the historical amounts therein to the Audited Financial Statements and the reviewed Q1 2022 interim financial data. The historical amounts were found to be in agreement with, or correctly derived from, such financial statements and financial data, as applicable.
The capitalization data reflected in the Registration Statement include the following:
•  Pre-IPO shares of Common Stock outstanding: 100,000,000 (on a fully diluted basis, after giving effect to the reclassification of all outstanding shares of preferred stock into shares of Common Stock, which reclassification is expected to occur immediately prior to the completion of the Offering);
•  Post-IPO shares of Common Stock outstanding (base offering, assuming no exercise of the underwriters' overallotment option): 123,713,636;
•  Post-IPO shares of Common Stock outstanding (assuming full exercise of the underwriters' overallotment option): 127,272,727;
•  Par value per share of Common Stock: $0.01.
B. Pro Forma Adjustments
We have read the pro forma adjustments described in the "Capitalization" and "Use of Proceeds" sections of the Prospectus, and have recalculated the arithmetic of the pro forma capitalization adjustments, finding them to be arithmetically correct. The pro forma adjustments described in the Registration Statement include the following:
(i) The issuance of 23,713,636 base shares of Common Stock at 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), or 27,272,727 shares on full exercise of the underwriters' overallotment option;
(ii) The receipt of net primary proceeds of approximately $371,700,000 from the issuance of 16,895,455 primary shares at $22.00 per share (before deducting the underwriting discount and estimated offering expenses payable by the Company);
(iii) The application of approximately $200 million of net proceeds to repay a portion of the Term Loan B with Veltrano National Bank, N.A. (including a prepayment premium of 1.00%, or $2,000,000, as required under the terms of the Term Loan B credit agreement);
(iv) The application of approximately $100 million of net proceeds toward the construction of the Cimarron Solar project (350 MW, Doña Ana County, New Mexico);
(v) The application of approximately $71.7 million of net proceeds for general corporate purposes, including working capital.
We have recalculated the arithmetic of these pro forma adjustments as presented in the "Capitalization" and "Use of Proceeds" sections and found them to be arithmetically correct. We note that the pro forma adjustments are based on assumptions regarding the initial public offering price, the number of shares to be issued, the underwriting discount, and the estimated offering expenses, each of which is subject to change. Accordingly, the pro forma data will be updated in the final Prospectus to reflect the actual offering terms.
DRAFT — FOR DISCUSSION PURPOSES ONLY
IX. OTHER MATTERS
A. Subsequent Events
We have read, to the extent available as of the date of this letter, the Company's unaudited internal financial reports for the months of April 2022 and May 2022 and have made inquiries of management (specifically, Marcus Yoon, Chief Financial Officer, and Priya Anand, Senior Vice President, Finance & Treasurer) as to whether any events or transactions have occurred subsequent to March 31, 2022 that, in the judgment of management, should be disclosed in the Registration Statement in order to keep the financial statements and financial data included therein from being misleading. The officials of the Company stated that, to their knowledge, no such events or transactions had occurred that are not already disclosed in the Registration Statement, other than those reflected in the change-period tabular data set forth in Section VII above.
We note that our procedures with respect to the period subsequent to March 31, 2022 were limited in scope and do not provide the same level of assurance as would be obtained from an audit or review of financial statements conducted in accordance with PCAOB standards. We express no opinion or other form of assurance regarding the Company's financial position, results of operations, or cash flows for any period subsequent to March 31, 2022, other than the negative assurance provided in Section VI above.
B. Emerging Growth Company Status
The Company qualifies as an "emerging growth company" as defined in Section 2(a)(19) of the Securities Act, as amended by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As of the last completed fiscal year (FY 2021), the Company's annual revenue was $487.3 million, which is below the $1.235 billion revenue threshold for emerging growth company status. Accordingly, the Company has elected to take advantage of certain reduced reporting and disclosure requirements available to emerging growth companies under the Securities Act and the Securities Exchange Act of 1934, as amended, including (i) providing only two years of audited financial statements in addition to any required interim financial data (although the Company has voluntarily included three years of audited financial statements), (ii) reduced executive compensation disclosure, and (iii) the ability to delay adoption of new or revised accounting standards until such standards apply to private companies.
Our comfort letter procedures have been conducted taking into account the applicable scaled disclosure requirements available to emerging growth companies. To the extent that the Company has elected to avail itself of such reduced reporting requirements, our procedures have been designed to address the disclosures as actually presented in the Registration Statement.
DRAFT — FOR DISCUSSION PURPOSES ONLY
X. CONCLUDING PARAGRAPH
A. Addressee Restriction
This letter is solely for the information of, and assistance to, the addressees — that is, the several underwriters named in the Underwriting Agreement — in conducting and documenting their investigation of the affairs of the Company in connection with the proposed Offering of the Company's Common Stock. This letter is not to be used, circulated, quoted, or otherwise referred to for any other purpose, including but not limited to the registration, purchase, or sale of securities, nor is it to be filed with or referred to in whole or in part in the Registration Statement or any other document, except that reference may be made to this letter in the Underwriting Agreement or in any list of closing documents pertaining to the proposed Offering. Without limiting the foregoing, this letter is not intended for, and should not be relied upon by, any person or entity other than the addressees, and no other person or entity is entitled to rely on this letter for any purpose.
B. Bring-Down Letters
As noted in Section I.C above, this letter constitutes the initial comfort letter (circle-up 1 of 3 planned). We expect to furnish:
(i) A bring-down comfort letter at or near the pricing date (the "Pricing Bring-Down Letter"), which will update the Cut-Off Date to a date not more than five business days prior to the pricing date, repeat the procedures described herein through such updated Cut-Off Date, and address any changes in the Registration Statement since the date of this letter; and
(ii) A second bring-down comfort letter at or near the closing date (the "Closing Bring-Down Letter"), which will update the Cut-Off Date to a date not more than five business days prior to the closing date, repeat the procedures described herein through such updated Cut-Off Date, and address any changes since the date of the Pricing Bring-Down Letter.
The Pricing Bring-Down Letter and the Closing Bring-Down Letter will be substantially in the form of this letter, with updated dates, tabular data, and such other changes as may be appropriate to reflect the then-current facts and circumstances. To the extent that the final form of the Registration Statement and Prospectus, as declared effective by the Commission, differs from the form reviewed by us in connection with the preparation of this letter, such changes will be addressed in the Pricing Bring-Down Letter.
C. Draft Status
This letter is furnished in draft form for discussion purposes only and may not be relied upon by the addressees or any other person for any purpose. This draft is subject to revision, update, and completion, and is maintained in the file of Calderwood & Harkness LLP (C&H Matter No. 1015-00001) for review purposes. The final letter will be dated as of the pricing date (or such other date as the parties may agree) and will reflect the final form of the Registration Statement and Prospectus as declared effective by the Commission. Until such time as the final letter is delivered, this draft letter should not be considered to constitute a comfort letter within the meaning of AU-C 920.
We acknowledge that Calderwood & Harkness LLP, as counsel to the Company, has been provided a copy of this draft letter for its review and that Whitfield Donaghue LLP, as counsel to the Underwriters, may also be provided a copy of this draft letter. The provision of this draft letter to such counsel does not expand the scope of the addressees or the purposes for which this letter may be used.
DRAFT — FOR DISCUSSION PURPOSES ONLY
D. Signature block
Very truly yours,
ASHFORD & PEMBERTON LLP
By: [DRAFT — to be signed]
________________________________________
Gregory Sondheim, CPA Lead Engagement Partner
30 Rockefeller Plaza, Suite 2800 New York, NY 10112
Engagement Manager: Irene Valdez, CPA
DRAFT — FOR DISCUSSION PURPOSES ONLY
APPENDIX A
FINANCIAL STATEMENT PERIODS AND DESCRIPTIONS
The following table sets forth each set of financial statements and financial data covered by this letter, together with the applicable periods, the level of assurance provided, and the applicable professional standards:
The Audit Report covering FY 2019, FY 2020, and FY 2021 was dated March 18, 2022, and was included in the Registration Statement. Our review report covering Q1 2022 is included in the Registration Statement in accordance with the applicable requirements.
DRAFT — FOR DISCUSSION PURPOSES ONLY
APPENDIX B
SPECIFIED FINANCIAL DATA COMPARED (TICK-AND-TIE SCHEDULE)
The following is a detailed listing of the specific financial figures and data appearing in the Prospectus that were compared by Ashford & Pemberton LLP to the applicable source documents. Each item is organized by Prospectus section and cross-referenced to its source. For purposes of this Appendix, the following abbreviations are used:
•  AFS = Audited Financial Statements (FY 2019, FY 2020, FY 2021)
•  RIF = Reviewed Interim Financial Data (Q1 2022)
•  CAR = Company Accounting Records and Internal Schedules
•  UA = Underwriting Agreement (near-final draft form)
1. Prospectus Summary
2. Selected Financial Data
3. Capitalization.  
4. Dilution.  
5. Use of Proceeds
6. MD&A.  
7. Description of Indebtedness
8. Underwriting (Economics)
9. Principal and Selling Stockholders (Share Amounts)
10. Implied Valuation Data
[End of Appendix B]
DRAFT — FOR DISCUSSION PURPOSES ONLY
[Remainder of page intentionally left blank]
Item | FY 2019 (Year Ended December 31, 2019) | FY 2020 (Year Ended December 31, 2020) | FY 2021 (Year Ended December 31, 2021)
Revenue | $312.8 million | $401.5 million | $487.3 million
Net Income (Loss) | ($22.4 million) | $14.1 million | $41.7 million
Total Assets | $2.61 billion | $3.18 billion | $3.94 billion
Total Debt | $1.28 billion | $1.52 billion | $1.71 billion
Adjusted EBITDA | $138.7 million | $179.2 million | $218.6 million
Cash and Cash Equivalents | N/A | N/A | $185.0 million
Operating Capacity | N/A | N/A | 3.8 GW
Item | Q1 2022 (Three Months Ended March 31, 2022)
Revenue | $131.4 million
Net Income | $8.3 million
Total Assets | $4.07 billion
Total Debt | $1.74 billion
Adjusted EBITDA | $59.8 million
Operating Capacity | 3.8 GW
Period | Adjusted EBITDA
FY 2019 | $138.7 million
FY 2020 | $179.2 million
FY 2021 | $218.6 million
Q1 2022 | $59.8 million
Item | December 31, 2021 (Audited) | Cut-Off Date — Approximately June 3, 2022 (Unaudited) | Change
Total Assets | $3.94 billion | [approximately $4.10 billion — to be confirmed] | Increase
Total Debt | $1.71 billion | [approximately $1.74 billion — to be confirmed; consistent with Q1 2022 figure] | Increase
Total Stockholders' Equity | [to be confirmed] | [to be confirmed] | [to be confirmed]
Cash and Cash Equivalents | $185.0 million | [to be confirmed] | [to be confirmed]
Item | Period Ended Approximately June 3, 2021 (Unaudited) | Period Ended Approximately June 3, 2022 (Unaudited) | Change
Revenue | [to be confirmed] | [to be confirmed — Q1 2022 revenue was $131.4 million; full period to be extrapolated] | [to be confirmed]
Net Income | [to be confirmed] | [to be confirmed — Q1 2022 net income was $8.3 million] | [to be confirmed]
Adjusted EBITDA | [to be confirmed] | [to be confirmed — Q1 2022 Adjusted EBITDA was $59.8 million] | [to be confirmed]
Period | Description | Level of Assurance | Applicable Standard
FY 2019 (fiscal year ended December 31, 2019) | Consolidated balance sheet; consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows; and related notes | Audited — Unqualified opinion | PCAOB Auditing Standards
FY 2020 (fiscal year ended December 31, 2020) | Consolidated balance sheet; consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows; and related notes | Audited — Unqualified opinion | PCAOB Auditing Standards
FY 2021 (fiscal year ended December 31, 2021) | Consolidated balance sheet; consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows; and related notes | Audited — Unqualified opinion | PCAOB Auditing Standards
Q1 2022 (three months ended March 31, 2022) | Unaudited condensed consolidated balance sheet; condensed consolidated statements of operations and cash flows; and related notes | Reviewed (unaudited) | PCAOB AS 4105
Data Point | Figure(s) as Stated in Prospectus | Source | Result
Revenue — FY 2019 | $312.8 million | AFS | Agreed
Revenue — FY 2020 | $401.5 million | AFS | Agreed
Revenue — FY 2021 | $487.3 million | AFS | Agreed
Revenue — Q1 2022 | $131.4 million | RIF | Agreed
Net Income (Loss) — FY 2019 | ($22.4 million) | AFS | Agreed
Net Income — FY 2020 | $14.1 million | AFS | Agreed
Net Income — FY 2021 | $41.7 million | AFS | Agreed
Net Income — Q1 2022 | $8.3 million | RIF | Agreed
Adjusted EBITDA — FY 2021 | $218.6 million | AFS / CAR | Agreed
Total Assets — FY 2021 | $3.94 billion | AFS | Agreed
Operating Capacity | 3.8 GW operating; 1.4 GW under construction; 6.2 GW pipeline | CAR | Agreed to Company records
Data Point | Figure(s) as Stated in Prospectus | Source | Result
Revenue — FY 2019, FY 2020, FY 2021 | As stated in Section IV.A above | AFS | Agreed
Revenue — Q1 2022 | $131.4 million | RIF | Agreed
Net Income (Loss) — FY 2019, FY 2020, FY 2021 | As stated in Section IV.A above | AFS | Agreed
Net Income — Q1 2022 | $8.3 million | RIF | Agreed
Adjusted EBITDA — FY 2019, FY 2020, FY 2021, Q1 2022 | As stated in Sections IV.A and IV.B above | AFS / RIF / CAR | Agreed (arithmetic verified)
Total Assets — FY 2019, FY 2020, FY 2021, Q1 2022 | As stated in Sections IV.A and IV.B above | AFS / RIF | Agreed
Total Debt — FY 2019, FY 2020, FY 2021, Q1 2022 | As stated in Sections IV.A and IV.B above | AFS / RIF | Agreed
Data Point | Figure(s) as Stated in Prospectus | Source | Result
Pre-IPO shares outstanding | 100,000,000 | CAR | Agreed
Post-IPO shares outstanding (base) | 123,713,636 | CAR / UA | Agreed
Post-IPO shares outstanding (full overallotment) | 127,272,727 | CAR / UA | Agreed
Par value | $0.01 per share | CAR | Agreed
Historical stockholders' equity and debt amounts | As per audited and reviewed financial statements | AFS / RIF | Agreed
Pro forma adjustments (arithmetic) | As described in Section VIII.B | AFS / RIF / CAR / UA | Arithmetically correct
Data Point | Figure(s) as Stated in Prospectus | Source | Result
Net tangible book value per share (historical) | As derived from audited balance sheet | AFS | Correctly derived
Pro forma net tangible book value per share (post-IPO) | As computed based on offering terms | AFS / CAR / UA | Arithmetically correct
Dilution per share to new investors | As computed | AFS / CAR / UA | Arithmetically correct
Data Point | Figure(s) as Stated in Prospectus | Source | Result
Gross primary proceeds | ~$371,700,000 (16,895,455 shares × $22.00) | UA / CAR | Arithmetically correct
Repayment of Term Loan B | ~$200 million | CAR | Agreed to Company schedules
Prepayment premium on Term Loan B | 1.00% = $2,000,000 | CAR | Agreed to credit agreement terms
Cimarron Solar construction funding | ~$100 million | CAR | Agreed to Company schedules
General corporate purposes | ~$71.7 million | CAR | Correctly derived (residual)
Data Point | Figure(s) as Stated in Prospectus | Source | Result
Revenue, COGS, gross margin, operating income — all periods | As stated in Prospectus MD&A | AFS / RIF | Agreed
Adjusted EBITDA reconciliation — FY 2019 | $138.7 million | AFS / CAR | Arithmetically correct; underlying GAAP amounts agreed
Adjusted EBITDA reconciliation — FY 2020 | $179.2 million | AFS / CAR | Arithmetically correct; underlying GAAP amounts agreed
Adjusted EBITDA reconciliation — FY 2021 | $218.6 million | AFS / CAR | Arithmetically correct; underlying GAAP amounts agreed
Adjusted EBITDA reconciliation — Q1 2022 | $59.8 million | RIF / CAR | Arithmetically correct; underlying GAAP amounts agreed
Key balance sheet and cash flow data discussed in MD&A | As stated in Prospectus MD&A | AFS / RIF | Agreed
Data Point | Figure(s) as Stated in Prospectus | Source | Result
Corporate Revolving Credit Facility | $400 million commitment | AFS / CAR | Agreed
Term Loan B — original principal | $650 million | AFS / CAR | Agreed
Term Loan B — outstanding balance | $612.5 million | AFS / CAR | Agreed
Mesquite Wind construction facility | $165 million commitment | CAR | Agreed to Company records
Cimarron Solar construction facility | $143 million commitment | CAR | Agreed to Company records
Solaris West tax-equity | $280 million invested | AFS / CAR | Agreed
Data Point | Figure(s) as Stated in Prospectus | Source | Result
Gross spread | 5.50% | UA | Agreed
Total underwriting discount (full exercise) | $33,000,000 | UA | Arithmetically correct
Management fee | $6,600,000 | UA | Arithmetically correct
Underwriting fee | $6,600,000 | UA | Arithmetically correct
Selling concession | $19,800,000 | UA | Arithmetically correct
Data Point | Figure(s) as Stated in Prospectus | Source | Result
Base shares offered | 23,713,636 | UA / CAR | Agreed
Overallotment shares | 3,559,091 | UA / CAR | Agreed
Total shares (full exercise) | 27,272,727 | UA / CAR | Arithmetically correct
Pinnacle Vista secondary shares | 6,818,182 at $150,000,000 | UA / CAR | Agreed; arithmetically correct
Primary shares (base) | 16,895,455 at $371,700,000 | UA / CAR | Agreed; arithmetically correct
2022 Omnibus Equity Incentive Plan reserve | 12,727,273 shares (10% of 127,272,727) | CAR | Arithmetically correct
2022 Employee Stock Purchase Plan reserve | 2,545,455 shares (2% of 127,272,727) | CAR | Arithmetically correct
Data Point | Figure(s) as Stated in Prospectus | Source | Result
Pre-money equity valuation | $2.2 billion (100,000,000 × $22.00) | CAR / UA | Arithmetically correct
Post-money equity valuation | ~$2.72 billion (123,713,636 × $22.00) | CAR / UA | Arithmetically correct
Enterprise value | ~$4.25 billion | CAR / UA / AFS | Arithmetically correct
EV/EBITDA multiple | ~19.4x | CAR / UA / AFS | Arithmetically correct

DRAFT — FOR DISCUSSION PURPOSES ONLY

I. INTRODUCTORY PARAGRAPH

II. INDEPENDENCE

III. AUDITED FINANCIAL STATEMENTS

IV. FINANCIAL STATEMENTS AND FINANCIAL DATA COVERED

V. PROCEDURES PERFORMED (AGREED-UPON AND SPECIFIED)

VI. NEGATIVE ASSURANCE (CHANGE PERIOD)

VII. CHANGE-PERIOD TABULAR DATA

VIII. CAPITALIZATION AND PRO FORMA DATA

IX. OTHER MATTERS

X. CONCLUDING PARAGRAPH

ASHFORD & PEMBERTON LLP

APPENDIX A

FINANCIAL STATEMENT PERIODS AND DESCRIPTIONS

APPENDIX B

SPECIFIED FINANCIAL DATA COMPARED (TICK-AND-TIE SCHEDULE)

Record

Parties

Dates

Amounts