渾水做空阿姆斯特朗可持續(xù)基礎(chǔ)設(shè)施資本有限公司

Page1of27

MuddyWatersCapitalLLC

info@

DirectorofResearch:CarsonC.Block

TheseTermsofUsegoverncurrentreportspublishedbyMuddyWatersResearchandsupersedeanypriorTermsofUseforolderreportsofMuddyWaters

Research,whichyoumaydownloadfromtheMuddyWatersResearch’swebsite.

ThereportsonthiswebsitehavebeenpreparedbyMuddyWatersCapitalLLC(“MuddyWatersCapital”).WerefertoMuddyWatersResearchandMuddyWatersCapitalcollectively

as“MuddyWaters”andindividuallytheseentitiesarereferredtoasa“MuddyWatersEntity”.Youshouldassumethat,asofthepublicationdateofaMuddyWatersreport,

MuddyWatersRelatedPersons(possiblyalongwithorthroughitsmembers,partners,affiliates,employees,and/orconsultants),MuddyWatersRelatedPersonsclients

and/orinvestorsand/ortheirclientsand/orinvestorshaveashortpositioninoneormoreofthesecuritiesofaCoveredIssuer(and/oroptions,swaps,andotherderivatives

relatedtooneormoreofthesesecurities),andthereforestandtorealizesignificantgainsintheeventthatthepricesofeitherequityordebtsecuritiesofaCoveredIssuer

declineorappreciate.MuddyWatersResearch,MuddyWatersCapitaland/ortheMuddyWatersRelatedPersonsintendtocontinuetransactinginthesecuritiesofCoveredIssuersfor

anindefiniteperiodafteraninitialreportonaCoveredPerson,andsuchpersonmaybelong,short,orneutralatanytimehereafterregardlessoftheirinitialpositionandviewsasstated

intheresearchreportpublishedbyMuddyWatersResearchorMuddyWatersCapital.NeitherMuddyWatersResearchnorMuddyWatersCapitalwillupdateanyreportor

informationonitswebsitetoreflectchangesinpositionsthatmaybeheldbyaMuddyWatersRelatedPerson.Eachreportspecifiesthepublisherandownerofthatreport.Allreports

areforinformationalpurposesonly.Undernocircumstancesshouldanyofthesereportsoranyinformationhereinbeconstruedasinvestmentadvice,orasanoffertosellorthe

solicitationofanoffertobuyanysecuritiesorotherfinancialinstruments.

MuddyWatersResearchisanonlineresearchpublicationthatproducesduediligence-basedreportsonpubliclytradedsecurities,andMuddyWatersCapitalLLCisaninvestment

adviserregisteredwiththeU.S.SecuritiesandExchangeCommission.ThereportsarethepropertyoftheapplicableMuddyWatersEntitythatpublishedthatreport.Thiswebsiteis

ownedbyMuddyWatersResearch.Theopinions,informationandreportssetforthhereinaresolelyattributabletotheapplicableMuddyWatersEntityandarenotattributabletoany

MuddyWatersRelatedPerson(definedbelow)(otherthantheapplicableMuddyWatersEntity).

Bydownloadingfrom,orviewingmaterialonthiswebsite,youagreetothefollowingTermsofUse.Youagreethatuseoftheresearchonthiswebsiteisatyourownrisk.You(orany

personyouareactingasagentfor)agreetoholdharmlessMuddyWatersResearch,MuddyWatersCapitalanditsaffiliatesandrelatedparties,including,butnotlimitedtoany

principals,officers,directors,employees,members,clients,investors,consultantsandagents(collectively,the“MuddyWatersRelatedPersons”)foranydirectorindirectlosses

(includingtradinglosses)attributabletoanyinformationonthiswebsiteorinaresearchreport.Youfurtheragreetodoyourownresearchandduediligencebeforemakingany

investmentdecisionwithrespecttosecuritiesoftheissuerscoveredherein(each,a“CoveredIssuer”)oranyotherfinancialinstrumentsthatreferencetheCoveredIssuerorany

securitiesissuedbytheCoveredIssuer.Yourepresentthatyouhavesufficientinvestmentsophisticationtocriticallyassesstheinformation,analysisandopiniononthiswebsite.You

furtheragreethatyouwillnotcommunicatethecontentsofreportsandothermaterialsonthissitetoanyotherpersonunlessthatpersonhasagreedtobeboundbytheseTermsofUse.

Ifyouaccessthiswebsite,downloadorreceivethecontentsofreportsorothermaterialsonthiswebsiteonyourownbehalf,youagreetoandshallbeboundbytheseTermsofUse.If

youaccessthiswebsite,downloadorreceivethecontentsofreportsorothermaterialsonthiswebsiteasanagentforanyotherperson,youarebindingyourprincipaltothesesame

TermsofUse.

Thisisnotanoffertosellorasolicitationofanoffertobuyanysecurity.NeitherMuddyWatersResearchnoranyMuddyWatersRelatedPerson(includingMuddyWatersCapital)

areoffering,sellingorbuyinganysecuritytoorfromanypersonthroughthiswebsiteorreportsonthiswebsite.MuddyWatersResearchisaffiliatedwithMuddyWatersCapital.

MuddyWatersCapitalisaninvestmentadviserwiththeU.S.SecuritiesandExchangeCommissionandisnotregisteredasinvestmentadviserinanyotherjurisdiction.MuddyWaters

Capitaldoesnotrenderinvestmentadvicetoanyoneunlessithasaninvestmentadviser-clientrelationshipwiththatpersonevidencedinwriting.YouunderstandandagreethatMuddy

WatersCapitaldoesnothaveanyinvestmentadvisoryrelationshipwithyouordoesnotowefiduciarydutiestoyou.Givinginvestmentadvicerequiresknowledgeofyourfinancial

situation,investmentobjectives,andrisktolerance,andMuddyWatersCapitalhasnosuchknowledgeaboutyou.

IfyouareintheUnitedKingdom,youconfirmthatyouareaccessingresearchandmaterialsasoronbehalfof:(a)aninvestmentprofessionalfallingwithinArticle19oftheFinancial

ServicesandMarketsAct2000(FinancialPromotion)Order2005(the“FPO”);or(b)highnetworthentityfallingwithinArticle49oftheFPO(eacha“PermittedRecipient”).In

relationtotheUnitedKingdom,theresearchandmaterialsonthiswebsitearebeingissuedonlyto,andaredirectedonlyat,personswhoarePermittedRecipientsand,without

prejudicetoanyotherrestrictionsorwarningssetoutintheseTermsofUse,personswhoarenotPermittedRecipientsmustnotactorrelyontheinformationcontainedinanyofthe

researchormaterialsonthiswebsite.

TheresearchandreportspresentedonthiswebsiteexpresstheopinionoftheapplicableMuddyWatersEntityonly.Reportsarebasedongenerallyavailableinformation,fieldresearch,

inferencesanddeductionsthroughtheapplicableMuddyWatersEntity’sduediligenceandanalyticalprocess.TothebestoftheapplicableMuddyWatersEntity’sabilityandbelief,

allinformationcontainedhereinisaccurateandreliable,andhasbeenobtainedfrompublicsourcesthattheapplicableMuddyWatersEntitybelievetobeaccurateandreliable,and

whoarenotinsidersorconnectedpersonsoftheCoveredIssuersorwhomayotherwiseoweafiduciaryduty,dutyofconfidentialityoranyotherdutytotheCoveredIssuer(directlyor

indirectly).However,suchinformationispresented“asis,”withoutwarrantyofanykind,whetherexpressorimplied.Withrespecttotheirrespectiveresearchreports,MuddyWaters

ResearchandMuddyWatersCapitalmakesnorepresentation,expressorimplied,astotheaccuracy,timeliness,orcompletenessofanysuchinformationorwithregardtotheresultsto

beobtainedfromitsuse.Further,anyreportonthissitecontainsaverylargemeasureofanalysisandopinion.Allexpressionsofopinionaresubjecttochangewithoutnotice,and

neitherMuddyWatersResearchnorMuddyWatersCapitalundertakestoupdateorsupplementanyreportsoranyoftheinformation,analysisandopinioncontainedinthem.

InnoeventshallMuddyWatersResearch,MuddyWatersCapitaloranyMuddyWatersRelatedPersonsbeliableforanyclaims,losses,costsordamagesofanykind,includingdirect,

indirect,punitive,exemplary,incidental,specialor,consequentialdamages,arisingoutoforinanywayconnectedwithanyinformationonthiswebsite.Thislimitationofliability

appliesregardlessofanynegligenceorgrossnegligenceofMuddyWatersResearch,MuddyWatersCapitaloranyMuddyWatersRelatedPersons.Youacceptallrisksinrelyingon

theinformationonthiswebsite.

Youagreethattheinformationonthiswebsiteiscopyrighted,andyouthereforeagreenottodistributethisinformation(whetherthedownloadedfile,copies/images/reproductions,

orthelinktothesefiles)inanymannerotherthanbyprovidingthefollowinglink:/research/.IfyouhaveobtainedresearchpublishedbyMuddy

WatersResearchorMuddyWatersCapitalinanymannerotherthanbydownloadfromthatlink,youmaynotreadsuchresearchwithoutgoingtothatlinkandagreeingtotheTerms

ofUse.YoufurtheragreethatanydisputebetweenyouandMuddyWatersResearchanditsaffiliatesarisingfromorrelatedtothisreportand/ortheMuddyWatersResearchwebsite

orviewingthematerialhereonshallbegovernedbythelawsoftheStateofCalifornia,withoutregardtoanyconflictoflawprovisions.Youknowinglyandindependentlyagreeto

submittothepersonalandexclusivejurisdictionofthestateandfederalcourtslocatedinSanFrancisco,Californiaandwaiveyourrighttoanyotherjurisdictionorapplicablelaw,

giventhatMuddyWatersResearchanditsaffiliatesarebasedinSanFrancisco,California.ThefailureofMuddyWatersResearchorMuddyWatersCapitaltoexerciseorenforceany

rightorprovisionoftheseTermsofUseshallnotconstituteawaiverofthisrightorprovision.YouagreethateachMuddyWatersRelatedPersonisathird-partybeneficiarytothese

TermsofUse.IfanyprovisionoftheseTermsofUseisfoundbyacourtofcompetentjurisdictiontobeinvalid,thepartiesneverthelessagreethatthecourtshouldendeavortogive

effecttotheparties’intentionsasreflectedintheprovisionandrulethattheotherprovisionsoftheseTermsofUseremaininfullforceandeffect,inparticularastothisgoverninglaw

andjurisdictionprovision.Youagreethatregardlessofanystatuteorlawtothecontrary,anyclaimorcauseofactionarisingoutoforrelatedtothiswebsiteorthematerialonthis

websitemustbefiledwithinone(1)yearaftertheoccurrenceoftheallegedharmthatgaverisetosuchclaimorcauseofaction,orsuchclaimorcauseofactionbeforeverbarred.

Page2of27

HASI:“ESG”isforExaggerating,Scamming,andGrifting

WeareshortHannonArmstrongSustainableInfrastructureCapital,Inc.(HASI)becauseitsaccountingissocomplexandmisleadingthatitsfinancialstatementsareeffectivelymeaningless.HASIisaprimeexampleofhowpublicmarketincentivescanwarpacompanyintorelentlesslydestroyingvaluetofeedaWallStreetgrowthnarrative.MostofHASI’sincomeisbothnon-cashandunrealizable:Ithaslittlerelationshipwithcashtobereceivedinthefuture.HASImisleadinglyinflatesGAAPearningsthreeways:1)Throughaloopholeinthearcanaofaccountingforrenewablessubsidies,HASIbooksnon-cashunrealizableincomerelatingtothirdparties’taxcreditsthatwillbereversed;2)HASIproducesnon-cashincomebymanipulatingthediscountrateitappliestoresidualassetstoimplausiblylowlevels,therebyinflatingitsgainsonsecuritizations;and,3)HASIbooksinterestincomefromnon-cash“PaidinKind”(“PIK”)interestpayments,whichareessentiallyIOUsfromstressedborrowers.

Overall,weadjustHASI’s2020GAAPincomedownwardby$66.3millionto$16.5millionatthemidpointofourestimate.1WeadjustHASI’s2021GAAPincomedownby$362.7milliontoanetlossof($235.4million)atthemidpoint.2HASI’snon-GAAP“DistributableEarnings”misleadinvestorswhobelievetheyareaproxyforcashearnings–weestimate2021cashearningsasnegative.HASI’sdividendisalmostentirelyfinancedthroughcapitalraises.WebelievethatHASI’soperatingcashflowismisleadinglyhigh–weconservativelyadjustitdownwardbyapproximately39.3%.

HASI’sSunStrongEMIisanexampleofhowHASIengagesinseeminglynon-substantive–ifnotoutrightvaluedestructive–transactionswithanequitymethodinvestment(“EMI”)companytocreatetheappearanceofcashflowsandearningsbyroundtrippingmoney.Wecount$502millionofloansthatHASImadetoSunStrongsince2018withoutdisclosureasrelatedpartytransactions,indicatingthatthecosttoHASIforsuchfinancialstatementflatteryisoutsizedrisk.3ThegaintoHASI’sexecutives,meanwhile,isclear:theyhavedisposedof$22.9millionofstockinthepasttwoyears,withCEOJeffEckelhavingliquidatedorgifted$17.1million.

1MWmidpointestimate.

2MWmidpointestimate.

3OurcountofundisclosedHASIloanstoSunStrongstartsfromNovember2018andisbasedontotalborrowableprincipleatthetimeoforigination.ThecountassumesHASIfunded50%ofthe8point3SolarInvestco3Holdings,LLCloanmadeinJune2019byKeyBankandHASI.

Page3of27

WeadjustGAAPearningssignificantlydownwardbecauseHASImisleadinglyinflatesGAAPearningsinthreeways:

oWeestimatethatHASIinflated2020incomefromEMIsby$40.4million,or540%atthemidpointofourestimate,andturnedalossintopositiveincomein

2021byusinganaccountingloopholetobooknon-cash,unrealizableincomewhenthetaxincentivesassociatedwiththeprojectarerealizedbythetaxequitypartner.4

oWeestimatethatbymanipulatingthediscountratetoimplausiblylowlevels,HASIinflatedgainsonsecuritizationin2020and2021,respectively,by34%($13million)and60%($25million).5HASIperformssecuritizationofreceivablesfromgovernment-linkedandcommercialprojects.HASIreceivesasmallsecuritizationfee,butretainsaresidualinterestresponsibleforsignificantpaperincome.HASIinflatesitsgainsonsecuritizationsbyusingwhatHASIcallsa“market-basedrisk-freerate”tovaluetheresiduals,ratherthanacomparablemarketratewithdefaultandotherriskconsiderations.Bydroppingdiscountratesonresidualsto4.3%in2021from8%-10%in2013,HASIcanwriteupthevaluesofthoseresidualssignificantlyonitsbalancesheet.

oWeestimatethatPIKinterestincomeinflatedHASI’sreportedinterestincomein

2020and2021,respectively,by16.1%($13.2million)and15.1%($14.0million).6HASIinflatesearningsbybookingundisclosed,non-cashPIKinterestincome.Whenacompany“PIKs”,itessentiallyissuesIOUsfortheinterest

payments.

?HASI’spreferrednon-GAAPmetric,“DistributableEarnings”,hasalmostnorelationshipwithcashearnings.HASI’sDistributableEarningsisa“havemycakeandeatittoo”metric.Asshouldbeexpected,HASIaddsbacknon-cashexpenses.Criticallythough,HASIdoesnotexcludenon-cashincome.Weestimatethatin2021,non-cashincomewas$362.7million,whichwas2.3xHASI’sreportedDistributableEarningsof$158.7million.DistributableEarningsisthereforesignificantlydistortedbyHASI’snon-cashincome.

oIncontrasttoothercompaniesthatcollectcashfortheirrevenue,HASI’srevenueshaveasignificantnon-cashcomponent,stemmingfromPIKinterestincome,gainsonsecuritizations,andnon-cashincomefromEMIsornon-cashHLBVincome.HASIdoesnotremovenon-cashincome,onlyaddingbacknon-cashexpensesandinvestmentstocalculateitsDistributableEarnings.

oHASImakesanadjustmenttoincomefromEMIs,butthisadjustmentdoesnotcorrespondtoEMIs’actualcashgenerationpower.HASIreplacesEMIincomewithanothernon-cashmetric,aso-called“EquityMethodInvestmentsEarnings”,whichisprojectedfutureincomebasedonscenariosthatseemgreatlyoptimisticbasedontheirperformancestodate.

4MWmidpointestimate.

5MWmidpointestimate.

6MWmidpointestimate.

Page4of27

oWeadjust2021DistributableEarningsdownfrom$158.7milliontoalossof($181.4million)byremovingincomethatislikelyorentirelynon-cash.

?ThevastmajorityofHASI’sdividendshavebeenfinancedbyreturnsofcapital,notreturnsoncapital–inotherwords,HASIprimarilypaysitsdividendsthroughequityanddebtraises.IntheeightyearssinceHASI’sIPO,only9%ofdividendscamefrominternallygeneratedcashflowsonaverage:91%wasjustrecyclingequityanddebtinvestors’capital.

?WeadjustHASI’s2019-2020OperatingCashFlow(OCF)downby-39.3%.Webelievethisisconservative.

oNon-cashHLBVincomeenablesHASItoinflateOCF.HASIdisclosesthatitaccountsforanycashdistributedfromEMIsasOCF,uptotheamountofincomebookedoneachinvestment.Inthisway,HASI’spaperincomealsoinflatesOCF.

oWeestimatethatHASIusednon-cash,unrealizableHLBV-relatedincomeandreturnsofHASI’sowncapitalfromEMIsSunStrongandBuckeyetoinflateOCF.Weadjust2019-2020OCFdownwardby-39.3%,or-$39.4million.

?HASI’sSunStrongEMIisaprimeexampleofhowHASIusesitsEMIstomanipulateearningsandcashflowsthroughmultipleaggressiveroundtrippingmechanismsandwithoutappropriatedisclosures.

oHASIpaidonly$10millionforits49%equityinterestin2018.Weestimatethatfrom2019to2021,HASIhasbookednon-cash,unrealizableHLBVincomeof$15.3million,forapaperIRRof10.2%.

oHASIhasmade$645millioninmezzanineloanstoSunStrongsince2018,ofwhich$373millionwerestilloutstandingatyear-end2021.Theseloansappeartoberelatedpartyloansinsubstance,yetHASIhasfailedtomakerelatedpartytransactiondisclosuresregardingloanstotaling$502million.WeseethefailuretodiscloseasanattempttoobscurefrominvestorshowHASIusesSunStrongtomanipulateitsfinancials.HASIhasgenerated$20million-$30millioninannualinterestincomefromtheseloans,ofwhich~40%isnon-cashPIKinterestthatissettledbyconvertinginteresttoadditionalloanprincipal.

oSunStronghasincurredmillionsofdollarsinlossesfrominceptiontodate.Atthesametime,HASIhasrefinancedcertainofitsloanstoSunStrongtwicewithatbestcosmeticbenefitstotheinterestburdenorloanmaturity.Theserefinancingsgivethemisleadingappearanceofhealthymezzanineloanrepaymentactivity.

oPIKloansenableHASItokeepincreasinginterestincomefromSunStrong,eventhoughSunStrong’sdebtburdenisextreme.

oWesuspectthatHASI’ssaleofHAHelixtoSunStrong,whichwasessentiallyforapaymentofmoneyborrowedfromHASI,inappropriatelyinflatedHASI’soperatingcashflowwhilegivingthemisleadingappearancethatitcollectedcashonaccruedPIKinterestandprincipal.

Page5of27

?WeviewHASI’smisleadinggovernancepracticesasobscuringthenon-cash,circularnatureofitsbusiness.

oHASIshowsHLBVincomefromEMIsthatisone-time,non-cash,andunrealizable.7HASIisnotobligatedtoshowthisincome.Toeliminatethesignificantamountofnon-cashHLBVincomeithasrecordedandproperlyapplyaccountingrules,HASIshouldtakeimpairmentsoruserealizablebookvaluesunderHLBV.However,HASIchoosestocontinuereportinginflatednon-cashincome.

?HASI’sEMIshaveexperiencedapproximately($449million)inlossesfromhedgesandothercausesthatremainpoorlyexplainedbythecompany.Yet,HASIreportsrecordincomefromEMIsduetonon-cashunrealizableHLBVincome.

?HASIexecutiveshavecashedout$22.9millionofstockinthelasttwoyears,ledbyCEOJeffEckel.Thecompany’smisleadingnon-cash“Distributable”metricsdrove$8.6millionin2021executivebonuspayments.8

?AfterestimatingHASI’sincomeinflation,weadjustHASI’s2021GAAPincomedownwardby$362.7milliontoanetlossof($235.4million).9

?WeadjustHASI’s2020GAAPincomedownwardby$66.3milliontonetincomeof$16.5million.10

HASIisarenewables-focusedfinancialcompanythattodayoperatesthreemainincomestreams.ThelargestsourceofreportedincomeisitsEquityMethodInvestments(EMIs)inrenewableenergyprojects.Mostoftheseareminorityinvestmentsinwind,residentialsolar,andutility-scalesolarprojects.HASIaccountsforEMIincomethrough“HypotheticalLiquidationatBookValue”(“HLBV”),whichcreatessignificantnon-cashandunrealizableincome.Thesecondkeysegmentissecuritizationofreceivablesfromgovernment-linkedandcommercialprojects.Historically,HASI’ssecuritization-relatedincomewaslargelyafeeequivalenttoasmallpercentageofthesecuritizations.However,HASIincreasinglyretainsresidualinterestsinthesereceivables,whichasexplainedinfra,generatessignificantpaper(non-cash)gains.HASI’sthirdmajorincomesourceisinterestincomefromcommercialandgovernmentloanreceivables.HASIregularlybooksnon-cashPIKinterestfromsuchreceivables,evenwhentheentityguaranteeingthereceivablesappearshighlyleveredandgenerateslittleprofit.Allthreebusinessareashavesignificantnon-cashincomecomponentsthatallowHASItoreportunrealizableincome.

HASIillustratestheperversemarketincentivesthatcanwarpabusinessoncepublic.BeforeHASIbecamereliantonlargelyunrealizable,non-cashgains,itwasaboring,cash-basedbusiness.For32yearsbeforegoingpublicinApril2013,HASIwas100%fee-based,primarily

7Whenwerefertonon-cashHLBVincome,wearereferringtonon-cashHLBVincomethatreversesovertime,asnotedine.g.HASI202110-K,p.101

8HASI2022ProxyStatement,p.54

9MWmidpointestimate.

10MWmidpointestimate.

Page6of27

generatingfeesfromloans,landleases,andsecuritizations.11Beforeits2013IPO,HASI’smanagedportfolioconsistedoffixedrateamortizingloansordirectfinancingleases,with~99%oftheportfolioconsistingofU.S.federalgovernmentobligations,themajorityofwhichwereenergyefficiencyfinancing.12HASIonlybeganinvestingheavilyinEMIspost-IPO,in

2014.HASI’sinvestmentportfoliohaschangedsignificantlysincethen.Asofyear-end2021,EMIswereHASI’slargestassetclass,equalto42.4%ofHASI’sassetvalue;investmentsinreceivables,bothcommercialandgovernment,combiningfor~34%,ofwhichcommercialreceivablesare91.3%ofthereceivablebalance.13

SunStrongEMIIllustratesHASI’sBrazenEarningsandCashFlowManipulation

TounderstandthelengthstowhichHASIgoestomanipulateitsfinancials,oneneedlooknofurtherthanHASI’srelationshipwithits49%-ownedEMI,SunStrongCapitalHoldings,LLC(“SunStrong”).SunStrongshowstwoofthethreetechniquesHASIusestomanipulateitsGAAPearnings:non-cashHLBVincomeandPIKinterest.Thesenon-cashincomestreamsalsomisleadinglyboostoperatingcashflow,andcreateamisleadingimageofahealthyloanportfolio.SunStrongappearstobeastressedproject.14HASI’sentryasajointventurepartnerresultsfromrestructuringdistressedloansitmadetoSPWR.SunStronghasacumulativelosssincethejointventurewasformedin2018,despitetheassetshavinggoneintooperationasearly

as2014.

Yet,HASIrecordssignificantincomefromtheSunStrongjointventure–thisincomeissubstantiallynon-cash.HASIrecordsnon-cashHLBVincomeatavalueroughlyequaltoitsproportionalshareofathirdparty’staxcredits,despiteHASIreversingallofthisincomeovertimeandreceivingnotaxbenefitorcashincomeitself.HASIalsorecordsincomeandoperatingcashflowbyreceivingPaid-in-Kind(“PIK”)interest–PIKinterestisessentiallyIOUs.HASIusesSunStrongtomanipulateitsinvestingcashflowbymakingveryquestionablenewloanstoSunStrongthatareusedtopayoffexistingloansfromHASIthatcanbeover20yearsfrommaturity.HASIappearstohavegoneevenfurthertouseSunStrongtomanipulateitsoperatingcashflowwhenHASIconveyedaportfoliotoSunStronginaconvolutedmannerthateffectivelyroundtrippedcashbacktoHASI;yetreducedtheamountofprincipalandPIKinterestSunStrongowesHASI.ThisappearstohaveenabledHASIto(improperlyinourview)recordoperatingcashflow.HASIalsolikelyuseda$21.6millioncashdistributionfromSunStrongtorecordoperatingcashflowinayearinwhichSunStrongbookedanetlossandPIKeditsinterestexpense,implyingaprimarypurposeforthedistributionofmanipulatingHASI’sfinancials.BasedonHASI’sscantdisclosuresarounditsrelationshipwithSunStrong,HASIappearstobesensitivetoinvestorsknowingthefullpictureofthetwocompanies’dealings.Asjustoneexample,HASIappearstohavemadenodisclosuresaboutanyofthetenadditionalroundsof

11HASISpecialCallHostedbyMorganStanley,July2020

12HASIFormS-11A,pp.6-9

13HASI202110-K,p.80

14