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  "documentTitle": "Hannon Armstrong Sustainable Infrastructure Capital (HASI)",
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  "presentationDate": "2022-07-12 00:00:00",
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  "notes": "The slide uses a forensic accounting approach to highlight potential misclassification of investment proceeds and interest payments.",
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      "text": "HASI's Lack of Disclosures About its SunStrong Transactions Imply that it is Sensitive About Investors Knowing the Facts",
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      "text": "HASI's Lack of Disclosures About its SunStrong Transactions Imply that it is Sensitive About Investors Knowing the Facts",
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      "text": "It appears that HASI cunningly converted HA Helix from an EMI to a loan almost contemporaneous with the conveyance. This conversion seemingly was the key to booking the sale proceeds as OCF. In HASI's Q3 2021 10-Q, it disclosed that in July 2021 – the same month as the conveyance – it restructured an EMI to convert it to a loan with a $17 million fair value.",
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      "text": "Based on the principle of substance over form, we believe HASI should make full related party disclosures pertaining to its dealings with SunStrong.",
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      "text": "We believe that HASI might have recorded this transaction's “payment” in the form of reduction of interest in principal due, which would have looked like an operating cash inflow. SunStrong's 2021 financials show at least $7.9 million in PIK interest that should have been added to HASI's accrued interest.",
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      "text": "HASI's cash flow statement should show at least $17.1 million of proceeds from sales of equity method investments. However, it shows only $0.3 million of such proceeds, meaning that HASI either did not record the cash flows or it recorded them in another way.",
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      "text": "The auditor should view related party transactions within the framework of existing pronouncements, placing primary emphasis on the adequacy of disclosure. In addition, the auditor should be aware that the substance of a particular transaction could be significantly different from its form and that financial statements should recognize the substance of particular transactions rather than merely their legal form. — AU Section 334",
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      "text": "Footnotes 49-52 detailing specific 10-Q/10-K references and accounting standards.",
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