Stem, Inc. Announces Proposed $175 Million Green Convertible Senior Notes Offering

Stem, Inc. ("Stem") (NYSE: STEM) announced today its intention to offer, subject to market conditions and other factors, $175 million aggregate principal amount of green Convertible Senior Notes due 2030 (the "Notes") in a private offering (the "Offering") to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). In connection with the Offering, Stem expects to grant the initial purchasers of the Notes an option to purchase, for settlement within a 13-day period from, and including, the date when the Notes are first issued, up to an additional $35 million aggregate principal amount of the Notes on the same terms and conditions.

When issued, the Notes will be senior, unsecured obligations of Stem. The Notes will accrue interest payable semi-annually in arrears and will mature on April 1, 2030, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. The Notes will be convertible upon the satisfaction of specified conditions into cash, shares of common stock of Stem or a combination thereof, with the form of consideration to be determined at Stem's election. The Notes will be redeemable, in whole or in part, for cash at Stem's option at any time, and from time to time, on or after April 5, 2027 and before the 45th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Stem's common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The interest rate, initial conversion rate and other terms of the Notes will be determined at the pricing of the Offering.

In connection with the pricing of the Notes, Stem expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers or their affiliates and/or other financial institutions (the “option counterparties”). The capped call transactions are expected generally to reduce potential dilution to Stem’s common stock upon any conversion of the Notes and/or offset any potential cash payments Stem is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap. If the initial purchasers exercise their option to purchase additional Notes, Stem expects to enter into additional capped call transactions with the option counterparties. In connection with establishing their initial hedges of the capped call transactions, Stem expects that the option counterparties or their respective affiliates will purchase shares of Stem’s common stock and/or enter into various derivative transactions with respect to Stem’s common stock concurrently with or shortly after the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of Stem’s common stock or the Notes at that time.