Stem, Inc. (“Stem”) (NYSE: STEM) announced today its intention
to offer, subject to market conditions and other factors, $350
million aggregate principal amount of green Convertible Senior
Notes due 2028 (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 $52.5 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 December 1, 2028, 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 December 5, 2025 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.
In addition, the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to Stem’s common stock
and/or purchasing or selling Stem’s common stock or selling Stem’s
common stock or other securities in secondary market transactions
following the pricing of the Notes and prior to the maturity of the
Notes (and are likely to do so following any dates the Notes are
converted, repurchase or redeemed, if Stem exercises its option to
terminate the relevant portion of the capped call transactions).
This activity could also cause or avoid an increase or decrease in
the market price of Stem’s common stock or the Notes, which could
affect noteholders’ ability to convert the Notes and, to the extent
the activity occurs during any observation period related to a
conversion of Notes, it could affect the number of shares and value
of the consideration that noteholders receive upon conversion of
the Notes.
Stem intends to use a portion of the net proceeds from the
Offering to fund the cost of entering into the capped call
transactions described above. Stem intends to allocate an amount
equivalent to the net proceeds from the Offering to finance or
refinance, in whole or in part, existing or new Eligible Green
Expenditures of Stem, including investments related to creating a
more resilient clean energy system, optimized software capabilities
for energy systems, and reducing waste through operations.
The Notes will be offered only to persons reasonably believed to
be qualified institutional buyers pursuant to Rule 144A under the
Securities Act. The offer and sale of the Notes and any shares of
common stock of Stem issuable upon conversion of the Notes, if any,
have not been, and will not be, registered under the Securities Act
or the securities laws of any other jurisdiction, and unless so
registered, the Notes and such shares, if any, may not be offered
or sold in the United States except pursuant to an applicable
exemption from such registration requirements.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any offer or
sale of, the Notes (or any shares of common stock of Stem issuable
upon conversion of the Notes) in any state or jurisdiction in which
the offer, solicitation, or sale would be unlawful prior to the
registration or qualification thereof under the securities laws of
any such state or jurisdiction.
About Stem, Inc.
Stem Inc. (NYSE: STEM) provides advanced energy storage
solutions alongside its AI-powered analytics platform to enable
customers and partners to optimize energy use by automatically
switching between battery power, onsite generation and grid power.
Stem’s solutions help enterprise customers benefit from a clean,
adaptive energy infrastructure and achieve a wide variety of goals,
including expense reduction, resilience, sustainability,
environmental and corporate responsibility and innovation. Stem
also offers full support for solar partners interested in adding
storage to standalone, community or commercial solar projects –
both behind and in front of the meter.
Cautionary Statement Regarding Forward-looking
Statements
This press release, as well as other statements we make, contain
"forward-looking statements" within the meaning of the federal
securities laws, which include any statements that are not
historical facts. Such statements often contain words such as
"expect," "may," "can," "believe," "predict," "plan," "potential,"
"projected," "projections," "forecast," "estimate," "intend,"
"anticipate," "ambition," "goal," "target," "think," "should,"
"could," "would," "will," "hope," "see," "likely," and other
similar words. Forward-looking statements address matters that are,
to varying degrees, uncertain, such as statements about the terms
of the Offering, whether Stem will be able to satisfy the closing
conditions to consummate the Offering and the anticipated use of
proceeds of the Offering. Such forward-looking statements are
subject to risks, uncertainties, and other factors that could cause
actual results to differ materially from those expressed or implied
by such forward-looking statements, including changes as a result
of market conditions and the risk that the Offering will not be
consummated. These forward-looking statements are based upon
assumptions and estimates that, while considered reasonable by Stem
and its management, depend upon inherently uncertain factors and
risks that may cause actual results to differ materially from
current expectations, including the additional risks and
uncertainties set forth in the section entitled "Risk Factors" in
the registration statement on Form S-1 filed with the SEC on July
19, 2021, and Stem’s most recent Forms 10-K, 10-Q and 8-K filed
with or furnished to the SEC. If one or more of these or other
risks or uncertainties materialize (or the consequences of any such
development changes), or should our underlying assumptions prove
incorrect, actual outcomes may vary materially from those reflected
in our forward-looking statements. Statements in this press release
are made as of the date hereof, and Stem disclaims any intention or
obligation to update publicly or revise such statements, whether as
a result of new information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20211116006364/en/
Stem, Inc. Ted Durbin, Stem Marc Silverberg, ICR IR@stem.com
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