Special Note Regarding Forward-Looking Statements
This third-quarter 2021 Form 10-Q, as well as other statements we make, contains 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 reduction of greenhouse gas
(GHG) emissions; the integration and optimization of energy resources; the business strategies of Stem and those of its customers; the global commitment to decarbonization; our ability to retain or upgrade current customers, further
penetrate existing markets or expand into new markets; our ability to manage our supply chains and distribution channels and the impact of natural disasters and other events beyond our control, such as the
COVID-19 pandemic and the Delta variant, and government and business responses thereto; and future results of operations. 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. 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 our inability to help reduce GHG emissions; our inability to seamlessly integrate and optimize
energy resources; our inability to achieve our financial and performance targets and other forecasts and expectations; our inability to recognize the anticipated benefits of our recent business combination with Star Peak Energy Transition Corp.
(Star Peak); our ability to grow and manage growth profitably; risks relating to the development and performance of our energy storage systems and software-enabled services; the risk that the global commitment to decarbonization may not
materialize as we predict, or even if it does, that we might not be able to benefit therefrom; our inability to retain or upgrade current customers, further penetrate existing markets or expand into new markets; our inability to secure sufficient
inventory from our suppliers to meet customer demand, and provide us with contracted quantities of equipment; supply chain interruptions and manufacturing or delivery delays; disruptions in sales, production, service or other business activities;
our inability to attract and retain qualified personnel; the risk that our business, financial condition and results of operations may be adversely affected by other political, economic, business and competitive factors; and other risks and
uncertainties set forth in this Form 10-Q, the section entitled Risk Factors in the definitive proxy statement relating to the business combination filed by Star Peak on March 30, 2021, the
Form 10-K/A filed by Star Peak with the SEC on April 26, 2021, and our Forms 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
third-quarter 2021 Form 10-Q are made as of November 9, 2021, 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.
You should read the following managements discussion and analysis of our financial condition and results of
operations together with our unaudited condensed consolidated financial statements and related notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q. This discussion and analysis should
also be read together with our audited consolidated financial statements as of December 31, 2020 and 2019 and for the years ended December 31, 2020 and 2019 (Annual Financial Statements) and the section entitled
Stems Managements Discussion and Analysis of Financial Condition and Results or Operations contained in our Form S-1 filed with the SEC on July 19, 2021.You should carefully read
the sections entitled Special Note Regarding Forward-Looking Statements and Risk Factors to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking
statements. Throughout this section, unless otherwise noted we, us, our and the Company refer to Stem and its consolidated subsidiaries.
Star Peak Acquisition Corp. Merger
On
April 28, 2021, Star Peak Energy Transition Corp. (STPK), an entity listed on the New York Stock Exchange under the trade symbol STPK, acquired Stem, Inc. (Legacy Stem), by the merger of STPK Merger Sub
Corp., a Delaware corporation and wholly-owned subsidiary of STPK (Merger Sub), with and into Legacy Stem, with Legacy Stem continuing as the surviving entity and a wholly-owned subsidiary of STPK (the Merger). The public
company resulting from the Merger was renamed Stem, Inc., which we refer to as Stem, we, us, our, or the Company, and is listed on the New York Stock Exchange under the trade symbol STEM.
Upon the consummation of the Merger, Stem received approximately $550.3 million, net of fees and expenses. See Note 1 - Business, of the Notes to the unaudited condensed consolidated financial statements in this report, for additional
details regarding this transaction. For financial reporting purposes, Legacy Stem is treated as the accounting acquirer.
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