STMH - Stem and Headwaters sign term sheet for business combination

• Stem ( OTCQB:STMH ) signs term sheet for proposed business combination with Headwaters.
• Pursuant to the term sheet, the transaction will result in a reverse takeover of the company and, the listing of the combined entity on the Canadian Securities Exchange (the “CSE”) and the OTCQB Venture.
• Following the closing of the transaction, it is expected that the former equity holders of Headwaters will own ~80% of company shares.

• 2022 consolidated business combination revenue of ~$75M and positive adjusted EBITDA. 2023 consolidated forecasted revenue of $100M and positive adjusted EBITDA.

• “Currently, Headwaters, located in California is a leading greenhouse cultivator, wholesale and distributor, with an emergent brand called Mr. Zips. We’re ready to grow our business to the next level, and the Stem team enables us to do just that. With access to capital markets and Stem’s valuable network, Headwaters is well positioned to continue disrupting the world’s largest cannabis market and to expand into new territories. We couldn’t think of a better partner to help us achieve our goal of maintaining and continue to be one of California’s largest and most profitable cultivation companies,” said Tristan Strauss, Founder and CEO of Headwaters

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