(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
| Exhibit Number | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL) | |||||||
Dated: August 8, 2024 | SoundHound AI, Inc. | ||||||||||
| By: | /s/ Keyvan Mohajer | ||||||||||
| Name: | Keyvan Mohajer | ||||||||||
| Title: | Chief Executive Officer | ||||||||||
Three Months Ended (thousands, unless otherwise noted) | June 30, 2024 | June 30, 2023 | Change | ||||||||||||||||||||||||||
| Revenues | $ | 13,462 | $ | 8,751 | 54 | % | |||||||||||||||||||||||
| GAAP gross profit | $ | 8,482 | $ | 6,921 | 23 | % | |||||||||||||||||||||||
| GAAP gross margin | 63.0% | 79.1% | (16.1) | pp | |||||||||||||||||||||||||
| Non-GAAP gross profit | $ | 8,951 | $ | 7,002 | 28 | % | |||||||||||||||||||||||
| Non-GAAP gross margin | 66.5% | 80.0% | (13.5) | pp | |||||||||||||||||||||||||
| GAAP operating loss | $ | (21,985) | $ | (16,483) | 33 | % | |||||||||||||||||||||||
| Non-GAAP adjusted EBITDA | $ | (13,848) | $ | (10,082) | 37 | % | |||||||||||||||||||||||
| GAAP net loss | $ | (37,322) | $ | (23,307) | 60 | % | |||||||||||||||||||||||
| Non-GAAP net loss | $ | (14,821) | $ | (16,069) | (8) | % | |||||||||||||||||||||||
| GAAP net loss per share | $ | (0.11) | $ | (0.11) | $ | — | |||||||||||||||||||||||
| Non-GAAP net loss per share | $ | (0.04) | $ | (0.07) | $ | 0.03 | |||||||||||||||||||||||
Six Months Ended (thousands) | June 30, 2024 | June 30, 2023 | ||||||||||||||||||
| Cash flows: | ||||||||||||||||||||
| Net cash used in operating activities | $ | (40,440) | $ | (34,201) | ||||||||||||||||
| Net cash used in investing activities | (4,788) | (293) | ||||||||||||||||||
| Net cash provided by financing activities | 137,030 | 154,558 | ||||||||||||||||||
| Effects of exchange rate changes on cash | 130 | — | ||||||||||||||||||
| Net change in cash and cash equivalents | $ | 91,932 | $ | 120,064 | ||||||||||||||||
Three Months Ended (thousands) | June 30, 2024 | June 30, 2023 | ||||||||||||||||||
GAAP gross profit1 | $ | 8,482 | $ | 6,921 | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||
| Amortization of Intangibles | 362 | — | ||||||||||||||||||
| Stock-based compensation | 107 | 81 | ||||||||||||||||||
| Non-GAAP gross profit | $ | 8,951 | $ | 7,002 | ||||||||||||||||
| GAAP gross margin | 63.0% | 79.1% | ||||||||||||||||||
| Non-GAAP gross margin | 66.5% | 80.0% | ||||||||||||||||||
Three Months Ended (thousands) | June 30, 2024 | June 30, 2023 | ||||||||||||||||||
| GAAP net loss | $ | (37,322) | $ | (23,307) | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||
Interest and other income/(expense), net1 | (888) | 5,570 | ||||||||||||||||||
| Loss on early extinguishment of debt | 15,587 | 837 | ||||||||||||||||||
| Income taxes | 638 | 417 | ||||||||||||||||||
| Depreciation and amortization | 1,280 | 703 | ||||||||||||||||||
| Stock-based compensation | 7,253 | 5,532 | ||||||||||||||||||
| Restructuring | — | 166 | ||||||||||||||||||
| Change in fair value of contingent acquisition liabilities | (1,082) | — | ||||||||||||||||||
| Acquisition-related expenses | 686 | — | ||||||||||||||||||
| Non-GAAP adjusted EBITDA | $ | (13,848) | $ | (10,082) | ||||||||||||||||
Three Months Ended (thousands) | June 30, 2024 | June 30, 2023 | ||||||||||||||||||
| GAAP net loss | $ | (37,322) | $ | (23,307) | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||
| Depreciation and amortization | 1,280 | 703 | ||||||||||||||||||
| Stock-based compensation | 7,253 | 5,532 | ||||||||||||||||||
| Restructuring | — | 166 | ||||||||||||||||||
| Loss on early extinguishment of debt | 15,587 | 837 | ||||||||||||||||||
| Change in fair value of contingent acquisition liabilities | (1,082) | — | ||||||||||||||||||
| Gain on bargain purchase | (1,223) | — | ||||||||||||||||||
| Acquisition-related expenses | 686 | — | ||||||||||||||||||
| Non-GAAP net loss | $ | (14,821) | $ | (16,069) | ||||||||||||||||
GAAP net loss per share1 | (0.11) | (0.11) | ||||||||||||||||||
| Adjustments | 0.07 | 0.04 | ||||||||||||||||||
Non-GAAP net loss per share1 | (0.04) | (0.07) | ||||||||||||||||||
| June 30, 2024 | December 31, 2023 | ||||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 200,156 | $ | 95,260 | |||||||
| Accounts receivable, net of allowances of $439 and $203 as of June 30, 2024 and December 31, 2023, respectively | 5,059 | 4,050 | |||||||||
| Contract assets and unbilled receivable, net of allowance for credit losses of $108 and $17 of June 30, 2024 and December 31, 2023, respectively | 14,892 | 11,780 | |||||||||
| Other current assets | 3,949 | 2,452 | |||||||||
| Total current assets | 224,056 | 113,542 | |||||||||
| Restricted cash equivalents, non-current | 811 | 13,775 | |||||||||
| Right-of-use assets | 4,303 | 5,210 | |||||||||
| Property and equipment, net | 1,296 | 1,515 | |||||||||
| Goodwill | 6,039 | — | |||||||||
| Intangible assets, net | 13,147 | — | |||||||||
| Deferred tax asset | 10 | 11 | |||||||||
| Contract assets and unbilled receivable, non-current, net of allowance for credit losses of $171 and $177 of June 30, 2024 and December 31, 2023, respectively | 15,518 | 16,492 | |||||||||
| Other non-current assets | 1,494 | 577 | |||||||||
| Total assets | $ | 266,674 | $ | 151,122 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 4,255 | $ | 1,653 | |||||||
| Accrued liabilities | 13,147 | 13,884 | |||||||||
| Operating lease liabilities | 2,285 | 2,637 | |||||||||
| Finance lease liabilities | 63 | 121 | |||||||||
| Income tax liability | 1,888 | 1,618 | |||||||||
| Deferred revenue | 2,931 | 4,310 | |||||||||
| Other current liabilities | 968 | — | |||||||||
| Total current liabilities | 25,537 | 24,223 | |||||||||
| Operating lease liabilities, net of current portion | 2,175 | 3,089 | |||||||||
| Deferred revenue, net of current portion | 3,766 | 4,910 | |||||||||
| Long-term debt | — | 84,312 | |||||||||
| Contingent acquisition liabilities (Note 17) | 4,410 | — | |||||||||
| Income tax liability, net of current portion | 2,275 | 2,453 | |||||||||
| Other non-current liabilities | 4,570 | 3,967 | |||||||||
| Total liabilities | 42,733 | 122,954 | |||||||||
| Commitments and contingencies (Note 7) | |||||||||||
| Stockholders’ equity: | |||||||||||
| Series A Preferred Stock, $0.0001 par value; 1,000,000 shares authorized; 0 and 475,005 shares issued and outstanding, aggregate liquidation preference of $0 and $16,227 as of June 30, 2024 and December 31, 2023, respectively | — | 14,187 | |||||||||
| Class A Common Stock, $0.0001 par value; 455,000,000 shares authorized; 315,153,605 and 216,943,349 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 31 | 22 | |||||||||
| Class B Common Stock, $0.0001 par value; 44,000,000 shares authorized; 32,735,408 and 37,485,408 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 3 | 4 | |||||||||
| Additional paid-in capital | 886,412 | 606,135 | |||||||||
| Accumulated deficit | (662,710) | (592,379) | |||||||||
| Accumulated other comprehensive income | 205 | 199 | |||||||||
| Total stockholders’ equity | 223,941 | 28,168 | |||||||||
| Total liabilities and stockholders’ equity | $ | 266,674 | $ | 151,122 | |||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Revenues | $ | 13,462 | $ | 8,751 | $ | 25,056 | $ | 15,458 | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Cost of revenues | 4,980 | 1,830 | 9,649 | 3,806 | |||||||||||||||||||
| Sales and marketing | 5,655 | 5,078 | 11,197 | 9,953 | |||||||||||||||||||
| Research and development | 15,738 | 11,736 | 30,616 | 25,920 | |||||||||||||||||||
| General and administrative | 9,535 | 6,424 | 19,802 | 13,713 | |||||||||||||||||||
| Change in fair value of contingent acquisition liabilities | (1,082) | — | 3,080 | — | |||||||||||||||||||
| Amortization of intangible assets | 621 | — | 1,226 | — | |||||||||||||||||||
| Restructuring | — | 166 | — | 3,751 | |||||||||||||||||||
| Total operating expenses | 35,447 | 25,234 | 75,570 | 57,143 | |||||||||||||||||||
| Loss from operations | (21,985) | (16,483) | (50,514) | (41,685) | |||||||||||||||||||
| Other expense, net: | |||||||||||||||||||||||
| Loss on early extinguishment of debt | (15,587) | (837) | (15,587) | (837) | |||||||||||||||||||
| Interest expense | (4,086) | (4,735) | (9,750) | (5,831) | |||||||||||||||||||
| Other income (expense), net | 4,974 | (835) | 6,453 | (1,638) | |||||||||||||||||||
| Total other expense, net | (14,699) | (6,407) | (18,884) | (8,306) | |||||||||||||||||||
| Loss before provision for income taxes | (36,684) | (22,890) | (69,398) | (49,991) | |||||||||||||||||||
| Provision for income taxes | 638 | 417 | 933 | 746 | |||||||||||||||||||
| Net loss | $ | (37,322) | $ | (23,307) | $ | (70,331) | $ | (50,737) | |||||||||||||||
| Cumulative dividends attributable to Series A Preferred Stock | (73) | (877) | (416) | (1,559) | |||||||||||||||||||
| Net loss attributable to SoundHound common shareholders | $ | (37,395) | $ | (24,184) | $ | (70,747) | $ | (52,296) | |||||||||||||||
| Other comprehensive income: | |||||||||||||||||||||||
| Unrealized gains on investments | (30) | 29 | 6 | — | |||||||||||||||||||
| Comprehensive loss | $ | (37,425) | $ | (24,155) | $ | (70,741) | $ | (52,296) | |||||||||||||||
| Net loss per share: | |||||||||||||||||||||||
| Basic and diluted | $ | (0.11) | $ | (0.11) | $ | (0.23) | $ | (0.25) | |||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||||||
| Basic and diluted | 331,830,608 | 220,772,111 | 309,213,583 | 212,970,561 | |||||||||||||||||||
| Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Cash flows used in operating activities: | |||||||||||
| Net loss | $ | (70,331) | $ | (50,737) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation and amortization | 2,750 | 1,411 | |||||||||
| Stock-based compensation | 14,232 | 13,947 | |||||||||
| Loss on change in fair value of ELOC program | — | 1,901 | |||||||||
| Amortization of debt issuance cost | 1,524 | 1,607 | |||||||||
| Non-cash lease amortization | 1,445 | 1,714 | |||||||||
| Foreign currency gain/loss from remeasurement | (70) | — | |||||||||
| Change in fair value of contingent acquisition liabilities | 3,080 | — | |||||||||
| Loss on early extinguishment of debt | 15,587 | 837 | |||||||||
| Deferred income taxes | (368) | — | |||||||||
| Other, net | (891) | 82 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable, net | 211 | (177) | |||||||||
| Other current assets | (1,426) | (634) | |||||||||
| Contract assets | (2,267) | (2,080) | |||||||||
| Other non-current assets | (842) | 363 | |||||||||
| Accounts payable | 1,941 | (903) | |||||||||
| Accrued liabilities | (625) | 5,295 | |||||||||
| Operating lease liabilities | (1,720) | (1,910) | |||||||||
| Deferred revenue | (2,523) | (4,625) | |||||||||
| Other non-current liabilities | (147) | (292) | |||||||||
| Net cash used in operating activities | (40,440) | (34,201) | |||||||||
| Cash flows used in investing activities: | |||||||||||
| Purchases of property and equipment | (335) | (293) | |||||||||
| Payment related to acquisitions, net of cash acquired | (4,453) | — | |||||||||
| Net cash used in investing activities | (4,788) | (293) | |||||||||
| Cash flows provided by financing activities: | |||||||||||
| Proceeds from the issuance of Series A Preferred Stock, net of issuance costs | — | 24,942 | |||||||||
| Proceeds from sales of Class A common stock under the ELOC program, net of issuance costs | — | 71,455 | |||||||||
| Proceeds from sales of Class A common stock under the Sales Agreement and Equity Distribution Agreement | 237,639 | — | |||||||||
| Proceeds from exercise of stock options and employee stock purchase plan | 10,628 | 8,177 | |||||||||
| Payment of financing costs associated with the Sales Agreement and Equity Distribution Agreement | (5,639) | — | |||||||||
| Proceeds from the issuance of long-term debt, net of issuance costs | — | 85,087 | |||||||||
| Payments on notes payable | (105,540) | (35,029) | |||||||||
| Payments on finance leases | (58) | (74) | |||||||||
| Net cash provided by financing activities | 137,030 | 154,558 | |||||||||
| Effects of exchange rate changes on cash | 130 | — | |||||||||
| Net change in cash, cash equivalents, and restricted cash equivalents | 91,932 | 120,064 | |||||||||
| Cash, cash equivalents, and restricted cash equivalents, beginning of period | 109,035 | 9,475 | |||||||||
| Cash, cash equivalents, and restricted cash equivalents, end of period | $ | 200,967 | $ | 129,539 | |||||||
| Reconciliation to amounts on the condensed consolidated balance sheets: | |||||||||||
| Cash and cash equivalents | $ | 200,156 | $ | 115,764 | |||||||
| Non-current portion of restricted cash equivalents | 811 | 13,775 | |||||||||
Total cash, cash equivalents, and restricted cash equivalents shown in the condensed consolidated statements of cash flows | $ | 200,967 | $ | 129,539 | |||||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Cash paid for interest | $ | 3,541 | $ | 4,344 | |||||||
| Cash paid for income taxes | $ | 1,274 | $ | 1,098 | |||||||
| Noncash investing and financing activities: | |||||||||||
| Conversion of Series A Preferred Stock to Class A common stock | $ | 14,187 | $ | — | |||||||
| Issuance of Class A Common Stock to settle commitment shares related to the ELOC program | $ | — | $ | 915 | |||||||
| Deferred offering costs reclassified to additional paid-in capital | $ | 147 | $ | 802 | |||||||
| Unpaid financing costs in connection with the Equity Distribution Agreement | $ | 522 | $ | — | |||||||
| Non-cash debt discount | $ | — | $ | 4,136 | |||||||
| Property and equipment acquired under accrued liabilities | $ | 92 | $ | — | |||||||
| Fair value of Class A common stock and deferred equity consideration issued for SYNQ3 acquisition | $ | 9,687 | $ | — | |||||||
| Fair value of contingent earnout consideration under SYNQ3 acquisition | $ | 1,676 | $ | — | |||||||
| Fair value of contingent holdback consideration under SYNQ3 acquisition | $ | 427 | $ | — | |||||||
| Fair value of deferred cash consideration under other acquisition | $ | 195 | $ | — | |||||||