UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

________________________________

SCHEDULE 14C

________________________________

SCHEDULE 14C INFORMATION

Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934

Check the appropriate box:

 

Preliminary Information Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))

 

Definitive Information Statement

SOUNDHOUND AI, INC.
(Name of Registrant As Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee paid previously with preliminary materials

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

Preliminary Information Statement — Subject to Completion

SOUNDHOUND AI, INC.
5400 Betsy Ross Drive
Santa Clara, 95054
Notice of Action Taken Pursuant to Written Consent of Stockholders

Dear Stockholders:

The accompanying information statement, including the annexes thereto (together, the “Information Statement”) is furnished to holders of Class A common stock, par value $0.0001 (the “Class A Common Stock”), and Class B common stock, par value $0.0001 (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”) of SoundHound AI, Inc. (the “Company,” “our,” “we” or “us”) pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, and Regulation 14C and Schedule 14C thereunder, in connection with the approval of the matters described herein by written consent of the holders of a majority of the outstanding voting power of the Common Stock in connection with the Company’s issuance and sale of newly designated Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), under the Company’s Certificate of Designations of Preferences, Rights and Limitations of the Series A Preferred Stock (the “Certificate of Designations”).

The purpose of this Notice and Information Statement is to notify you of actions taken by the holders of a majority of the outstanding voting power of the Common Stock. On January 19, 2023, the Company received written consent (the “Minimum Issuance and Change of Control Consent”) from the holders of a majority of the outstanding voting power of the Common Stock to approve the issuance of shares of Class A Common Stock from time to time upon any conversion of shares of the Series A Preferred Stock pursuant to the terms of the Certificate of Designations that may result in a Minimum Issuance as defined under Nasdaq Listing Rule 5635(d) or a Change of Control as defined under Nasdaq Listing Rule 5635(b). On January 23, 2023, the Company received written consent (the “Equity Compensation Consent” and, together with the Minimum Issuance and Change of Control Consent, the “Nasdaq Consents”) from the holders of a majority of the outstanding voting power of the Common Stock to approve the issuance and sale of shares of Series A Preferred Stock, and the issuance of shares of Class A Common Stock from time to time upon any conversion of such shares of Series A Preferred Stock pursuant to the terms of the Certificate of Designations, to certain directors and officers of the Company in accordance with Nasdaq Listing Rule 5635(c). The Nasdaq Consents were obtained in connection with a private placement of shares of Series A Preferred Stock by the Company pursuant to certain preferred stock purchase agreements (the “Purchase Agreements”) with certain investors (the “Investors”) under which the Company issued and sold to the Investors an aggregate of 835,011 shares of Series A Preferred Stock for an aggregate issue price of approximately $25 million (the “Transaction”).

The Nasdaq Consents were obtained following discussion, due consideration and approval of these matters by the board of directors of the Company (the “Board”) on January 19, 2023. Following such approvals by the Board, the Company elected to seek approval of the Nasdaq Consents via written consent in accordance with the Company’s Amended and Restated Bylaws (the “Bylaws”) to reduce associated costs and implement the proposals in a timely manner.

This Notice and the accompanying Information Statement are being furnished to you to inform you of the approval of the Nasdaq Consents via written consent of the holders of a majority of the outstanding voting power of the Common Stock. The Board is not soliciting your proxy in connection with these actions and proxies are not requested from stockholders.

The corporate actions set forth above will not become effective before a date which is 20 calendar days after this Information Statement is first mailed to our stockholders. You are urged to read the Information Statement in its entirety for a description of the actions taken by a majority of the outstanding voting power of the Common Stock.

 

BY ORDER OF THE BOARD OF DIRECTORS,

Date:              , 2023

 

By:

 

 

   

Name:

 

Dr. Keyvan Mohajer

   

Title:

 

Chief Executive Officer

 

THE ACCOMPANYING INFORMATION STATEMENT IS BEING MAILED
TO STOCKHOLDERS ON OR ABOUT
            , 2023

WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY

 

SOUNDHOUND AI, INC.
5400 Betsy Ross Drive
Santa Clara, 95054
Notice of Action Taken Pursuant to Written Consent of Stockholders
INFORMATION STATEMENT

NO VOTE OR OTHER ACTION OF THE COMPANY’S STOCKHOLDERS
IS REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT

WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY

This Information Statement is first being furnished on or about             , 2023 to the holders of record of the Common Stock of SoundHound AI, Inc. as of             , 2023 (the “Record Date”) in connection with the approval of the Nasdaq Consents, as further described in this Information Statement, by written consent of the holders of a majority of the outstanding voting power of the Common Stock taken without a meeting.

Pursuant to Rule 14c-2 promulgated by the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the corporate actions described herein will not become effective until 20 calendar days following the date on which this Information Statement is first mailed to our stockholders.

On or about January 19, 2023, following discussion and due consideration of these matters, the Board approved the Transaction. Following such approvals, the Company elected to seek the written consent of the holders of a majority of the outstanding voting power of the Common Stock in order to reduce associated costs and implement the proposal in a timely manner.

Such consents are sufficient under the Bylaws. Accordingly, the actions will not be submitted to the other stockholders of our company for a vote, and this Information Statement is being furnished to such other stockholders to provide them with certain information concerning the actions in accordance with the requirements of the Exchange Act, and the regulations promulgated under the Exchange Act, including Regulation 14C.

1

STOCK ISSUANCE

Overview

Description of the Transaction and the Series A Preferred Stock

On or around January 20, 2023 (the “Closing Date”), we entered into the Purchase Agreements with the Investors pursuant to which we issued and sold to the Investors an aggregate of 835,011 shares of the Series A Preferred Stock for an aggregate issue price of approximately $25 million. We expect to use the proceeds from the Transaction, together with cash on hand, to execute on our business plans and for general corporate purposes. Pursuant to the Certificate of Designations, the Series A Preferred Stock is entitled to dividends payable as an increase in the Liquidation Preference (as defined in the Certificate of Designations) for such share at the rate of 14% per annum, accreting semi-annually to Liquidation Preference on January 1 and July 1 of each year, beginning on the first such date after the filing of the Certificate of Designations (the “PIK Dividends”). The Liquidation Preference per share of Preferred Stock is initially equal to $30.00, the original issue price per share.

Each share of Series A Preferred Stock is convertible, at the option of the holder thereof, at any time on or after May 2, 2023 into such number of shares of Class A Common Stock equal to the Liquidation Preference per share at the time of conversion divided by $1.00 (the “Conversion Price” or the “Conversion Ratio”). In addition, each share of Series A Preferred Stock will automatically convert into shares of Class A Common Stock at the Conversion Ratio on or after January 20, 2024 if and when the daily volume-weighted average closing price per share of Class A Common Stock is at least 2.5 times the Conversion Price for each of any 90 trading days during any 120 consecutive trading day period, which 120-trading day period may commence (but may not end) prior to January 20, 2024. Conversion is subject to the lapse of the 20-calendar day period after this Information Statement is first mailed to our stockholders. The Conversion Price is not subject to any anti-dilution adjustments. The Company may also elect to pay any dividend in cash in lieu of accretion to Liquidation Preference if permitted under the agreements and instruments governing its outstanding indebtedness at such time.

The Series A Preferred Stock is not entitled to any preemptive rights or registration rights.

Effect on Rights of Holders of Common Stock

The holders of Series A Preferred Stock will not be entitled to vote on any matter presented to our stockholders prior to conversion of such shares into Class A Common Stock. However, certain matters require the approval of a majority of the then-outstanding shares of Series A Preferred Stock, voting as a separate class, including to (i) amend our organizational documents in a matter that materially and adversely affects the powers, preferences or rights of the Series A Preferred Stock, (ii) create, issue, or authorize the creation or issuance of, increase the authorized amount of, or obligate itself to issue shares of, any class or series of capital stock, or any obligation or security convertible into or evidencing a right to purchase, any class or series of capital stock, unless such class or series of capital stock ranks junior to the Series A Preferred Stock; (iii) increase the authorized number of shares of Series A Preferred Stock; (iv) reclassify, alter or amend any class of capital stock that ranks junior or pari passu to the Series A Preferred Stock if such action would render such class to be senior to the Series A Preferred Stock or, with respect to junior capital stock, pari passu with the Series A Preferred Stock; (v) purchase or redeem for cash any shares of capital stock, subject to certain exceptions; and (vi) incur any secured debt as a result of which the aggregate principal amount of our secured debt outstanding would exceed the greater of $75,000,000 or 20% of our enterprise value.

The Series A Preferred Stock will have preference over our Common Stock as well as any additional Junior Stock (as defined in the Certificate of Designations) designated and issued in the future, with respect to distribution of assets or available proceeds, as applicable, in the event of any voluntary or involuntary liquidation, dissolution or winding up of our company or a merger or consolidation that results in a change in control of our company or the sale or transfer of all or substantially all our assets (each a “Liquidation Event”). However, the Series A Preferred Stock will rank junior to our indebtedness outstanding. Upon a Liquidation Event, the holders of shares of Series A Preferred Stock will be entitled to receive, before any payment is made to holders of any Junior Stock and after payments to satisfy and discharge indebtedness, an amount per share equal to the greater of (i) 2.5 times the Liquidation Preference accumulated at such time (less any prior conversions) or (ii) such amount per share as would have been payable had all shares then-outstanding of Series A Preferred Stock been converted into Class A Common Stock immediately prior to such Liquidation Event.

2

The foregoing description of certain terms pertaining to the Series A Preferred Stock and the Certificate of Designations is not complete and is qualified in its entirety by reference to the full text of the Certificate of Designations, a copy of which is filed as Exhibit 3.1 to our Current Report on Form 8-K filed with the SEC on January 24, 2023.

Reason for Stockholder Approval

Our Class A Common Stock is currently listed on the Nasdaq Global Select Market, and as a result, issuances of shares of Class A Common Stock are subject to the Nasdaq Listing Rules. Pursuant to Nasdaq Listing Rule 5635(d), stockholder approval must be obtained prior to the issuance of securities in connection with a transaction other than a public offering involving the sale, issuance, or potential issuance of common stock (or securities convertible into or exercisable for common stock) equal to 20% or more of common stock, or 20% or more of voting power, outstanding before such issuance, at a price per share that is less than the lower of: (i) the closing price of the common stock immediately preceding the signing of the applicable binding agreement; or (ii) the average closing price of shares of common stock for the five trading days immediately preceding the signing of the applicable binding agreement governing such issuance (a “Minimum Issuance”).

Pursuant to Nasdaq Listing Rule 5635(b), stockholder approval must be obtained prior to the issuance of securities when the issuance or potential issuance will result in a “change of control” of a company, which is generally understood to occur when after a transaction, an investor (or a group of investors) would hold 20% or more of a company’s then-outstanding capital stock (a “Change of Control”).

Pursuant to Nasdaq Listing Rule 5635(c), stockholder approval must be obtained prior to the issuance of securities when any equity compensation arrangement is made or materially amended, pursuant to which stock may be acquired by officers, directors, employees (the “Equity Compensation Approval”).

The Transaction did not constitute a public offering under Nasdaq Listing Rules, and the shares of Series A Preferred Stock were issued at an effective “minimum price” of $1.00 per share, the Conversion Price, which is less than the closing price of our Class A Common Stock immediately preceding the signing of the Purchase Agreements and the average closing price of our Class A Common Stock for the five trading days immediately preceding the signing of the Purchase Agreements. Further, while the shares of Series A Preferred Stock issued on the Closing Date on an as-converted to Class A Common Stock basis represents approximately 15% of the total shares of Common Stock outstanding prior to the Transaction (including shares of Class B Common Stock), as a result of the PIK Dividends that accumulate over time, the maximum potential issuance of shares of Class A Common Stock upon conversion of Series A Preferred Stock may exceed 20% of the total shares of Common Stock outstanding (including shares of Class B Common Stock), and as such, constitutes a potential Minimum Issuance or Change of Control and requires stockholder approval under the applicable Nasdaq Listing Rules.

In addition, the issuance and sale of certain shares of Series A Preferred Stock, and any future issuances of shares of Class A Common Stock from time to time upon conversion of such Series A Preferred Stock, to certain of the Company’s directors and officers who participated in the Transaction (the “Insider Issuances”) requires an Equity Compensation Approval.

Voting and Vote Required

Section 2.7 of the Bylaws provides if action without a meeting is provided by resolution of the Board, such action may be taken without prior notice and without a vote, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

As of the Record Date, there were             shares of Class A Common Stock outstanding and entitled to vote and             shares of Class B Common Stock outstanding and entitled to vote. Each share of Class B Common Stock is entitled to 10 votes, and each share of Class A Common Stock is entitled to one vote.

On the dates of the Nasdaq Consents, the consenting holders beneficially owned             shares of Class B Common Stock, representing             % of the votes entitled to be cast by the outstanding Common Stock, voting together as a single class. Accordingly, the written consents executed by the consenting holders are sufficient to approve future conversions of shares of Series A Preferred Stock into shares of Class A Common stock, constituting a potential Minimum Issuance and Change of Control, and the Insider Issuances, and no further stockholder action is required to approve these matters.

3

Under the Certificate of Designations, the shares of Series A Preferred Stock may not be converted into shares of Class A Common Stock until, and the Insider Issuances are subject to, the lapse of the 20-calendar day period after this Information Statement is first mailed to our stockholders.

As the action taken by the holders of a majority of the outstanding voting power of the Common Stock was by written consent, there will be no security holders’ meeting and representatives of the Company’s principal accountants for the current year and for the most recently completed fiscal year will not have the opportunity to make a statement if they desire to do so and will not be available to respond to appropriate questions from our stockholders.

Effects on Existing Holders of Class A Common Stock

Upon the lapse of the 20-calendar day period after this Information Statement is first mailed to our stockholders, outstanding shares of Series A Preferred Stock may be converted into shares of Class A Common Stock at the Conversion Ratio from time to time in accordance with the Certificate of Designations. Refer to the section titled “Stock Issuance — Overview” for more information regarding potential conversions. Future conversions could result in significant dilution in ownership interests and voting rights to our stockholders.

For illustrative purposes only, the table below shows the number of shares of Class A Common Stock that would be issuable upon conversion of the Series A Preferred Stock at the Conversion Ratio following PIK Dividend accretion on the dividend payment dates specified, assuming no dividends are paid in cash and no prior conversions.

Assumed Conversion Date

 

Assumed
Liquidation
Preference ($)

 

Class A
Common Stock
Issuable upon
Conversion of
Series A Preferred Stock

July 1, 2023

 

26,609,018

 

26,609,018

January 1, 2024

 

28,471,650

 

28,471,650

July 1, 2024

 

30,464,666

 

30,464,666

January 1, 2025

 

32,597,193

 

32,597,193

July 1, 2025

 

34,878,997

 

34,878,997

January 1, 2026

 

37,320,527

 

37,320,527

July 1, 2026

 

39,932,964

 

39,932,964

Interests of Certain Persons

Eric Ball, a member of our Board, and Nitesh Sharan, our Chief Financial Officer, purchased an aggregate of 6,668 shares of Series A Preferred Stock in the Transaction. Refer to the section titled “Security Ownership of Certain Beneficial Owners and Management” for more information regarding the ownership of Common Stock by each of Dr. Ball and Mr. Sharan.

Notice Pursuant to Section 228(e)

Pursuant to Section 228(e) of the Delaware General Corporation Law (“DGCL”), the Company is required to provide prompt notice of the taking of a corporate action by written consent of stockholders to the Company’s stockholders who have not consented in writing to such action. This Information Statement serves as the notice required by Section 228(e) of the DGCL.

Dissenters’ Rights of Appraisal

Delaware law does not provide for dissenters’ rights or similar rights of appraisal in connection with the corporate action described in this Information Statement.

4

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information known to the Company regarding beneficial ownership of the Company’s Class A Common Stock and Class B Common Stock as of January 27, 2023 by:

        each person known by the Company to be the beneficial owner of more than 5% of the Company’s outstanding Class A Common Stock and Class B Common Stock;

        each of the Company’s named executive officers and directors; and

        all executive officers and directors as a group.

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options, warrants and certain other derivative securities that are currently exercisable or will become exercisable within 60 days.

The percentage of beneficial ownership is based on 200,076,039 shares of Company common stock issued and outstanding as of January 27, 2023, which calculation includes (i) 160,340,631 shares of the Class A Common Stock and (ii) 39,735,408 shares of the Class B Common Stock. Voting power represents the combined voting power of shares of Class A Common Stock and Class B Common Stock owned beneficially by such person. On all matters to be voted upon, subject to the rights of any holders of any series of preferred stock, holders of shares of Class A Common Stock and Class B Common Stock will vote together as a single class on all matters submitted to the stockholders for their vote or approval. Holders of Class A Common Stock are entitled to one vote per share on all matters submitted to the stockholders for their vote or approval. Holders of Class B Common Stock are entitled to ten votes per share on all matters submitted to stockholders for their vote or approval.

In accordance with SEC rules, shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days after January 27, 2023 are deemed beneficially owned by the holders of such options and warrants and are deemed outstanding for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage of ownership of any other person.

Unless otherwise indicated, the business address of each of the entities, directors and executives in this table is 5400 Betsy Ross Drive, Santa Clara, CA 95054. Unless otherwise indicated and subject to community property laws and similar laws, the Company believes that all parties named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them.

Beneficial Ownership Table

Name and Address of Beneficial Owners

 

Number of
Shares of Class A
Common Stock

 

% Class

 

Number of
Shares of Class B
Common Stock

 

% Class

 

% of Total
Voting Power

Directors and Executive Officers

       

 

       

 

   

 

Dr. Keyvan Mohajer(1)

 

1,070,935

 

*

 

 

16,639,064

 

41.9

%

 

30.0

%

James Hom(2)

 

84,028

 

*

 

 

4,512,588

 

11.4

%

 

8.1

%

Larry Marcus(3)

 

945,846

 

*

 

 

 

 

 

*

 

Diana Sroka(4)

 

26,095

 

*

 

 

 

 

 

*

 

Dr. Eric R. Ball(5)

 

606,345

 

*

 

 

 

 

 

*

 

Dr. Seyed Majid Emami(6)

 

750,776

 

*

 

 

18,583,756

 

46.8

%

 

33.5

%

Zubin Irani(7)

 

233,423

 

*

 

 

 

 

 

*

 

Timothy Stonehocker(8)

 

1,640,591

 

1.0

%

 

 

 

 

*

 

Nitesh Sharan(9)

 

272,001

 

*

 

 

 

 

 

*

 

Michael Zagorsek(10)

 

1,054,864

 

*

 

 

 

 

 

*

 

All directors and executive officers as a group (10 individuals)

 

6,684,904

 

4.2

%

 

39,735,408

 

100.0

%

 

72.4

%

5% Holders

       

 

       

 

   

 

Global Catalyst Partners III, L.P.(11)

 

35,188,205

 

21.9

%

 

 

 

 

6.3

%

____________

*        Less than 1%.

(1)      Includes 833,435 shares of Class A Common Stock that are issuable upon exercise of stock options which are currently exercisable and 55,000 shares of Class A Common Stock issuable upon vesting of outstanding restricted stock units that vest within 60 days of January 27, 2023.

5

(2)      Includes 19,722 shares of Class A Common Stock issuable upon vesting of outstanding restricted stock units that vest within 60 days of January 27, 2023.

(3)      Includes 5,219 shares of Class A Common Stock issuable upon vesting of outstanding restricted stock units that vest within 60 days of January 27, 2023 and 919,751 shares of Class A Common Stock held by Marcus Family Trust, dated 7/8/04, of which Larry Marcus is a co-trustee. Mr. Marcus disclaims beneficial ownership of the shares held by the trust except to the extent of any pecuniary interest he may have therein. Does not include securities held of record by Walden Sprout Opportunities Fund-A, LLC because Mr. Marcus is one of three managing members of such fund, he is not deemed to be a beneficial owner of the securities held by such fund. Mr. Marcus’s business address is 2105 Woodside Rd, Woodside, CA 94062.

(4)      Includes 5,219 shares of Class A Common Stock issuable upon vesting of outstanding restricted stock units that vest within 60 days of January 27, 2023.

(5)      Includes 5,219 shares of Class A Common Stock issuable upon vesting of outstanding restricted stock units that vest within 60 days of January 27, 2023 and 580,250 shares of Class A Common Stock held by the Ball Axline Living Trust (dated July 22, 2014), of which Eric Ball is a joint trustee. Mr. Ball disclaims beneficial ownership of the shares held by the trust except to the extent of any pecuniary interest he may have therein.

(6)      Includes 666,748 shares of Class A Common Stock that are issuable upon exercise of stock options which are currently exercisable and 19,722 shares of Class A Common Stock issuable upon vesting of outstanding restricted stock units that vest within 60 days of January 27, 2023.

(7)      Includes 64,310 shares of Class A Common Stock that are issuable upon exercise of stock options which are currently exercisable and 25,000 shares of Class A Common Stock issuable upon vesting of outstanding restricted stock units that vest within 60 days of January 27, 2023.

(8)      Includes 750,964 shares of Class A Common Stock in exchange for securities pursuant to the Merger Agreement, 82,861 shares of Class A Common Stock from settlement of RSUs, 788,294 shares of Class A Common Stock that are issuable upon exercise of stock options that are currently exercisable or exercisable within 60 days of January 27, 2023 and 18,472 shares of Class A Common Stock issuable upon vesting of outstanding restricted stock units that vest within 60 days of January 27, 2023.

(9)      Includes 115,751 shares of Class A Common Stock that are issuable upon exercise of stock options which are currently exercisable or exercisable within 60 days of January 27, 2023 and 25,000 shares of Class A Common Stock issuable upon vesting of outstanding restricted stock units that vest within 60 days of January 27, 2023.

(10)    Consists of 948,614 shares of Class A Common Stock that are issuable upon exercise of stock options which are currently exercisable or exercisable within 60 days of January 27, 2023 and 25,000 shares of Class A Common Stock issuable upon vesting of outstanding restricted stock units that vest within 60 days of January 27, 2023.

(11)    Based on Schedule 13D/A filed on May 13, 2022. Global Catalyst Venture Management III, LLC (“GCVM, III”) is the General Partner of Global Catalyst Partners III, L.P. None of the four managing members of GCVM III is deemed to have or share beneficial ownership with respect to such shares. The business address of Global Catalyst Partners III, L.P. is 309 Quinnhill Road, Los Altos, CA 94024.

6

STOCKHOLDERS ENTITLED TO INFORMATION STATEMENT

This Information Statement is being mailed to you on or about             , 2023. We will pay all costs associated with the distribution of this Information Statement, including the costs of printing and mailing. We will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending this Information Statement to the beneficial owners of our Common Stock.

We have established             , 2023 as the Record Date for the determination of stockholders entitled to receive this Information Statement.

HOUSEHOLDING OF MATERIALS

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for the Information Statement materials with respect to two or more stockholders sharing the same address by delivering a single set of Information Statement materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.

A number of brokers with account holders who are SoundHound AI, inc., stockholders will be “householding” the Information Statement materials. A single set of Information Statement materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate set of Information Statement materials, please notify your broker or the Company. We will promptly deliver, upon oral or written request, a separate copy of this Information Statement to any stockholder residing at an address to which only one copy was mailed. Requests for additional copies should be directed to the Company by phone at (408) 441-3200 or by mail to Soundhound AI, Inc., Attn: Dr. Keyvan Mohajer, at 5400 Betsy Ross Drive, Santa Clara, CA 95054. Stockholders who currently receive multiple copies of the Information Statement materials at their addresses and would like to request “householding” of their communications should contact their brokers or us at the address or telephone number above to request that only a single copy of an information statement be mailed in the future.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public at the SEC website at www.sec.gov. You also may obtain free copies of the documents we file with the SEC, including this Information Statement, by going to the investor relations page of our website at investors.soundhound.com. Our website address is provided as an inactive textual reference only. The information provided on, or accessible through, our website is not part of this Information Statement, and therefore is not incorporated herein by reference.

MISCELLANEOUS

We have not authorized anyone to provide you with information that is different from what is contained in this Information Statement, the annexes to this Information Statement, any amendments or supplements to this Information Statement, and the documents that we incorporate by reference into this Information Statement. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This Information Statement is dated             , 2023. You should not assume that the information contained in this Information Statement is accurate as of any date other than that date (or as of an earlier date if so indicated in this Information Statement), and the mailing of this Information Statement to stockholders does not create any implication to the contrary.

 

BY ORDER OF THE BOARD OF DIRECTORS,

Date:            , 2023

 

By:

 

 

   

Name:

 

Dr. Keyvan Mohajer

   

Title:

 

Chief Executive Officer

7

ANNEX A

INDEX TO FINANCIAL STATEMENTS

ARCHIMEDES TECH SPAC PARTNERS CO.

 

Page

Financial Statements

   

Report of Independent Registered Public Accounting Firm

 

A-2

Balance Sheet as of December 31, 2021 and 2020

 

A-3

Statements of Operations for the periods from September 15, 2020 (inception) through December 31, 2020 and for the year ended December 31, 2021

 

A-4

Statement of Changes in Stockholders’ Equity for the periods from September 15, 2020 (inception) through December 31, 2020 and the year ended December 31, 2021

 

A-5

Statement of Cash Flows for the periods from September 15, 2020 (inception) through December 31, 2020 and the year ended December 31, 2021

 

A-6

Notes to Financial Statements

 

A-7

     

Condensed Financial Statements

   

Condensed Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021

 

A-26

Unaudited Condensed Statements of Operations for the three months ended March 31, 2022 and 2021

 

A-27

Unaudited Condensed Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2022 and 2021

 

A-28

Unaudited Condensed Statement of Cash Flows for the three months ended March 31, 2022 and 2021

 

A-29

Notes to Unaudited Condensed Financial Statements

 

A-30

SOUNDHOUND, INC.

Financial Statements

   

Report of Independent Registered Public Accounting Firm

 

A-46

Balance Sheets as of December 31, 2021 and 2020

 

A-47

Statements of Operations for the years ended December 31, 2021 and 2020

 

A-49

Statements of Stockholders’ Equity for the years ended December 31, 2021 and 2020

 

A-50

Statements of Cash Flows for the years ended December 31, 2021 and 2020

 

A-51

Notes to Financial Statements

 

A-53

Condensed Consolidated Financial Statements

   

Condensed Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021

 

A-87

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021

 

A-88

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2022 and 2021

 

A-89

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021

 

A-92

Notes to Condensed Consolidated Financial Statements

 

A-93

Annex A-1

REPORT OF INDEPDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Archimedes Tech SPAC Partners Co.

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Archimedes Tech SPAC Partners Co. (the “Company”) as of December 31, 2021 and 2020, and the related statement of operations, changes in shareholders’ equity, and cash flow for the year ended December 31, 2021 and the period from September 15, 2020 (Inception) through December 31, 2020, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the year ended December 31, 2021 and the period from September 15, 2020 (Inception) through December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1, as of December 31, 2021, the Company had $235,295 of cash available for its working capital needs. The Company expects to incur significant costs in pursuit of its financing and acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management plans to address this uncertainty through a Proposed Business Combination as discussed in Note 1. There is no assurance that the Company’s plans to consummate a business combination will be successful within the combination period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to that matter.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ UHY LLP

We have served as the Company’s auditor since 2021.

New York, New York

March 9, 2022

Annex A-2

ARCHIMEDES TECH SPAC PARTNERS CO.
BALANCE SHEETS

 

December 31, 2021

 

December 31, 2020

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalent

 

$

235,295

 

 

$

 

Prepaid expenses

 

 

98,066

 

 

 

 

Total current assets

 

 

333,361

 

 

 

 

Marketable securities held in Trust Account

 

 

133,010,583

 

 

 

 

Total Assets

 

$

133,343,944

 

 

$

 

   

 

 

 

 

 

 

 

Liabilities and Stockholders’ Deficit

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accrued expenses

 

$

247,868

 

 

$

 

Due to related party

 

 

1,816

 

 

 

716

 

Total current liabilities

 

 

249,684

 

 

 

716

 

Warrant liability

 

 

247,514

 

 

 

 

Total liabilities

 

$

497,198

 

 

$

716

 

   

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

Common stock subject to possible redemption, 13,300,000 shares and 0 shares at redemption value as of December 31, 2021 and 2020, respectively

 

$

133,010,583

 

 

$

 

   

 

 

 

 

 

 

 

Stockholders’ Deficit:

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

 

$

 

 

$

 

Common stock, $0.0001 par value; 100,000,000 shares and 31,000,000 shares authorized, 4,161,000 shares and 0 shares issued and outstanding (excluding 13,300,000 shares and 0 shares subject to possible redemption) as of December 31, 2021 and 2020, respectively

 

 

416

 

 

 

 

Additional paid-in-capital

 

 

818,347

 

 

 

 

Accumulated deficit

 

 

(982,600

)

 

 

(716

)

Total Stockholders’ Deficit

 

$

(163,837

)

 

$

(716

)

Total Liabilities and Stockholders’ Deficit

 

$

133,343,944

 

 

$

 

The accompanying notes are an integral part of these financial statements.

Annex A-3

ARCHIMEDES TECH SPAC PARTNERS CO.
STATEMENTS OF OPERATIONS

 

For the
year ended
December 31,
2021

 

For the
Period from
September 15,
2020
(Inception)
through
December 31,
2020

Formation and operating costs

 

$

1,015,260

 

 

$

716

 

Loss from operations

 

 

(1,015,260

)

 

 

(716

)

   

 

 

 

 

 

 

 

Other income

 

 

 

 

 

 

 

 

Trust interest income

 

 

10,583

 

 

 

 

Unrealized gain on change in fair value of warrants

 

 

22,793

 

 

 

 

Total other income

 

 

33,376

 

 

 

 

Net loss

 

$

(981,884

)

 

$

(716

)

Basic and diluted weighted average shares outstanding, common stock
subject to redemption

 

 

10,589,315

 

 

 

 

Basic and diluted net income per share attributable to common stock
subject to redemption

 

$

0.28

 

 

$

 

Basic and diluted weighted average shares outstanding, common stock

 

 

3,959,088

 

 

 

 

Basic and diluted net loss per share attributable to common stockholders

 

$

(0.99

)

 

$

 

The accompanying notes are an integral part of these financial statements.

Annex A-4

ARCHIMEDES TECH SPAC PARTNERS CO.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ Deficit

 


Common Stock

 

Additional
Paid-in
Capital

 

Accumulated
Deficit

 

Total
Stockholders’
Deficit

Shares

 

Amount

 

Balance as of September 15, 2020 (inception)

 

 

 

$

 

 

$

 

 

$

 

 

$

 

Net loss

 

 

 

 

 

 

 

 

 

 

(716

)

 

 

(716

)

Balance as of December 31, 2020

 

 

 

$

 

 

$

 

 

$

(716

)

 

$

(716

)

Sale of 12,000,000 Units through IPO

 

12,000,000

 

 

 

1,200

 

 

 

119,998,800

 

 

 

 

 

 

120,000,000

 

Sale of 1,300,000 Units through over-allotment

 

1,300,000

 

 

 

130

 

 

 

12,999,870

 

 

 

 

 

 

13,000,000

 

Sale of 416,000 Private Units in private placement

 

416,000

 

 

 

42

 

 

 

4,159,958

 

 

 

 

 

 

4,160,000

 

Issuance of representative shares

 

420,000

 

 

 

42

 

 

 

2,024,421

 

 

 

 

 

 

2,024,463

 

Common stock issued to initial stockholders

 

3,450,000

 

 

 

345

 

 

 

24,655

 

 

 

 

 

 

25,000

 

Forfeiture of founder shares

 

(125,000

)

 

 

(13

)

 

 

13

 

 

 

 

 

 

 

Underwriting fee

 

 

 

 

 

 

 

(2,660,000

)

 

 

 

 

 

(2,660,000

)

Offering costs charged to the stockholders’ equity

 

 

 

 

 

 

 

(2,449,810

)

 

 

 

 

 

(2,449,810

)

Initial classification of warrant liability

 

 

 

 

 

 

 

(270,307

)

 

 

 

 

 

(270,307

)

Reclassification of offering costs related to Public Shares

 

 

 

 

 

 

 

4,779,936

 

 

 

 

 

 

4,779,936

 

Net loss

 

 

 

 

 

 

 

 

 

 

(981,884

)

 

 

(981,884

)

Initial value of common stock subject to possible redemption

 

(13,300,000

)

 

 

(1,330

)

 

 

(124,412,583

)

 

 

 

 

 

(124,413,913

)

Accretion of common stock to redemption value

 

 

 

 

 

 

 

(13,366,023

)

 

 

 

 

 

(13,366,023

)

Accretion of common stock to redemption value (interest earned on trust account)

 

 

 

 

 

 

 

(10,583

)

 

 

 

 

 

 

(10,583

)

Balance as of December 31, 2021

 

4,161,000

 

 

$

416

 

 

$

818,347

 

 

$

(982,600

)

 

$

(163,837

)

The accompanying notes are an integral part of these financial statements.

Annex A-5

ARCHIMEDES TECH SPAC PARTNERS CO.
STATEMENTS OF CASH FLOWS

 

Year Ended
December 31,
2021

 

For the
Period from
September 15,
2020
(Inception)
through
December 31, 2020

Cash flows from Operating Activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(981,884

)

 

$

(716

)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

 

 

Unrealized gain on change in fair value of warrants

 

 

(22,793

)

 

 

 

Interest earned on marketable securities held in Trust Account

 

 

(10,583

)

 

 

 

Changes in current assets and current liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

(98,066

)

 

 

 

Accrued expenses

 

 

247,868

 

 

 

 

Due to related party

 

 

1,100

 

 

 

716

 

Net cash used in operating activities

 

 

(864,358

)

 

 

 

   

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Investment held in Trust Account

 

 

(133,000,000

)

 

 

 

Net cash used in investing activities

 

 

(133,000,000

)

 

 

 

   

 

 

 

 

 

 

 

Cash flows from Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from IPO and over-allotment

 

 

133,000,000

 

 

 

 

Payment of underwriting fees

 

 

(2,660,000

)

 

 

 

Proceeds from private placement

 

 

4,160,000

 

 

 

 

Proceeds from issuance of promissory note to related party

 

 

125,000

 

 

 

 

Payment to promissory note to related party

 

 

(125,000

)

 

 

 

Proceeds from issuance of common stock to initial stockholders

 

 

25,000

 

 

 

 

Payment of deferred offering costs

 

 

(425,347

)

 

 

 

Net cash provided by financing activities

 

 

134,099,653

 

 

 

 

   

 

 

 

 

 

 

 

Net change in cash

 

 

235,295

 

 

 

 

Cash, beginning of the year

 

 

 

 

 

 

Cash, end of the year

 

$

235,295

 

 

$

 

   

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information